U.S. v. Sassak, 87-1753

Decision Date12 September 1989
Docket NumberNo. 87-1753,87-1753
Citation881 F.2d 276
Parties-5338, 89-2 USTC P 9455 UNITED STATES of America, Plaintiff-Appellee, v. Ronald J. SASSAK, Defendant-Appellant.
CourtU.S. Court of Appeals — Sixth Circuit

Aaron T. Speck (argued), Taylor, Mich., for defendant-appellant.

John R. Roth (argued), Asst. U.S. Atty., Detroit, Mich., for plaintiff-appellee.

Before MILBURN and NELSON, Circuit Judges; and PECK, Senior Circuit Judge.

JOHN W. PECK, Senior Circuit Judge.

Defendant Ronald J. Sassak appeals his federal jury conviction of April 29, 1987, on fourteen counts of aiding or abetting in the preparation of false and fraudulent tax returns, in violation of 26 U.S.C. Sec. 7206(2). Although not a member of the bar, Sassak is a graduate of the Detroit College of Law. He proceeded pro se at trial.

Sassak promotes the view that labor is property; therefore, when one is paid wages by an employer, Sassak argues that he is merely exchanging his labor property for his employer's property and he does not receive any net gain in property. On this basis, Sassak asserts that most wages may not be taxed under the sixteenth amendment to the Constitution. Sassak presented this theory at several meetings at which he advised participants how they could file their returns in order to receive a refund of all of the federal income taxes that had been withheld. He sold a book of tax protester materials entitled The Greatest Swindle Ever Told. The authorship of the work is uncertain, but he apparently had some role in its compilation.

Sassak allegedly prepared false returns for eight individuals for tax years 1979 to 1982. Seven of the eight taxpayers testified that Sassak either "typed" or "prepared" his or her return, for a fee of approximately $60 and up to 10% of the anticipated refund. Sassak was also available to represent the taxpayers, for an additional fee, in IRS proceedings that were conducted as a result of filing the returns. Sassak altered the printed IRS forms in several respects, including changing the line for "employee business expenses" to read "nontaxable receipts." On each return, the taxpayer claimed a deduction in the amount of his or her wages under the "nontaxable receipts" category, resulting in little or no net adjusted gross income and zero tax liability in each case. A three page letter which Sassak had prepared, explaining his theory on the nontaxability of wages, was attached to many of the forms. The taxpayers signed their respective forms and attached letters; Sassak did not sign or identify himself on any of these items and informed the taxpayers that he was not required to do so because he was only a typist. Most of the taxpayers testified that they were unaware of the legal theory relied upon for the deductions.

Sassak argues that the district court erred in failing to instruct the jury regarding his theory that he was not guilty because he did nothing more than type the forms. Sassak also claims that the district court instructed the jury inadequately regarding willfulness and erroneously failed to require the jury to consider his good faith beliefs. Sassak further contends that the district court abused its discretion by preventing him from testifying and using certain demonstrative charts concerning his asserted belief that some wages are not taxable. These arguments will be addressed in turn.

I. Typist Instruction

Sassak was convicted under 26 U.S.C. Sec. 7206(2), which provides that any person who

[w]illfully aids or assists in, or procures, counsels, or advises the preparation or presentation under, or in connection with any matter arising under, the internal revenue laws, of a return, affidavit, claim, or other document, which is fraudulent or is false as to any material matter, whether or not such falsity or fraud is with the knowledge or consent of the person authorized or required to present such return, affidavit, claim, or document ... shall be guilty of a felony....

Theoretically, anyone who causes a false return to be filed or furnishes information which leads to the filing of a false return could be guilty of violating 26 U.S.C. Sec. 7206(2). However, it has been held that one must engage in "some affirmative participation which at least encourages the perpetrator" in order to be guilty of aiding in the preparation and presentation of false tax returns. E.g., United States v. Graham, 758 F.2d 879, 885 (3d Cir.) (citations omitted), cert. denied, 474 U.S. 901, 106 S.Ct. 227, 88 L.Ed.2d 227 (1985).

Sassak argued at trial that he was not an income tax return preparer, but merely a typist who complied with the "preconceived notions" already held by the taxpayers. He requested a jury instruction that he should he found not guilty if the jury believed his claim that he only typed the returns. 1 Under 26 U.S.C. Sec. 7701(36)(B) one who merely types documents is not an income tax return preparer. 2 Assuming this to be the case, Sassak could nonetheless be found in violation of 26 U.S.C. Sec. 7206(2) for aiding and abetting in the preparation of false income tax returns. The only relationship between the two code sections is that, as interpreted by the courts, both seem to require some affirmative action or knowledge on the part of the actor. It is adequate to analyze violation of 26 U.S.C. Sec. 7206(2) in terms of an actor's actual willfulness and knowledge of the falsity of the return that is prepared. We observe that the tax laws do not require one to meet the definition of "income tax return preparer" in order to be guilty of aiding or abetting in the preparation of a false return. While the fact that a citizen did nothing more than type a tax return may be some evidence of his or her willfulness or knowledge concerning any falsity contained on the return, that fact alone is not necessarily exculpatory. Therefore, we reject Sassak's contention that the district court erred in refusing to charge the jury that Sassak would have to be found not guilty if they found that he merely provided typing and photocopying services for the taxpayers.

We are not persuaded that failure to give the proposed instruction was reversible error on the ground that the court must instruct the jury on all defense theories, however weakly supported by the evidence they may be. United States v. Garner, 529 F.2d 962 (6th Cir.), cert. denied, 426 U.S. 922, 96 S.Ct. 2630, 49 L.Ed.2d 376 cert. denied, 429 U.S. 850, 97 S.Ct. 138, 50 L.Ed.2d 124 (1976). Here, it is the law, rather than the evidence, that fails to support the theory that Sassak, as a mere typist, could not have violated 26 U.S.C. Sec. 7206(2). No conceivable factual finding by the jury removes this flaw in Sassak's argument. Therefore, Sassak was not entitled to receive the charge he requested.

II. Instructions on willfulness and knowledge

"The essential elements of an offense under section 7206(2) are (1) that defendant aided, assisted, procured, counseled, advised or caused the preparation and presentation of a return; (2) that the return was fraudulent or false as to a material matter; and (3) that the act of the defendant was willful." United States v. Hooks, 848 F.2d 785, 788-89 (7th Cir.1988). Sassak asserts that the district court was in error in failing to give his requested defense instruction on the element of willfulness. Sassak requested the following instruction:

WILLFULNESS--SUBJECTIVE NOT OBJECTIVE

The indictment alleges that the Defendant willfully aided in the preparation of false and fraudulent income tax returns. If your [sic] find that Defendant's acts were due to inadvertence, negligence, mistake, or to an honest, sincere and good faith belief of the requirements of the law, then you must find the Defendant NOT GUILTY. This is true even if you determine that Defendant's beliefs and actions were unreasonable. The only issue in assessing wilfulness [sic] is whether the beliefs were in fact held in good faith by the Defendant, and not whether those beliefs were right or wrong, reasonable or unreasonable.

A trial court's refusal to give a requested jury instruction is reversible error only if the instruction is 1) correct, 2) not substantially covered by the actual jury charge, and 3) so important that failure to give it substantially impairs defendant's defense. United States v. Parrish, 736 F.2d 152,156 (5th Cir.1984). Neither party maintains that the offered instruction would not be a correct statement of the law. It is undisputed that failure to properly charge the jury as to the willfulness element of the offense would have substantially impaired Sassak's defense, for his defense was premised on his claim that he honestly believed wages were not income, so he honestly believed that the returns he typed or prepared were accurate. However, the government asserts that the actual jury charge given here adequately explained the willfulness requirement.

The district judge extensively instructed the jury as to the requirement that Sassak's conduct be willful and knowing. The court explained the government's burden of proving such conduct, and the defense of a good faith misunderstanding of the law. The district court instructed the jury in part:

To find the defendant guilty of violating Section 7206(2), you must not only find that he did the acts complained of and of which stands charged, but you must also find that the acts were done willfully by him.

The word "willfully," as used in this statute, means voluntary, intentional violation of a known legal duty. In other words, the defendant must have acted voluntarily and intentionally and with the specific intent to do something the law forbids; that is to say, with a purpose either to disobey or to disregard the law.

Now willfulness necessarily depends upon the defendant's state of mind at the time that the acts or omission for which he is charged were committed. This is a question for...

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