U.S. v. Thomas

• Decision Date: 06 June 1986
• Docket Number: No. 85-2120,85-2120
• Citation: 788 F.2d 1250
• Parties: -1215, 86-1 USTC P 9354 UNITED STATES of America, Plaintiff-Appellee, v. Kenneth L. THOMAS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1250

788 F.2d 1250

57 A.F.T.R.2d 86-1215, 86-1 USTC P 9354

UNITED STATES of America, Plaintiff-Appellee, v. Kenneth L. THOMAS, Defendant-Appellant.

No. 85-2120.

United States Court of Appeals Seventh Circuit.

Argued Feb. 24, 1986.

Decided April 17, 1986.

As Amended on Denial of Rehearing and Rehearing En Banc June 6, 1986.

Andrew B. Spiegel, Chicago, Ill., for defendant-appellant.

Sharon E. Jones, Asst. U.S. Atty., and Anton Valukas, U.S. Atty., Chicago, Ill., for plaintiff-appellee.

Before CUDAHY and EASTERBROOK, Circuit Judges, and FAIRCHILD, Senior Circuit Judge.

EASTERBROOK, Circuit Judge.

From 1966 through 1976 Kenneth L. Thomas filed tax returns. Then he stopped, claiming that he had no tax liability. He filed a form informing his employer that he had 23 withholding allowances, which dramatically reduced the tax his employer withheld. He ceased filing returns.

An indictment filed March 19, 1984, charged Thomas with wilfully failing to file tax returns for the tax years 1979, 1980, and 1981, in violation of 26 U.S.C. Sec. 7203. A superseding indictment filed October 1, 1984, retained these three charges and added four more: failing to file tax returns for 1982 and 1983, and wilfully filing false certificates asking his employer to cease all withholding on the ground that he is "exempt" from taxation, in violation of 26 U.S.C. Sec. 7205. The 1983 return was due after the filing of the first indictment. The trial began on January 15, 1985, and the jury convicted Thomas on all counts. The district court sentenced Thomas to a total of four years' imprisonment and fined him $22,000. As the time sequence suggests, the principal problem is one of compliance with the Speedy Trial Act, 18 U.S.C. Sec. 3161 et seq. Before considering this problem, we clear out the underbrush.

I

1. Thomas is a tax protester, and one of his arguments is that he did not need to file tax returns because the sixteenth amendment is not part of the constitution. It was not properly ratified, Thomas insists, repeating the argument of W. Benson & M. Beckman, The Law That Never Was (1985). Benson and Beckman review the documents concerning the states' ratification of the sixteenth amendment and conclude that only four states ratified the sixteenth amendment; they insist that the official promulgation of that amendment by Secretary of State Knox in 1913 is therefore void.

Benson and Beckman did not discover anything; they rediscovered something that Secretary Knox considered in 1913. Thirty-eight states ratified the sixteenth amendment, and thirty-seven sent formal instruments of ratification to the Secretary of State. (Minnesota notified the Secretary orally, and additional states ratified later; we consider only those Secretary Knox considered.) Only four instruments repeat the language of the sixteenth amendment exactly as Congress approved it. The others contain errors of diction, capitalization, punctuation, and spelling. The text Congress transmitted to the states was: "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration." Many of the instruments neglected to capitalize "States," and some capitalized other words instead. The instrument from Illinois had "remuneration" in place of "enumeration"; the instrument from Missouri substituted "levy" for "lay"; the instrument from Washington had "income" not "incomes"; others made similar blunders.

Thomas insists that because the states did not approve exactly the same text, the amendment did not go into effect. Secretary Knox considered this argument. The Solicitor of the Department of State drew up a list of the errors in the instruments and--taking into account both the triviality of the deviations and the treatment of earlier amendments that had experienced more substantial problems--advised the Secretary that he was authorized to declare the amendment adopted. The Secretary did so.

Although Thomas urges us to take the view of several state courts that only agreement on the literal text may make a legal document effective, the Supreme Court follows the "enrolled bill rule." If a legislative document is authenticated in regular form by the appropriate officials, the court treats that document as properly adopted. Field v. Clark, 143 U.S. 649, 12 S.Ct. 495, 36 L.Ed. 294 (1892). The principle is equally applicable to constitutional amendments. See Leser v. Garnett, 258 U.S. 130, 42 S.Ct. 217, 66 L.Ed. 505 (1922), which treats as conclusive the declaration of the Secretary of State that the nineteenth amendment had been adopted. In United States v. Foster, 789 F.2d 457, 462-63 & n. 6 (7th Cir. 1986), we relied on Leser, as well as on the inconsequential nature of the objections in the face of the 73-year acceptance of the effectiveness of the sixteenth amendment, to reject a claim similar to Thomas's. See also Coleman v. Miller, 307 U.S. 433, 59 S.Ct. 972, 83 L.Ed. 1385 (1939) (questions about ratification of amendments may be nonjusticiable). Secretary Knox declared that enough states had ratified the sixteenth amendment. The Secretary's decision is not transparently defective. We need not decide when, if ever, such a decision may be reviewed in order to know that Secretary Knox's decision is now beyond review.

2. Thomas testified before the grand jury that returned the superseding indictment. He presented his explanations for not paying taxes, including his belief that wages are not income and an assertion that "all individual income tax revenues are gone before one nickel is spent on the services which taxpayers expect from their Government." In response to questions asked by the prosecutor, Thomas conceded that he had received technical training paid for by the Navy, payment funded by taxes. Thomas maintains that the indictment should be dismissed because of these questions, which he says are improper; because the prosecutor failed to present the grand jury with exculpatory evidence (other than Thomas's own testimony); and because the prosecutor advised the grand jurors that Thomas's legal theories are incorrect.

The short answer is that "[a]n indictment returned by a legally constituted and unbiased grand jury, like an information drawn by the prosecutor, if valid on its face, is enough to call for a trial of the charge on the merits." Costello v. United States, 350 U.S. 359, 363, 76 S.Ct. 406, 409, 100 L.Ed. 397 (1956) (footnote omitted). See also United States v. Calandra, 414 U.S. 338, 344-45, 94 S.Ct. 613, 618-19, 38 L.Ed.2d 561 (1974). A somewhat longer answer is that even if the district court should have required the prosecutor before trial to obtain a fresh indictment, there is no reason to restart the process now that there has been a trial and conviction. The grand jury is designed principally to prevent the prosecutor from subjecting innocent people to the burden and trauma of trial. The real "victims" of any abuse of the grand jury process are a subset of those who are indicted and acquitted at trial. We know now that Thomas was not tried unnecessarily. The Supreme Court held in United States v. Mechanik, --- U.S. ----, 106 S.Ct. 938, 89 L.Ed.2d 50 (1986), that procedural errors before the grand jury do not require the reversal of a conviction by the petit jury. See also United States v. Burke, 781 F.2d 1234, 1245 (7th Cir.1985); United States v. Roth, 777 F.2d 1200, 1203-06 (7th Cir.1985); United States v. Murphy, 768 F.2d 1518, 1533-34 & n. 2 (7th Cir.1985), cert. denied, --- U.S. ----, 106 S.Ct. 1188, 89 L.Ed.2d 304 (1986). The principle disposes of Thomas's contention.

3. This assumes, however, that the petit jury properly convicted Thomas, which he denies. He asserts that the evidence was insufficient. Not so. Thomas filed returns for at least ten years, so he knew of the tax laws. The IRS sent Thomas a letter in 1978 informing him of the need to file (and the penalties for not filing). He was a field engineer at IBM, obviously capable of understanding enough to act wilfully. He failed to file a tax return for 1983, even though this was due after the return of the first indictment. It is not for want of information that Thomas did not file. A jury was entitled to find his neglect wilful, as that term is used in tax law. United States v. Pomponio, 429 U.S. 10, 97 S.Ct. 22, 50 L.Ed.2d 12 (1976); United States v. Copeland, 786 F.2d 768 (7th Cir.1985). The false certificates claiming exemption were filed knowingly; Thomas's evidentiary position here is that because IBM (on the advice of the IRS) ignored his certificates, he cannot be convicted. Section 7205 forbids the filing of "false" forms, however, and reliance on the forms is not an element of the offense. United States v. Lawson, 670 F.2d 923, 928 (10th Cir.1982).

Thomas relies on United States v. Snider, 502 F.2d 645 (4th Cir.1974), which reversed a conviction for filing a claim of three billion exemptions. The employer in Snider was a Friends School; the taxpayer, a Quaker, objected to the use of taxes for war; the claim of exemption, transparently symbolic, was accompanied by Snider's explanation that as an objector to war he would not pay tax voluntarily but invited the government to levy on his bank account. Toleration of this form of symbolic speech does not help Thomas, who did everything within his power to deceive IBM and rid himself of tax.

4. The district court gave the following instructions on the meaning of wilful conduct and the defense of good faith misunderstanding.

When the word "wilfully" is used in these instructions, it means the voluntary and intentional violation of a known legal duty. The failure to act is wilfully done if done voluntarily, purposefully, deliberately and intentionally, as distinguished from accidentally, inadvertently or negligently.

The requirement that an offense be committed "wilfully" is not met if a...