United States v. Goldstein, Crim. A. No. 2222.

• Decision Date: 10 September 1973
• Docket Number: Crim. A. No. 2222.
• Citation: 386 F. Supp. 833
• Parties: UNITED STATES of America, Plaintiff, v. Louis GOLDSTEIN and Selma Goldstein, Defendants.
• Court: U.S. District Court — District of Delaware

386 F. Supp. 833

UNITED STATES of America, Plaintiff, v. Louis GOLDSTEIN and Selma Goldstein, Defendants.

Crim. A. No. 2222.

United States District Court, D. Delaware.

September 10, 1973.

COPYRIGHT MATERIAL OMITTED

Bruce L. Thall, Asst. U. S. Atty., Wilmington, Del., for plaintiff.

Edmund N. Carpenter, 2nd, and David S. Swayze, Richards, Layton & Finger, Wilmington, Del., for defendants.

OPINION

STAPLETON, District Judge:

On March 3, 1972 a grand jury indicted Louis Goldstein on three counts. Counts I and III charged that Mr. Goldstein and his wife, Selma, filed income tax returns for the years 1964 and 1966, respectively, which they did not believe to be true and correct as to every material matter in violation of Section 7206(1) of Title 26 of the United States Code. Count II charged Mr. Goldstein with willfully failing to make a timely income tax return for the year 1965 in violation of Section 7203 of Title 26 of the United States Code. The subsequent proceedings have been lengthy and warmly contested. After an unsuccessful attack on the composition of the grand jury and other extensive pre-trial proceedings, the case went to trial on June 11, 1973. The trial lasted three weeks. The jury acquitted both defendants on Counts I and III. However, it found Mr. Goldstein guilty on Count II.

Count II of the indictment reads as follows:

That Louis Goldstein during the calendar year 1965, while a resident of New Castle County, State of Delaware, had received a gross income of $25,954.05, that by reason of such income he was required by law following the close of the calendar year 1965 and on or before April 15, 1966 to make an income tax return to the District Director of Internal Revenue for the Internal Revenue District of Delaware at Wilmington, Delaware in the Judicial District of Delaware, stating specifically the items of his gross income and any deductions and credits to which he was entitled and that, well knowing all of the foregoing facts, he did willfully and knowingly fail to timely make said income tax return to said District Director of Internal Revenue or to any proper officer of the United States, in violation of Section 7203, Title 26, United States Code.

The government's evidence showed that Mr. Goldstein, a member of the bar of this Court, filed an application for extension of time to file his 1965 income tax return on Form 2688 on April 15, 1966. The following appeared in print at the foot of the application:

The Internal Revenue Service will indicate below whether the extension is granted or denied and will return the original of this application to you

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NOTICE TO APPLICANT:

Your application is approved. This form must be attached to your individual income tax return when filed as evidence that the extension was granted. Interest accrues at the rate of 6 percent per year on any tax due for the year from the regular due date of the return until paid.

Your application cannot be considered since it was received in this office after the due date of the return. Your return should be filed without further delay. Please attach this form to the return to explain the delay in filing.

Careful consideration has been given to the reasons and other data given in your application but it has been determined that the extension is not warranted. Your return should be filed by the regular due date or within 10 days of the date of signature of this notice, if the end of such 10-day period is later than the regular due date. The 10-day period granted shall constitute a valid extension of time for filing returns for purposes of elections required to be made on timely filed returns. Please attach this form to the return to explain the delay in filing.

Other ____________ ___________________________ (Date) (District Director)

The government's evidence further indicated that this form was returned to Goldstein signed by the District Director and dated April 27, 1966. None of the boxes were checked. However, opposite the word "Other" appeared the following:

Other: Social Security Number Missing. REJECTED Items ________ and ________ incomplete. Resubmit within ten days if reconsideration desired.

The evidence showed that there had been no resubmission. The government introduced a stipulation stating that the defendant knew he had a duty to file the return on or before April 15, 1966, and other evidence establishing that Mr. Goldstein did not file his 1965 return until August 14, 1969, after an investigation of his tax returns had been commenced.

Mr. Goldstein testified that he did not timely file his 1965 return because the press of his business, personal and family problems, as well as the press of his accountant's business and personal problems did not permit the preparation of his return in sufficient time to file it when due.

Following the close of all the evidence, Goldstein moved for a judgment of acquittal. He urged that there had been a fatal variance between the indictment and the government's proof because the government's evidence established that Goldstein had no legal duty to file his 1965 return until May 7, 1966. The basis for this contention was an argument that the law provided an automatic ten day extension for any taxpayer who filed a timely application for an extension and was unsuccessful in obtaining one. In support of this position Goldstein referred the Court to Revenue Ruling 64-214 which reads as follows:

Section 6081. EXTENSION OF TIME FOR FILING RETURNS

Concern has been expressed by taxpayers as to the validity of elections made in income tax returns filed after the regular due date but within the ten-day period granted in the denial of applications for extensions of time to file.

To be effective, certain elections made at the option of the taxpayer are required to be made in a timely filed return (including any legally extended period in which to file). When an application for extension of time to file (Form 2688 for individuals and Form 2758 for fiduciaries, partnerships, and small business corporations) is denied, the return must be filed by the later of the regular due date or ten days from the date of the denial.

Accordingly, elections required to be made within the time prescribed by law (including any extension thereof) for filing the return are timely made when the return is filed within the ten-day period granted on Forms 2688 and 2758.

The government did not refer the Court to any other authority on this subject. It asserted, however, that if May 7th were the relevant date there still had been no fatal variance. The Court reserved its ruling on the defendant's motion for judgment of acquittal pursuant to Rule 29(b) of the Federal Rules of Criminal Procedure.

Mr. Goldstein asked the Court to charge the jury as follows:

There is unrebutted evidence in the record of this case that Louis Goldstein timely filed a Form 2688, Request for Extension, on April 15, 1966, with respect to the filing of his 1965 Federal income tax return. I instruct you as a matter of law that under the regulations in force in 1964, the timely filing of such a Request automatically extended the due date for the filing of the 1965 Federal income tax return of Louis Goldstein until May 7, 1966. Accordingly, in the course of your deliberations with regard to Count II, you should substitute the date of May 7, 1966 for the date of April 15, 1966 which appears in the recitation of that Count on the face of the Indictment, and you should weigh and consider the evidence before you pertaining to that Count in light of the amended date.¹

The instructions submitted by the government prior to the motion for acquittal were drawn on the theory that Mr. Goldstein's 1965 return had been due on April 15, 1966. The government did not object, however, to the Court's charging as the defense had requested. The Court charged the jury in part as follows:

With respect to the second element, the defendant has likewise not contested that his return for the year 1965 was not filed by the date required by law. I should explain to you that while the indictment states that the time required by law was April 15, 1966, it is conceded that the defendants filed an application for extension on April 15, 1966 which was denied on April 27, 1966. Under these circumstances the defendants were not required by law to file their return for 1965 until May 7, 1966. Accordingly, the relevant date with respect to this Count is May 7, 1966 and I shall hereafter use that date when referring to the filing time required by law.

* * * * * *

Mr. Goldstein has testified that he did not timely file because the press of his business, personal and family problems and the press of his accountant's business and personal problems did not permit preparation of his return in sufficient time to file on the date required by law. If for these or any other reasons he put his return and the preparation therefor out of his mind until it was not possible to meet his obligation to file on May 7, 1966 he cannot be found to have acted "willfully" within the meaning of the statute. Similarly, if he in fact believed that his accountant was making the necessary preparations to file a timely return and retained that belief until it was not possible to file a timely return, he cannot be found to have acted willfully. On the other hand, if you find beyond a reasonable doubt that Mr. Goldstein deliberately and intentionally persisted in a course of conduct calculated to disable him and his accountant from preparing a return for timely filing, that finding would support the conclusion that he acted with bad purpose, intending not to fulfill the obligation of timely filing which he has testified that he knew he had.

In attempting to ascertain Mr. Goldstein's state of mind from all the evidence you should keep in mind that the question involved here is his state of mind on and during the period of time leading up to May 7, 1966.

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