United States v. Matosky, 17435.

• Decision Date: 18 May 1970
• Docket Number: No. 17435.,17435.
• Citation: 421 F.2d 410
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Edward E. MATOSKY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

421 F.2d 410 (1970)

UNITED STATES of America, Plaintiff-Appellee, v. Edward E. MATOSKY, Defendant-Appellant.

No. 17435.

United States Court of Appeals Seventh Circuit.

February 2, 1970.

Rehearing Denied February 26, 1970.

Certiorari Denied May 18, 1970.

Joseph A. Lamendella, David P. Schippers, Chicago, Ill., for defendant-appellant; Schippers, Betar, Lamendella & O'Brien, Chicago, Ill., of counsel.

Thomas A. Foran, U. S. Atty., Chicago, Ill., for plaintiff-appellee; John Peter Lulinski, Michael B. Nash, Richard A. Makarski, Samuel K. Skinner, Asst. U. S. Attys., of counsel.

Before CASTLE, Chief Judge, HASTINGS, Senior Circuit Judge, and KILEY, Circuit Judge.

Certiorari Denied May 18, 1970. See 90 S.Ct. 1691.

CASTLE, Chief Judge.

Defendant-appellant, Edward E. Matosky, prosecutes this appeal from the judgment of conviction and sentence entered following his trial before a jury on a three-count indictment charging failure to file timely income tax returns for the years 1962, 1963, and 1964, in violation of 26 U.S.C. § 7203.¹ The defendant predicates the existence of error requiring a reversal on the district court's rejection of instructions tendered by the defendant and the giving of the instructions it did.

There was evidence that the defendant had fled from New York to Chicago to avoid a state prosecution and that he did not file returns for 1962 and 1963, and did not file the return due for 1964 until April 17, 1967, in order to avoid detection of his whereabouts and apprehension. It was stipulated, however, that defendant was required to file income tax returns for the years involved, knew of this requirement, but did not file returns for 1962 and 1963, and did not file a return for 1964 until April 17, 1967.

It appears that the only issue for jury determination resulting from the trial was whether defendant's failure to file the returns for the relevant years was willful.

The defendant contends that the jury should have been instructed that the failure to file must have a tax associated motive to be "willful" within the meaning of § 7203, and that the evidence that defendant's failure to file was due to his fears that it would lead to his discovery and apprehension should be considered in determining whether the "willfulness" element of the offense had been established.

The instructions given by the trial court on the "willfulness" element of the offense advised the jury, inter alia, that "willful" as used in § 7203 means simply voluntary, purposeful, deliberate and intentional conduct as distinguished from accidental, inadvertent, or negligent conduct, and that the only bad purpose or bad motive necessary for the government to prove is a deliberate intention not to file returns which the defendant knew ought to have been filed.

The defendant's proffered instructions, which were refused, incorporated as an essential element of "willfulness" the existence of a tax associated motive — a failure to file "so that the government would not know the extent of liability" and "purpose to prevent the government from getting that which it lawfully requires" and would have advised the jury that in determining whether defendant's failure to file was "willful" it should consider the testimony that he did not file the returns because he feared they would disclose his identity and he would be prosecuted by the New York authorities and whether such reason was based on actual belief and held in good faith.

We perceive no error in the instruction as given by the trial court or in its rejection of the instructions tendered by the defendant.

Defendant's argument that the test of "willfulness" is the same under § 7203, as it is under § 7201,² has been rejected by the Supreme Court in Sansone v. United States, 380 U.S. 343, 351, 85 S. Ct. 1004, 13 L.Ed.2d 882 (1965). There the Court held that a mere willful omission is sufficient to commit the misdemeanor proscribed by § 7203, while a willful commission is required to commit the felony proscribed by § 7201.

A succinct discussion of the issue presented in the instant case is found in United States v. Schipani, 362 F.2d 825, 831 (2d Cir. 1966), cert. den. 385 U.S. 934, 87 S.Ct. 293, 17 L.Ed.2d 214, where the Court stated:

"`Willfully\' under § 7203 calls only for proof that the taxpayer failed to file his tax return intentionally and knowingly and not through accident or mistake or other innocent cause. `Willfully\' under § 7201 calls for proof that the taxpayer failed to file a tax return with the specific intention of evading or defeating payment of the tax. The context of the respective statutes makes this perfectly clear, and they have been so interpreted and construed by the Supreme Court. Sansone v. United States, 380 U.S. 343, 85 S.Ct. 1004, 13 L.Ed.2d 882 (1965); Spies v. United States, 317 U.S. 492, 63 S.Ct. 364, 87 L.Ed. 418 (1943)."

See also United States v. Fahey, 411 F.2d 1213, 1214 (9th Cir. 1969), where the Court stated:

"* * * Unlike some other circuits,³ we suggest that Congress intended to draw a distinction between an intent to defraud (which intent must be willful), and a willful intent to fail to file, which may or may not involve an intent to defraud. For example, one might honestly plan and intend to pay the tax revenues due his Government at some future time subsequent to the required filing date, and hence have no intent to defraud. If one intentionally fails to file a return (or keep records, or supply information) at the times required by law, with full knowledge he was required to do so (whether or not he can pay), would it not be an intentional act — not to defraud, but to file the required return? The Supreme Court has held it to be. Sansone v. United States, 380 U.S. 343, 85 S.Ct. 1004, 13 L.Ed.2d 882 (1965).

`This misdemeanor requires only wilfulness and the omission of the required act. * * *

* * * * * *

`The intent to report the

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