the morning is no morning your honour's may please the court i would like to focus mainly on the court's just just records refusal of the credibility charge with respect to the taxpayer witnesses in this case and this tax preparer fraud case the government relied on nine taxpayer witnesses all of whom had filed false returns with admittedly inflated expenses and deductions and who had underpaid taxes for years as a result none of whom had been charged civilly or criminally nor even required to pay back the taxes owed each denied any knowledge of the deductions on their own returns which they had signed and received copies of and they had signed statements saying that they had read them they all testified that mr jacobs the tax preparer made up these deductions on her own now despite the clear interest that each of these taxpayers had in testifying for the government against miss jacobs and despite the district court's own view that they were involved in tax fraud which he express several times on the record the court refused a routine jury instruction requested by the defense on how to evaluate such witnesses who have an obvious interest in testifying for the government miss cassidy i mean the district court gave  a general discussion or instruction regarding witness credibility and it looked to me that you had ample or that the defense had ample opportunity to argue just what you're saying right now the reasons that the witness had incentive to lie that they were involved also potentially in tax fraud and you know our general principle is that we look at the charges a hole in the arguments made a trial to determine whether your position was adequately presented and i don't see any basis for concluding that it wasn't adequately presented in fact the jury acquitted and one of the instances didn't yes the jury did acquit and one instance and that was in a case where the particular witness had lied so egregiously over such a long period of time including to the i r s agents when they audit her before they ever approached anyone about miss jacobs why wasn't the jury amply instructed and the defen e adequately presented why because the general interest in the outcome charged the jury gave was in the end a very general charge that did not flag at all the cooperating witnesses the taxpayer witnesses in this case which was the real issue in fact immediately following to argue that weren't you we were but that but this court is held in vonn and in prawle that the defense is entitled entitled to have its theory of the case submitted to the jury as long as there is some foundation in the evidence and this includes the theory that the government witnesses are lying now and nowhere did the courts charge flag for the jury that these particular witnesses should be scrutinized with great care because of their potential motive to testify for the government and circumstances or ensure that the defense has an adequate opportunity to explain well if they did if the if your refusal to instruct on the the defense theory of the case could be harmless because the defense argued the theory of the case there would be no right to that really no right and there have been cases reversing for the court's refusal to charge the theory of the case it's in the court the court's charge which explains all of the elements and all the ways in which the defendant can be can be convicted it doesn't point out what the defense theory is or at all flag in any way these particular witnesses in fact immediately following the general credibility instruction on interest of witnesses the court explained the potential interest of the law enforcement witnesses amazingly leaving out the the main witnesses whose credibility was an issue here which with the taxpayers now the reason for the for the refusal was not at all that the court thought that these witnesses were not interested and motivated to testify falsely in fact the court opined that they were they were probably guilty of tax fraud and and question the government on why they had never been charged a couple of times even after here their testimony now this was the defense theory that the taxpayers knowing we filed false returns and then blamed it all a mistake ups and that was what the court seemed to think also so the refusal to give this charge denied the defense its theory of the case charge and it was on the ground it made no sense and even the government doesn't really defend the court's reason the court's expressed his view that somehow using the phrase the defense argued would highlight the fact that the defendant did not testify now that that that's not a reason that's that's a legal error so the only issue is whether it was harmless and we contend it was not harmless because it affected the main credibility issue in the case it was the defense it was the the the defense theory the government contends that there was abundant evidence because there were nine witnesses who all said the same thing that they knew nothing and that mr jacobs just made it all up but the credibility of these witnesses all suffered from the same infirmity their implausible denials that they knowingly filed returns what would for what would follow from a correct charge from th a charge that as required by vaughn and prawle actually identifies the witnesses who are motivated to testify for the government and explains that they have a potential motivation and tells the jury that they must realize their testimony carefully to determine whether they gain more by lying or by telling the truth what would follow from that if the court if the if the jurors actually looked at this question and determined concluded that yes it looks to them like these text payers didn't knowingly submit false returns what would follow first that would make them guilty of tax fraud making it more likely that they would lie and blame mr jacobs to protect themselves and curry favor with the government who could have charged them as the judge pointed not was there evidence that they knew there was there was there was evidence from which it can be inferred that they know five of the nine taxpayers continue to submit returns with similar or even greater false to duction other preparer's that they moved on to that was maybe the best evidence after miss jacobs and is that evidence in your view exonerate miss jacobs i mean couldn't it be that they knew and she knew and they wanted to meet her business model it appears was generating returns and refunds for a flat fee for taxpayers and that's why they went to her but the fact that they may have known doesn't necessarily mean that she didn't know also well that that's true as far as it goes for sufficiency of the evidence your honor but it's a very different matter in terms of the jury's fact finding and deciding on the credibility of these witnesses because it's still  effect to the credibility and into really important ways number one their motivation to testify falsely and deny their actual false fraudulent behavior on their own and second if they lied about that which every one of them testified at trial that they didn't know anything about this and they they never looked at their returns despite saying that they had if they were lying they committed perjury at trial right in front of the jury on the stand and the jury should have subjected their testimony to extra scrutiny and that is that consequence of that supposing they say that defense would have shown they were lying when they said they didn't know it would have shown that they were lying about that and if they were lying about that maybe they were lying about the whole thing which was the thing which was that they didn't give that they did not give the miss jacob testified about it and agent i distrust testimony does not really provide the smoking gun that the government claims first of all it shows legist are unlike the majority of the taxpayer witnesses actually describing a business that he had and telling his jacobs about his business expenses it did show that miss jacobs estimated the total number and deductions where legislator could not give her a specific number but she also rejected many of his suggested deductions and requests it also showed legist are trying too hard to set her up and making misleading statements for example critically misleading statements ambiguous statements about when he moved from upstate which determined several of the numbers that were on her her all this was in for a turn it was all in from the jury argued to the jury it was argued to the jury no one was precluded from arguing the theory that these interested motive to protect himself or herself in general but there was no flagging whatsoever of these witnesses as having a particular motive to lie or you reserved a couple of minutes for rebuttal you could use it now if you would like you know i will say that you know thank you thank you your honor may please the court greg knapp of the united states i can agree that when his credibility was an important issue at this trial who is the source of the faults of formation who was lying but equally important is that in order to present her side of that argument the defendant miss jacobs did not need a special caution instruction on so called taxpayer witnesses for that and there are several reasons for that first there's no support in this court's case law to treat these types of witnesses these client witnesses the same as court treats other type of witnesses for whom a special credibility instruction is required when this is like accomplices coconspirators those without cooperation agreements in contrast to those special credibility instructions  defendant proposed language that directed the jury to her own arguments about why these government witnesses were line as a basis for treating those same witnesses with great care and special caution that is the language of a special credibility instruction yes i mean what i can do is tell about this court's cases that discuss those type of instructions and they all involve circumstances in which there's actual evidence of a cooperation agreement evidence of prior perjury evidence of  testimony of accomplices saying they were involved in the participation of the offense we have none of that here because he thinks that this was just a generic credibility instruction i can imagine it having some greater impact on the jury were the court to  lend its own force to the possibility of an argument that these individuals had their personal incentives to not be truthful reliance and about how assiduous they were in presenting information that may be but our argument is that under the circumstances the defend it was not entitled to that extra judicial force because she is merely arguing that these witnesses are lying that's the ultimate question for the jury there's no extrinsic factor of when his credibility such as a cooperation is going up insofar as the government has foregone prosecution of the individuals on false return submission that  this might be an appropriate counterbalance for that kind of understand and that was her theory of the defense and she was fully into how to present that but that is not a circumstance that this court has recognized where the any court has recognized for giving a special credibility is structured again with the language of great care in particular caution because whether or not these witnesses were line whether or not they were motivated as the defense argued to testify against mr jacobs because they thought rightly or wrongly that that would delay their own prosecution that was the ultimate argument that was presented that's yes what was there any record evidence about whether these individuals were going to be or have been prosecuted now know that the government and the district court expressed its view that it felt that these witnesses were all testifying truthfully and that they reasonably relied  most of the taxpayer witnesses never had to pay the back the back taxes that is true and that was that because generally when during a criminal tax investigation the government identify certain witnesses my understanding is that as a matter of iris practice a freeze is put on those witnesses accounts which prevents assessment of civil tax liability for the duration of the investigation well  statue of limitations would've been blown well how about after the trial but before the statute ran why well i don't i don't i think the statute would have run by then and so and so and in any case that the fact that these witnesses didn't that i'm aware of so i would have thought the government first place i assume the government is very anxious to collect all taxes due my right about that ok that's so these taxes were due right crawl that's true but it doesn't necessarily follow from there that through the fences in titles and to a special credibility charge to treat the witnesses with great care particular caution especially here where that where the issue is whose line but who is the source of the false information there was no cooperation agreement of course the defense can argue that these witnesses had some unspoken understanding some unspoken incentives that if they just went along and and point a finger at the defendant that would work to their benefit that's an argument but that in itself is not a basis for saying you should treat these witnesses with great care in particular caution because that was a jury question that was the ultimate question who is a source of this false information and there wasn't anything to be served by giving the request but it does seem as we've just been reviewing that that's not entirely so i mean that seems likely that the government would not come after them for the tax that's likely yes but that's not part of any agreement that's not part of any exchange or transaction contrary to th the defense and for that reason we argue there's no basis for a special caution charge and as support for that it's an out of circuit case but we say seven circuit case jordan in our briefs where the defense had presented same argument as presented here and i said well look these witnesses weren't prosecuted or actually i should correct myself it was just one witness in the jordan case but this one this wasn't prosecuted that cast doubt as part of his credibility and therefore we should get a special jury charge a special caution charge and some circuit said no no there's no cooperation agreement of course you can argue that and it was argued it was fairly presented as has been what was the subject of cross examination even prior to the argument i'm sorry what was the it was a subject of cross examination of o witness even prior to the argument absolutely that was doing his  job and not just one cross examination but nine cross examination it's on each witness the defense brought up testimony that these witnesses knew about the criminal tax investigation they knew that the government thought that their returns were fraudulent and nevertheless they were not prosecuted and with some exceptions they were not required to pay back taxes so it was fairly presented and some not as much concerned about no prosecution that's pure prosecutorial discretion but not going after money that the government is it i should clarify if there's a showing of fraud by the taxpayer that would be a basis for extending the limitations period but the government's theory here and apparently one accepted by the joy after people in the absence for it if somebody submits a return it's a perfectly innocent i'm just wondering why what you can do it all these other like you all i can say is a part of administrative practice from the i r s of not moving when there's a criminal investigation identifies witnesses that's just that's just practice administrative practice while it's true as the reason is really one of the most awful reasons that litigants it's like say it's it's done that way and so all i'm asking you is do you think the u s attorney's office of the southern just not known for its in that it might look into this to see if questions for me i assume your argument is that even if we thought it should have been given it's harmless error and not correct and that not for many reasons not the least of which was the overwhelming evidence of guilt including the undercover agent operation because they were government witnesses that has to be why and that has to be that was the argument that was made before the jury and some of them even testified that no they were they they were hoping that they would never have to pay back that was what we believe in this is this was cross examination in each case it was it was some also admitted that they feared the i r s when the i r s showed up at their door and the i r s had multiple meetings with these tax payers and they were scared they knew where their interests l mr granny and feared that he was he would be a rest so he cooperated he said that he testified to that right on the record and mr rose was worried when the i r s came of course they were worried they had filed false returns the i r s told them they were false and asked them to explain they all blame mr jacobs now crawl in von require in a circumstance like this more than a generic instruction particularly a case like this i think where the government argued that even if the as a fallback rebuttal they argued that even because it was really so obvious that these tax payers were not really being straightforward the government argued that even if they did file knowingly file false returns the defendant was guilty now in this context the jury should have been instructed by the judge that they were they should if they found the taxpayers knowingly submitted false returns that they should subject these particular witnesses to extra scrutiny they should consider that fact in considering whether they should believe their testimony and they should they should carefully assess whether these witnesses were more motivated to lie or motivated to tell the truth von require the identification of the witnesses specifically those the government argues that that these were failure to charge a defense theory defenses but they don't say anything about cooperation of witnesses no there these two cases are both about cooperating witnesses and improve all it's not just court it's also what the law does not just apply to witnesses with a formal agreement the prong struction that was given which the court held was not even enough was directed toward any witness who who was a cooperator or was hoping for immunity or other personal advantage that's what we have here thank you thank you thank you both for your arguments