five issues for the court's consideration here i believe that since the government conceded the fifth that i'm not going to say anything about that list of court wants to hear on there we'll start with the first issue which is whether or not count seventeen stated in offense it's our position that it did not state an offense because in that case they failed to plead a preparing proceeding which was required by the sixth circuit law that was in effect at the time which was and then of course that was also adopted by the u s supreme court mariella we believe that there was no nexus in time or causation or logic with administrative proceeding such as an investigation or audit that was set forth i mean so do you think what's required in the case law as magic words is a little bit of a pejorative but i mean what seems pretty close functionally to the same point well i think what it has to say is that there's a pending p and it's not over checking out to see whether or not you filed your ten forty over looking at your ten forty over looking to your core records or look at it to see whether you filed tax records were looking to see whether correct that's average administrative stuff that they do every day you can make false or misleading statements when they're investigating up to a quote proceeding i didn't say that you could make false and misleading statements what i'm saying is they have to relate to a pending proceeding but i thought proceeding was not a noun and that's really what how you have to look at this generally have to do something you can't just sit back and engage in omissions in the end raised up to a felony but once again that's not our main argument or main argument is they didn't plead what kassouf requires which is are pending proceeding it just doesn't say it doesn't if it if we define proceeding to mean investigation doesn't the idea that agents who we he well knew were attempting to ascertain income expenses in taxes for defendant i mean that souter if i were to have defined i r s investigation it would be agents inquiring about income expenses and taxes and that's the precise language that the indictment uses it does it does your position simply require them to add during an investigation at the end of up at that end of that sentence i believe it should your honor actually it should be some sort of official proceeding or some sort of estimation because those exact acts are what they do every year when they evaluate your ten forties when the day we all are ten forty zero or whatever were filed is that right you don't normally they don't they they check our expenses electronically they check our income they check our to see if our taxes are right they check and see if our schedule sees or write i know they check and see if my schedule c is right because i'm a sole proprietor most attorneys in private practice  was you file and they come back and say we have some questions about these items and that at that point would count as an investigation but it wouldn't count when you just file if you're going to make an analogy to something we all understand that that would seem to be the analogy and they come back and say i see you filed it could for you we have some questions about you know thanks so security taxes or whatever else it is that they're concerned about why isn't that an investigation and suppose that some official number something or i think it's it's a group that's running the mill stuff that's not an actual investigation into something let me give an example because i'm kind of agreeing with you that if you just file and they're processing i'm ok with that not being investigation but i understand how it's not an investigation when you file may come back and say we have some questions about what you did i've had it i've had taxes i mean your honor i can only explain it this way i've actually got a letter yeah language yeah that's what really goes on i mean in my subject of investigation of the investigations and big investigations if you respond to that inquiry and they say you're supposed to fill this farm and you doctor something at the got a a failure to simply file is not enough you have to corruptly endeavor to impede or obstruct you have to have the intent to and can peter instruct and then act on that intent so we think that this  indictment doesn't meet this count did not meet the standards of merit no and yes but just make sure i'm getting your last point your last point doesn't sound like a complaint about the indictment you seem to be complaining about sufficiency that's one complaint about that count of the and the other issue that i would like to raise that i think is important is the lesser included an instruction under he was charged under seven to zero two with the offense of and we asked for a seven two o three lesser instruction which is which is a misdemeanor because it doesn't create contain explain seven to zero to doesn't have a temper and express temper element even though all taxes as we all know have to be paid when the ira says they got to be paid seventy three said does have an expressed temperament which is times are times required by law if someone is guilty of seven two or three are they automatically guilty of seven to two i would say yes they could be so doesn't that preclude the lesser included offense and the reason why i say that it could be is because i think the distinction is very simple it's whether or not it's an act versus an omission i think seven to zero to governs x seven two of three governs omission is to act  the supreme court case explained to us that the scheme basically criminalizes the behavior whether it's a felony or misdemeanor in the distinction is x versus omissions so are you saying that they'll only omissions it in this case you're suggesting that the lesser included offense actually has an additional element an element of time and that's what i guess i'm stumbling over the idea of how a lesser included offense can have an a at an additional element  required by law and if you look at the indictment in this case and this is the key the indictment basically tracks a seven to zero three charge because it says no way that the indictment alleges  month after the last day the court which is exactly what seven two o three stalking about at the time so but you know that i used to wish him behind the intuition behind you point is correct seven two or three covers less yes but that doesn't make a lesser included that's a problem seven two or three does cover less it covers fewer crimes but that's the question isn't whether something covers less whether sless included so that's understand but i would point out that ni you mentioned i don't see it cited in any of the breeze but i brought up speeds there that again speed united states versus speed and you tell me what where you say that in your brief or in their honor i was looking at my materials that were put on at the trial level in the sentencing hearing and that's where species came from i'm sorry i apologize for that is that the ninth circuit case or says no no that's us what your military says i'm trying to find the earlier i'd like to if i could move on to whether you can use uncharged conduct is relevant conduct under the guise of the sensing guidelines in this case that's exactly what happened the court did use or include in the present investigation report and charge conduct as relevant conduct and we argue that that should not occur or that what that does is does damage to the presumption of innocence because you've never even been charged with it but here the us but here the courts using it against you to calculate a number on the table in section two to the guidelines that's our problem and we thought oh water over the dam and that is there sure is judge i remember you know thirty one years ago one of the first ayos video conference on the guidelines and how they talked about the fact that the new deal is it's a char it's a real conduct system not a charge based system and that's what underpins the entire guideline relevant content and i remember going to that and i will tell you that there are some good things about the guidelines or some bad things about the guidelines and i think this is one of the bad things about it because nobody i think has ever really articulated that using one charge conduct we're not talking about what the government brought up which is acquitted conduct even though that's sort of strange too because then you're worse yeah because you risk your restored to uncharged that maybe nobody's ever looked at this from this saying which is known as percent come of the fine it's quite often if you really want the government incentivized to charge everything if that's the only way they can use it at sentencing that seems like a no not only not a you know a p victory it seems worse than that it seems but there are awful they do that now that you i mean they basically changed it just charging conspiracy instead of substantive offenses in most drug offenses these days because they know that you know they could have one hundred sales or they could have one conspiracy incorporate a hundred sales into it they're still going to get the same sentence because of the way the guidelines work the same things are true with the financial aspect of the federal sentencing guidelines i see that my time's expired good morning may please the court no a litany on behalf of the united states i'd like to turn back to the discussion of count seventeen in this case and take it sort of in three parts the first is pleading versus proof the second is count seventeen as alleged the third is harmless error and in terms of is this a burden of pleading at the indictment stage or proof i have to confess the government's brief at the bottom of page eighteen erroneously lumps in with mariela from the supreme court as well as mine or from the six circuit as jury instruction cases or burden of proof cases it in that case count twenty six of that indictment which the court listed in a footnote but no one rather lengthy indictment the government pleaded itself right out of court all of the allegations and that caused provision were preparatory actions before a firing had occurred before the irises interests had been peaked at all things like failing to maintain records moving money around in a manner that years later could be more difficult to track so i think what the district court in kisumu said is take all of the reading requiring a pleading standard i think in light of marin l o maybe this court doesn't need to go down that road mariella as a generic matter is that the government agrees that elements of the offense have to be adjusted in the indictment  generically elements of the offense generally speaking should be in the indictment that's right but it's generally sufficient to track the statutory language and that's what this court said and kahless regarding the generic destruction of justice statute from the criminal code so listen it's enough track those elements obstruction of justice may require a pending judicial or grand jury proceeding but it's enough to allege that the nexus is an implicit requirement something different not a textual amid the must be alleged and i think that's the right reading of do you concede that it is whether you call it implicit requirement or implicit it seems to me that after marriage it's an element that has to be proved i think it's a burden of proof requirement mariella never used the word element anywhere in the opinion it was always referred to as a requirement and i can liken it to any number of other statutes where there is a statutory element let's say interstate commerce requirement that's been narrowed over time and that's all near and elevated in it's case they said we're going to interpret the words  administration of the internal revenue code more narrowly and work adding elements that are missing in the interstate commerce element have to be in the indictment correct but one manner of proving it one limiting manner is to say in a firearm case we have to prove that the farm process a lot we don't have to plead in the indictment at the that this shouldn't be a pleading requirement because the court's because someone is who cares if you're right about this first point partner who cares is your point in other words you don't have to have this in the indictment i think it's enough in the  cases to track the statutory language of the indictment our indictment went further i think we're ok and i'll get to that in a second but i think it's enough to say that someone corruptly endeavored to interfere with the due administration of the internal revenue code knowing that a trial you're going to have to show some nexus to a pending proceeding of which the defendant was aware but in our case and i think a lot of the discussion earlier today was about the bonus language in count seventeen right something beyond because souf and there i would break it down into four add on statements and count seventeen that go beyond the bare statutory language first willfully misleading agents of the i r s second by making false and misleading statements to those agents and by concealing information sought by those agents who he well  ascertain income expenses and taxes for himself in his various businesses that's exactly what his suv mera know and remind me something i have seven that i don't know if you've read this minor case but what did which side of the line did miner take on this point mine or was  jury instructions case or didn't have to deal with pleading or proof we're calling this bonus language account seventeen what do you think is the bare minimum that's necessary i think tracking the statutory language from section seventy two twelve a is enough similarly like this court held in colace tracking the statutory language of section fifteen zero three from the criminal code is enough but in any event i think the language in count seventeen in our case is sufficient these are not  you have to so usually an element has to be proven beyond a reasonable doubt at trial do you think that you have to prove beyond a reasonable doubt at trial the notion that there was an investigation auditors you know the language from there i know yeah i think that you know i think that's clear in light of there and doesn't that i think doesn't that suggest that that language is at least usually i think of elements or things that are in the indictment and then have to be proven beyond a reasonable doubt  at that at the at the trial itself and isn't that good evidence that it's and at least not just evidence like you to meet your burden of proof or different way evidence jury ways to show due administration but in fact something that has to be proven beyond a reasonable doubt in my mind as an element of i guess i think it's clear and i would agree it has to be proven a trial i don't think it's clear in light of sooth especially this court's decision and collets it has to be pleaded separately in the indictment beyond the statutory language with the statute just a maybe i'm just not following this is that because you would look at the language of statute and say a word like impede you can't given what that means if your theory is going to be impede the only way to do this  is so some nexus to investigation so your point is that is that how you responding to judge murphy that it's not a separate element it's just really one of the terms in the statute and the way you would show impede beyond a reasonable doubt would pick up next is that the point you're getting i don't think it's the appealing which i think it's the due administration of the internal revenue code language that's what mariela was focused exclusively on what does that mean and it narrowed what that means it didn't add anything to the statute it just said this is why how we interpret this phrase to avoid the ignus issues fair notice issues it's got to mean a little something more so that is my point and i'm simply preserving this issue i don't think our case or this count rises or falls on that i think count so you announce that while this mental energy and then you say thought i thought i made that clear at the outset but i can't seventeen even if this court were to take a very broad reading of and say there must be some sort of investigation heightened scrutiny  is missing some information please include it with that qualify as an investigation triggering the statute i think it does undermine or minor uses language such as anything that piques irises interest in an individual taxpayer beyond the normal course filing a process or a term i think that what at that point the i r s is singled out taxpayer pay for some sort of heightened scrutiny there still has to be obstructive conduct after that it still has to involve that particular inquiry but i do think that's enough and here the facts of this case went well beyond everything's an investigation other than just processing returns well i don't think courts have flushed this out completely but the supreme court mera no certainly suggests that they said we're not going to provide a longer list of what counts but what we're looking for something beyond the day to day processing of tax returns that's right when they send you a letter that's beyond the day to day process i think it could be yes if they're so acting you for heightened scrutiny something's amiss things these wrong we're trying to follow up at that point you could begin obstructing them you could lie in your response you could omit things they asked for you could any number of i mean they're just what we conduct after that but i do think that would qualify so if hypothetically we were to say you lose on the point  count seventeen and the adequacy of the indictment on count seventeen do you lose and constantine later on and if not why not no it's subject to harmless error standard and that's this court's decision and custom bullets so even if in fails to state a required offense element it's subject to harmless error if you and our brief lays out trial proof extensively mr rankin in this case knew he was under investigation because three different revenue officers s revenue officers and a special agent from the iris visited him in person served him with summonses i notified him of their intent to seek tax levies began levying him his accounts and with respect to special agents out and told him you are now under criminal investigation there's no doubt he was that there were different cases open and different heightened investigative efforts and that he knew about them in fact he bragged about them to his own employees in a pretty pitiful e mail that's for it's someone doing something in a vacuum maybe failing to maintain a record that the i r s would want later or maybe moving money in around that makes it more difficult to track later his conduct occurred after agents showed up in person told him what was going on told him he had failed to file told him they required certain documents told him he was going to be levied on serve him notice of appellate rights all the conduct follows that so under a harmless error standard and there's no doubt the grand jury would have indicted had that offense element if this court deems that required an indictment had it been alleged is the harmless error standard the standard for a chat room and i think it is yes you're on the language and corbin custom bill is a little wishy washy it almost puts the burden on the defendant i don't think that's right i think that's the government's burden to show harmlessness i'll turn briefly to the second issue raised which is the lesser included offense on the payroll failure to pay over payroll taxes mr rankin did cite a case from the ninth circuit in his reply brief to tar that's dealing with a different greater offense seventy two a one tax evasion not seventy two up to the count at issue here that he was charged with and convicted of so i don't think guitar lends anything to the discussion i think the judges were on to something when any tax offense including seventy two zero two that there has to be a deadline right if it's failure to account for your employees payroll taxes presumably there's a deadline to file if it's a failure to pay over presumably there's a deadline but the schmuck decision from s supreme court says we don't look in here proof we look at element by element the language of the statute so if the defendant is right if seventy two zero three contains an additional element he was not entitled to a lesser included offense if he's wrong there the same elements and he was not entitled to ask what or where or what are the two provisions it was hard for me to really distinguish what they were doing so i think they were different i guess what was seven two or three like what is it designed to accomplish as compared to seventy two or two so view these statutes as geared towards different comic i'm not saying you could only charge it this way but seventy two a two is a felony and it uses language like collect account for and pay over so that is geared towards someone in mr rankin shoes who is holding funds in trust on behalf of a third party right like an employer holding the employee's share of fica and social security in trust maybe an airline holding certain excise taxes in trust for someone else collecting them accounting for them and paying them over seventy two or three deals more with an individual right failure to file and failure to pay so the language is different that said courts have affirmed misdemeanor convictions for someone in mr rankin shoes who failed to file on behalf of his employees failed to pay over but that's how i  conceptualize and that's why one is a felony i think it's it's more severe when you fail to pay over someone else's money than simply rahner you fail to collect forward or account for it and that's why it is charged that way in this case and are there any cases that actually deal with whether seventy whether there's an extra element or not in this case in any event when pressed on this issue there was no differential proof at trial right that's the other requirement to be entitled to a lesser included instruction has to be some evidence in dispute that would allow a rational jury to consistently convict on the lesser offense and consistently acquit on the greater there was no differential proof in this case and that's the basis on which chief judge starr assad denied neither question instruction i think that's could be an easier way to get there for this court  dr mr lytton points out that he thinks that the statutory scheme is different well if you really look at the elements it's the same and what my position is is seven two zero two as a general statute seven two o three is a specific statute and it's a subset of seventy two zero two and let me tell you why he talks about how a defendant has a duty to collect under seven to zero two or the defendant or seven two or three has a duty to keep records supply information make a return and a duty to pay ok account for well that the records supplying information pay over the duty to pay so the defining maybe difference is that the duty to collect is different than the duty to pay over and that is the group that is the extra months actually in seven to zero two and it's the duty to collect and usually when you have a general statute a specific statute that covers the same conduct the government's allowed to elect a trial which way they want to go in this case mr rankin through his motion is miss through his proposed jury instructions he attempted to get this offense reduced to a misdemeanor and if you look at his proposed jury instructions i think there are fifty i would ask that you take a look at that because those proposed jury instructions suggest that it is a lesser element the other thing that mister lytton is pointed out is when he talks nello and whether or not again it's proposed whether or not that's an element versus a due administration issue and what constitutes due administration look at mr rankin's again proposed jury instructions that reported out right there as laid out that there is an actual proceeding going on that's what he asked for and that was it i'm sorry it wasn't fifty it was one of five page i d seventeen and one so with that point your honor so i think that mr rankin's case is submitted i know as many times that there's anything else that and thank you both for your argument the case to be submitted and with the clerk in turn court