In the

United States Court of Appeals

For the Seventh Circuit

No. 14-2069

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

GEORGE W. CURTIS,

Defendant-Appellant.

Appeal from the United States District Court for the 

Eastern District of Wisconsin.

No. 1:13-cr-00113-WCG— William C. Griesbach, Chief Judge.

ARGUED DECEMBER 3, 2014 — DECIDED MARCH 31, 2015

Before MANION, ROVNER, and HAMILTON, Circuit Judges.

ROVNER, Circuit Judge. George W. Curtis was convicted of

three misdemeanor counts of failure to pay income taxes, in

violation of 26 U.S.C. § 7203. On appeal, he contends that the

district court abused its discretion in admitting evidence of

other wrongdoing and in instructing the jury on the meaning of

“willfulness.” We affirm.
2 No. 14-2069

I.

George W. Curtis has been a lawyer for more than fifty

years. He was running his successful law practice as a sole

proprietorship at the time of the events relevant to this appeal.

His tax difficulties began in 1996 and 1997, when he filed

returns reporting tax obligations of $218,983 and $248,236,

respectively, but made no payments toward those debts.

According to Curtis, around that time, a law partner withdrew

money from the practice and declared bankruptcy without ever

repaying the debt of nearly $600,000. Curtis also underwent an

expensive divorce during this time period. In 1999, when the

Internal Revenue Service (“IRS”) noticed that Curtis still had

not paid the taxes for 1996 and 1997 and had failed to file a

return for 1998, the agency assigned Revenue Officer Pamela

Pfeffer to address Curtis’s issues. As a result, Curtis entered into

an installment agreement with the IRS, making monthly

payments toward his outstanding tax debt. Not surprisingly,

the amount owed was increased by interest and penalties. The

IRS warned Curtis that he would be required to make estimated

tax payments going forward.

In 2003, Revenue Officer Pfeffer again worked with Curtis

in an attempt to bring his tax obligations current after he filed

a return for 2000 but failed to pay more than $90,000 in taxes

owed. He entered into a second installment agreement to pay

those taxes as well as an amount remaining from 1997. He was

again reminded of his obligation to make estimated payments

going forward. Notwithstanding that reminder, shortly after

agreeing to the second installment plan, he filed a return for

2003 reflecting an unpaid tax liability of $176,802. Pfeffer again

contacted him to discuss options for paying the taxes, including
No. 14-2069 3

reducing his personal expenses or selling assets. Nevertheless,

he filed a return for 2004 reflecting an unpaid tax liability of

$61,000. 

In February 2006, after Pfeffer retired from the IRS, the

agency assigned a second Revenue Officer, Hans Bichler, to

work with Curtis. Curtis failed to make estimated payments for

that year and had stopped making payments on the installment

plan. At the time, Curtis had outstanding tax obligations for

1997, 2000, 2003 and 2004. In 2006, Curtis made some progress

in paying off his pending tax debts. He paid $65,000 toward his

2005 liabilities, and another $42,000 to finally satisfy the 1997

debt. In 2007, Curtis sold some real estate and Revenue Officer

Bichler applied $167,000 from the sale to resolve Curtis’s 2000

tax debt.

But that was not the end of Curtis’s tax woes. He timely filed

returns for 2007, 2008 and 2009, years for which he owed

$151,906, $113,354, and $112,973, respectively, but he had paid

nothing toward these liabilities at the time of filing. By this time,

Revenue Officer Bichler had also retired from the IRS, and no

new agent was assigned to address Curtis’s liabilities. Instead,

the IRS referred thematter for criminal investigation, and Curtis

was charged with three misdemeanor counts of willfully failing

to pay the taxes he owed for 2007, 2008 and 2009, in violation of

26 U.S.C. § 7203.

Prior to trial, the government indicated its intention to offer

evidence under Rule 404(b), including evidence of Curtis’s

history of failing to pay his taxes, his past dealings with the IRS

and its efforts to collect back taxes, and his withdrawals of

money from his law practice to pay personal expenses. Curtis
4 No. 14-2069

did not object to any of this evidence, conceding that it was

relevant to his intent and knowledge during the charged years.

But he did object to the government’s proposed evidence that

he failed to pay payroll taxes for his law firms’s employees for

the third and fourth quarters of 2013. The government argued

that this evidence was relevant to Curtis’s intent and especially

relevant to rebut his anticipated defense that he acted in good

faith. Curtis objected that any violations of the tax laws subsequent to the charged years did not bear on his state of mind

during the time of the charged offenses. Instead, he maintained,

the government’s use of this evidence demonstrated nothing

other than propensity to commit the crime, a forbidden use of

such evidence. Curtis also argued that the evidence was not

relevant to his intent because payroll taxes are different in kind

from income taxes, payroll taxes are often paid by office

administrators, and the failure to pay those taxes post-dated the

offense conduct by several years. The evidence would also

cause undue prejudice, Curtis argued, because it would imply

that he was harming his employees as well as the government.

In short, he contended that the payroll tax evidence did not

meet the standards for admissionunder Rule 404(b). The district

court agreed that the evidence demonstrated propensity, and

tentatively granted Curtis’s motion to exclude the payroll tax

evidence from the trial. 

The court laterreversed course andallowed the government

to bring in this evidence after Curtis testified during the defense

case-in-chief that he was current on his tax obligations for 2010,

2011 and 2012. Curtis declined the court’s offer of a limiting

instruction on this Rule 404(b) evidence. As we will discuss

below, Curtis asked the court to instruct the jury that willful-
No. 14-2069 5

ness required proof of a bad motive. He also asked the court to

give an instruction on good faith. Although the court gave

Curtis’s proposed instruction on good faith, it declined to

modify the pattern instruction to include a requirement for bad

motive, instead using the pattern instruction on willfulness. The

jury convicted on all three counts, and Curtis appeals.

II.

On appeal, Curtis first contends that the court erred when it

allowed the government to admit evidence that he had not paid

payroll taxes for two quarters in 2013. He also maintains that

the court abused its discretion when it declined to give the

willfulness instruction he requested and instead gave the

pattern instruction. We review the district court's decision to

admit evidence under Rule 404(b) for abuse of discretion only.

United States v. Johnson, 584 F.3d 731, 736 (7th Cir. 2009). “We

review jury instructions de novo, but we will reverse a conviction

only if the instructions as a whole misled the jury as to the

applicable law.” United States v. Simon, 727 F.3d 682, 698

(7th Cir. 2013); United States v. Joshua, 648 F.3d 547, 554 (7th Cir.

2011). 

A.

Curtis faced three counts of willful failure to pay tax, in

violation of 26 U.S.C. § 7203. To sustain a conviction under

section 7203, the government was required to prove: (1) that

Curtis was required to pay taxes; (2) that Curtis failed to pay the

taxes; and (3) that Curtis acted willfully in failing to pay. United

States v. Hassebrock, 663 F.3d 906, 919 (7th Cir. 2011); United

States v. Beall, 970 F.2d 343, 347 (7th Cir. 1992). Curtis conceded

that he was required to pay taxes for the three charged years
6 No. 14-2069

and that he failed to pay them. At trial, he contested only the

element of willfulness. Failure to pay taxes under section 7203

is a specific intent crime. United States v. Birkenstock, 823 F.2d

1026, 1028 (7th Cir. 1987). In criminal tax cases, willfulness

“requires the Government to prove that the law imposed a duty

on the defendant, that the defendant knew of this duty, and that

he voluntarily and intentionally violated that duty.” Cheek v.

United States, 498 U.S. 192, 201 (1991). See also United States v.

Pomponio, 429 U.S. 10, 12 (1976) (the word “willfully” in the tax

statutes “generally connotes a voluntary, intentional violation

of a known legal duty”); Birkenstock, 823 F.2d at 1028 (the

willfulness element in section 7203 requires proof of an intentional violation of a known legal duty). 

As we noted above, the district court tentatively concluded

before trial that the government could not introduce evidence

of Curtis’s failure to pay payroll taxes for his law business in the

third and fourth quarters of 2013. Although the government

sought to introduce the evidence to demonstrate Curtis’s

willfulness in failing to pay his taxes, the court concluded that

the evidence appeared to prove that point only by way of a

propensity inference, in violation of Rule 404(b). The court also

opined that the potential for unfair prejudice outweighed the

probative value of the evidence. See Fed. R. Evid. 403.

But the court reversed course during the defense case-inchief after Curtis’s counsel posed several questions to Curtis

regarding a summary exhibit for tax years 1996 through 2012.

For each of those years, Exhibit 1000 listed, among otherthings,

the amount of taxes owed, penalties and interest accrued, taxes

paid toward the year’s liabilities, the year paid, and whether the
No. 14-2069 7

taxes for a given year were fully satisfied. For example, the first

row, representing 1996, showed $555,320.00 in taxable income;

$218,983.00 in taxes owed; $112,080.74 in penalties; $71,618.79

in interest; $402,682.53 as the total owed and the total paid; 2001

as the year the amount was paid in full; and $0 as the amount

paid during the year the taxes were due. The chart also showed

that tax years 2003, 2004, 2007, 2008 and 2009 were not paid in

full as of the time of trial, and in fact, Curtis had made no

payments toward the obligations for the charged years of 2007

through 2009. Finally, the chart indicated that Curtis paid his

taxes in full for tax years 2010, 2011 and 2012, completing each

year’s payments during the subsequent year. With this exhibit

before the jury, defense counsel engaged in the following

exchange with Curtis:

Q: And as Exhibit No. 1000 indicates—And do you

have that in front of you?

A: I do.

Q: Your tax obligations for the years 2010, 2011,

and 2012 are fully paid; is that correct?

A: That’s what the record shows.

Q: And—and do you still have significant obligations with respect to the charged years here and

some obligation with respect to the—a couple of

years earlier than that? Is that also true?

A: That’s what the record shows.

Q: And during the period of time for the years that

are reflected in Exhibit No. 1000 you agree with

the fact that you paid almost $2 million to the
8 No. 14-2069

IRS and your tax obligations for that same

period of time were something just short of

$1,900,000?

A: That’s right. I—I paid 1.917,807.

Q: Can you tell the court and jury whether or not

you believed that you would have the capacity

through one method or another of adjusting

your living style which may even mean liquidating assets, that you were going to liquidate

all of the tax liabilities that were reflected on

your tax returns for the years 2007, 2008, 2009,

and any other years for which there remained a

delinquency?

A: Absolutely. That was discussed with Mr.

Bichler. And I believe that the 167 grand that I

engineered in selling those two properties

would certainly take care of more than one of

those years and that David had already made

an agreement to buy an additional chunk of

land for a quarter million dollars.

Q: Was there ever a time during the period of your

dealing with the collection agents when you

believe[d] that your tardiness in making your

tax payment would bring you to court as a

defendant in a criminal case?

A: Absolutely not. I felt I had a very positive

understanding relationship with both Pam and

Hans, who were sometimes complimentary
No. 14-2069 9

about my efforts. I just candidly discussed how

things were going. I had listed our properties

with three different Realtors, reported to them

the snags, and they encouraged me.

R. 51, Tr. at 529-31.

Following this exchange, the government again moved to

admit evidence that Curtis had failed to pay payroll taxes for

his law firm’s employees in the last two quarters of 2013. The

government argued that Curtis’s proposed jury instructions

suggested that he would claim a defense of mistake, and that

the evidence that he had recently failed to pay taxes was

relevant to show that his earlier failure to pay was not due to a

mistake. The government also contended that Curtis’s testimony that he had fully paid his 2010, 2011 and 2012 taxes

implied to the jury that he was current with his recent tax

obligations when he in fact was not; he had failed to turn over

to the IRS the payroll taxes that he had withheld from employees in the last two quarters of 2013. Curtis countered that

income taxes and payroll taxes are different in kind, that the

charged conduct was too remote in time from the payroll tax

evidence, and that this evidence was in actuality propensity

evidence. The court ultimately ruled that Curtis opened the

doorto admission of the evidence by suggesting to the jury that

he had paid in full his recent tax obligations. The government

then questioned Curtis about his failure to pay the payroll taxes.

R. 51, Tr. at 568-72. Specifically, the government questioned

Curtis regarding how he spent money that he withdrew from

his law firm and how he decided which bills to pay. The focus

of the questioning was that Curtis chose repeatedly to pay other

obligations instead of paying taxes, including the payroll taxes.
10 No. 14-2069

The government made no further mention of Curtis’s failure to

pay the payroll taxes in two quarters of 2013. 

After the trial, we clarified the law governing Rule 404(b)

evidence in an en banc opinion in United States v. Gomez, 763 F.3d

845 (7th Cir. 2014):

In sum, to overcome an opponent's objection to the

introduction of other-act evidence, the proponent of

the evidence must first establish that the other act is

relevant to a specific purpose other than the person's

character or propensity to behave in a certain way.

See Fed.R.Evid. 401, 402, 404(b). Other-act evidence

need not be excluded whenever a propensity inference can be drawn. But its relevance to “another

purpose” must be established through a chain of

reasoning that does not rely on the forbidden inference that the person has a certain character and acted

in accordance with that character on the occasion

charged in the case. If the proponent can make this

initial showing, the district court must in every case

assess whether the probative value of the other-act

evidence is substantially outweighed by the risk of

unfair prejudice and may exclude the evidence under

Rule 403 if the risk is too great. The court’s Rule 403

balancing should take account of the extent to which

the non-propensity fact for which the evidence is

offered actually is at issue in the case.

Gomez, 763 F.3d at 860. 

The government offeredtwo reasons in support of admitting

the payroll tax evidence, neither of which relied on a forbidden
No. 14-2069 11

inference that Curtis had a certain character and acted in

accordance withthat character during the three charged counts.

First, the evidence was relevant to rebut the implication that

Curtis had fully paid his recent tax obligations. As his counsel

conceded at oral argument, his testimony that he had fully paid

his 2010, 2011 and 2012 taxes was not generally relevant to his

intent for the charged years. In essence, though, that testimony

implied that his recent compliance demonstrated good faith.

With Curtis having opened the door to the relevance of his taxpaying behavior after the charged conduct, the district court did

not abuse its discretion when it ruled that the government was

free to walk through that door. See United States v. Schmitt, 770

F.3d 524, 536 (7th Cir. 2014), cert. denied, — U.S. —; 2015 WL

998658 (Mar. 9, 2015) (a defendant “opens the door” to otherwise inadmissible evidence when he affirmatively and genuinely places at issue the specific matter that the evidence is

being offered to establish). And the government used that

evidence in a manner that did not raise the wrongful propensity

inference. Instead, the government simply noted that Curtis had

used his earnings from his law firm to pay other expenses and

had neglected to pay the payroll taxes. When Curtis implied

that he was up-to-date with his tax obligations in 2010, 2011 and

2012 (some of which he paid in 2013), he placed at issue his nonpayment of other taxes in that same time frame.

The payroll tax evidence was also relevant to Curtis’s

anticipated defense that he acted with a good faith misunderstanding when he failed to pay his taxes in the charged years.

Curtis contended in his defense that he mistakenly believed he

was in compliance because IRS agents allowed him repeatedly

to negotiate late payments through installment plans. See R. 51,
12 No. 14-2069

Tr. at 648 (where defense counsel argued in closing: “And it is

the defense in this case that George Curtis, by reason of his

experience with the Internal Revenue Service, had a good faith

understanding that his paying his taxes in an untimely fashion

was okay. It was not a crime.”). Had he known that he was

violating a criminal law, he implied, he would have paid his

taxes. That theory was refuted by evidence that he failed to pay

his payroll taxes even after he had been charged with a crime

for failing to pay income taxes, at a time when he could no

longer claim a good faith belief that late payments constituted

compliance with criminal laws. Although income taxes and

payroll taxes are different in kind, as a sole proprietor of his law

firm, Curtis was personally responsible for paying the payroll

taxes in the same way he was personally responsible for paying

his income taxes. And contrary to his claim that the incidents

were too far apart in time to be relevant, Curtis’s failure to pay

the payroll taxes was essentially contemporaneous with late

payments he made on his 2012 income taxes. Finally, this

evidence was highly relevant to the sole issue in the trial,

Curtis’s intent. In short, the court did not abuse its discretion by

allowing the evidence.

True, the district court could have explained its reasoning

more fully on the record. As we said in Gomez, the court must,

in every case, “assess whether the probative value of the

other-act evidence is substantially outweighed by the risk of

unfair prejudice and may exclude the evidence under Rule 403

if the risk is too great.” 763 F.3d at 860. Gomez was decided after

Curtis’s trial and so the district court did not have the benefit of

its reasoning. The court did not expressly engage in that

analysis on the record here, but any error was harmless. See
No. 14-2069 13

Fed. R. Crim. P. 52(a); Gomez, 763 F.3d at 863 (evidentiary errors

are subject to review for harmlessness). The test for harmless

error is whether, in the mind of the average juror, the prosecution's case would have been significantly less persuasive had the

improper evidence been excluded. Simon, 727 F.3dat 697; United

States v. Klebig, 600 F.3d 700, 722 (7th Cir. 2009). The government produced substantial evidence that Curtis knew he was

obligated to pay his taxes, had the money to do so, and chose to

use that money to pay for other things instead. The payroll tax

evidence was lost in a sea of far more damning evidence

demonstrating Curtis’s intent. For example, during the three

charged years, Curtis had adjusted gross income of more than

$1.4 million but paid none of it toward his corresponding tax

liabilities of approximately $378,000 for that same time period.

Instead, he spent more than $1.1 million on personal expenses

that included $142,916 in life insurance premiums; $43,266 for

a new Lincoln Navigator luxury SUV; $17,730 worth of wine;

$32,775 in donations and political contributions; $6,945 on

jewelry; and $10,891 on his pets. Presented with these expenditures and a list that also included gifts, firearms, restaurants,

department stores, and other purely discretionary spending,

any jury would conclude that Curtis had the money to pay his

taxes (at least in part) and simply chose not to. The government’s case would have been equally persuasive without the

payroll tax evidence. Any error was therefore harmless.

B.

We can dispense with Curtis’s remaining issue in short

order. He asked the court to modify the pattern jury instruction

for willfulness to include a requirement that the government

prove that he acted with a bad motive or purpose. He also
14 No. 14-2069

asked for an instruction regarding his defense of good faith. The

court gave the requested good faith instruction but declined to

modify the pattern instruction. And the court was correct to do

so. The Supreme Court has expressly rejected a formulation of

the willfulness instruction that requires anything more than

proof of a voluntary, intentional violation of a known legal

duty. Pomponio, 429 U.S. at 12. The Court in fact rejected a court

of appeals holding that the criminal tax statute required “a

finding of a bad purpose or evil motive.” 429 U.S. at 11. More

recently, in Cheek, the Supreme Court againstated a formulation

of the meaning of “willfulness” that required “the Government

to prove that the law imposed a duty on the defendant, that the

defendant knew of this duty, and that he voluntarily and

intentionally violated that duty.” Cheek, 498 U.S. at 201. It is not

necessary for the government to prove more than this and the

district court was correct to reject Curtis’sproposed instruction.

In any case, the court’s good faith instruction was sufficient to

address his asserted defense. As the instructions given were a

correct statement of the law, the court did not err. Simon, 727

F.3d at 698; Joshua, 648 F.3d at 554.

AFFIRMED.