RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit I.O.P. 32.1(b) File Name: 17a0051p.06 

### UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

U NITED S TATES OF A MERICA , Plaintiff-Appellee ,

v

.

J OHN V. B ALLARD , Defendant-Appellant

. ┐ │ │ │ │ │ │ │ ┘ No. 16-6254

Appeal from the United St ates District Court for the Western District of Tennessee at Memphis. No. 2:16-cr-20078-1—Sheryl H. Lipman, District Judge. Decided and Filed: March 3, 2017 Before: DAUGHTREY, SUTTON, and DONALD, Circuit Judges.

_________________ COUNSEL

ON BRIEF: Mary C. Jermann-Robinson, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Memphis, Tennessee, for Appellant. Dam on Keith Griffin, UNITED STATES ATTORNEY’S OFFICE, Memphis, Tennessee, for Appellee.

_________________ OPINION

_________________ SUTTON, Circuit Judge. John Ballard li ed about his income, hid money in family members’ bank accounts, and filed then dismisse d several Chapter 13 bankruptcy petitions. Through these and other inartful dodges, he tr ied to avoid paying $848,798 in taxes arising from his income as a securities broker between 2000 a nd 2008. The Internal Revenue Service noticed. Even after the IRS started asking questions, Ballard told the agency that he did not have any income in 2009, when in truth he had made ov er $500,000 as a broker that year. The lies and 

### >No. 16-6254 United States v. Ballard Page 2

deceptions led to a criminal charge, then a guilt y plea, for violating 26 U.S.C. § 7212(a), which prohibits “corruptly . . . obstruc t[ing] or imped[ing] . . . admi nistration of [the tax laws].”
The Sentencing Guidelines say that district courts may sentence individuals for violations of that provision as a tax evasio n offense or as an obstruction of justice offense, whichever is “most appropriate.” U.S.S.G. App. A, Introduct ory cmt. Ballard urge d the court to use the obstruction of justice guideline. The district court disa greed. It rejected Ba llard’s argument that he never intended to evade paying his taxes but was merely delaying the payments (merely obstructing justice in other words) until he made real money—apparently more than $500,000 a year. Use of the tax evasion guideline led to a higher offense level for Ballard and an increase in the sentencing range from 8–14 months to 24–30 m onths, and eventually led to a sentence of 18 months. We affirm.
Starting in 1998, Ballard worked as a securities broker pa id on commission. Not every firm he worked for withheld his income taxes. In 2008, the IRS classified him as a “non-filer” because he filed returns without paying his tax bills. In response to IRS inquiries, Ballard filled out Form 433-A in January 2009, claiming no income and no ability to pay. In truth, he was employed by a securities brokerage in Texa s and ended up making over $500,000 that year. Rather than starting to pay off the more than $800,000 he owed to the gove rnment at that point, Ballard spent that year’s income on (1) a new $96,000 Range Rover, which he titled in his wife’s name and then resold six weeks later for cash, (2) $25,000 in furniture for a new house he started leasing for $6,000 per month, and (3) an $80,000, six-week trip to Palm Beach with his family. He also sometimes used his wife’s and his mo ther-in-law’s bank accounts to deposit earnings and pay expenses. Unamused, the IRS issued a notice of intent to levy his brokerage income in 2010. Ballard responded by quitting hi s job, apparently cutt ing his income to spite the IRS. He filed and later dismissed a Chapter 13 bankruptcy petition, halting the colle ction efforts of the IRS and his other creditors. Th is was not the only time he de ployed this tactic, having done the same thing five times before (and ten times since).
These evasive actions triggered a criminal i nvestigation. In 2012, IR S agents interviewed Ballard. He denied having any employment in 2009 and claimed that all of the money he made that year arose from work for prior years. But in fact the money was paym ent for work he did inNo. 16-6254 United States v. Ballard Page 3

January, April, May, June, August, and December of 2009. And he knew it. That lie, charged the local United States Attorney, constituted “corruptly . . . obstruct[ing] or imped[ing] . . . administration of [the tax laws]” in violation of 26 U.S.C. § 7212(a). He pleaded guilty to that single count.
Ballard raised one objection at sentencing: Rather than sentencing him under the tax evasion guideline, the district court should sentence him unde r the obstruction of justice guideline, which in his case (though not always) would lead to a lower base offense level. His offense, he claimed, was more akin to obstruction of justice than tax evasion because all that was actually charged was the 2012 lie to IRS investigators, and he had always intended, he claimed, to pay his taxes once he had the money. The di strict court applied th e tax evasion guideline nonetheless, which produced an advisory range of 24–30 months. The district court varied downward and sentenced Ballard to 18 months, and it required him to make full restitution of his unpaid taxes. Ballard appealed the applicati on of the tax evasion guideline, as his plea agreement permitted.
When a taxpayer violates § 7212(a)’s omnibus clause, as Ballard did, the Guidelines give the sentencing judge two options: § 2T1.1 (tax ev asion) or § 2J1.2 (obstruction of justice). U.S.S.G. App. A.
Section 2T1.1 covers “Tax Evasion; Willful Failure to File Return, Supply Information, or Pay Tax; Fraudulent or False Returns, Statemen ts, or Other Documents.” It explains that the base offense level should be calculated under the Guidelines’ tax table ac cording to the “[tax] loss that would have resulted had the offense been successfully completed,” and that the applicable “tax loss is not reduced by any paym ent of the tax subsequent to the commission of the offense.” U.S.S.G. § 2T1.1. Other offenses punishable under that section include evading taxes, 26 U.S.C. § 7201, willfully failing to file a tax return, keep records, or supply information as the tax code and regulations require, id. § 7203, making fraudulent st atements under penalty of perjury in a “return, stat ement, or other document,” id. § 7206(1), removing, depositing, or concealing “any [taxed or levied] goods or commoditie s . . . with intent to evade or defeat the assessment or collection of any tax,” id. § 7206(4), and perpetrating various forms of fraud onNo. 16-6254 United States v. Ballard Page 4

the Secretary, id. §§ 7206(3), 7207; see United States v. Neilson , 721 F.3d 1185, 1188 (10th Cir. 2013).
Section 2J1.2, in partial but not complete contrast, covers “O bstruction of Justice.” The section’s background note explains that “[n]um erous offenses of varying seriousness may constitute obstruction of justice,” includi ng obstructing a criminal investigation, intimidating jurors, stealing or altering court records, interc epting grand jury deliberations, altering evidence, threatening or injuring witnesses, and im peding the communications of judges or law enforcement. U.S.S.G. § 2J1.2; see 18 U.S.C. §§ 1001, 1503, 1505, 1506, 1508, 1509, 1510(a), 1512, 1513, 1516, 1519; U.S.S.G. App. A. This guideli ne thus “covers a broad range of conduct that generally involves interfering with th e administration of the justice system.” Neilson , 721 F.3d at 1188. Its instructions on “specific offe nse characteristics” tell courts what to do when the offense involves violence or threats, sex offenses, terro rism, or substantial fabrication or destruction of documents, but they do not me ntion tax offenses or lying to investigators specifically. U.S.S.G. § 2J1.2(b).
We give fresh review to a district court’s application of the Guidelines to a set of undisputed facts. United States v. Kimble , 305 F.3d 480, 485 (6th Cir. 2002). When “more than one guideline section is referenced for the particular stat ute” of conviction, the Guidelines tell us to “use the guideline most appropriate for th e offense conduct charged.” U.S.S.G. App. A, Introductory cmt. The only offense conduct we look at is what’s described in the indictment or stipulated in the plea agreement. See U.S.S.G. § 1B1.2, comment. (n.1); United States v. Almeida , 710 F.3d 437, 441 (1st Cir. 2013); Neilson , 721 F.3d at 1187. Our analysis of the relevant guidelines looks at function (what doe s each guideline section say it is for) and the neighborhood of covered offenses (what other cr imes does the guideline section apply to). See United States v. Hochschild , 442 F.3d 974, 977–78 (6th Cir. 2006); Neilson , 721 F.3d at 1188. The question, at bottom, is whet her the conduct described in th e count of conviction is “more akin to the conduct covere d” by one guideline se ction or the other. Neilson , 721 F.3d at 1187–
88

. The district court thought the most appropriate guideline fo r Ballard’s crime was § 2T1.1, and so do we. Consider the description of his offense conduct, as outlined in the indictment:No. 16-6254 United States v. Ballard Page 5

that he “falsely stat[ed] to an Internal Reve nue Service–Criminal Investigations Special Agent investigating [Ballard’s] outstanding debt for taxes due . . . that commission checks [Ballard] received from NFP Securities, Inc. in January 2009, April 2009, May 2009, June 2009, August 2009, and December 2009 were for work done at an ea rlier date, and that he was not working in 2009, whereas in truth and in fact [Ballard] then well knew that these commission checks were for work done” in the months the checks issued. R. 1 at 1.
This is just the sort of “Willful Failure to . . . Supply Information[] or Pay Tax” that § 2T1.1 is built for. He lied to an IRS agent. Why? To throw off the investigation of his “outstanding debt for taxes.” R. 1 at 1. Th at offense conduct could have been charged under other statutes punishable under § 2T1.1. See, e.g. , 26 U.S.C. §§ 7201 (tax evasion), 7203 (willfully failing to supply required info rmation). And the government would have incurred a tax loss of over $800,000 if that lie, in conjunction with his many other uncharged evasions, had succeeded. Even if Ballard is tell ing the truth about always intending to pay his tax bill once he hit it bi g—even indeed if he had already started repaying hi s outstanding taxes— § 2T1.1 has a provision explaining how to account fo r that circumstance: Change nothing about the tax loss calculation. A ll of that points to § 2T1.1 as the right guideline. Yes, § 2J1.2 covers a broad genus of obstruction offens es, including Ballard’s. But wh en another possible guideline explicitly includes the o ffense conduct, in addition to covering offenses that are close cousins of that conduct, that’s where the offense belongs. See Neilson , 721 F.3d at 1188–89.
Ballard objects. Because he always admitted he owed taxes, because he had always intended to pay them one day, and because the on ly charged conduct was one false statement, he claims that his offense is more like obstruction of an investigati on than tax evasion. Like the district court, we think these points are fair. But like the district court, we think they are unpersuasive in the end. Ballard’s promise a bout intending to eventually pay his taxes is irrelevant to our determination of which guideline is the right one; the only facts that matter are the ones in the criminal information. See U.S.S.G. § 1B1.2; United States v. Malki , 609 F.3d 503, 510 (2d Cir. 2010). Ballard sti pulated that he lied to IRS i nvestigators in order to avoid having to pay taxes at that tim e and that he failed to pay th e debt even though he earned a significant income in 2009, conduct quite similar to tax evasion. But even if we looked outsideNo. 16-6254 United States v. Ballard Page 6

the charges, we have nothing but Ballard’s word to indicate that he was going to pay one day. His promise is less than credible, we think, in c ontext—particularly in the context of his efforts to outmaneuver the IRS over a dozen years and th e sudden appearance of his noble intentions only after being caught.
Nor are we swayed by the f act that the charged conduct was just one lie. The egregiousness of the offense does not determine which of these two sections is appropriate (though it can, and here did, drive the district cour t to vary below the gui delines range). What matters in the choice between two guidelines secti ons is which section is more precisely tailored to reflect offense characteristics—like tax ev asion and tax loss—and which section covers a more closely related group of crimes. What Ba llard did, and what the government charged, was a lie to the tax collector about his earnings. The district cour t sentenced Ballard accordingly.
For these reasons, we affirm.