UNPUBLISHED

UNITED STATES COURT OF APPEALS 

FOR THE FOURTH CIRCUIT 

No. 08-4493 

UNITED STATES OF AMERICA, 

 Plaintiff - Appellant, 

 v. 

MARTIN LOUIS BAUCOM, 

 Defendant - Appellee.

Appeal from the United States District Court for the Western 

District of North Carolina, at Charlotte. Graham C. Mullen, 

Senior District Judge. (3:02-cr-00147-GCM-1) 

No. 08-4512 

UNITED STATES OF AMERICA, 

 Plaintiff - Appellant, 

 v. 

PATRICK GRANT DAVIS, 

 Defendant - Appellee. 

Appeal from the United States District Court for the Western 

District of North Carolina, at Statesville. Graham C. Mullen, 

Senior District Judge. (5:02-cr-00026-GCM-CH-1) 
Argued: September 23, 2009 Decided: January 13, 2010 

Before TRAXLER, Chief Judge, WILKINSON, Circuit Judge, and 

Margaret B. SEYMOUR, United States District Judge for the 

District of South Carolina, sitting by designation. 

Vacated and remanded by unpublished per curiam opinion. 

ARGUED: David Alan Brown, Sr., OFFICE OF THE UNITED STATES 

ATTORNEY, Charlotte, North Carolina, for Appellant. Noell Peter 

Tin, TIN, FULTON, WALKER & OWEN, PLLC, Charlotte, North 

Carolina; Ross Hall Richardson, FEDERAL DEFENDERS OF WESTERN 

NORTH CAROLINA, INC., Charlotte, North Carolina, for Appellees. 

ON BRIEF: Gretchen C. F. Shappert, United States Attorney, 

Charlotte, North Carolina, for Appellant. Claire J. Rauscher, 

Executive Director, FEDERAL DEFENDERS OF WESTERN NORTH CAROLINA, 

INC., Charlotte, North Carolina, for Appellee Martin Louis 

Baucom. 

Unpublished opinions are not binding precedent in this circuit. 

2 
PER CURIAM: 

 The government appeals the sentences imposed on Martin 

Baucom and Patrick Davis after remand by the Supreme Court. We 

vacate the sentences and remand for new sentencing proceedings 

before a different district court judge.1

I. 

 Appellants operated Baucom-Davis and Associates, a land 

surveying and computer consulting business. From 1990 until 

2002, Baucom and Davis failed to file personal income tax 

returns and failed to file income and employment tax returns for 

the business. 

 In May 2002, Baucom and Davis were separately charged with 

three counts of failure to file income tax returns. Through a 

superseding indictment, the government consolidated the cases 

and added a fourth count, charging both with conspiracy to 

defraud the United States. In August 2003, the case finally 

proceeded to trial, and Baucom and Davis were convicted on all 

counts. 

 1

 During the sentencing proceedings that took place after 

remand, the district court declared its intention to recuse 

itself from any further proceedings involving these defendants. 

See J.A. 187. We hereby direct that the case on remand be 

assigned to a different district court judge. 

3 
 According to the information set out in the presentence 

reports (“PSRs”), Baucom owed $347,134.40 in unpaid taxes, while 

Davis owed $365,618.31. These amounts included unpaid federal 

and state income taxes from 1993 to 1997. Although the PSRs 

noted that the defendants had not paid taxes for the years 1998 

through 2002, the amounts for those years could not then be 

determined and thus were not included in the loss amount 

calculated by the PSR. The PSRs recommended two-level 

acceptance-of-responsibility adjustments for each defendant, 

bringing the total offense level to 16 and yielding a 21-27 

month Guidelines sentencing range for Baucom and for Davis. 

 A sentencing hearing was held for Baucom in November 2004. 

The district court refused to include unpaid state taxes as 

relevant conduct, believing it was unfair to consider state-law 

violations when sentencing for a federal crime. The court 

announced a sentence of 21 months, but delayed entering judgment 

until after Davis was sentenced. After the Supreme Court 

announced its decision in United States v. Booker, 543 U.S. 220 

(2005), the district court set aside Baucom’s sentence and 

indicated that it would hold a new sentencing hearing. 

 The district court finally convened sentencing hearings for 

Baucom and Davis in February 2006. The district court again 

refused to consider state tax losses as relevant conduct, and 

the court declined to permit the government to present evidence 

4 
of the tax losses for the years 1998-2002, evidence that had 

become available since the PSRs were prepared in 2004. Over the 

government’s objections, the district court granted two-level 

acceptance-of-responsibility adjustments for each defendant. 

The district court’s calculations yielded offense levels of 16 

and advisory sentencing ranges of 21-27 months for each 

defendant. 

 As to Baucom, the court described him as a “scofflaw” who 

had ignored the tax laws for 12 years, J.A. 146, and failed to 

take any steps to correct his tax problems. The court 

nonetheless varied downward from the advisory Guidelines range 

and sentenced Baucom to 15 months’ imprisonment. As to Davis, 

the court likewise concluded that a downward variance was 

appropriate. The district court noted Davis’s “extraordinary 

charitable works,” J.A. 129, his efforts to become current on 

his tax liability, and the hardship that the employees of 

Davis’s business would suffer if he were sent to prison. The 

district court therefore sentenced Davis to four years’ 

probation, conditioned on the service of 12 months’ house 

arrest. 

 The government appealed the sentences to this court. We 

vacated and remanded for resentencing, concluding, among other 

things, that the district court erred by granting acceptance-ofresponsibility adjustments and by refusing to consider unpaid 

5 
state taxes as relevant conduct. See United States v. Baucom, 

486 F.3d 822, 829-30 (4th Cir. 2007) (“Baucom I”). 

 Davis filed a petition for a writ of certiorari. After the 

Supreme Court issued its opinion in Gall v. United States, 552 

U.S. 38 (2007), the Court granted the petition, vacated our 

decision, and remanded to this court for reconsideration in 

light of Gall. See Davis v. United States, 128 S. Ct. 870 

(2008) (mem). We issued an order remanding the case to the 

district court for resentencing in accordance with principles 

set forth out in Gall. 

 Prior to the second sentencing hearing for the defendants, 

the probation agent filed supplements to the initial PSRs. The 

supplemental PSRs eliminated the acceptance-of-responsibility 

reductions that we had previously found improper and included 

the federal and state tax losses for 1998-2002, information that 

had been unavailable when the PSRs were first prepared. The 

inclusion of the information from those years raised the tax 

loss to more than $580,000 for Baucom and for Davis, which 

raised the offense level for each defendant from 18 to 20 and 

yielded 33-41 month advisory sentencing ranges. 

 At the re-sentencing hearing for Baucom, the district court 

initially indicated that it agreed with the calculations of the 

PSR supplement. The district court, however, reversed course, 

refusing to permit the government to present evidence of the 

6 
additional tax losses that had not been included in the original 

PSRs and refusing to increase the offense level based on those 

losses. The court therefore determined Baucom’s total offense 

level to be 18. 

 Counsel for Baucom sought a downward variance, arguing that 

the five years between Baucom’s conviction and sentencing had 

taken a toll on his family. Counsel noted that while Baucom had 

not yet paid any of his federal taxes, he had filed tax returns 

for the years 2003 through 2005 and was prepared to file his 

2006 return. In response, the government noted that Baucom had 

not filed federal tax returns for 12 years, had only managed to 

file three federal tax returns since his conviction, but still 

had failed to file a single state tax return. The government 

pointed out that Baucom had not paid any of his federal or state 

tax liabilities, and had even declared himself to be a 

subcontractor rather than an employee so as to avoid any tax 

withholding. The government argued that an upward variance was 

appropriate and sought a prison term of 84 months. 

 The district court appeared to agree with the government, 

stating that, “[r]egrettably, Mr. Baucom presents a continued 

scofflaw. I think the government’s argument is largely 

correct.” J.A. 164. The court noted that “[h]e has not paid 

any of his state taxes. . . . He continues to reject the 

seriousness of the offense. He continues not to abide by the 

7 
law. . . . [C]ertainly if he’s not going to pay his taxes, all 

we can do basically is punish him for that.” J.A. 165. Despite 

the tenor of the court’s comments, the district court still 

concluded that a downward variance was appropriate, and the 

court sentenced Baucom to the 15-month term of imprisonment 

originally imposed. 

 Davis was resentenced later that day. Counsel for Davis 

had not yet seen the supplemental PSR, and the district court 

offered to re-schedule the hearing. As counsel for Davis 

reviewed the supplemental PSR, the government noted that the 

issues were the same as in Baucom’s resentencing and that it 

suspected the district court would resolve the issues in the 

same manner. The district court then explained the differences 

in the supplemental PSR: “You know you lose the two points for 

acceptance of responsibility and that the Presentence Report 

calls for an 18 [total offense level] and one [criminal history 

category].” J.A. 171. Counsel for Davis then stated, “I guess 

it’s two levels up from what it was previously,” to which the 

court responded, “That’s correct. The Court of Appeals tells me 

. . . I should not have accepted the recommendation in the 

Presentence Report, and that therefore it was 18 and one.” J.A. 

171. 

 Counsel for Davis agreed to proceed with the sentencing and 

urged the district court to again impose a probationary 

8 
sentence. Counsel explained that Davis had filed all his tax 

returns since the conviction and was actively working with the 

IRS to negotiate and pay his tax liabilities. Counsel noted 

that Davis was still running his company and was involved in the 

same charitable activities as he had been at the time of the 

original sentencing. For its part, the government argued that a 

term of incarceration was required. The government noted that 

while Davis was current with his tax filings, Davis had not yet 

repaid any of the back taxes. The government contended that 

Davis had structured his personal finances and business 

operation so as to put most of his assets beyond the reach of 

the government, thus making himself effectively judgment-proof, 

and that Davis facilitated Baucom’s ongoing tax avoidance by 

agreeing to treat Baucom as an independent contractor rather 

than an employee. 

 The district court concluded that a probationary sentence 

was warranted for Davis. The court explained that 

the situation with Mr. Davis is completely different 

from Mr. Baucom. Mr. Davis has stepped up. He has 

filed his taxes. . . . 

 He has no criminal record. The circuit took 

umbrage with me talking about his charitable work, but 

I think I can consider that. I don’t give it 

particularly great weight in this. I think the 

support he provides his family, his gainful 

employment, I think the effect on large numbers of 

employees who would be out of work tells me that I did 

the right thing the first time for the right reasons. 

. . . 

9 
J.A. 185. The district court therefore sentenced Davis to the 

same sentence previously imposed -- four years’ probation, 

conditioned on the service of 12 months’ house arrest. 

 The government appeals and again challenges the sentences 

imposed on Baucom and Davis. 

II. 

 Although the Sentencing Guidelines are now advisory, see

United States v. Booker, 543 U.S. 220, 245 (2005), “district 

courts in the post-Booker landscape must follow specific steps 

to arrive at an appropriate sentence.” United States v. Abu 

Ali, 528 F.3d 210, 260 (2008). The court must first calculate 

the appropriate advisory Guidelines range, making factual 

findings as necessary. After giving the parties the opportunity 

to argue for the sentence they believe to be warranted, the 

court must consider the advisory sentencing range in conjunction 

with the factors set out in 18 U.S.C.A. § 3553(a) (West 2000 & 

Supp. 2009) and impose the sentence it concludes is appropriate 

under all the circumstances. See Gall, 552 U.S. at 49-50; Abu 

Ali, 528 F.3d at 260. When imposing sentence, the district 

court “must make an individualized assessment based on the facts 

presented,” Gall, 552 U.S. at 50, and the court “must adequately 

explain the chosen sentence to allow for meaningful appellate 

review,” id.

10 
 Our review of the district court’s sentencing decision is 

limited to determining, under a deferential abuse-of-discretion 

standard, whether the sentence imposed is reasonable. See id.

at 40-41. This reasonableness review requires us to determine 

whether the court committed any procedural errors, “such as 

failing to calculate (or improperly calculating) the Guidelines 

range, treating the Guidelines as mandatory, failing to consider 

the § 3553(a) factors, selecting a sentence based on clearly 

erroneous facts, or failing to adequately explain the chosen 

sentence-including an explanation for any deviation from the 

Guidelines range.” Id. at 51. If there are no procedural 

errors, we then consider the substantive reasonableness of the 

sentence. “Substantive reasonableness review entails taking into 

account the totality of the circumstances, including the extent 

of any variance from the Guidelines range.” United States v. 

Pauley, 511 F.3d 468, 473 (4th Cir. 2007) (internal quotation 

marks omitted). 

 On appeal, the government contends that the sentences 

imposed by the district court are procedurally and substantively 

unreasonable. The government claims that the district court 

miscalculated the Guidelines range by refusing to consider the 

additional tax losses, that the district court failed to 

properly consider the § 3553(a) factors, and that the district 

11 
court failed to adequately explain its reasons for the sentences 

imposed. 

A. 

 We begin with the government’s claim that the district 

court improperly calculated the advisory sentencing range under 

the guidelines. The government contends that the state and 

federal tax losses for the years 1998-2002 were part of the 

relevant conduct and therefore should have been considered by 

the district court when determining the defendants’ offense 

level. We agree. 

 The base offense level for tax evasion charges is 

determined by the tax loss, see U.S.S.G. § 2T1.1(a) (1998), and 

the tax loss includes the losses flowing from the offense of 

conviction and all relevant conduct, see U.S.S.G. § 1B1.3(a). 

The superseding indictment charged Baucom and Davis with 

conspiring to violate the tax laws beginning in 1993 and 

continuing through the date of the indictment – December 2002. 

The tax losses, both state and federal, for the years 1998 – 

2002 are thus part of the relevant conduct for the offense of 

conviction. See U.S.S.G. § 2T1.1, cmt., n.2 (“In determining 

the total tax loss attributable to the offense . . ., all 

conduct violating the tax laws should be considered as part of 

the same course of conduct or common scheme or plan unless the 

evidence demonstrates that the conduct is clearly unrelated. 

12 
The following examples are illustrative of conduct that is part 

of the same course of conduct or common scheme or plan: (a) 

there is a continuing pattern of violations of the tax laws by 

the defendant. . . .”). The defendants do not challenge the 

substance of this conclusion -- that is, they do not argue that 

the 1998-2002 tax losses do not fall within the Guidelines’ 

definition of relevant conduct. Instead, Baucom and Davis 

advance separate arguments as to the government’s claim that the 

district court erred in calculating the offense levels. 

 Baucom contends that the loss amounts for 1998-2002 cannot 

be included now because the government did not present evidence 

establishing those losses at the sentencing proceedings in 2006. 

See United State v. Parker, 30 F.3d 542, 553-54 (4th Cir. 1993) 

(“[T]he prosecution has already been given one full and fair 

opportunity to offer whatever proof about Tonsler Park it could 

assemble. Having failed to seize that opportunity, the 

Government at resentencing should not be allowed to introduce 

additional evidence to prove that Tonsler Park contained a 

playground [and thus that a sentencing enhancement would apply]. 

One bite at the apple is enough.”). 

 In this case, however, the government has not had “one full 

and fair opportunity” to offer evidence of the 1998-2002 losses. 

The original PSRs, prepared in 2004, did not include the taxloss figures for the years 1998-2002, because that information 

13 
could not be determined at that time. The PSRs, however, did 

note that losses of an as-yet undetermined amount had occurred 

for those years. Information about those losses had become 

available by the time of the sentencing in 2006, but the 

district court refused to permit the government to present that 

evidence. See J.A. 117-19. While the primary focus of our 

opinion in Baucom I was the district court’s error in excluding 

the state tax amounts, our opinion also made clear that the 

district court erred by not permitting the government to present 

the evidence of the 1998-2002 tax losses. As we explained in 

Baucom I, inclusion of the state tax amounts alone would not 

have affected the defendants’ offense levels, but we nonetheless 

rejected the defendants’ claim that the state-tax error was 

harmless. We reasoned that because “the district court did not 

include in its calculations tax losses from the years 1998 

through 2002, nor did it consider updated figures offered by the 

Government at Davis’ sentencing hearing,” Baucom I, 486 F.3d at 

829, the total loss amount at that point was uncertain, and we 

therefore could not conclude that the state-tax error was 

harmless. 

 Our opinion in Baucom I thus required the district court on 

remand to allow the government to present evidence of the 1998-

2002 tax losses and to consider those losses when calculating 

the defendants’ offense levels. The Supreme Court’s decision to 

14 
vacate Baucom I for reconsideration in light of Gall gives us no 

reason to question that conclusion now. The 1998-2002 tax 

losses are clearly part of the defendants’ pre-indictment 

pattern of tax evasion and thus are properly considered relevant 

conduct, and the original PSRs discussed the defendants’ failure 

to file returns from 1998 through 2002. That information about 

the amount of those tax losses was not available for inclusion 

in the PSRs should not have precluded the government in the 

original sentencing hearing from presenting the (then) newly 

available information, as we concluded in Baucom I.2 Because the 

government has never had an opportunity to present this 

evidence, Parker’s one-bite-at-the-sentencing-apple rule simply 

has no applicability here. 

 For his part, Davis contends that the district court in 

fact set his offense level at 20, the level sought by the 

government on appeal, and that, accordingly, there was no error 

in the district court’s Guidelines calculation. We disagree. 

 The 2006 PSR set Davis’s offense level at 20, and two of 

those points were attributable to the 1998-2002 tax losses. 

When the district court summarized the changes in the PSR for 

 2

 If the defendants at the original hearing had not been 

prepared to address the 1998-2002 tax loss information, the 

district court could have granted a brief continuance to give 

counsel an opportunity to prepare. 

15 
Davis’s attorney, the court told counsel that the difference was 

the elimination of the acceptance-of-responsibility reduction, 

and the court twice told counsel that the offense level was 18. 

See J.A. 171. Since the district court had just sentenced 

Baucom and had in that proceeding refused to include the twopoint increase for the 1998-2002 tax losses, it is apparent that 

the district court likewise took those two points off Davis’s 

offense level, thus giving him an offense level of 18, as the 

district court stated to counsel. 

 As support for his claim, however, Davis points to an 

exchange between the district court and the government at the 

end of the hearing, when the government was putting its 

objections to the sentencing on the record. As noted above, 

the PSR set the offense level at 20, but the government at 

sentencing sought a sophisticated-means enhancement that would 

have brought the offense level to 22. At the end of the 

hearing, the government noted its objection “to the Court’s 

ruling that [the offense level and criminal history score] 

should not be 22 and one.” J.A. 187. The district court 

interjected, “20 and one. 20 and one.” J.A. 187. The 

government then explained that its “position is it should have 

been 22 and one, Your Honor,” to which the district court 

responded, “Based on what you[] argued, yeah. Okay.” J.A. 187. 

We disagree with Davis’s claim that the district court’s mention 

16 
of “20 and one” means that the court actually used an offense 

level of 20 for Davis. We think it clear from the context of 

this conversation that the district court was briefly confused 

about the offense level the government had sought and thought 

the government had only sought an offense level of 20. The 

court’s statement in no way indicates that the court actually 

used an offense level of 20 when sentencing Davis. 

 Because the 1998-2002 state and federal tax losses were 

clearly relevant conduct, the district court erred by excluding 

those amounts from the tax loss calculation. See United States 

v. Hayes, 322 F.3d 792, 802 (4th Cir. 2003) (“[A] court has no 

discretion to disregard relevant conduct in order to achieve the 

sentence it considers appropriate.”). This error in the 

Guidelines’ calculation renders the sentences procedurally 

unreasonable and requires us to remand for resentencing. See

United States v. Diaz-Ibarra, 522 F.3d 343, 347 (4th Cir. 2008) 

(“An error in the calculation of the applicable Guidelines 

range, whether an error of fact or of law, infects all that 

follows at the sentencing proceeding, including the ultimate 

sentence chosen by the district court, and makes a sentence 

procedurally unreasonable even under our deferential abuse-ofdiscretion standard.” (internal quotation marks omitted)). 

17 
B. 

 Although the Guidelines-calculation error in and of itself 

requires re-sentencing, we briefly address other issues raised 

by the government that might arise again on remand. 

 We agree with the government that the district court failed 

to adequately consider the need for deterrence and failed to 

consider the policy statements expressing the Sentencing 

Commission’s views that tax evasion is a serious offense, its 

concerns about the pre-Guidelines frequency of probationary 

sentences for tax evaders, and its belief that deterrence of 

others should be a primary consideration when sentencing tax 

evaders. See U.S.S.G. Ch. 2, Pt. T, introductory cmt.; id. at 

Ch. 1, Pt. A, introductory cmt 4(d). As we explain in United 

States v. Engle, No. 08-4497, an opinion also filed today, the 

district court is not required to agree with the Commission’s 

policy views, but it is required to consider those views. 

 We also agree with the government that the district court’s 

explanation for the sentences was inadequate. A district 

court’s sentencing decision must be premised on an 

“individualized assessment based on the facts presented,” Gall, 

552 U.S. at 50, and the court’s explanation of its sentencing 

must be sufficient “to satisfy the appellate court that [the 

district court] has considered the parties’ arguments and has a 

reasoned basis for exercising his own legal decisionmaking 

18 
authority,” Rita v. United States, 551 U.S. 338, 356 (2007). 

The district court’s explanation need not necessarily be 

“elaborate or lengthy,” particularly when the sentence is within 

the advisory Guidelines range. United States v. Carter, 564 

F.3d 325, 330 (4th Cir. 2009). In this case, however, the 

sentences significantly deviated from the advisory Guidelines 

range, thus warranting a more detailed explanation from the 

district court. See Gall, 552 U.S. at 50 (explaining that if 

the sentencing judge “decides that an outside-Guidelines 

sentence is warranted, he must consider the extent of the 

deviation and ensure that the justification is sufficiently 

compelling to support the degree of the variance. We find it 

uncontroversial that a major departure should be supported by a 

more significant justification than a minor one.”). And as to 

Baucom, the explanation offered by the district court, which 

characterized Baucom is a “continued scofflaw,” would have 

supported an upward variance, but it in no way provides any 

support for a downward variance in any amount, much less the 

significant downward variance imposed by the district court in 

this case. 

 Finally, we also agree with the government that the 

district court improperly focused on the effect that a term of 

imprisonment for Davis would have on Davis’s employees. 

Sentencing a defendant to prison will always have an effect, 

19 
often a very serious negative effect, on the lives of others -- 

families lose caretakers and providers, and employees sometimes 

lose their employers. In the usual case, however, the effect of 

the sentence on others is an insufficient basis for rejecting a 

term of imprisonment. Moreover, because defendants who have 

employees are more likely to be wealthy, the approach taken by 

the district court in this case would, as the government argues, 

have the effect of “reward[ing] the wealthy with probationary 

sentences while punishing the impoverished with incarceration.” 

Brief of Appellant at 23. While the socio-economic status of a 

defendant may sometimes be relevant to certain aspects of the 

sentencing process, it should not play the kind of role that it 

played in the district court’s decision in this case to entirely 

disregard the sentence recommended by the Guidelines. See

Engle, No. 08-4497, section II(B). 

III. 

 Accordingly, for the foregoing reasons, we hereby vacate 

the sentences and remand for resentencing before a different 

district judge. On remand, the district court shall permit the 

government to present evidence of the state and federal tax 

losses for the years 1998 through 2002, and the court shall 

20 
21 

include those amounts when determining the defendants’ offense 

levels. 

VACATED AND REMANDED