United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

Argued February 5, 2007

Decided March 1, 2007

Before

Hon. FRANK H. EASTERBROOK, Chief Judge

Hon. ILANA DIAMOND ROVNER, Circuit Judge

Hon. DIANE S. SYKES, Circuit Judge

No. 06-3205

UNITED STATES OF AMERICA, ] Appeal from the United

] States District Court for

Plaintiff-Appellee, ] the Central District of

] Illinois, Peoria Division

]

v. ] No. 06 CR 10019

]

]

ROBERT LAWRENCE, ]

] Michael H. Mihm,

Defendant-Appellant. ] Judge.

O R D E R

On March 16, 2006 , a federal grand jury indicted Robert Lawrence on three

counts of tax evasion under 26 U.S.C. § 7201 and three counts of willful failure to

file income taxes under 26 U.S.C. § 7203, relating to the years 1999, 2000, and

2001. Shortly before trial, the government discovered an error in computing the tax

amount due. Although that error impacted only some of the counts, the government

inexplicably filed a motion to dismiss the indictment, and the district court granted

the motion to dismiss with prejudice. Lawrence’s response to this fortuitous turn of

NONPRECEDENTIAL DISPOSITION

To be cited only in accordance with

 Fed. R. App. P. 32.1
No. 06-3205 2

events was to file a motion for attorney’s fees and costs under the Hyde

Amendment.

The Hyde Amendment provides that “the court ... may award ... a reasonable

attorney’s fee ... where the court finds that the position of the United States was

vexatious, frivolous or in bad faith ....” Pub.L. No. 105-119, § 617, 111 Stat. 2519

(1997) (reprinted in 18 U.S.C. § 3006A , historical and statutory notes). Lawrence

argues that the government acted in bad faith or in a vexatious or frivolous manner

in obtaining the indictment and pursuing the criminal case.

According to Lawrence, the Paperwork Reduction Act of 1995 (PRA) required

the Internal Revenue Service to display valid Office of Management and Budget

(OMB) numbers on its Form 1040 and the1040 tax form does not in fact contain a

valid OMB number. Lawrence argues that the PRA by its terms prohibits the

government from imposing a criminal penalty upon a citizen for the failure to

complete a form where the information request at issue does not comply with the

PRA. Lawrence never explains how this argument is even relevant to the three

counts involving tax evasion, but even as to the other three counts, it must fail.

Although Lawrence recites the meaning of vexatious, frivolous and bad faith

in an extensive quote of the government’s filing, Lawrence fails to set forth how

those terms are met by the alleged conduct here. Lawrence’s brief represents an

attempt to prove that the PRA could present a valid defense to the criminal charges. 

Yet Lawrence conceded at oral argument that no case from this circuit establishes

such a proposition, and in fact Lawrence cites to no caselaw from any jurisdiction

that so holds. In contrast, the government referenced numerous cases supporting

its position that the PRA does not present a defense to a criminal action for failure

to file income taxes, including: Salberg v. United States, 969 F.2d 379 (7th Cir. 1992);

United States v. Neff, 954 F.2d 698 (11th Cir. 1992); United States v. Kerwin, 945

F.2d 92 (5th Cir. 1991); United States v. Hicks, 947 F.2d 1356 (9th Cir. 1991); and

United States v. Wunder, 919 F.2d 34 (6th Cir. 1990). Nor is the correctness of

Lawrence’s position evident from the language of the PRA itself. Lawrence provides

no explanation for how government conduct can be vexatious, frivolous, or in bad

faith when there is no law contrary to it. 

Lawrence’s own definition of those terms is instructive. He notes that:

vexatious means “without reasonable or probable cause or excuse,” United States v.

Gilbert, 198 F.3d 1293, 1298 (11th Cir. 1999); frivolous means “groundless,” as where

“the government’s position was foreclosed by binding precedent,” United States v.

Braunstein, 281 F.3d 982, 995 (9th Cir. 2002); and bad faith is “not simply bad

judgment or negligence, but rather ... the conscious doing of a wrong because of

dishonest purpose or moral obliquity,” United States v. True, 250 F.3d 410, 423 (6th
No. 06-3205 3

Cir. 2001). He then spends the majority of his brief refuting the applicability of the

numerous cases cited by the government. His refutation consists mainly of the

argument that those cases addressed an earlier version of the PRA, but he makes

no effort to explain how the reasoning in those cases is no longer relevant in light of

the amendments to the PRA. His attempts at refuting those cases thus ring hollow,

but that ultimately would not matter. Lawrence cannot simply argue that the

government was wrong; he must argue that they are so wrong that the criminal

case was vexatious, frivolous or in bad faith, and that the district court erred in

holding otherwise. He has no case support for his argument that the PRA so clearly

foreclosed the criminal action as to render the conduct vexatious, frivolous or in bad

faith, nor does the language of the PRA establish that proposition. And that is all

that matters in this appeal. That failure renders the myriad other arguments

raised by the government irrelevant. It matters not whether the 1040 tax form in

fact included a valid OMB number, because that is not the issue in this Hyde

Amendment appeal. Nor does the standard of review ultimately matter here,

because the appeal would fail regardless of the standard employed. 

Lawrence makes a secondary argument which, as far as we can discern,

asserts that the indictment did not charge a triable offense because it failed to

reference the statutory requirement to file a tax return. A similar argument was

rejected in Sloan v. United States, 939 F.2d 499, 501-03 (7th Cir. 1991), and

Lawrence makes no effort to distinguish that case. In fact, Lawrence again supplies

no case support for his argument, let alone any cases establishing that the

inadequacy of the indictment was so clear as to render the government’s conduct

vexatious, frivolous or in bad faith. The district court properly denied the request

for attorney’s fees under the Hyde Amendment. AFFIRMED.