F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

U N I T E D S T A T E S O F A M E R I C A , Plaintiff-Appellee,

v.

D O N A L D M. W A

N L A N D , J R

. , Defendant-Appellant. No. 14-10170

D.C. No. 2:09-cr-00008-L KK-1

OPI NI ON

A ppeal from the United States District Court for the Eastern District of California L awrence K. Karlton, District J udg e, Presiding

Arg ued and Submitted J une 15, 2016 San F rancisco, California

F iled J uly 27, 2016

B efore: J . Clifford W allace, Mary M. Schroeder, and J ohn B . Owens, Circuit J udg es.

Opinion by

J udg e OwensU N I T E D S T A T E S V

. W A N L A N D 2

SUMMARY *

Crim inal Law

The panel affirmed the district c ourt in all respects in a

case in wh i c h the defendant was convicted of tax r elated charg es, including tax evasion.

The panel held th a t neither the district court nor the jury erred in concluding that the defen dant’s monthly income from his law practice qualified as “salary or wag es” under 26 U.S.C. § 6331(e), and theref o r e r ejected the defendant’s contention that the g overnment could not prove concealment of property subject to a levy

, a s required for conviction under 26 U.S.C. § 7206(4).

Rejecting the defendant’s contention that the district cour t erred in dismissing the levy counts because they ex ceeded the three-y e a r s t a tute o f limitations, the panel h e ld that the six

y ear statute of limitations of 26 U.S.C. § 6 5 3 1 (1 ), covering
tax o ffen s e s “ involving the defrauding or attempting to defraud” the g overnment, applies to prosecutions under § 7206(4).

The panel held that the d istrict court properly r ejected the de fe n d ant’s arg ument that res judicata precludes the
go v ernment from p ursuing a c riminal action concerning h i s debts that w ere already discharg ed in bankruptcy

. The panel held res judicata c a n n o t apply because the I RS in a

* T h is su m m ary co n stitu

tes n o part o f th e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.U N I T E D S T A T E S V

. W A N L A N D 3

bankrup t c y a c tion and the United States g overnment in a criminal action are not in privity

.

The panel resolved several of the defendant’s arg uments in a concurrently -filed memorandum disposition.

COUNSEL

J ohn R. Hurley (arg

u ed) and E duardo G. Roy
, P r o m etheus Partners L L P, San F rancisco, California, for D efendantAppellant.

Christopher H ales (arg

ued) and Matthew D. Seg al, Assistant United States Attorney s; Camil A. Skipper, Appellate Chief; United States Attorney ’s Office, Sacramento, California; for Plaintiff-Appellee.

OP INION

OW ENS, Circuit J udg e:

D efendant Donald W anland, J r. appeals from his jury convictions and sentence for tax relate d c h a rg es, including
t a x e vasion. Althoug h W anland r aises many arg ument s challeng ing h is convictions a nd sentence, none has merit, so we affirm the district court in all respects. 1

1 W e reso lv e s e v eral o f Wan l an d ’ s arg u m en t s in a co n cu rren tly

- f iled

m em o ran d u m

d isp o s itio n

.U N I T E D S T A T E S V

. W A N L A N D 4

I. F actual Background

W a nland was a successful civil attorney in Sacramento, California, and his law practice g enerated considerable inc o m e

. I n the 1 990s, he e n tered into two partnership
ag reements with Richard Be r nstein—the L aw Offices o f W a n land a nd B ernstein ( from which W anland drew his income ) a

nd 705 University Partners (which held the real
estate at 705 University Avenue, the partnership’s law office). W a n land received 7 5 % o f the p r ofits, while B ernstein received 25% of t h e profits, in scheduled monthly draws. More s p e c ifically

, p artners were entitled to “withdraw from the p a r t n ership funds in equal monthly installments an amount equal to four-fif t h s o f his distributive share o f partnership n et pr o f

i t s for the preceding y ear.” 705 University Partners had its own bank accou nt (“705 Account”), which W anland used as b o t h h is business a nd personal account. 2

W a nland’s disputes wit h t h e I nternal Revenue Service (“I RS”) b eg an in the 1990s, and they continued into the new millennium. Fo r tax y ears 2000–2003, W anland filed personal tax returns reporting many h undreds of thousands o f dollars of income, and owing a round $450,000 in tax es. W a n land never pai d t h e s e tax e s, and then stopped filing personal ta x returns a ltog ether. His law partnership continued to file returns showing income of around $300,000 each y ear.

2 T h ro u g h o u t th e relev an t tim e p erio d

, 7 0 5 Un i v ersity P artn e r s h a d

sev eral dif

f eren t b a n k acco u n t n

u m b ers. W e ref

er to th em j o in tly as th e

“ 70 5 A cco u n t.”U N I T E D S T A T E S V

. W A N L A N D 5

After several fai l e d attempts to resolve his tax deficiencies, an I RS O fficer was a ssig n ed to W anland’s c ase. F ollowing some initial correspondence, the officer sent a Collection I nformation Statement (I RS F orm 433A) to W a n land’s personal accountant to c o m plete. F orm 433A discloses an individual’s income, e x penses, assets, accounts, and liabilities so the I RS can assess a n individual’s ability to pay outstanding tax es.

I n November 2003, W anland completed, sig ned, a n d submitted the F orm 433A. He l i s t ed only one bank account with a balance of $9. H e d i d n ot list the 705 Account, even t h o ug h, in the previous month alone, he had deposited $35,000 from his law p ractice int o a nd spent over $18,000 from the 705 Account. He a l s o d i d not list his American Ex press card, e ven thoug h he had used roug h ly $15,000 from the 705 Account in October and N ovember to pay d own its balance. H e also never disclosed th e 7 0 5 Account to his accountants, w ho would h ave told Wanland that he needed to disclose it on the F orm 433A.

I n April 2004, the I RS reass i gn e d W anland’s case to a different I RS Officer, w ho concluded that W anland h ad the ability to pay his tax l i ab ilities, p enalties, and interest. I n May 2004, she met with W anland and h i s accountant, a nd W a n land pro m i sed to pay $ 10,000 per month towards his outstanding tax balance, and to g et a loan to o b tain more funds. He never g ot the loan, a nd stopped making pay

ments after four months.

I n April 2005, Wanland provided an updated F orm 4 33A, which r e ported the same account as the previous F orm 4 33A, this time with an a ccount balance of “minimal/unknown.” He
ag ain omitted the 705 Account, even thoug h he had d epositedU N I T E D S T A T E S V

. W A N L A N D 6

$ 2 0
, 000 into it just a few d ay s e arlier. The I RS Officer

, suspicious that W anland had been hiding accounts, issued a

summons to W anland’s bank around the same time. She then learned about the 7 05 Account, and issued levies o n both partnerships—the L aw Offices of W a nland and B ernstein a

nd 705 University

Partners. The levies stated:

This levy requires y

o u to turn over to us: this
tax pay e r’s wag es a

nd salary that have been earned but not paid, a s well as wag e s a nd salary earned in the future until this levy i s released, and (2) this tax pay er’s other income that y o u have now or for which y ou a re oblig ated.

The levies g ave n otice that “[ w] ag e s and salary include fees, commissions, and bonuses.” A levy served on wag es a nd salary is “continuous f

rom the date such levy i s f i rst made until such levy is released” by the I RS, and therefore c o v e rs property acquired after the date on which i t w a s served. 26 U.S.C. § 6331(e).

Prior t o t h e levies being served, W anland’s law partner B ernstein wrot e W anland checks to the 705 Account on W a n land’s request. Afte r t h e levies w ere served, B ernstein refused to write any more checks for W anland’s partnership draws, a n d s h o rtly thereafter left the partnership. W anland then w rote checks to himself from the 705 Account. D onald Spaulding then joined the p ar t n e r ship, assumed B ernstein’s check writing responsibilities, and wrote checks to W anland
at the 705 Account when asked to do so. W anland n ever told Spaulding about the le v i e s , and Spaulding would not have written the checks had he known about the levies.U N I T E D S T A T E S V

. W A N L A N D 7

B y now, the amount of unpaid tax es, penalties, a nd interest ex ceeded $ 900,000. Althoug h he only disclosed o ne account with $9 or a “minimal/unknown” amount, from 2000 throug h 2006 W anland deposited $1.95 million into the 705 Account ($1.8 million from the law partnership), a nd s p ent $1.92 million from that account. This included spending on tri ps to H awaii, L ake Tahoe resorts and casinos, and L a s Veg as casinos. Additionally

, Wanland used about $422,000
to pay o ff the undisclosed American Ex press car d (which included spa a

nd tanning char g es , clothing purchases, a nd other non-business related ex penses).

II. P rocedural History

A. The Indictm ents and P retrial Litigation

A 2009 i n dictment charg ed W a nland w ith tax evasion (26 U.S.C. § 7 201). A J a

nuary 2012 superseding indictment charg ed W an l a n d with tax e vasion, numerous counts o f concealment of propert y s u bject to a levy (26 U .S.C. § 7206(4)), and several counts of willful failure to f i le a tax return (26 U.S.C. § 7203). The superseding indictment alleg ed that W anland c o m m i t t ed t a x e v a s i o n by : (1) concealing the nature and ex tent of his assets; (2) making false statements about h is income and a bility to pay h is tax e s; (3) p l a c ing f

unds and property in the name of a nominee; (4) defy ing a tax levy ; and ( 5) p ay ing creditors other than the United States. As for the levy c o u nts, the superseding indictment tied each c ount to a parti c u lar transaction, including checks, debit card purchases

, and cash withdrawals.U N I T E D S T A T E S V

. W A N L A N D 8

1. Motions to Dism iss the Levy Counts

W a nland moved to dismiss the levy counts, arg uing that under 26 U.S.C. § 6331(e)

, c ontinuous levies are only authoriz ed for “salary or w ag e s,” a n d his partnership draws did not q ualify as such. Therefore, the g overnment could not prove that W anland’s partnership profits were “ property upon which levy is authoriz e d,” as section 7206 ( 4 ) requires. The district cour t c o n cluded that the q uestion ultimately was a factual dispute, and r eserved it f o r t r ial. W anland renewed this arg ument when he moved for a judg ment of acquittal on the levy counts un d e r F ederal Rule of Criminal Procedure 29(a), which the district court ag ain denied.

W a nland a lso moved to dismiss the levy counts on statute of limitations g rounds, arg uing that the limit for these c ounts

was three y e ars, not six

. T h e district court rejected that motion. I t reviewed the lang u ag e of 26 U.S.C. § 6 531 (which
g overns the statute of limitations for tax crimes) to conclude that the six -y ear statute of limitations descri b e d in section 6531(1) applied to the levy c ounts, because it a pplies to “ all of fenses where fraud is a n essential element.” Section 7206(4), titled “ Remo v a l o r concealment with intent to defraud,” fell “under the umbrella of § 6531(1).”

2. Motion to Dism iss f

or Res Judicata

W a nland filed for b ankruptcy in 2007, and listed the I RS

as his big g est creditor. T he I RS eventually received limited proceeds f

r o m the liquidation of Wanland’s a ssets. I n J u ne 2011, W anland obtained his discharg e under 11 U.S.C. § 727. The attached “Ex planation O f Ba n kruptcy Discharg e I n A Ch a pter 7 Case,” however, stated that “[ d] ebts f or mostU N I T E D S T A T E S V

. W A N L A N D 9

tax es” are one of the “common ty p es of debts” that are “ not discharg ed.”

After the return of th e superseding indictment, W anland moved to dismiss the charg es on res judicata g rounds. He
arg ued that “ because the Governm ent failed to raise the claims in the indictment d uring the bankruptcy proceeding to prevent nondischarg eability

, and failed to stay the bankruptcy proceeding s pending the outcome of the current cr i minal matter,” r es judicata prevented the g overnment from “pursuing a c riminal action co n cerning the assets and tax liabilities the bankruptcy court already disch a rg ed.” The district court rejected that arg u ment, ex plai n i n g that res judicata “does not apply where the claim in q u es tion could
not have been brough t i n the prior proceeding due to limitations on the prior court’s jurisdiction.”

B. Trial

At trial, Wanland raised many defenses. He argu e d t h at the levy counts were invalid, a s they were continuous levies, which apply o n l y t o “salary or wag es.” B ecause his partnership draws were n e i t her salary n or wag es, he contended that he l a cked the requisite intent by ig noring the levies. H e also said that an attorney o pined that the levies did not apply to him.

I n i t s jury instructions, the trial court defined “salary o r wag es” as follows:

The funds levied ag ainst were the defendant’s “salary ,” if they represent remuneration p a i d
to defendant on an annual basis

, but were predetermined, or owed, to be paid out (orU N I T E D S T A T E S V

. W A N L A N D 10

advanced) at reg ular intervals (for ex a mple, weekly

, b i-weekly

, monthly or quarterly ) in a fix ed amount.

The funds levied ag ainst were “ wag es” if they were remuneration for services performed by

an employ ee fo r h is e mploy er, including the cash value of all remunera t ion (including benefits) paid in a

ny medium o ther than cash. Y o u m u s t u s e y o u r c o m m o n

- s e n s e

u n d e rstanding of a

ny terms not specifically defined h ere, including “employ ee” a nd “employ er.”

The jury returned g uilty verdicts on the tax evasion c ount, the willful failure to file counts, and 24 of the 26 levy counts. 3 The trial court sentenced W anland to 46 months in prison a nd 36 months of supervised release.

III. STANDARD OF REVIEW

A district court’s denial of a motion to dismiss an indictment based on its interpretation of a federal statute a nd its denial of a motion for a judg ment o f acquittal are both reviewed de novo. United States v. Olander

, 572 F .3d 764, 766 (9th Cir. 2009); United S tates v. Sanchez

, 639 F

. 3d 1201, 1203 (9th Cir. 2011). “W e review the district co u rt’s fo rmulation of jury instructions for an abuse of discretion, and we r eview de n o vo whether the instructions misstated o r omitted an element of the c harg e d offense.” United States v

. Hofus

, 598 F .3d 1 171, 1174 (9th Cir. 2 010) (citation omitted). “The d istrict court’s c onclusion reg arding the applicability o f

3 T h e g o v ern m en t v o l u n tarily d ism issed

f iv e lev y co u n ts p rio r to trial.U N I T E D S T A T E S V

. W A N L A N D 11

a statute of limitations is a matter of law reviewed d e novo.” United States v. W

orkinger

, 90 F .3d 1409, 1412 (9th Cir. 1996). “ Res judicata claims a r e reviewed de novo.” Intriplex Techs., Inc. v. Crest Grp., Inc.
, 499 F .3d 1048, 1052 (9th Cir. 2007).

IV. ANALYSIS

A. Legal Suf

f iciency of

The Levy Counts

On appeal, Wanl an d r e news his attacks on the levy counts, arg uing that his partnership draws were neither salary

nor w ag es as a matter of law and fact. The d i s t r i c t c ourt correctly le f

t that decision to the jury

, a nd a mple evidence supported the g uilty

verdicts on these counts.

An inquiry into tax e vasion does not end with how the defendant labels his income. Otherwise, evaders c ould paint their salary and wag es as “fruits of labor

, ” “donations for work,” or “g ifts from my boss” and avoi d t h e levy process altog ether. The district court put it this way : “[ n] obody in his rig ht mind would think that somehow or o ther lawy er’s draws
oug ht to b e treated differently than wag es and sala r y in
g eneral.” W anland cannot point to any thing t h at sug g ests Cong r ess had a different take.

Rather than limiting o ur review to labels, we l o o k a t the substance of W anland’s p artnership d raws, which the district
court correctly cast as a jury q uestion. The district court’s jury instruction, quoted above, captured the essence of the inquiry

. Under the par t n e r s hip ag reement, W anland was entitled to receive routin e , equal monthly draws that were remuneration solely f

or services provided to the partnerships’ clients. These draws were set a t a predetermined amo u nt,U N I T E D S T A T E S V

. W A N L A N D 12

identical to wag e s o r s a l ary in all relevant respects. This included a routine $3,000 p er month pay ment for the rent on his house. That W a

n land occasionally withdrew more money in one month than another d o es not chang e the routine income h e was g uaranteed and that he received for his work as a lawy er.

Not surprising ly

, other courts ag r ee with o u r analy sis. F or ex ample, in U

nited States v. Jefferson-Pilot Life Insurance Co.
, 49 F .3d 1020 (4th Cir. 1995), a civil case, the F ourth Circuit held that secti o n 6 331’s “salary or wag es” lang uag e covered commissions p ai d t o an insurance sales m an, rejecting the same arg ument that W anland n ow makes. Id. a t 1021. Even thoug h the d efendant did not label his commissions as “salary ” or “wag es,” they were pay ments made to the individual on a repeat basis a n d a t consistent
amounts. Id. As such, they fit d i re c t l y within “[ t] he underly ing purpose of the [ continuous l evy ] provision,” which was desig ned “to p rovide a means of levy ing upon remuneration pay able to a tax pay er on a r e curring b asis for personal services performed for the pay o r.” Id. at 1022.

Similarly

, in United S

ta tes v. Moskowitz, Passman & Edelman

, 6 03 F .3d 162 (2d Cir. 2010), another civil case, the Second Ci r c u i t a

p plied J efferson-Pilot to law firm partnership draws. The court ex plained that the “sala r y or wag es” provision applies t o “ compensation for services p aid in the form of fees, commissions, bonuses, and similar items .” Id.
at 168 (quot i n g 2 6 C.F .R. § 301.6331-1(b)(1)). Partnership draws are s i m ilar to fees, commissions, or bonuses, and a re compensation directly for services r endered to clients. Id. at 168–69; see also Mission Primary Care Clinic, PLLC v. Dir., Internal Revenue Serv.
, 3 7 0 F. App’x 536 (5th Cir. 2 010) (holding that pay

ments remunerated to doctor-members of aU N I T E D S T A T E S V

. W A N L A N D 13

PL L C could constitute “ salary or wag es” because the “critical characterist i cs” of the pay ments were similar to traditional salaries or wag es).

W a nland falls back on the rule of lenity to arg ue that we should dismiss his levy convictions because the e x tent of the “salary or w ag es” lang u ag e was ambig uous. B ut the r u l e o f lenity h as limited application g e n erally

, a nd n one h ere. W h ile no previous Ninth Circuit case has addres s e d this particular issue, that is not determinative. “[ A] lack of prior appellate ruling s on the topic does not render the law vag ue.” United States v. Kahre

, 737 F .3 d 554, 568 (9th Cir. 2 013) (quoting United States v. George
, 420 F .3d 991, 995 (9th Cir. 2005)). “The rule of lenity o nly applies . .

. where there is a g rievous ambig u ity o r uncertainty in the lang uag e a nd
structure of the statute, such that even after a court has seiz ed
every thing from which aid can b e derived, it is still left with

an ambig u ous statute.” I d. at 572 (quoting United States v

. Carona , 660 F .3d 360, 369 (9th Cir. 2011)).

L enity is especially inappropriate here, as “[ i] n clusion o f

a scienter requirement ‘mitig ates a law’s va gu eness, especially with respect to the adequacy of notice t o the complainant that his conduc t i s p roscribed.’” Id. (quoting United S tates v

. Guo
, 634 F .3d 1119, 1123 (9th Cir. 2 011));

see also Guo
, 634 F .3d at 1 123 (reasoning tha t a scienter requirement in the statute “alleviates a ny concern over the complex ity of the reg ulatory scheme”). The jury had to find that W anland a c t e d with the intent “to evade and defeat the collection of the assessed tax es,” a strin ge n t m ens r ea element. Moreover, the continuous levy

, served on W anland, stated that “[ w] ag es and s a l a r y include fees, commissions, and bonuses.” W anland was therefore on notice that his rig id definition of “salary or wag es” may have been incorrect. SeeU N I T E D S T A T E S V

. W A N L A N D 14

United S tates v

. Cabaccang

, 3 32 F

. 3 d 622, 635 n.22 (9th Cir. 2003) (ex plaining that the rule o f l e n i t y is concerned with ensuring that “defendants have n o tice of the criminality o f their actions” and “that leg islatures

. . . define criminal activity ” (quoting United S t ates v. Bass
, 404 U.S. 336, 348 (1971))). Moreover, a s requested by W anland, the di s t r i ct court g ave the jury advice of couns e l a nd g ood faith instructions. Had the jury b elieved W anland relied on an attorney or was g enuinely u ncertain about his responsibilities under the law, it could have a c q u i t ted him. A c cording ly

, neither the district court nor the jury erred in concluding that W a n land’s monthly income f

r om his law practice qualified a s “salary or wag es” under section 6331(e).

F inally

, W anland a rgues that it is incorrect to treat partnership draws as “salary o r wag es” under section 6331(e) because the I nternal Revenue Code treats self-employ ment income d ifferently from the salary and w a ge s of employ ees. He contends that the “salary ” and “wag es” r e f

e r enced in section 6331 must have the same meaning s that they have in the employ

ment tax code. W e disa gr e e

. “There is no indication in the Code

. . . that Cong ress intended to coordinate the meanin g s of these terms between the two separate sets of provisions.” Jefferson-Pilot

, 49 F .3d at 1023. A s t h e F ourth Circuit pointed out, “ [ i] f Cong ress had so intended, it e a sily could have included in § 6331(e) a cross reference to the employ

ment tax p ro v isions, as it has done repeatedly

in other sections of the Code.” Id.

I nstead, like th e d i s t rict court, we construe “salary o r wag es” in section 6331(e) in accordance with its p l ai n o r natural meaning . B lack’s L aw Dictionary defines a “salary ”

a s “[ a] n ag reed upon compensation for services—esp. professional or semiprofessional services—us u

. p aid atU N I T E D S T A T E S V

. W A N L A N D 15

r e gu lar intervals on a y early basis, a s disting uished from a n h o u r l y basis.” The jury instructions closely tracked th i s definition. H ere, there was am p le evidence for the jury to find that W anland’s pa rt n ership draws were r emuneration paid for professional services ( l e ga l services), defined on a y early basis ( based on the y ear’s profits), and pay a b l e at reg ular intervals (monthly ) , rendering them a “salary .”

B. Statute of

Lim itations—Levy Counts

W a nland arg ues that t he district court erred in not dism i s sing the levy counts because they ex c eeded the threey ear statute of l i m i t a tions. All of the levy counts covered 2006 transactions

, while the superseding indictment was returned in J anuary 2012. The district court w as correct to reject this arg ument and apply a six -y ear statute o f limitations.

Criminal ta x p roceeding s g enerally have a three-y e ar statute of limitations. See 26 U .S.C. § 6531. There are, thoug h, several ex ceptions for which a six -y ear statute o f li m itations a

pplies. Id. § 6531(1)–(8). Under section 6531(1), tax offenses “involving the d efrauding or attempting
to defraud” the g overnment h ave a six -y ear sta tute o f limitations. “Section 6531(1), b y i t s o wn terms, does not require that a defendant be ex pressly indicted for tax fraud.” W orkinger

, 90 F .3d at 1413. Cong r ess intended for a six -y e ar statute of limitations for “all offenses which are fairly identifiable as those in w hich fraud is an essential ing redient, by whatever words they be defined.” Id. at 1414 ( q u o ting United S t a t e s v. Grainger
, 346 U.S. 235, 244 (1953)). This includes statutes not la b eled “‘fraud,’ if those o f f enses did reflect fraudulent activity .” Id. at 1413.U N I T E D S T A T E S V

. W A N L A N D 16

As noted a

bove, section 7206(4) requires one to act “with intent to evade or defeat the assessment or collect i o n o f a n y tax imposed by this title.” An individual must know of a tax liability and a levy o n h i s property to remedy that tax liability

, but still deliberately take some action to “evade o r defeat” that levy

. As in W orkinger

, that is ex actly the ty pe o f “defrauding ” that section 6531(1) w as intended to cover. W e ag ree with the district court that the six -y e ar statute o f limitations of section 6531(1) applies to prosecutions under section 7206(4).

W a nland makes several arg uments in favor of a three-y e ar statute of limitations. F irst, he contends that contin u ing to interpret section 6531(1) broadly would allo w the six -y e ar statute of limitations ex ception t o become more prevalent than the three -y e ar r

ule. This is not persuasive in lig h t o f W orkinger

. As this c ourt ex plained, Congr es s intended for the ex ception for offenses involving f raud to s weep broadly and “cover most acts that a person could perfor m i n an attempt to avoid pay ing tax es.” W orkinger

, 90 F .3d at 1413;

see also id. (acknowledg ing the reali t y t h a t section 6531(1) and its counterpart, section 6531(2), may be broad enoug h to effectively “ render the 3-y ear period almost irrele v a n t” (quoting Patricia T. Morg an, Tax Procedure and Tax Fra u d in a Nutshel l

, § 1 3.1.7 (1990))). W e thus do not h esitate to apply the six -y ear statute of li m i tations to violations o f section 7206(4), which necessarily require fraudulent conduct.

Second, W anland arg

ues more specifically that a pply ing section 6531(1) to section 7206(4) is inappropriate because

one of the eig h t specifically e numerated e x c e p tions, section 6 5 31(5), is for a crime u nder another subsection of section 7206—section 7206(1). He arg ues that becaus e C o n g ressU N I T E D S T A T E S V

. W A N L A N D 17

elected to ex tend the statute of limitations for a particu l a r subsection of section 7206, it deliberately omitted t h e other subsections of se c tion 7 206. This arg ument is likewise untenable under W

orkinger

. Spec ifically enumerated

ex c e ptions providing for a six

- y ear statute of limitations were included so that Cong ress c o u ld be “ sure that mere technical distinctions would n o t make a difference in the sta t ute o f limitations.” W

orkinger

, 9 0 F .3d at 1413. I n other words, they r eflect a rather-be-safe-than-sorry approach

, a nd a re sometime s d u plicative of conduct that would a lso be encompassed under sections 6531(1) and (2). I d

. That Cong r ess specifically e numerated that section 7 2 06(1) have

a six

- y ear statute of limitations say s little, if any thing

, about the statute of limitations for section 7206(4).

F inally

, Wanland p oints out that the I nternal Revenue Manual (I RM) provides that the statu te of limitations for section 7206(4) is three y ears. I RM § 9

. 1

. 3

. 3.7.3.1. The I R M
, h o w ever, does not bind this court. See Fargo v

. Comm’r
, 447 F .3d 706, 713 (9th Cir. 200 6 ) ( s t a t ing that the I RM “does n ot h ave the force o f law and does n o t con fer rig hts on tax pay ers”); see also United States v. Mead Corp.
, 533 U.S. 218, 234–35 (2001) (ex plaining that ag ency manuals are “bey ond the Chevron pale,” and we afford them deference o nly to the ex tent that we v alue the “thoroug h ness, log ic, and ex pertness” o f the writer). F or the above described
reasons, w e d o not conclude that the I RM’s recommendation is persuasive, and w e hold that the six -y ear statute o f limitations applies to violations of section 7206(4).

C. Res Judicata

W a nland arg u es that because his debts were discharg ed in bankruptcy

, he no long er owes the debts for the unpaid tax e sU N I T E D S T A T E S V

. W A N L A N D 18

from which the c rimin a l c h a rg es arose. According to W a n land, t h e g overnment should “be precluded from pursuing a criminal action concerning the asset s a n d tax liabilities the bankruptcy court already discharg e d.” The district court properly

rejected this arg

ument.

R e s j u d icata r equires Wanland to establish three el e m e n t s : (1) privity b etween parties in the act i o n s ; (2) an identity o f claims between actions; a nd (3) a final judg men t o n the merits in the previous action. See Ta h oe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Planning Agency
, 3 2 2 F .3d 1064, 1077 (9th Cir. 2003).

F irst, W anland fa ils to demonstrate privity between the parties. Courts have not a ssumed that all federal a g encies a re in privity for r e s judicata purposes, and instead look to the substance of c laims. See Sunshin e A n t h r acite Coal Co v

. Adkins

, 310 U.S. 381, 4 02–03 (1940) (ex plaining that while there are occasions w hen privity ex ists between different officers or ag encies o f the g overnment, this co n s i d e r ation is
not just a “matter of form, b ut o f substance”); see also United States v. Ledee

, 772 F .3d 21, 30 (1 s t Cir. 2014) (“[ C] ourts have recog niz ed in the preclusion c ontex t the folly of treating the g overnment as a sing le entity in which representation by

one g overnment ag ent is n ecessari l y representation for all
seg ments of the g overnment.”). F or ex ampl e, in United States v. Hickey

, 367 F

. 3d 888 (9th Cir. 2004), this c ourt h eld that the Securities and E x chang e Commission (SEC) and the United States in a criminal p r o s e c u t ion are not in privity because when the SEC bring s an action under the Securities Act o f 1 933 o r Securities E x c h ang e Act of 1934, it is “ not acting as ‘the federal sovereig n vindicating the criminal law of the United Sta t e s .’” Id. at 893 (quoting United States v

. Heffner , 85 F .3d 435, 439 (9th Cir. 1996)).U N I T E D S T A T E S V

. W A N L A N D 19

J u st as in Hickey

, the I RS’s role in pursuing tax debts i n

a bankruptcy action i s not to act as a “federal sovereig n vindicating the criminal law.” I n a bankruptcy proceeding

, the I RS is a cting as a creditor try ing to recover debts. I n this capacity

, its interests will often differ from the interests o f the United States g overnment in a criminal prosecution. F or

ex a mple, if the I RS were in a position where it had to “make

a claim a g ainst the e state and a t the same time pr e s e r ve a subsequen t criminal p rosecution” ag ainst a defendant, it “would have to pursue an opposition to the bankruptcy based

on fraud, even if to do so mig ht be contrary to its interest” a s

a debtor. United States v. Tatum
, 943 F .2d 370, 381 (4th Cir. 1991).

The different roles o f t h e I RS and the U nited States
g overnment in criminal pros ec u t ions correspond to the different purposes of bankruptcy a nd crim i n a l proceeding s. The purpose of a bankruptcy action is to h el p t h o se in b ad financial positions move forward, not, as with a criminal prosecution, to resolve h arms ag a inst society d eserving o f punishment. See Gruntz v. County of Los Angeles

, 202 F .3d 1074, 1085 (9th Cir. 2000) (“The purpose of bankruptcy is to protect those in financial, not mor a l difficulty ,” and the bankruptcy c ode “reflects [t h a t] philosophy

. ” ); Tatum
, 943 F .2d a t 381–82 (referring to bankruptcy proceeding s a nd criminal tax prosecutions, ex plaining that “[ t] he pursuit o f

one proceeding w ill seldom reso l v e t h e other”). Thus, the I RS in a bankruptcy action and the United States g overnment in a criminal action are not in privity

.

W h ile w e need not g o further because W anland has failed

on the f irst prong , he raises several a r g u ments related to the i d e n t i ty of claims prong that we briefly address. He takes issue with the district court’s r easoning that res judicataU N I T E D S T A T E S V

. W A N L A N D 20

c a nnot apply here because the bankruptcy court had n o authority to adjudicate criminal matters. He points p rimarily
t o United States v. Liquidators o f European Federal Cre d i t Bank

, 630 F .3d 1139 ( 9th Cir. 2 011), to arg ue that, even if the
g overnment could not h a v e m a d e a p articular claim in an earlier p roceeding

, it can still b e barred from making that claim in a second p roceeding

. I n Liquidators

, this court h eld that res judicata barred the g overnment fr o m b r i ng ing a criminal forfeiture proceeding with respect to t h e s ame property inv o l v e d in a p rior c ivil forfeiture proceeding because both c laims involved the same “transactional nucleus of facts.” Id. at 1151–5 2

. T h i s was in spite of the fact that the g overnment could not have broug h t a criminal forfeiture action in the civil forfeiture proceeding b ecause the criminal and c ivil forfeiture statutes d o not permit consolidati o n

. I d. at 1151.

This court acknowledg ed that the result of its holding no long er fit within the pattern reflected in our c ircuit’s case law that res judicata o n ly applies where a claim could have been asserted in a previous action. Id. (cit i ng Tahoe-Sierra

, 322 F .3d at 1078). I t ex p lained, however, that this decision

was “ driven by the unique contex t of forfeiture.” Id. at 1152. “Unlike in o ther contex ts, the two ty pes of forfeiture actions always seek the same result,” “arise from ex actly the same facts,” “necessarily a lway s involve the same potential plaintiff,” and “involve the same g eneral determination.” Id. I n sum, “[ t] he two forfeiture options—civil and criminal— provide the g overnment two d i f ferent paths to reaching the

same g oal—forfeiture of the p r operty .” Id. F or the reasons described above, the I RS in bankruptcy proceeding s and the United States g overnment in criminal prosecutions are not the

same p laintiff, nor do bankruptcy and c riminal actions purport to achieve the same g oal. According ly

, it w ould beU N I T E D S T A T E S V

. W A N L A N D 21

inappropriate to ex pa n d Liquidators

, decided for the peculiarities of the forfeiture contex t, to the facts here. 4

AF F IRMED

.

4 W e also do u

b t th at th ere h as been a f

in al j u d g m en t o n

th e m erits w i th
resp ect t o W an lan d ’ s tax d eb ts. W an lan d receiv ed a g en eral d isch arg e

u n d er 1 1 U.S.C. § 7 2 7 . Un d er a g en eral d isch arg e o rd er, m o st d eb ts are

au to m atically d isch arg ed

. T h ere are a f ew ex cep tio n s, th o u g h

, i n clu d in g f o r a tax “ w i th resp ect to w h ich t h e d e b t o r m ad e a f rau d u l en t retu rn or

w illf u l ly attem p t ed i n an y m an n er to ev ad e o r def eat.” Id

. § 5 23 (a)(1 )(C). In acco rd an ce w ith th e statu to ry ex cep tio n s to d isch arg e, W an lan d w as

w arn ed in h is d isch arg e o rd er th at so m e ty p es o f d eb t are n o t d isch arg ed

, in clu d in g “ d eb ts f

o r m o st tax es.” Ev en if

, as W an lan d p o in ts ou t, th e in ten t re q u i r em en ts f

o r d em o n stratin g “ w illf

u l tax ev asio n ” f

o r n o n

d isch arg eab ility o f deb t an d w illf u l tax ev asio n f

o r a crim in al tax ev asio n ch arg e are th e sam e, Ha wkin s v. Fra n ch ise T a x Bd

. o f Ca l.

, 7 6 9 F.3 d 6 6 2
, 6 6 9 (9 th C ir. 2 0 1 4), th e issu e h ad lik ely n o t b een ad j u d icated p rio r to th e j u ry v erd ict in th is trial.