FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

DONALD M. WANLAND, JR.,

Defendant-Appellant.

No. 14-10170

D.C. No.

2:09-cr-00008-LKK-1

OPINION

Appeal from the United States District Court

for the Eastern District of California

Lawrence K. Karlton, District Judge, Presiding

Argued and Submitted June 15, 2016

San Francisco, California

Filed July 27, 2016

Before: J. Clifford Wallace, Mary M. Schroeder,

and John B. Owens, Circuit Judges.

Opinion by Judge Owens
2 UNITED STATES V. WANLAND

SUMMARY*

Criminal Law

The panel affirmed the district court in all respects in a

case in which the defendant was convicted of tax related

charges, including tax evasion.

The panel held that neither the district court nor the jury

erred in concluding that the defendant’s monthly income from

his law practice qualified as “salary or wages” under 26

U.S.C. § 6331(e), and therefore rejected the defendant’s

contention that the government could not prove concealment

of property subject to a levy, as required for conviction under

26 U.S.C. § 7206(4).

Rejecting the defendant’s contention that the district court

erred in dismissing the levy counts because they exceeded the

three-year statute of limitations, the panel held that the sixyear statute of limitations of 26 U.S.C. § 6531(1), covering

tax offenses “involving the defrauding or attempting to

defraud” the government, applies to prosecutions under

§ 7206(4).

The panel held that the district court properly rejected the

defendant’s argument that res judicata precludes the

government from pursuing a criminal action concerning his

debts that were already discharged in bankruptcy. The panel

held res judicata cannot apply because the IRS in a

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.
UNITED STATES V. WANLAND 3

bankruptcy action and the United States government in a

criminal action are not in privity.

The panel resolved several of the defendant’s arguments

in a concurrently-filed memorandum disposition.

COUNSEL

John R. Hurley (argued) and Eduardo G. Roy, Prometheus

Partners LLP, San Francisco, California, for DefendantAppellant.

Christopher Hales (argued) and Matthew D. Segal, Assistant

United States Attorneys; Camil A. Skipper, Appellate Chief;

United States Attorney’s Office, Sacramento, California; for

Plaintiff-Appellee.

OPINION

OWENS, Circuit Judge:

Defendant Donald Wanland, Jr. appeals from his jury

convictions and sentence for tax related charges, including

tax evasion. Although Wanland raises many arguments

challenging his convictions and sentence, none has merit, so

we affirm the district court in all respects.1

1 We resolve several of Wanland’s arguments in a concurrently-filed

memorandum disposition.
4 UNITED STATES V. WANLAND

I. Factual Background

Wanland was a successful civil attorney in Sacramento,

California, and his law practice generated considerable

income. In the 1990s, he entered into two partnership

agreements with Richard Bernstein—the Law Offices of

Wanland and Bernstein (from which Wanland drew his

income) and 705 University Partners (which held the real

estate at 705 UniversityAvenue, the partnership’s law office). 

Wanland received 75% of the profits, while Bernstein

received 25% of the profits, in scheduled monthly draws. 

More specifically, partners were entitled to “withdraw from

the partnership funds in equal monthly installments an

amount equal to four-fifths of his distributive share of

partnership net profits for the preceding year.” 705

University Partners had its own bank account (“705

Account”), which Wanland used as both his business and

personal account.2

Wanland’s disputes with the Internal Revenue Service

(“IRS”) began in the 1990s, and they continued into the new

millennium. For tax years 2000–2003, Wanland filed

personal tax returns reporting many hundreds of thousands of

dollars of income, and owing around $450,000 in taxes. 

Wanland never paid these taxes, and then stopped filing

personal tax returns altogether. His law partnership

continued to file returns showing income of around $300,000

each year.

2 Throughout the relevant time period, 705 University Partners had

several different bank account numbers. We refer to them jointly as the

“705 Account.”
UNITED STATES V. WANLAND 5

After several failed attempts to resolve his tax

deficiencies, an IRS Officer was assigned to Wanland’s case. 

Following some initial correspondence, the officer sent a

Collection Information Statement (IRS Form 433A) to

Wanland’s personal accountant to complete. Form 433A

discloses an individual’s income, expenses, assets, accounts,

and liabilities so the IRS can assess an individual’s ability to

pay outstanding taxes.

In November 2003, Wanland completed, signed, and

submitted the Form 433A. He listed only one bank account

with a balance of $9. He did not list the 705 Account, even

though, in the previous month alone, he had deposited

$35,000 from his law practice into and spent over $18,000

from the 705 Account. He also did not list his American

Express card, even though he had used roughly $15,000 from

the 705 Account in October and November to pay down its

balance. He also never disclosed the 705 Account to his

accountants, who would have told Wanland that he needed to

disclose it on the Form 433A.

In April 2004, the IRS reassigned Wanland’s case to a

different IRS Officer, who concluded that Wanland had the

ability to pay his tax liabilities, penalties, and interest. In

May 2004, she met with Wanland and his accountant, and

Wanland promised to pay $10,000 per month towards his

outstanding tax balance, and to get a loan to obtain more

funds. He never got the loan, and stopped making payments

after four months.

In April 2005, Wanland provided an updated Form 433A,

which reported the same account as the previous Form 433A,

this time with an account balance of “minimal/unknown.” He

again omitted the 705 Account, even though he had deposited
6 UNITED STATES V. WANLAND

$20,000 into it just a few days earlier. The IRS Officer,

suspicious that Wanland had been hiding accounts, issued a

summons to Wanland’s bank around the same time. She then

learned about the 705 Account, and issued levies on both

partnerships—the Law Offices of Wanland and Bernstein and

705 University Partners. The levies stated:

This levy requires you to turn over to us: this

taxpayer’s wages and salary that have been

earned but not paid, as well as wages and

salary earned in the future until this levy is

released, and (2) this taxpayer’s other income

that you have now or for which you are

obligated.

The levies gave notice that “[w]ages and salary include fees,

commissions, and bonuses.” A levy served on wages and

salary is “continuous from the date such levy is first made

until such levy is released” by the IRS, and therefore covers

property acquired after the date on which it was served. 

26 U.S.C. § 6331(e).

Prior to the levies being served, Wanland’s law partner

Bernstein wrote Wanland checks to the 705 Account on

Wanland’s request. After the levies were served, Bernstein

refused to write any more checks for Wanland’s partnership

draws, and shortly thereafter left the partnership. Wanland

then wrote checks to himself from the 705 Account. Donald

Spaulding then joined the partnership, assumed Bernstein’s

check writing responsibilities, and wrote checks to Wanland

at the 705 Account when asked to do so. Wanland never told

Spaulding about the levies, and Spaulding would not have

written the checks had he known about the levies.
UNITED STATES V. WANLAND 7

By now, the amount of unpaid taxes, penalties, and

interest exceeded $900,000. Although he only disclosed one

account with $9 or a “minimal/unknown” amount, from 2000

through 2006 Wanland deposited $1.95 million into the 705

Account ($1.8 million from the law partnership), and spent

$1.92 million from that account. This included spending on

trips to Hawaii, Lake Tahoe resorts and casinos, and Las

Vegas casinos. Additionally, Wanland used about $422,000

to pay off the undisclosed American Express card (which

included spa and tanning charges, clothing purchases, and

other non-business related expenses).

II. Procedural History

A. The Indictments and Pretrial Litigation

A 2009 indictment charged Wanland with tax evasion

(26 U.S.C. § 7201). A January 2012 superseding indictment

charged Wanland with tax evasion, numerous counts of

concealment of property subject to a levy (26 U.S.C.

§ 7206(4)), and several counts of willful failure to file a tax

return (26 U.S.C. § 7203). The superseding indictment

alleged that Wanland committed tax evasion by:

(1) concealing the nature and extent of his assets; (2) making

false statements about his income and ability to pay his taxes;

(3) placing funds and property in the name of a nominee;

(4) defying a tax levy; and (5) paying creditors other than the

United States. As for the levy counts, the superseding

indictment tied each count to a particular transaction,

including checks, debit card purchases, and cash withdrawals.
8 UNITED STATES V. WANLAND

1. Motions to Dismiss the Levy Counts

Wanland moved to dismiss the levy counts, arguing that

under 26 U.S.C. § 6331(e), continuous levies are only

authorized for “salary or wages,” and his partnership draws

did not qualify as such. Therefore, the government could not

prove that Wanland’s partnership profits were “propertyupon

which levy is authorized,” as section 7206(4) requires. The

district court concluded that the question ultimately was a

factual dispute, and reserved it for trial. Wanland renewed

this argument when he moved for a judgment of acquittal on

the levy counts under Federal Rule of Criminal Procedure

29(a), which the district court again denied.

Wanland also moved to dismiss the levy counts on statute

of limitations grounds, arguing that the limit for these counts

was three years, not six. The district court rejected that

motion. It reviewed the language of 26 U.S.C. § 6531 (which

governs the statute of limitations for tax crimes) to conclude

that the six-year statute of limitations described in section

6531(1) applied to the levy counts, because it applies to “all

offenses where fraud is an essential element.” Section

7206(4), titled “Removal or concealment with intent to

defraud,” fell “under the umbrella of § 6531(1).”

2. Motion to Dismiss for Res Judicata

Wanland filed for bankruptcy in 2007, and listed the IRS

as his biggest creditor. The IRS eventually received limited

proceeds from the liquidation of Wanland’s assets. In June

2011, Wanland obtained his discharge under 11 U.S.C. § 727. 

The attached “Explanation Of Bankruptcy Discharge In A

Chapter 7 Case,” however, stated that “[d]ebts for most
UNITED STATES V. WANLAND 9

taxes” are one of the “common types of debts” that are “not

discharged.”

After the return of the superseding indictment, Wanland

moved to dismiss the charges on res judicata grounds. He

argued that “because the Government failed to raise the

claims in the indictment during the bankruptcy proceeding to

prevent nondischargeability, and failed to stay the bankruptcy

proceedings pending the outcome of the current criminal

matter,” res judicata prevented the government from

“pursuing a criminal action concerning the assets and tax

liabilities the bankruptcy court already discharged.” The

district court rejected that argument, explaining that res

judicata “does not apply where the claim in question could

not have been brought in the prior proceeding due to

limitations on the prior court’s jurisdiction.”

B. Trial

At trial, Wanland raised many defenses. He argued that

the levy counts were invalid, as they were continuous levies,

which apply only to “salary or wages.” Because his

partnership draws were neither salary nor wages, he

contended that he lacked the requisite intent by ignoring the

levies. He also said that an attorney opined that the levies did

not apply to him.

In its jury instructions, the trial court defined “salary or

wages” as follows:

The funds levied against were the defendant’s

“salary,” if they represent remuneration paid

to defendant on an annual basis, but were

predetermined, or owed, to be paid out (or
10 UNITED STATES V. WANLAND

advanced) at regular intervals (for example,

weekly, bi-weekly, monthly or quarterly) in a

fixed amount.

The funds levied against were “wages” if they

were remuneration for services performed by

an employee for his employer, including the

cash value of all remuneration (including

benefits) paid in any medium other than cash. 

You must use your common-sense

understanding of any terms not specifically

defined here, including “employee” and

“employer.”

The jury returned guilty verdicts on the tax evasion count,

the willful failure to file counts, and 24 of the 26 levy counts.3

The trial court sentenced Wanland to 46 months in prison and

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 and

its denial of a motion for a judgment of acquittal are both

reviewed de novo. United States v. Olander, 572 F.3d 764,

766 (9th Cir. 2009); United States v. Sanchez, 639 F.3d 1201,

1203 (9th Cir. 2011). “We review the district court’s

formulation of jury instructions for an abuse of discretion,

and we review de novo whether the instructions misstated or

omitted an element of the charged offense.” United States v.

Hofus, 598 F.3d 1171, 1174 (9th Cir. 2010) (citation omitted). 

“The district court’s conclusion regarding the applicability of

 

3

 The government voluntarily dismissed five levy counts prior to trial.
UNITED STATES V. WANLAND 11

a statute of limitations is a matter of law reviewed de novo.” 

United States v. Workinger, 90 F.3d 1409, 1412 (9th Cir.

1996). “Res judicata claims are reviewed de novo.” Intriplex Techs., Inc. v. Crest Grp., Inc., 499 F.3d 1048, 1052 (9th

Cir. 2007).

IV. ANALYSIS

A. Legal Sufficiency of The Levy Counts

On appeal, Wanland renews his attacks on the levy

counts, arguing that his partnership draws were neither salary

nor wages as a matter of law and fact. The district court

correctly left that decision to the jury, and ample evidence

supported the guilty verdicts on these counts.

An inquiry into tax evasion does not end with how the

defendant labels his income. Otherwise, evaders could paint

their salary and wages as “fruits of labor,” “donations for

work,” or “gifts from my boss” and avoid the levy process

altogether. The district court put it this way: “[n]obody in his

right mind would think that somehow or other lawyer’s draws

ought to be treated differently than wages and salary in

general.” Wanland cannot point to anything that suggests

Congress had a different take.

Rather than limiting our review to labels, we look at the

substance of Wanland’s partnership draws, which the district

court correctly cast as a jury question. The district court’s

jury instruction, quoted above, captured the essence of the

inquiry. Under the partnership agreement, Wanland was

entitled to receive routine, equal monthly draws that were

remuneration solely for services provided to the partnerships’

clients. These draws were set at a predetermined amount,
12 UNITED STATES V. WANLAND

identical to wages or salary in all relevant respects. This

included a routine $3,000 per month payment for the rent on

his house. That Wanland occasionallywithdrew more money

in one month than another does not change the routine

income he was guaranteed and that he received for his work

as a lawyer.

Not surprisingly, other courts agree with our analysis. 

For example, in United States v. Jefferson-Pilot Life

Insurance Co., 49 F.3d 1020 (4th Cir. 1995), a civil case, the

Fourth Circuit held that section 6331’s “salary or wages”

language covered commissions paid to an insurance

salesman, rejecting the same argument that Wanland now

makes. Id. at 1021. Even though the defendant did not label

his commissions as “salary” or “wages,” they were payments

made to the individual on a repeat basis and at consistent

amounts. Id. As such, they fit directly within “[t]he

underlying purpose of the [continuous levy] provision,”

which was designed “to provide a means of levying upon

remuneration payable to a taxpayer on a recurring basis for

personal services performed for the payor.” Id. at 1022.

Similarly, in United States v. Moskowitz, Passman &

Edelman, 603 F.3d 162 (2d Cir. 2010), another civil case, the

Second Circuit applied Jefferson-Pilot to law firm partnership

draws. The court explained that the “salary or wages”

provision applies to “compensation for services paid in the

form of fees, commissions, bonuses, and similar items.” Id.

at 168 (quoting 26 C.F.R. § 301.6331-1(b)(1)). Partnership

draws are similar to fees, commissions, or bonuses, and are

compensation directly for services rendered to clients. Id. at

168–69; see also Mission Primary Care Clinic, PLLC v. Dir.,

Internal Revenue Serv., 370 F. App’x 536 (5th Cir. 2010)

(holding that payments remunerated to doctor-members of a
UNITED STATES V. WANLAND 13

PLLC could constitute “salary or wages” because the “critical

characteristics” of the payments were similar to traditional

salaries or wages).

Wanland falls back on the rule of lenity to argue that we

should dismiss his levy convictions because the extent of the

“salary or wages” language was ambiguous. But the rule of

lenity has limited application generally, and none here. 

While no previous Ninth Circuit case has addressed this

particular issue, that is not determinative. “[A] lack of prior

appellate rulings on the topic does not render the law vague.” 

United States v. Kahre, 737 F.3d 554, 568 (9th Cir. 2013)

(quoting United States v. George, 420 F.3d 991, 995 (9th Cir.

2005)). “The rule of lenity only applies . . . where there is a

grievous ambiguity or uncertainty in the language and

structure of the statute, such that even after a court has seized

every thing from which aid can be derived, it is still left with

an ambiguous statute.” Id. at 572 (quoting United States v.

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

Lenity is especially inappropriate here, as “[i]nclusion of

a scienter requirement ‘mitigates a law’s vagueness,

especially with respect to the adequacy of notice to the

complainant that his conduct is proscribed.’” Id. (quoting

United States v. Guo, 634 F.3d 1119, 1123 (9th Cir. 2011));

see also Guo, 634 F.3d at 1123 (reasoning that a scienter

requirement in the statute “alleviates any concern over the

complexity of the regulatory scheme”). The jury had to find

that Wanland acted with the intent “to evade and defeat the

collection of the assessed taxes,” a stringent mens rea

element. Moreover, the continuous levy,served on Wanland,

stated that “[w]ages and salary include fees, commissions,

and bonuses.” Wanland was therefore on notice that his rigid

definition of “salary or wages” may have been incorrect. See
14 UNITED STATES V. WANLAND

United States v. Cabaccang, 332 F.3d 622, 635 n.22 (9th Cir.

2003) (explaining that the rule of lenity is concerned with

ensuring that “defendants have notice of the criminality of

their actions” and “that legislatures . . . define criminal

activity” (quoting United States v. Bass, 404 U.S. 336, 348

(1971))). Moreover, as requested by Wanland, the district

court gave the jury advice of counsel and good faith

instructions. Had the jury believed Wanland relied on an

attorney or was genuinely uncertain about his responsibilities

under the law, it could have acquitted him. Accordingly,

neither the district court nor the jury erred in concluding that

Wanland’s monthly income from his law practice qualified as

“salary or wages” under section 6331(e).

Finally, Wanland argues that it is incorrect to treat

partnership draws as “salary or wages” under section 6331(e)

because the Internal Revenue Code treats self-employment

income differently from the salary and wages of employees. 

He contends that the “salary” and “wages” referenced in

section 6331 must have the same meanings that they have in

the employment tax code. We disagree. “There is no

indication in the Code . . . that Congress intended to

coordinate the meanings of these terms between the two

separate sets of provisions.” Jefferson-Pilot, 49 F.3d at 1023. 

As the Fourth Circuit pointed out, “[i]f Congress had so

intended, it easily could have included in § 6331(e) a cross

reference to the employment tax provisions, as it has done

repeatedly in other sections of the Code.” Id.

Instead, like the district court, we construe “salary or

wages” in section 6331(e) in accordance with its plain or

natural meaning. Black’s Law Dictionary defines a “salary”

as “[a]n agreed upon compensation for services—esp.

professional or semiprofessional services—usu. paid at
UNITED STATES V. WANLAND 15

regular intervals on a yearly basis, as distinguished from an

hourly basis.” The jury instructions closely tracked this

definition. Here, there was ample evidence for the jury to

find that Wanland’s partnership draws were remuneration

paid for professional services (legal services), defined on a

yearly basis (based on the year’s profits), and payable at

regular intervals (monthly), rendering them a “salary.”

B. Statute of Limitations—Levy Counts

Wanland argues that the district court erred in not

dismissing the levy counts because they exceeded the threeyear statute of limitations. All of the levy counts covered

2006 transactions, while the superseding indictment was

returned in January 2012. The district court was correct to

reject this argument and apply a six-year statute of

limitations.

Criminal tax proceedings generally have a three-year

statute of limitations. See 26 U.S.C. § 6531. There are,

though, several exceptions for which a six-year statute of

limitations applies. Id. § 6531(1)–(8). Under section

6531(1), tax offenses “involving the defrauding or attempting

to defraud” the government have a six-year statute of

limitations. “Section 6531(1), by its own terms, does not

require that a defendant be expressly indicted for tax fraud.” 

Workinger, 90 F.3d at 1413. Congress intended for a six-year

statute of limitations for “all offenses which are fairly

identifiable as those in which fraud is an essential ingredient,

by whatever words they be defined.” Id. at 1414 (quoting

United States v. Grainger, 346 U.S. 235, 244 (1953)). This

includes statutes not labeled “‘fraud,’ if those offenses did

reflect fraudulent activity.” Id. at 1413.
16 UNITED STATES V. WANLAND

As noted above, section 7206(4) requires one to act “with

intent to evade or defeat the assessment or collection of any

tax imposed by this title.” An individual must know of a tax

liability and a levy on his property to remedy that tax

liability, but still deliberately take some action to “evade or

defeat” that levy. As in Workinger, that is exactly the type of

“defrauding” that section 6531(1) was intended to cover. We

agree with the district court that the six-year statute of

limitations of section 6531(1) applies to prosecutions under

section 7206(4).

Wanland makes several arguments in favor of a three-year

statute of limitations. First, he contends that continuing to

interpret section 6531(1) broadly would allow the six-year

statute of limitations exception to become more prevalent

than the three-year rule. This is not persuasive in light of

Workinger. As this court explained, Congress intended for

the exception for offenses involving fraud to sweep broadly

and “cover most acts that a person could perform in an

attempt to avoid paying taxes.” Workinger, 90 F.3d at 1413;

see also id. (acknowledging the reality that section 6531(1)

and its counterpart, section 6531(2), may be broad enough to

effectively “render the 3-year period almost irrelevant”

(quoting Patricia T. Morgan, Tax Procedure and Tax Fraud

in a Nutshell, § 13.1.7 (1990))). We thus do not hesitate to

apply the six-year statute of limitations to violations of

section 7206(4), which necessarily require fraudulent

conduct.

Second, Wanland argues more specifically that applying

section 6531(1) to section 7206(4) is inappropriate because

one of the eight specifically enumerated exceptions, section

6531(5), is for a crime under another subsection of section

7206—section 7206(1). He argues that because Congress
UNITED STATES V. WANLAND 17

elected to extend the statute of limitations for a particular

subsection of section 7206, it deliberately omitted the other

subsections of section 7206. This argument is likewise

untenable under Workinger. Specifically enumerated

exceptions providing for a six-year statute of limitations were

included so that Congress could be “sure that mere technical

distinctions would not make a difference in the statute of

limitations.” Workinger, 90 F.3d at 1413. In other words,

they reflect a rather-be-safe-than-sorry approach, and are

sometimes duplicative of conduct that would also be

encompassed under sections 6531(1) and (2). Id. That

Congress specifically enumerated that section 7206(1) have

a six-year statute of limitations says little, if anything, about

the statute of limitations for section 7206(4).

Finally, Wanland points out that the Internal Revenue

Manual (IRM) provides that the statute of limitations for

section 7206(4) is three years. IRM § 9.1.3.3.7.3.1. The

IRM, however, does not bind this court. See Fargo v.

Comm’r, 447 F.3d 706, 713 (9th Cir. 2006) (stating that the

IRM “does not have the force of law and does not confer

rights on taxpayers”); see also United States v. Mead Corp.,

533 U.S. 218, 234–35 (2001) (explaining that agency

manuals are “beyond the Chevron pale,” and we afford them

deference only to the extent that we value the “thoroughness,

logic, and expertness” of the writer). For the above described

reasons, we do not conclude that the IRM’s recommendation

is persuasive, and we hold that the six-year statute of

limitations applies to violations of section 7206(4).

C. Res Judicata

Wanland argues that because his debts were discharged in

bankruptcy, he no longer owes the debts for the unpaid taxes
18 UNITED STATES V. WANLAND

from which the criminal charges arose. According to

Wanland, the government should “be precluded from

pursuing a criminal action concerning the assets and tax

liabilities the bankruptcy court already discharged.” The

district court properly rejected this argument.

Resjudicata requires Wanland to establish three elements:

(1) privity between parties in the actions; (2) an identity of

claims between actions; and (3) a final judgment on the

merits in the previous action. See Tahoe-Sierra Pres.

Council, Inc. v. Tahoe Reg’l Planning Agency, 322 F.3d

1064, 1077 (9th Cir. 2003).

First, Wanland fails to demonstrate privity between the

parties. Courts have not assumed that all federal agencies are

in privity for res judicata purposes, and instead look to the

substance of claims. See Sunshine Anthracite Coal Co v.

Adkins, 310 U.S. 381, 402–03 (1940) (explaining that while

there are occasions when privity exists between different

officers or agencies of the government, this consideration is

not just a “matter of form, but of substance”);see also United

States v. Ledee, 772 F.3d 21, 30 (1st Cir. 2014) (“[C]ourts

have recognized in the preclusion context the folly of treating

the government as a single entity in which representation by

one government agent is necessarily representation for all

segments of the government.”). For example, in United

States v. Hickey, 367 F.3d 888 (9th Cir. 2004), this court held

that the Securities and Exchange Commission (SEC) and the

United States in a criminal prosecution are not in privity

because when the SEC brings an action under the Securities

Act of 1933 or Securities Exchange Act of 1934, it is “not

acting as ‘the federal sovereign vindicating the criminal law

of the United States.’” Id. at 893 (quoting United States v.

Heffner, 85 F.3d 435, 439 (9th Cir. 1996)).
UNITED STATES V. WANLAND 19

Just as in Hickey, the IRS’s role in pursuing tax debts in

a bankruptcy action is not to act as a “federal sovereign

vindicating the criminal law.” In a bankruptcy proceeding,

the IRS is acting as a creditor trying to recover debts. In this

capacity, its interests will often differ from the interests of the

United States government in a criminal prosecution. For

example, if the IRS were in a position where it had to “make

a claim against the estate and at the same time preserve a

subsequent criminal prosecution” against a defendant, it

“would have to pursue an opposition to the bankruptcy based

on fraud, even if to do so might be contrary to its interest” as

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

1991).

The different roles of the IRS and the United States

government in criminal prosecutions correspond to the

different purposes of bankruptcy and criminal proceedings. 

The purpose of a bankruptcy action is to help those in bad

financial positions move forward, not, as with a criminal

prosecution, to resolve harms against society deserving of

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 moral difficulty,” and the

bankruptcy code “reflects [that] philosophy.”); Tatum,

943 F.2d at 381–82 (referring to bankruptcy proceedings and

criminal tax prosecutions, explaining that “[t]he pursuit of

one proceeding will seldom resolve the other”). Thus, the

IRS in a bankruptcy action and the United States government

in a criminal action are not in privity.

While we need not go further because Wanland has failed

on the first prong, he raises several arguments related to the

identity of claims prong that we briefly address. He takes

issue with the district court’s reasoning that res judicata
20 UNITED STATES V. WANLAND

cannot apply here because the bankruptcy court had no

authority to adjudicate criminal matters. He points primarily

to United States v. Liquidators of European Federal Credit

Bank, 630 F.3d 1139 (9th Cir. 2011), to argue that, even if the

government could not have made a particular claim in an

earlier proceeding, it can still be barred from making that

claim in a second proceeding. In Liquidators, this court held

that res judicata barred the government from bringing a

criminal forfeiture proceeding with respect to the same

property involved in a prior civil forfeiture proceeding

because both claims involved the same “transactional nucleus

of facts.” Id. at 1151–52. This was in spite of the fact that

the government could not have brought a criminal forfeiture

action in the civil forfeiture proceeding because the criminal

and civil forfeiture statutes do not permit consolidation. Id.

at 1151.

This court acknowledged that the result of its holding no

longer fit within the pattern reflected in our circuit’s case law

that res judicata only applies where a claim could have been

asserted in a previous action. Id. (citing Tahoe-Sierra,

322 F.3d at 1078). It explained, however, that this decision

was “driven by the unique context of forfeiture.” Id. at 1152. 

“Unlike in other contexts, the two types of forfeiture actions

always seek the same result,” “arise from exactly the same

facts,” “necessarily always involve the same potential

plaintiff,” and “involve the same general determination.” Id. 

In sum, “[t]he two forfeiture options—civil and criminal—

provide the government two different paths to reaching the

same goal—forfeiture of the property.” Id. For the reasons

described above, the IRS in bankruptcy proceedings and the

United States government in criminal prosecutions are not the

same plaintiff, nor do bankruptcy and criminal actions

purport to achieve the same goal. Accordingly, it would be
UNITED STATES V. WANLAND 21

inappropriate to expand Liquidators, decided for the

peculiarities of the forfeiture context, to the facts here.4

AFFIRMED.

4 We also doubt that there has been a final judgment on the merits with

respect to Wanland’s tax debts. Wanland received a general discharge

under 11 U.S.C. § 727. Under a general discharge order, most debts are

automatically discharged. There are a few exceptions, though, including

for a tax “with respect to which the debtor made a fraudulent return or

willfully attempted in any manner to evade or defeat.” Id. § 523(a)(1)(C). 

In accordance with the statutory exceptions to discharge, Wanland was

warned in his discharge order that some types of debt are not discharged,

including “debts for most taxes.” Even if, as Wanland points out, the

intent requirements for demonstrating “willful tax evasion” for nondischargeability of debt and willful tax evasion for a criminal tax evasion

charge are the same, Hawkins v. Franchise Tax Bd. of Cal., 769 F.3d 662,

669 (9th Cir. 2014), the issue had likely not been adjudicated prior to the

jury verdict in this trial.