* This order and judgment is not binding precedent, e xcept under the

doctrines of law of the case, res judicata, and col lateral estoppel. The court generally disfavors the citation of orders and judg ments; nevertheless, an order and judgment may be cited under the terms and condi tions of 10th Cir. R. 36.3. 

## F I L E D United States Court of Appeals Tenth Circuit 

### October 7, 2005

Clerk of Court UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff - Appellee, No. 04-3508

v. (D. Kansas) DAVID G. PFLUM,

Defendant - Appellant. (D.C. No. 04-CR-40008-SAC)

ORDER AND JUDGMENT *

Before HENRY , McKAY , and HARTZ , Circuit Judges.
Benjamin Franklin famously quipped that “in this wo rld nothing can be said to be certain, except death and taxes.” Letter fro m Benjamin Franklin to JeanBaptiste Le Roy (Nov. 13, 1789), in 10 The Writings of Benjamin Franklin 69 (A. Smyth ed. 1907). While not contesting the inevitab ility of the former (as far as we know), David G. Pflum believed he had found a lo ophole to escape the latter. After an extensive study that included reading book s such as “The Great Income1 We note that the author of these books, Irwin Schif f, has maintained for more than 30 years that income taxes are voluntary, but, not surprisingly, “he has never been successful with that theory in court.” Nov. 13, 1789, United States v. Schiff , 379 F.3d 621, 623 (9th Cir. 2004) (citing cases i n which Schiff’s arguments have been rejected); Newman v. Schiff , 778 F.2d 460, 467 (8th Cir. 1985) (referring to the “blatant nonsense” promotedby Schiff). -2- Tax Hoax” and “How Anyone Can Stop Paying Income Taxes,” he stopped paying
taxes. 1But Franklin was more prescient than Mr. Pflum real ized. He was indicted on eight counts of failure to pay quarterly employm ent taxes, in violation of 26 U.S.C. § 7202, and three counts of failure to file a federal income tax return, in violation of 26 U.S.C. § 7203. By his own testimony he conceded that from 1997 to 1999 he failed to file federal income tax return s, and in 1998 and 1999 he failed to withhold federal employment taxes. The j ury found him guilty on all 11 counts. Because the trial was held after Blakely v. Washington , 524 U.S. 296 (2004), but before United States v. Booker , 125 S. Ct. 738 (2005), when the constitutionality of the Federal Sentencing Guideli nes was uncertain, the trial judge, recognizing that the amount of tax loss to t he government would be a major factor at sentencing, decided to submit the i ssue to the jury. It found the tax loss to be $573,900.00, resulting in an offense level of 18 and a sentencing range of 27-33 months. Mr. Pflum was sentenced to 30 months in prison. On appeal he asserts that the district court erred in two respects: (1) in refusing to-3-

give the jury a proposed instruction on “willfulnes s,” and (2) in denying a motion to strike the testimony of two IRS agents. We affi rm the conviction and sentence.
I. WILLFULNESS INSTRUCTION Mr. Pflum argues that the district court erred in r efusing to give a proposed instruction relating to the “willfulness” of his ac ts. We review the district court’s refusal to give a requested jury instruction for an abuse of discretion. United
States v. Starnes , 109 F.3d 648, 650-51 (10th Cir. 1997). “A distri ct court does not abuse its discretion so long as the charge as awhole adequately states the law.” Id . at 651 (internal quotation marks omitted). The crimes with which Mr. Pflum was charged require d the jury to find beyond a reasonable doubt that he acted “willfully. ” 26 U.S.C. §§ 7202, 7203. The court not only instructed the jury that it mustfind that Mr. Pflum acted willfully, but it also gave the following instructi ons: INSTRUCTION NO. 18 As mentioned earlier, the third element for the § 7 202 offenses charged in Counts One through Eight of the Second S uperseding Indictment and the third element for the § 7203 off enses charged in Counts Nine through Eleven of the Second Supersedin g Indictment are the same insofar as the government must prove t hat the defendant acted willfully. The defendant acted “willfully” if the law imposed a duty on him, he knew of the duty, and he voluntarily and in tentionally violated the duty. A defendant’s conduct is not “w illful” if it resulted from negligence, inadvertence, accident, m istake or reckless disregard for the requirements of the law, or resul ted from a good-4-

faith misunderstanding that he was not violating a duty that the law imposed on him. If you have a reasonable doubt as to whether the defendant acted willfully, you must acquit the defe ndant.
R. at 45.
INSTRUCTION NO. 19

The defendant asserts he did not act willfully as c harged in the indictment, because he did not believe that the law imposed a duty on him. A defendant does not act “willfully” if he believes in good faith that he is acting within the law or that his actions comply with the law, even though the belief turns out to be inc orrect or wrong. Having the burden to prove the defendant acted will fully as charged, the government must prove the defendant did not bel ieve in good faith that his actions were lawful. The burden of proving good faith does not rest with the defendant because a defendan t does not have an obligation to prove anything in this case. Ther efore, if you find that the defendant actually believed what he was do ing was in accord with tax laws, then you must conclude that the defe ndant did not act willfully. In making this determination about the defendant’s good faith, you must keep the following in mind. A defendant’s good-faith belief or misunderstanding of the law need not be r ational or even reasonable, as long as he actually held the belief in good faith. A defendant’s good faith misunderstanding of the law must be distinguished from a defendant who understands the duty imposed on him by law but disagrees with that law or views the law as unconstitutional. There is no defense of good fait h belief or misunderstanding when a defendant knows his duty un der the tax laws but believes, sincerely or not, that the tax l aws are unconstitutional or invalid. A defendant’s belief that the tax laws violate his constitutional rights does not constitute a good faith misunderstanding of the requirements of the law. F urthermore, a defendant’s disagreement with the government’s tax collection system and policies does not constitute a good fait h misunderstanding of the law. You shall disregard any asserted good-5-

faith claims that the tax laws are unconstitutional or invalid or that the tax collection system and policies are wrong. In determining whether the defendant actually held the belief or misunderstanding in good faith, you must conside r all the evidence in the case including the defendant’s effort to res earch and understand the relevant tax laws and other authorit ative judicial decisions and materials, the reasonableness of the defendant’s beliefs, and all of his actions taken before and af ter the events in question that bear on the sincerity of the defendan t’s state beliefs. Id . at 46-47.
INSTRUCTION NO. 21

In proving that an act is done willfully, the gover nment must show that the defendant knew of his legal duty and violated it, voluntarily and intentionally, and not because of m istake or inadvertence or other innocent reason. The knowled ge that a person possesses at any given time may not ordinarily be p roved directly because there is no way of directly scrutinizing th e workings of the human mind. Knowledge may be proved by a person’s words, acts or omissions, along with all the other evidence, in de ciding whether a person acted knowingly, that is voluntarily and int entionally. In deciding whether a person has knowledge, you als o may consider inferences drawn from proof that a person deliberately closed his eyes to what would otherwise have been o bvious to him. If you are convinced beyond a reasonable doubt thata person was aware of the high probability of the existence of afact and that he deliberately avoided learning the truth, then you m ay infer knowledge of the existence of this fact, but you may still fi nd that the personal actually believed the fact does not exist. It is e ntirely up to you as to whether you find a person deliberately closes his e yes to the obvious and as to what inferences should be drawn from suchevidence. You may not conclude that a person has knowledge, howev er, from proof of mistake, negligence, carelessness, or a belief i n an inaccurate proposition.-6-

Id . at 50-51. Not satisfied with the instructions, Mr. Pflum prop osed additional language: “In this case, the Defendant is not pres umed to know the law.” Id . at 11 The district court decided that the substance o f the proposed instruction was adequately expressed in other instructions. We agr ee. To be sure, to establish willfulness the governmenthad to prove beyond a reasonable doubt that Mr. Pflum had knowledge of th e law. United States v. Ambort , 405 F.3d 1109, 1114 (10th Cir. 2005). But the in structions given established the government’s burden without the add itional language proposed by Mr. Pflum. The jury was instructed that the govern ment must prove each element of the offense beyond a reasonable doubt, including willfulness. Instruction 18 defined willfulness: “The defendant acted ‘willful ly’ if the law imposed a duty on him, he knew of that duty , and he voluntarily and intentionally violated the duty.” R. at 45 (emphasis added). Instruction 21 is even more clear: “In proving that an act is done willfully, the government must show that the defendant knew of his legal duty and violated it, voluntarily and intentionally, and not because of mistake or inadvertence or other innocent reason.” Id . at 50. The jury was also given a lengthy “good faith” instruction, which stated that an act is not done willfully if the person “believes in good faith that he is acting within the law” and that the defendant’s “good-faith belief or misunder standing of the law need not be-7-

rational or even reasonable . . . .” Id . at 46-47. This instruction also reiterated that the burden was on the government to prove thatthe defendant acted willfully and that the defendant “does not have an obligation to prove anything in this
case.” Id . at 46. The jury was more than adequately instructed that t he government had to prove beyond a reasonable doubt that Mr. Pflum was aware of the duties the law imposed upon him and that he intentionally violated those duties. Accordingly, we cannot say that the district court abused its di scretion in refusing to give the proposed instruction.
II. MOTION TO STRIKE TESTIMONY Mr. Pflum’s second issue on appeal is whether the d istrict court erred in refusing to strike the testimony of two government witnesses. On crossexamination IRS Special Agent Henry Herron testifie d that the rate of income tax withholding was 28%, a figure that he said was in t he federal Sentencing Guidelines, but could be found in the United States Code as well. Agent Abbe Stewart later testified on cross-examination that w age withholding is governed by IRS publication Circular E. On redirect she testif ied that the 28% figure could be found in 26 C.F.R. § 31.3402(g)(1). After the gove rnment rested, Mr. Pflum moved to strike the testimony. His counsel argued that the regulation cited by Agent Stewart related only to supplemental wages an d did not mention a 28%-8-

figure. He also argued that Circular E had no lega l effect because it was not published in the regulations. The district court d enied the motion, but gave Mr. Pflum leave to raise it again. The motion was renewed at the close of evidence and denied again without comment by the co urt. Before addressing Mr. Pflum’s argument, we make two observations regarding the procedural context of the issue. Fir st, although Mr. Pflum originally argued that the challenged testimony aff ected both his conviction and sentence, he now concedes that the testimony affect ed only his sentence calculation. The jury did not need to find a speci fic amount of tax loss to convict Mr. Pflum on any of the counts. The amount of tax loss was submitted to the jury solely to prevent any potential sentencing problems that might arise in light of Blakely

. Second, Mr. Pflum has not objected to the mandatoryapplication of the Sentencing Guidelines to this case. Had he done so , we would be confronted with nonconstitutional Bookererror because the sentence was calculated solely o n facts found by the jury. See United States v. Gonzalez-Huerta , 403 F.3d 727, 731-32 (10th Cir. 2005). But because Mr. Pflum has not ra ised this issue, we need not address it. See United States v. Sandia , 188 F.3d 1215, 1218 n.2 (10th Cir. 1999). For purposes of this case we will treat the guideli nes in a pre- Booker fashion.-9-

“We review the district court’s admission of eviden ce for an abuse of discretion, not disturbing the court’s decision unl ess we have a definite and firm conviction that the trial court made a clear error of judgment or exceeded the bounds of permissible choice in the circumstances.” Richardson v. Mo. Pac. R.R.
Co. , 186 F.3d 1273, 1276 (10th Cir. 1999) (internal qu otation marks and brackets omitted). We may affirm on any ground supported bythe record. United States v. Sandoval , 29 F.3d 537, 542 n.6 (10th Cir. 1994). We affirm because Mr. Pflum’s objection to the chal lenged testimony was not timely. See generally1 Jack B. Weinstein & Margaret A. Berger, Weinstein’s Federal Evidence , § 103.11 (Joseph M. McLaughlin, ed., Matthew Bend er 2d ed. 1997) (“An objection to the admission of evidence m ust be ‘timely’ or else any error in admission may not be asserted on appeal. An objection is ‘timely’ if it is made as soon as the opponent knows, or should know, that the objection is applicable.” (footnotes omitted)). The basis for t he objection—that the 28% figure used to calculate the tax loss is not in the United States Code or the regulations—was known to Mr. Pflum, or should have been known, long before the objection was made. Specifically, even before Agent Herron took the stand Mr. Pflum had stipulated to the admission of Govern ment Exhibits 6 and 7, which consisted of spreadsheets showing the names of Mr. Pflum’s employees, the wages they were paid, and the amount of taxes that should have been withheld.-10-

The exhibits relied on the 28% figure in calculatin g the required withholding. The cross-examination of Agent Herron also demonstr ates that Mr. Pflum’s counsel was aware of the 28% figure before Agent He rron took the stand. Indeed, Mr. Pflum’s counsel questioned Agent Herron extensi vely about the 28% figure, and even suggested that the figure was from the Sen tencing Guidelines, and not the Tax Code. At one point Mr. Pflum’s counsel asked Agent Herron : “Is it not true that that 28 percent that you are using is notsomething that’s dictated or required by the federal income tax laws, the 28 per cent figure comes from another set of laws. Is that correct?” Aplee. Supp. App. at 161. The cross-examination of Agent Stewart also reveals that Mr. Pflum was aware of the basis for his objection long before th e government rested its case. Agent Stewart did not testify on direct examination about the tax loss or the 28% figure. Her testimony was limited to describing a W-4 form and the difference between employees and independent contractors. On cross-examination Mr. Pflum’s counsel questioned Agent Stewart about the withholding rate for federal income taxes and how that rate would be cal culated. Agent Stewart responded: “You would have to look at the payroll tax tables that the Internal Revenue Service puts out each year . . . .” Id . at 194. Q. Now, this table, is that circular E? A. That would be circular E.-11-

Q. Okay. Good enough. That’s what I want. So yo u’re familiar with the fact that under Section 3402 of—just the section it self says withholding shall be done according to some table, right? A. That’s one of the ways, yes.

. . . . Q. And the typical way to withhold would be you’d look at the regulations and it would say consult circular E, correct? A. Give or take, yeah. Q. And so you’d have to dig out circular E . . . t o determine how much is to be withheld? A. That’s correct.

. . . . Q. And the only way you could determine that would be by looking at circular E? A. That’s correct. Id . at 194-195. Under Fed. R. Evid. 103 evidentiary objections gene rally must be made at the time the evidence is offered. See Sorensen v. City of Aurora , 984 F.2d 349, 355 (10th Cir. 1993); see also Vallejos v. C.E. Glass Co. , 583 F.2d 507, 511 (10th Cir. 1978) (motion to exclude raised as part of mot ion for directed verdict was not timely; “the proper time to object to the admission of evidence . . . was at the time it was offered”). In this case Mr. Pflum did not o bject until after four additional witnesses had been called and the government had re sted its case. United States v. Gibbs , 739 F.2d 838, 849 (3d Cir. 1984) (en banc) (objec tion untimely when made “ not when the evidence was offered, but during a motion to strike made afterthe government had rested”); United States v. Kanovsky , 618 F.2d 229, 231-12-

(2d Cir. 1980) (“[T]he record reveals that appellan t’s objection below was not timely since it was not made until after the witnes s was excused and the jury dismissed from the courtroom.”). The belated objec tion deprived the government of the opportunity to cure any potential defects in the testimony. Because the objection was untimely, it was properly overruled. We AFFIRM Mr. Pflum’s conviction and sentence.
ENTERED FOR THE COURT

Harris L Hartz Circuit Judge