Present: All the Justices 

JAMES LEONARD GIBSON 

v. Record No. 072023 OPINION BY JUSTICE DONALD W. LEMONS 

 JUNE 6, 2008 

COMMONWEALTH OF VIRGINIA 

FROM THE COURT OF APPEALS OF VIRGINIA 

 In this appeal, we consider whether a conviction under 

Code § 58.1-1815 requires proof of both a failure to 

truthfully account for and a failure to pay withholding tax. 

I. Facts and Proceedings Below 

 In 2000, James Leonard Gibson (“Gibson”) registered 

Leonard Gibson Excavating, Inc. (“Gibson Excavating”) for 

sales and withholding taxes with the Virginia Department of 

Taxation. Gibson, the president of Gibson Excavating, was the 

person listed as responsible for the sales and withholding 

taxes. Although the required forms were filed, Gibson failed 

to pay withholding taxes for the periods of October 16, 2001 

through August 22, 2002 in the amount of $278.93, November 22, 

2002 through May 7, 2003 in the amount of $35,314.94, and June 

11, 2003 through November 24, 2003 in the amount of 

$12,464.06. The underlying taxes for the period of October 

16, 2001 through August 22, 2002 had been paid; however, the 

remaining amount owed was for penalties and interest incurred. 

Gibson testified that the company simply did not have money to 

pay the obligations. However, there was also evidence that 
Gibson paid himself a salary of $116,592.00 in 2002, yet 

underpaid the tax obligations by over $22,000.00. 

 Gibson was charged with three misdemeanor counts of 

failure to pay tax, in violation of Code § 58.1-1815, for the 

three periods that withholding taxes were not paid. He was 

convicted in the General District Court of the County of 

Stafford and then appealed to the Circuit Court of the County 

of Stafford. In an order entered August 24, 2004 in the 

circuit court, the trial court found “the evidence would 

support a finding of guilty” but “defer[red] final disposition 

until August 15, 2005.” Deferral was further delayed and on 

December 15, 2005, the trial court entered an order finding 

Gibson guilty of the charges and continued the case for 

sentencing. Gibson was sentenced to twelve months in jail for 

each of the three convictions. The entirety of the twelvemonth sentence was suspended for two of the convictions and 

all but 90 days was suspended on the third conviction. 

 Gibson appealed to the Court of Appeals of Virginia which 

affirmed the trial court’s judgment and Gibson’s convictions. 

Gibson v. Commonwealth, 50 Va. App. 285, 649 S.E.2d 214 

2
(2007). Gibson appeals to this Court on four assignments of 

error1: 

1. The trial court erred by finding one guilty of a 

violation of section 58.1-1815 of the Code of Virginia 

when the person truthfully accounts for his tax 

obligation, but is unable to pay the obligation and does 

not take any steps to avoid the obligation. 

2. The Court of Appeals erred by not addressing whether the 

term “tax” in section 58.1-1815 includes penalties and 

interest assessed by the taxing authority. 

3. The trial court erred by finding that an individual who 

fails to pay penalties and interest assessed by a taxing 

authority, although the underlying tax had been paid, is 

guilty of a violation of section 58.1-1815 of the Code of 

Virginia. 

4. The courts erred by not recognizing the courts [sic] 

authority to defer findings of guilt absent a specific 

legislative grant of authority. 

II. Analysis 

A. Deferral 

 The circuit court’s August 24, 2004 order stated “that 

the evidence would support a finding of guilt” but “defers 

final disposition until August 15, 2005 . . . to which time 

this case is continued, and the bond is continued.” The order 

continued the case but did not enter a final disposition. 

Additionally, the record in this case does not reveal any 

particular disposition that would be entered after deferral. 

 1

 Gibson did not file transcripts of the proceedings 

below; rather he proceeds on appeal with a written statement 

of facts in lieu of a transcript pursuant to Rule 5:11(c). 

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Gibson’s argument that it was understood that the charges 

would be dismissed at the end of the year is unsupported by 

the record. 

 Gibson received the initial deferral of disposition for 

one year; however, no request for further deferral appears on 

the record. Although the December 15, 2005 order recites, 

“counsel for the defendant noted his exceptions to the 

ruling,” nothing appears in the order or in the written 

statement of facts revealing what, if any, objections Gibson 

made. After the December 15th order was entered “find[ing] 

the defendant guilty,” no additional request for deferral was 

made. Additionally, the final sentencing order does not 

reveal that a request for additional deferral was made. 

Finally, no objection was made to the sentencing order. 

 Gibson further alleges that he received a “double 

sentence,” namely a deferred sentence and then an adjudication 

of guilt with sentences of confinement in jail. Gibson 

mischaracterizes what happened in the trial court. The 

initial August 24, 2004 order did not impose a sentence. The 

record does not reflect any understanding or agreement that 

the charges would be dismissed at the end of the deferral 

period. 

 Finally, Gibson argues that he is entitled to “the 

suspended imposition of sentence initially ordered” on August 

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24, 2004 pursuant to “the plethora of options available to a 

trial court to dispense justice” under Code § 19.2-303. 

However, Code § 19.2-303 is inapplicable to this case because 

its terms only apply “[a]fter conviction.” Gibson was not 

convicted on August 24, 2004; rather, he was convicted on 

December 15, 2005. 

 Gibson’s fourth assignment of error is based upon a 

faulty premise concerning what actually transpired in the 

trial court. On the only occasion that Gibson requested a 

deferral of disposition to a later date, it was granted by the 

trial court. The record reveals no additional requests or 

motions for deferral. Consequently, the trial court never 

denied such a request or motion. Accordingly, the issue 

presented in Gibson’s fourth assignment of error, namely that 

the trial court “erred by not recognizing the courts [sic] 

authority to defer findings of guilt absent a specific 

legislative grant of authority” is not properly before us 

because the record reflects no ruling of the trial court to 

that effect. We note that although the Court of Appeals 

addresses this issue in its opinion, the question was not 

properly before the Court of Appeals for the same reason.2

 2 See also Moreau v. Fuller, 276 Va. ___, ___ n.5, ___ 

S.E.2d ___, ___ n.5 (2008) (this day decided) (overruling 

Gibson v. Commonwealth, 50 Va. App. 285, 649 S.E.2d 214 (2007) 

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B. Tax Issues 

1. Definition of “Tax” 

 Gibson’s second and third assignments of error are based 

upon arguments that were not made in the trial court. 

Gibson’s argument that the term “tax” as used in Code § 58.1-

1815 does not include penalties and interest was not preserved 

in the statement of facts or in the circuit court’s orders and 

no transcript was filed. There is no indication in the record 

that Gibson made these arguments to the circuit court. 

Therefore, Gibson waived these arguments pursuant to Rule 

5:25. “The purpose of Rule 5:25 is to afford the trial court 

the ability to address an issue. If that opportunity is not 

presented to the trial court, there is no ruling by the trial 

court on the issue, and thus no basis for review or action by 

this Court on appeal.” Riverside Hospital v. Johnson, 272 Va. 

518, 526, 636 S.E.2d 416, 420 (2006). 

2. Effect of Bankruptcy 

 Gibson Excavating filed for bankruptcy protection under 

Chapter 11 of the United States Bankruptcy Code. 11 U.S.C. 

§ 1101 et seq. The proceeding was converted to a Chapter 7 

proceeding and it “was during this liquidation process that 

the withholding tax assessments for the final charge were 

 

to the extent that it is inconsistent with the holding of that 

case). 

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accumulated.” Gibson argues that he “clearly had no authority 

or control, and consequently ‘willfulness’ for the failure for 

withholding taxes to be paid when a corporation was in the 

control of a bankruptcy trustee.” 

 This argument is made for the first time before this 

Court. The argument was not made at the trial court nor was 

it made in the Court of Appeals. Accordingly, we will not 

consider the argument made for the first time before this 

Court. Rule 5:25. 

3. Scope of Code § 58.1-1815 

 Code § 58.1-1815 provides, in pertinent part, “Any . . . 

person required to collect, account for and pay over any 

sales, use or withholding tax, who willfully fails to collect 

or truthfully account for and pay over such tax . . . shall 

. . . be guilty of a Class 1 misdemeanor.” 

Under well-established principles, an issue of 

statutory interpretation is a pure question of law 

which we review de novo. When the language of a 

statute is unambiguous, we are bound by the plain 

meaning of that language. Furthermore, we must 

give effect to the legislature's intention as 

expressed by the language used unless a literal 

interpretation of the language would result in a 

manifest absurdity. If a statute is subject to 

more than one interpretation, we must apply the 

interpretation that will carry out the legislative 

intent behind the statute. 

Conyers v. Martial Arts World of Richmond, Inc., 273 Va. 96, 

104, 639 S.E.2d 174, 178 (2007) (citations omitted). 

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 Gibson argues that to violate the statute one would have 

to fail to collect or truthfully account for and fail to pay 

over the tax. We have not previously addressed the elements 

of the crime proscribed in Code § 58.1-1815. However, a 

federal statute is worded in much the same way: “any person 

required under this title to collect, account for, and pay 

over any tax imposed by this title who willfully fails to 

collect or truthfully account for and pay over such tax shall 

. . . be guilty of a felony.” 26 U.S.C § 7202 (2000). The 

United States Courts of Appeals for the Second Circuit, the 

Third Circuit, and the Ninth Circuit have interpreted the 

language of 26 U.S.C. § 7202 in the conjunctive. United 

States v. Gilbert, 266 F.3d 1180, 1183-84 (9th Cir. 2001); 

United States v. Thayer, 201 F.3d 214, 220-21 (3rd Cir. 1999); 

United States v. Evangelista, 122 F.3d 112, 121 (2d Cir. 

1997). In order to comply with statutory obligations, a 

responsible party must account for and pay over a tax, and 

this requirement is not satisfied unless both obligations have 

been met. The “plain language of the disputed passage in [26 

U.S.C.] § 7202 creates a dual obligation – to ‘truthfully 

account for and pay over’ trust fund taxes – that is satisfied 

only by fulfilling both separate requirements. Accordingly, 

the command of the statute is violated by one ‘who willfully 

fails’ either to ‘account for’ or to ‘pay over’ the necessary 

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funds.” Evangelista, 122 F.3d at 121. See also Gilbert, 266 

F.3d at 1183-84; Thayer, 201 F.3d at 220-21. 

Gibson’s interpretation of the statute would allow a 

person to collect the taxes and use them for his own benefit 

without penalty under Code § 58.1-1815. Such a result cannot 

be the intent of the General Assembly in enacting this Code 

provision particularly in light of federal case law to the 

contrary interpreting identical language. We hold the Court 

of Appeals did not err in affirming Gibson’s convictions. 

Affirmed.