Source: http://federaltaxcrimes.blogspot.com/2016/04/is-jury-adequately-informed-that-good.html
Timestamp: 2019-04-20 14:16:11+00:00

Document:
The district court effectively and correctly instructed the jury as to willfulness, which "in this context simply means a voluntary, intentional violation of a known legal duty." United States v. Pomponio, 429 U.S. 10, 12, 97 S. Ct. 22, 50 L. Ed. 2d 12 (1976) (per curiam) (explaining the statutory definition of willfulness in the Internal Revenue Code); see also United States v. Damra, 621 F.3d 474, 502 (6th Cir. 2010) (holding  that the district court "effectively and correctly" instructed the jury on willfulness element by matching the language used in Pomponio). Because "the good faith-requirement is effectively bundled into the willfulness instruction," no separate instruction regarding good faith is required. Damra, 621 F.3d at 502; see also Sassak, 881 F.2d at 280 (holding that substance of proposed good faith belief instruction was fully covered by willfulness instruction given). Thus, a jury's finding of willfulness under this definition "'would necessarily negate any possibility' that the defendant acted in good faith." Damra, 621 F.3d at 502-03 (quoting United States v. Tarwater, 308 F.3d 494, 510 (6th Cir. 2002)). As the Supreme Court explained in Cheek, "one cannot be aware that the law imposes a duty upon him and yet be ignorant of it, misunderstand the law, or believe the duty does not exist." Cheek, 498 U.S. at 201; see also id., at 205 (rejecting constitutional as-applied challenge under the Pomponio line of cases because such claims "reveal full knowledge of the provisions at issue and a studied conclusion, however, wrong," and not from "innocent mistakes caused by the complexity of the Internal Revenue Code").
Contrary to Rae's assertion, Cheek does not require a separate good faith instruction. Rather, Cheek merely held that the trial court in that case erred in instructing the jury that good faith was measured by an objective rather than a subjective standard, and that an unreasonable belief did not negate willfulness. See Cheek, 498 U.S. at 202 ("Characterizing a particular belief as not objectively reasonable transforms the inquiry into a legal one and would prevent the jury from considering it.") In short, the district court did not abuse its discretion by declining to provide an additional good faith instruction.
Rae alleges that his "various correspondence through the years" to the IRS and State of Michigan as well as his failure to respond to district court order directing him to comply with the IRS summons "show that he had a history of disbelief as to what he was told by government officials and agencies, supporting the position of his good faith belief that he did not have to pay the taxes." Reply Br. at 1. He claims that the jury instruction given was "not sufficient for the jury to adequately consider Dr. Rae's intent as displayed through his good faith defense in this case." Reply Br. at 3. But, as noted, the Supreme Court and this court have held that an instruction like the one given by the district court in this case is sufficient because it incorporates the concept of subjective good faith belief.
Furthermore, as the district court held, an additional instruction was not warranted on this record. Rae did not testify, and he did not offer any evidence at trial. And, in both opening statements and closing arguments, Rae's attorney told the jury that Rae's "theory of defense" was that he researched the law and "drew conclusions" that he was not subject to taxes, and that "even if eccentric, he held the belief in good faith." In short, Rae's argument is without merit, because the proposed good faith instruction was substantially covered by the instruction given and its omission did not substantially impair the defense. See Sassak, 881 F.2d at 279.
An act or failure to act is “willful” if it is a voluntary and intentional violation of a known legal duty.
I don't know whether the presentation of this instruction was an error of the trial judge or of the court reporter or of the Court of Appeals. But if that instruction was given as quoted, it is wrong.
The holding that the good faith belief defense is subsumed in a standard willfulness instruction is often repeated by the courts in order avoid having to reverse the case for retrial.
I believe that defendants who go to trial in these cases should make the record that the defense has been put in play. This may require the defendant to testify -- often viewed as a no, no by defense counsel. But, if it is the only defense one has, if the defense is not otherwise prominently presented in the record, the defendant just may have to testify. Of course, if the defendant lacks credibility, then you just may have to take the risk that the court will determine that the issue has not been put in play sufficiently to warrant a separate instruction. And, because of holdings like Rae, the time to win this issue is at the trial level.
4. Failure to Give the Requested Good Faith Instruction.
Now we come to something a bit more meaty. The defense asserted a good faith reliance defense and the record had sufficient evidence to establish that it was a defense to be submitted to the jury. The defense thus properly requested a good faith jury instruction drawn from the Eleventh Circuit's pattern jury instructions. The Per Curiam held that the defense was entitled to that instruction and failure to give it upon proper request was reversible error.
In the course of its glittering generalities and string quotes, the Per Curiam says some curious things. It says, for example, "The requested good faith reliance jury instruction was based on our pattern jury instructions and was, therefore, a correct statement of the law." The Per Curiam cannot be serious in that statement read on its face. Congress never passed the pattern jury instructions nor has the Supreme Court put its imprimature on it, so if the pattern jury instructions misinterpret the law, the pattern jury instructions do not become the law. Cf. United States v. Svete, 521 F.3d 1302, 1310(11th Cir. 2008), reversed en banc 556 F.3d 1157 (11th Cir. 2009) (although reversed because the pattern was found correct, the key point is that pattern jury instructions are not the law).
Once you work past the fluff, the bottom line is that there was sufficient evidence to support the requested jury instruction.
The opinion, including the short dissent, is 70 pages long. Reminds me of the quote attributed to Blaise Pascal (and others), "I would have written a shorter letter, but I did not have the time."
In the subsequent opinion on petition for rehearing in Kottwitz, 627 F.3d 1383 (11th Cir. 2010), here, the Court expanded its discussion on the reliance on good faith and expanded it to the conspiracy charge. The opinion on rehearing is short, so I quote it in full: I have bold-faced certain portions of the opinion to draw the readers attention in light of the earlier discussion in this blog.
Defendants/Appellants have petitioned for rehearing. We have considered Defendants' arguments and the Government's reply. And we have looked at the record again. We stand by our decision, United States v. Kottwitz, 614 F.3d 1241 (11th Cir. 2010), except on the issue of the accountant-reliance jury instruction for Count One.
Defendants contend that the district court erred in refusing to give Defendants their requested jury instruction about reliance on an accountant's advice. In our original decision, we concluded that this refusal constituted reversible error on Counts Three, Four, and Five. Then, we remanded the case to the district court for retrial with the requested instruction on those counts only. Now, we conclude that the district court was also similarly incorrect to deny Defendants' accountant-reliance jury instruction on the Count One conspiracy charges.
To receive a requested jury instruction in this Circuit, a defendant's burden is light: "any foundation in the evidence" is sufficient. United States v. Opdahl, 930 F.2d 1530, 1535 (11th Cir. 1991). On reflection, we accept that Defendants met this burden. Sufficient evidence was introduced to allow the conviction of Defendants on Count One on the basis of several alternative interpretations of the facts.
Even though no evidence directly showed that Defendants' accountant was involved in initially entering/hiding transactions on the corporate books (for example, the personal-expense transactions), Defendants introduced enough circumstantial evidence to warrant an instruction that -- at some pertinent point -- Defendants may have relied on the accountant's advice.
| n2 The correct test in this Circuit for the "act" element in an 18 U.S.C. section 371 conspiracy (including the subset of Section 371 conspiracies against the Internal Revenue Service known as Klein conspiracies) is "the commission of an act in furtherance of the agreement." United States v. Adkinson, 158 F.3d 1147, 1153 (11th Cir. 1998). A "failure to properly report income," id. at 1154, is one example of conduct that could satisfy the act element of a Klein conspiracy. But it is not the only possible act that could do so: for example, intentionally making false entries in corporate books could be an act in furtherance of the agreement. Because we cannot know the precise act(s) on which the jury relied for the Count One conspiracy convictions, we cannot rule out that the jury relied on an act that involved -- in a material way -- advice from Defendants' accountant.
n3 To be clear, as a result of our original decision and this present order, we have vacated or reversed each of Defendants' convictions and sentences at issue on appeal.
Otherwise, Defendants' petitions for rehearing are DENIED. And, no judge of the Court having requested a poll, Defendant Kottwitz's suggestion for rehearing en banc is DENIED.
Petitions DENIED, except Defendants' convictions and sentences on Count One are VACATED; the case is REMANDED.
The point is that a reliance on accountant instruction is essentially a good faith instruction. By relying on the accountant in good faith, they did not have the requisite Check willfulness intent to violate the law. Where the record permits that inference of reliance / good faith, they are entitled to the instruction.
Fifth Circuit Sustains Convictions Despite Trial Judge's Refusal to Give Proper Cheek Willfulness Instruction (Federal Tax Crimes Blog 11/21/15; 11/22/15), here.
D.C. Circuit Affirms Preparer Convictions Over Ineffective Assistance Claims (Federal Tax Crimes Blog 7/30/15), here.
Making a Cheek Good Faith "Defense" Without Testifying (Federal Tax Crimes Blog 11/24/11), here.
Fourth Circuit Reverses Tax Obstruction Conviction Because of Bad Instruction and Affirms Denial of Good Faith Instruction for False Claim Conviction (Federal Tax Crimes Blog 11/20/13), here.

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