Source: https://supreme.justia.com/cases/federal/us/429/10/
Timestamp: 2019-04-19 11:04:31+00:00

Document:
At respondents' trial on a charge of willfully filing false income tax returns in violation of § 7206(1) of the Internal Revenue Code, the District Court adequately instructed the jury on willfulness in accordance with the standard that willfulness in the context of § 7206 and related statutes simply means a voluntary, intentional violation of a known legal duty, United States v. Bishop, 412 U. S. 346, and hence an additional instruction on good faith was unnecessary.
Certiorari granted; 528 F.2d 247, reversed and remanded.
After a jury trial, respondents were convicted of willfully filing false income tax returns in violation of 26 U.S.C. § 7206(1). [Footnote 1] Based on its reading of United States v. Bishop, 412 U. S. 346 (1973), the Court of Appeals held that the jury was incorrectly instructed concerning willfulness, and remanded for a new trial. 528 F.2d 247 (1975). The United States petitioned for certiorari. We reverse.
a corporation. Their defense was that these transactions were correctly reported, or at least that they thought so at the time.
"voluntarily and intentionally and with the specific intent to do something which the law forbids, that is to say with [the] bad purpose either to disobey or to disregard the law."
Finally, the jury was instructed that "[g]ood motive alone is never a defense where the act done or omitted is a crime," and that, consequently, motive was irrelevant except as it bore on intent. The Court of Appeals held this final instruction improper because "the statute at hand requires a finding of a bad purpose or evil motive." 528 F.2d at 249. In so holding, the Court of Appeals incorrectly assumed that the reference to an "evil motive" in United States v. Bishop, supra, and prior cases meant something more than the specific intent to violate the law described in the trial judge's instruction.
"The Court, in fact, has recognized that the word 'willfully' in these statutes generally connotes a voluntary, intentional violation of a known legal duty. It has formulated the requirement of willfulness as 'bad faith or evil intent,' [ 290 U. S. ] Murdock, 290 U.S. [389,] 290 U. S. 398, or 'evil motive and want of justification in view of all the financial circumstances of the taxpayer,' Spies \[v. United States\], 317 U.S. [492,] 317 U. S. 498, or knowledge that the taxpayer 'should have reported more income than he did.' Sansone \[v. United States\], 380 U.S. [343,] 380 U. S. 353. See James v. United States, 366 U. S. 213, 366 U. S. 221 (1961); McCarthy v. United States, 394 U. S. 459, 394 U. S. 471 (1969)."
522 F.2d 974, 977 (CA 1975) (en banc), cert. denied, 423 U.S. 1049 (1976); United States v. McCorkle, 511 F.2d 482, 484-485 (CA7) (en banc), cert. denied, 423 U.S. 826 (1975); United States v. Greenlee, 517 F.2d 899, 904 (CA3), cert. denied, 423 U.S. 985 (1975); United States v. Hawk, 497 F.2d 365, 366-369 (CA9), cert. denied, 419 U.S. 838 (1974). The trial judge in the instant case adequately instructed the jury on willfulness. An additional instruction on good faith was unnecessary.
The respondents' other allegations of error, which the Court of Appeals found it unnecessary to reach, should be considered by that court in the first instance.
"(1) . . . Willfully makes and subscribes any return, statement, or other document, which contains or is verified by a written declaration that it is made under the penalties of perjury, and which he does not believe to be true and correct as to every material matter . . ."
"shall be guilty of a felony. . . ."
"couldn't claim this [the partnership losses] as a deduction . . . because, by so doing, they would know that they were filing a false report of their total gross income."
"[t]o establish the specific intent, the Government must prove that these defendants knowingly did the acts, that is, filing these returns, knowing that they were false, purposely intending to violate the law."
"bear in mind the sole charge that you have here, and that is the violation of 7206, the willful making of the false return, and subscribing to it under perjury, knowing it not to be true and [sic] to all material respects, and that and that alone."
The Court of Appeals, in Bishop, held that the evidence under the misdemeanor statute "need only show unreasonable, capricious, or careless disregard for the truth or falsity of income tax returns filed." 455 F.2d 612, 615 (CA9 1972). This Court rejected the view that this lesser degree of culpability was required for a violation of the misdemeanor statute, and held, on the contrary, that "Congress used the word willfully' to describe a constant, rather than a variable, in the tax penalty formula." 412 U.S. at 412 U. S. 359-360.
"if you do find that they were not bona fide loans, then you must next determine whether or not the defendants knew at the time they were withdrawing this money that it was not a loan. . . . In other words, you should determine whether they knew that, and as I have told you, that is an essential element."
"knew that they couldn't transfer [a certain asset] to a partnership, and, therefore, when they couldn't transfer it, they couldn't take the benefits of any losses sustained by the partnership in question. . . ."

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