Source: https://law.justia.com/cases/federal/appellate-courts/F2/807/269/311518/
Timestamp: 2020-08-07 21:26:14
Document Index: 591141330

Matched Legal Cases: ['§ 65311', '§ 7102', '§ 7201', '§ 7203', '§ 7201', '§ 6531']

United States of America, Appellee, v. Donald F. Ferris, Defendant, Appellant, 807 F.2d 269 (1st Cir. 1986) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › First Circuit › 1986 › United States of America, Appellee, v. Donald F. Ferris, Defendant, Appellant
United States of America, Appellee, v. Donald F. Ferris, Defendant, Appellant, 807 F.2d 269 (1st Cir. 1986)
US Court of Appeals for the First Circuit - 807 F.2d 269 (1st Cir. 1986) Argued Oct. 7, 1986. Decided Dec. 16, 1986
The sole issue in this case is when the six-year statute of limitations, 26 U.S.C. § 65311 started to run on an indictment dated January 22, 1985, charging attempted evasion of taxes due for the calendar year 1977 in violation of 26 U.S.C. § 7102.2
The government takes two positions, only the first of which we discuss4 : that the statute starts running on the date of the last affirmative act of tax evasion without regard to the due date of the taxes not paid.
Since we are reviewing the refusal to grant a motion to dismiss the indictment, the allegations of the indictment and the unchallenged statement of proof of the prosecutor must be accepted as true. See United States v. Sampson, 371 U.S. 75, 78-79, 83 S. Ct. 173, 174-75, 9 L. Ed. 2d 136 (1962); Boyce Motor Lines v. United States, 342 U.S. 337, 343 n. 16, 72 S. Ct. 329, 332 n. 16, 96 L. Ed. 367 (1952).
It is important to emphasize that defendant was indicted for the felony offense of attempted tax evasion under 26 U.S.C. § 7201, not the misdemeanor offense of failing to file a tax return, 26 U.S.C. § 7203. In Spies v. United States, 317 U.S. 492, 63 S. Ct. 364, 87 L. Ed. 418 (1943), the Court discussed the difference between the misdemeanor of a willful failure to pay a tax when due and the felony of willful attempt to defeat and evade a tax. It held: "If the tax-evasion motive plays any part in such conduct [concealment of assets or covering up sources of income] the offense may be made out even though the conduct may also serve other purposes such as concealment of other crime." Id. at 499, 63 S. Ct. at 368. So also in United States v. Beacon Brass Co., Inc., 344 U.S. 43, 45-46, 73 S. Ct. 77, 78-79, 97 L. Ed. 61 (1952), the Court said: "The language of Sec. 145(b) [the predecessor to 26 U.S.C. § 7201] which outlaws willful attempts to evade taxes 'in any manner' is clearly broad enough to include false statements made to Treasury representatives for the purpose of concealing unreported income."
The case law substantiates the government's position that it is the date of the latest act of evasion, not the due date of the taxes, that triggers the statute of limitations. In United States v. Trownsell, 367 F.2d 815 (7th Cir. 1966), the court held that the statute of limitations started running in February of 1961 when defendant transferred a sum of money to a Swiss bank account notwithstanding that the taxes were due between 1946 and 1953. In United States v. Shorter, 608 F. Supp. 871 (D.D.C. 1985), the court stated the prevailing rule: "An act constituting evasion which occurs during the limitations period brings the prosecution within the statute of limitations even if the taxes being evaded were due and payable prior thereto." Id. at 874. See also United States v. Mousley, 194 F. Supp. 119 (E.D. Pa. 1961), aff'd without opinion, 311 F.2d 795 (3d Cir.), cert. denied, 372 U.S. 966, 83 S. Ct. 1091, 10 L. Ed. 2d 129 (1963).
We do not find the cases relied on by defendant controlling. In United States v. Habig, 390 U.S. 222, 88 S. Ct. 926, 19 L. Ed. 2d 1055 (1968), the Court considered the application of the statute of limitations to an indictment charging an attempt to evade taxes by filing a false return and aiding in the preparation and presentation of a false return. The Court held that the offenses were committed when the returns were actually filed. It rejected defendant's contention that the critical date was not when the returns were actually filed, but the earlier date when they were due to be filed. The Court held that it made no sense to assert that "Congress intended the limitations period to begin to run before appellees committed the acts upon which the crimes were based." Id. at 224-25, 88 S. Ct. at 927-28. The rationale of Habig supports the government's position here. The acts upon which the crime was based here are the false statements made in 1979 and 1983, continuing attempts to evade payment of the 1977 income tax. If all that defendant had done was to fail to file his 1977 income tax return, then the last act of evasion would have been April 15, 1978, the date the return and tax were due. The defendant, however, by deceitful statements continued his tax evasion through January of 1983.
In United States v. Meyerson, 368 F.2d 393 (2d Cir. 1966), cert. denied, 386 U.S. 991, 87 S. Ct. 1305, 18 L. Ed. 2d 335 (1967), the court held that the fugitive from justice tolling provision of 26 U.S.C. § 6531 applied to a person who was outside the United States. The issue before us was not a factor in Myerson. The court did state that the statute of limitations for the willful evasion of tax commenced to run from the last date upon which the return was due. Id. at 395. But defendant had argued, as in Habig, that the effective date was the earlier on which he had filed his return. We do not think the court's statement, which was addressed to a different question than the one before us, is applicable to our case.
Another case relied on by defendant is United States v. Kafes, 214 F.2d 887 (3d Cir.), cert. denied, 348 U.S. 887, 75 S. Ct. 207, 99 L. Ed. 697 (1954). The court held that in a prosecution for both attempting to evade income taxes and wrongful failure to file tax returns, the statute of limitations did not start to run until March 15 of the year following that for which the taxes were owed. Id. at 890. As in Meyerson, the question of whether subsequent acts of evasion would postpone the running of the statute of limitations was not an issue.
Three other cases cited by defendants are simply not apposite and beg the question. Grunewald v. United States, 353 U.S. 391, 77 S. Ct. 963, 1 L. Ed. 2d 931 (1957), involved the application of the statute of limitations to a tax fraud conspiracy. The Court held that "the crucial question in determining whether the statute of limitations has run is the scope of the conspiratorial agreement." Id. at 397, 77 S. Ct. at 970. We agree with defendant that the government bears the burden of proving that the prosecution was started within the applicable statute of limitations period. Id. at 396, 77 S. Ct. at 969. But that only gets us to the question, it does not help decide it.
Toussie v. United States, 397 U.S. 112, 90 S. Ct. 858, 25 L. Ed. 2d 156 (1970), involved an indictment for failing to register for the draft. The holding was that statute of limitations normally begin to run on the day the crime is complete and that failure to register is a single act so that the statute of limitations began to run on the first date on which the obligation to register occurred. How this applies to the question before us is difficult to perceive. The issue in United States v. Hankin, 607 F.2d 611 (3d Cir. 1979), was when the crime of violating the Federal Election Campaign Act was completed; to be specific, whether making a political contribution occurs at the time of deposit of the checks or some other time. Id. at 613. The court held that the statute of limitations began to run when the contributions were made and that the action was barred. We do not question the holding, but it is hardly relevant to the issue before us.