Opinion ID: 3025683
Heading Depth: 2
Heading Rank: 1

Heading: facts

Text: During the period charged in the indictment, Joseph Donato and Kevin McKee owned and operated McKee-Donato Construction Company (“the Partnership”), a small New Jersey carpentry and home renovation business. Inge Donato functioned as the Partnership’s bookkeeper. All three are longstanding members of the Reformed Israel of Yaweh (“RIY”), a small religious sect founded by Leo Volpe that opposes payment of taxes based upon the members’ religious opposition to war and the taxes that fund it. 1 Inasmuch as we are vacating each of the defendants’ convictions on Counts 2 through 13, and Inge’s convictions on two counts, we need not address the claims of error that pertain to sentencing. We will, however, address certain evidentiary rulings that are challenged in this appeal as the same issues may again arise if the Defendants are retried on the tax evasion charges. 5 The Partnership employed members of RIY as well as non-members. When providing the Partnership’s payroll records to accountants for preparation of quarterly payroll tax returns (IRS Form 941), Inge Donato omitted payroll information for the employees who were members of RIY. Consequently, federal withholding taxes were not deducted from their paychecks. However, the correct payroll information was provided for employees who were not members of RIY, and their taxes were properly withheld from their paychecks. The omission resulted in incomplete and inaccurate quarterly tax returns for the Partnership for the applicable years. The Partnership also failed to withhold or pay employment taxes that should have been collected from RIY-member/employees for those same quarters. In addition, Kevin McKee and Joseph Donato failed to file their individual federal income tax returns for the years 1997 through 2000. As we shall explain, Joseph’s 6 failure to file had consequences for Inge, who was also charged with failure to file for those years. Kevin McKee and the Donatos were each charged separately with conspiracy to defraud the United States (Count 1), and employment tax evasion (Counts 2 through 13). In addition, they were each charged with failure to file their individual federal income tax returns for the years 1997 through 2000, in violation of 26 U.S.C. § 7203. (Counts 14 through 21).2 The court granted Inge’s motion for judgment of acquittal on Counts 15 and 17, charging her with failure to file for 1997 through 2000, because the evidence did not establish that she had income for those tax years. The court denied her motion for judgment of acquittal on Counts 14 and 16 based upon evidence that we will discuss detail below. The jury returned guilty 2 The Donatos were charged in Counts 14 through 17 and McKee in Counts 18 through 21. 7 verdicts against all Defendants on each of the remaining counts, and this appeal followed their sentencing.