Opinion ID: 4019312
Heading Depth: 3
Heading Rank: 2

Heading: Statute of Limitations—Levy Counts

Text: Wanland argues that the district court erred in not dismissing the levy counts because they exceeded the threeyear statute of limitations. All of the levy counts covered 2006 transactions, while the superseding indictment was returned in January 2012. The district court was correct to reject this argument and apply a six-year statute of limitations. Criminal tax proceedings generally have a three-year statute of limitations. See 26 U.S.C. § 6531. There are, though, several exceptions for which a six-year statute of limitations applies. Id. § 6531(1)–(8). Under section 6531(1), tax offenses “involving the defrauding or attempting to defraud” the government have a six-year statute of limitations. “Section 6531(1), by its own terms, does not require that a defendant be expressly indicted for tax fraud.” Workinger, 90 F.3d at 1413. Congress intended for a six-year statute of limitations for “all offenses which are fairly identifiable as those in which fraud is an essential ingredient, by whatever words they be defined.” Id. at 1414 (quoting United States v. Grainger, 346 U.S. 235, 244 (1953)). This includes statutes not labeled “‘fraud,’ if those offenses did reflect fraudulent activity.” Id. at 1413. 16 UNITED STATES V. WANLAND As noted above, section 7206(4) requires one to act “with intent to evade or defeat the assessment or collection of any tax imposed by this title.” An individual must know of a tax liability and a levy on his property to remedy that tax liability, but still deliberately take some action to “evade or defeat” that levy. As in Workinger, that is exactly the type of “defrauding” that section 6531(1) was intended to cover. We agree with the district court that the six-year statute of limitations of section 6531(1) applies to prosecutions under section 7206(4). Wanland makes several arguments in favor of a three-year statute of limitations. First, he contends that continuing to interpret section 6531(1) broadly would allow the six-year statute of limitations exception to become more prevalent than the three-year rule. This is not persuasive in light of Workinger. As this court explained, Congress intended for the exception for offenses involving fraud to sweep broadly and “cover most acts that a person could perform in an attempt to avoid paying taxes.” Workinger, 90 F.3d at 1413; see also id. (acknowledging the reality that section 6531(1) and its counterpart, section 6531(2), may be broad enough to effectively “render the 3-year period almost irrelevant” (quoting Patricia T. Morgan, Tax Procedure and Tax Fraud in a Nutshell, § 13.1.7 (1990))). We thus do not hesitate to apply the six-year statute of limitations to violations of section 7206(4), which necessarily require fraudulent conduct. Second, Wanland argues more specifically that applying section 6531(1) to section 7206(4) is inappropriate because one of the eight specifically enumerated exceptions, section 6531(5), is for a crime under another subsection of section 7206—section 7206(1). He argues that because Congress UNITED STATES V. WANLAND 17 elected to extend the statute of limitations for a particular subsection of section 7206, it deliberately omitted the other subsections of section 7206. This argument is likewise untenable under Workinger. Specifically enumerated exceptions providing for a six-year statute of limitations were included so that Congress could be “sure that mere technical distinctions would not make a difference in the statute of limitations.” Workinger, 90 F.3d at 1413. In other words, they reflect a rather-be-safe-than-sorry approach, and are sometimes duplicative of conduct that would also be encompassed under sections 6531(1) and (2). Id. That Congress specifically enumerated that section 7206(1) have a six-year statute of limitations says little, if anything, about the statute of limitations for section 7206(4). Finally, Wanland points out that the Internal Revenue Manual (IRM) provides that the statute of limitations for section 7206(4) is three years. IRM § 9.1.3.3.7.3.1. The IRM, however, does not bind this court. See Fargo v. Comm’r, 447 F.3d 706, 713 (9th Cir. 2006) (stating that the IRM “does not have the force of law and does not confer rights on taxpayers”); see also United States v. Mead Corp., 533 U.S. 218, 234–35 (2001) (explaining that agency manuals are “beyond the Chevron pale,” and we afford them deference only to the extent that we value the “thoroughness, logic, and expertness” of the writer). For the above described reasons, we do not conclude that the IRM’s recommendation is persuasive, and we hold that the six-year statute of limitations applies to violations of section 7206(4).