Opinion ID: 3186370
Heading Depth: 3
Heading Rank: 2

Heading: Belief and Willfulness

Text: Fairchild argues that even if her statement of income was inaccurate, the evidence was insufficient to show that she knew and believed that she had underreported her income. According to Fairchild, the nature of the money that she received from Karlen and Pietz was unclear. She notes that she, Karlen, and Pietz all gave different accounts of the nature of the money over time and that her accountant did not know how to categorize the money for tax purposes. She asserts that she liberally estimated the money received from Karlen and Pietz as payment for private parties. She cites her testimony at trial that she truly believed that she accurately declared income from these private clients and that the remainder of the money was gifted to her. She concludes that because of the widespread confusion over the nature of the money, no rational juror could have found that [she] believed that the declaration of her income was false. Fairchild also argues that the evidence was insufficient to show that she willfully made and subscribed false tax returns. She asserts that she sincerely held this belief and that she did not willfully violate the tax laws because she had a good-faith belief that the money that she received from Karlen and Pietz above and beyond the amount that she declared as income was a gift. Filing false tax returns is a specific intent crime requiring a showing of willfulness, which 'simply means a voluntary, intentional violation of a known legal duty.' United States v. Mathews, 761 F.3d 891, 893 (8th Cir. 2014) (quoting Cheek v. United States, 498 U.S. 192, 201 (1991)). Intent may be inferred from conduct, and [w]illfulness in a criminal tax case may be established by a consistent pattern of not reporting income or inconsistently reporting income. Id. at 893 (alteration in original) (quotations and citations omitted). Furthermore, the factfinder may infer from the facts of the case whether an act was committed willfully. Id. at 894. -12- Fairchild contends that the government failed to prove that her conduct was willful because there was evidence of her good-faith belief that she was not violating the tax laws. 'The issue is whether, based on all the evidence, the [g]overnment has proved that [Fairchild] was aware of the duty at issue, which cannot be true if the jury credits a good-faith misunderstanding and belief submission, whether or not the claimed belief or misunderstanding is objectively reasonable.' United States v. Morse, 613 F.3d 787, 794 (8th Cir. 2010) (first alteration in original) (quoting Cheek, 498 U.S. at 202). The government frequently must prove intent by circumstantial evidence; the determination often depends on the credibility of witnesses, as assessed by the factfinder. United States v. Morris, 723 F.3d 934, 939 (8th Cir. 2013) (quotation and citation omitted). The jury may infer intent from the Appellants' conduct, such as inconsistencies between Appellants' representations to government agencies and other entities. Id. (citation omitted). Because knowledge . . . turns in large part on the credibility of the witnesses, it is peculiarly within the province of the factfinder. Id. (quotation and citation omitted). For that reason, a jury is free to disregard [a defendant's] statements as not credible in evaluating whether the defendant had a 'good[-]faith belief' that he was properly preparing his tax returns. Mathews, 761 F.3d at 894. We hold that sufficient evidence exists to support the jury's finding that Fairchild knew and believed that she had underreported her income and that she willfully did so. At trial, Fairchild testified that she truly believed that she accurately declared income from Karlen and Pietz and that the remainder of the money was a gift to her. But, the jury was free to disregard [Fairchild's] statements as not credible. See Mathews, 761 F.3d at 894.