Opinion ID: 793369
Heading Depth: 6
Heading Rank: 2

Heading: Whether the Purpose was in Issue

Text: 171 The violations of failing to file a tax return and filing a false tax return require strict willful conduct. See 26 U.S.C. §§ 7203, 7206. As explained by this Court: 172 The word willfully, as used in this statute, means a voluntary, intentional violation of a known legal duty. In other words, the defendant must have acted voluntarily and intentionally and with the specific intent to do something he knew the law prohibited, that is to say, with intent either to disobey or to disregard the law. Negligent conduct is not sufficient to constitute willfulness. 173 United States v. Tarwater, 308 F.3d 494, 510 (6th Cir.2002) (emphasis supplied). Because of the complexity of the tax system, tax law is one of the few areas where the Supreme Court has held that ignorance of the law is a defense. Cheek v. United States, 498 U.S. 192, 199-200, 111 S.Ct. 604, 112 L.Ed.2d 617 (1991). If the defendant has a good faith belief that he was not violating tax law, the defendant cannot be found guilty of a tax violation, even if the good faith belief is unreasonable. Id. at 202, 111 S.Ct. 604. 174 In this case, willfulness and absence of mistake were in issue with respect to the tax violations. During pretrial discussions, Defendants presented a good faith defense in that the failure to file and the underreporting were caused by sloppy bookkeeping and the illness of an employee. 175 The government sought to present evidence of under the table payments to attack Defendants' good faith defense. The record is clear that Defendants knew of their tax obligations with respect to the payment of employees, as Defendants partially complied by paying a portion of the salaries by checks with proper withholdings. Defendants admit that they committed countless uncharged federal tax crimes. (Elie Abboud Def.'s Br. 29.) The government's implication was that because Defendants had willfully violated tax laws with respect to payment of employees, Defendants also willfully violated tax laws with respect to the failure to file and the underreporting. 176 The government also sought to present the evidence to show motive. The government's theory was that Defendants' motive in perpetrating the check-kiting scheme was based on cash flow problems Defendants were experiencing. The implication was that Defendants' under the table payments were evidence of this cash flow problem. 177