Opinion ID: 585638
Heading Depth: 3
Heading Rank: 1

Heading: Checks Totalling $33,000

Text: 28 Because the given instructions refer only to the $200,000 check, Fuentes contends that the district court effectively omitted his defense that he believed the two additional checks totalling approximately $33,000 were nontaxable as loans on which Fuentes understood Parker would pay taxes. The instructions as given do not cover this defense contention. Our inquiry is thus whether Fuentes' purported belief as to the nontaxability of these monies had a basis in the evidence so as to require the giving of an appropriate instruction. 29 Fuentes testified that the $33,000 represented salary advances or loans, which he believed were nontaxable because Parker's company informed him by letter that it had written off the loans and would pay taxes on the money. The court then questioned Fuentes further on this subject. Fuentes said he had been confused about whether the taxes the company paid represented taxable income to him. He admitted, however, that he probably knew in 1986 that taxes paid by others on his behalf would represent taxable income to him, but that he never thought of it that way. Fuentes also admitted in response to the court's questions that in 1986 he knew that a loan when written off became income and that a loan excused in 1986 would be income for 1986. Fuentes concluded by saying that Basically it was a loan. Truly it was a loan. I did not think it was included [in taxable income]. 30 Fuentes argues that his answers to the district court's questions at trial did not negate his good faith belief defense and that he was entitled to an appropriate instruction that applied to his belief in the nontaxability of these monies. In declining to give his proffered instruction, he contends, the district court effectively required that the grounds for his good faith belief be reasonable in light of his understanding of the tax laws at the time of trial. We disagree. The court's questions and Fuentes' responses dealt explicitly with his understanding in 1986 concerning the taxability of loans and of taxes paid by others, not at the time of trial. Under Cheek, the focus is not on the knowledge of the reasonable person, but rather on the knowledge of the defendant. United States v. Powell, 955 F.2d 1206, 1211 (9th Cir.1992). Here Fuentes' admitted knowledge of the applicable tax laws contradicted his asserted beliefs of nontaxability. This effectively negated the good faith belief defense as to these monies, for one cannot be aware that the law imposes a duty upon him and yet be ignorant of it, misunderstand the law, or believe that the duty does not exist. Cheek, 111 S.Ct. at 611 (emphasis added). Fuentes cannot escape the effect of his admitted knowledge of the applicable tax laws by simply asserting that at the time he didn't think of it. The court did not err in declining to give a good faith belief instruction as to these monies.