Opinion ID: 585638
Heading Depth: 2
Heading Rank: 2

Heading: Fuentes' Testimony

Text: 6 Fuentes argues that the district court erred in excluding portions of his own testimony relating to his state of mind, because this evidence was relevant and probative in negating the willfulness of his tax evasion. Willfulness is a necessary element of tax evasion under 26 U.S.C. § 7201, which makes it a felony to willfully attempt[ ] in any manner to evade or defeat any tax imposed by federal law. In determining whether an evasion was willful, we look only to whether Fuentes had a good faith belief that the income was nontaxable, regardless of whether that belief was objectively reasonable. Cheek v. United States, 111 S.Ct. 604, 611 (1991). 7 Nor did the district court err in its decision that this evidence was not relevant to prove that Fuentes actually suffered from emotional distress injuries. The district court did admit state of mind evidence to the extent it was relevant to show that Fuentes sustained emotional injuries in the course of his employment, for which he purportedly believed the $200,000 check represented a settlement. His testimony as to his emotional reactions to Parker's actions, including his emotional devastation when Parker fired him, was admitted. On the other hand, testimony about his feelings stemming from his own unwise personal investments was excluded. Because this evidence dealt only with alleged emotional injuries resulting from Fuentes' own investment decisions, and not from his treatment on the job or his firing, it was properly excluded as irrelevant to the issue of compensable emotional injury. Nor did the district court abuse its discretion in refusing to reopen the defense case to admit evidence concerning the stress Fuentes felt at the time because of these financial reversals. 8 Fuentes disputes the exclusion of his testimony concerning his state of mind at the time he met with Parker and received the $200,000 check. In answer to his attorney's question, Fuentes was allowed to testify that Parker did not indicate to him what particular claims the money was meant to settle. The court sustained the government's objection when Fuentes attempted to testify about his own understanding at that time as to what claims the money covered. Fuentes was, however, allowed to testify that he did not believe the check represented taxable income because he knew that compensation for personal injuries was not taxable based on his prior experience with such settlements and his familiarity with the Tax Code, and that damages for emotional distress were similarly nontaxable. The court did not abuse its discretion in excluding the testimony regarding Fuentes' understanding in 1986, because that testimony was merely cumulative of other testimony he was allowed to present. 9 Fuentes objects to the exclusion of his testimony regarding a meeting with his stockbroker, Beauchamp Johnson. Fuentes argues that he would have testified that he told Johnson that the money was not taxable because it was in settlement for emotional distress. He never made any proffer concerning his own testimony to the district court, however. Rather, he made a proffer as to Johnson's testimony. The court held an evidentiary hearing outside the jury's presence, questioning Johnson regarding his recollection of this conversation to determine the accuracy of the proffer. Johnson stated that Fuentes told him that the money was nontaxable and was to compensate him for economic losses he had suffered. Johnson did not mention compensation for emotional injuries. In light of the lack of a proper proffer at trial and the lack of evidentiary support for the proffer Fuentes now makes on appeal, we conclude that the court did not abuse its discretion in excluding Fuentes' testimony regarding this conversation as irrelevant to his good faith belief defense.