Opinion ID: 747628
Heading Depth: 3
Heading Rank: 2

Heading: Convictions for Filing False Tax Returns

Text: 25 (Counts 107 and 108) 26 Defendant was convicted, under 26 U.S.C. § 7206(1), 4 of filing false personal income tax returns for 1990 and 1991. These charges resulted from defendant's failure to report as income the money that he embezzled from Phar-Mor through checks paid to the WBL, checks paid to himself, and checks paid to third parties for his benefit. He argues that the following errors require reversal of these convictions: first, that the evidence was insufficient to establish that he knew any of the omitted items were required to be included as income; second, that the expert testimony of I.R.S. Agent Kurzweil invaded the province of the jury to decide the facts underlying the charge; and third, that the jury instructions for counts 107 and 108 deprived him of his Sixth Amendment right to a jury trial. We consider these claims in turn.
27 The record is devoid of evidence that defendant raised these sufficiency of the evidence claims before the District Court. Neither defendant's motion for judgment of acquittal made under FED.R.CRIM.P. 29 at the end of the Government's case and renewed after trial, nor his motion for a new trial made pursuant to FED.R.CRIM.P. 33 after trial, specifically contested the sufficiency of the evidence claim regarding Counts 107 and 108. Under United States v. Carr, 5 F.3d 986, 991 (6th Cir.1993), defendant has failed to preserve these issues for review on appeal. Therefore, we do not reach the merits of these claims. 5
28 IRS Revenue Agent Bradley Kurzweil testified at trial as an expert witness for the government regarding the two tax counts. Defendant argues that Kurzweil intruded on the province of the jury by testifying to underlying factual issues and offered impermissible opinions on a legal question. Defendant objects to the following trial testimony: 29 Q: If you assume that funds have been taken from Phar-Mor, which are not authorized, if you assume that those funds have been diverted to the World Basketball League, and assuming that is an entity owned by Mr. Monus, and you assume a specific amount of funds that have been diverted, what is the impact of those funds on Mr. Monus' tax liabilities for 1990 an 1991? 30 A: The dollar amount would be taxable to him in each year. 31 This testimony did not usurp the function of the jury. Kurzweil did not give his opinion about whether or not defendant was guilty; he merely gave his opinion that the events assumed in the question would trigger tax liability. Such testimony is permissible as an expert opinion to help the jury determine a fact in issue. See United States v. DeClue, 899 F.2d 1465, 1473 (6th Cir.1990) (finding that expert testimony of IRS agent regarding tax liability did not usurp function of jury because agent did not give her opinion about guilt of defendant). 32 Defendant's arguments that Kurzweil's testimony was an impermissible opinion on a legal question are also without merit. Defendant relies on United States v. Zipkin, 729 F.2d 384 (6th Cir.1984), where we held that it was impermissible for a judge to delegate the responsibility of deciding the law of the case to a jury through the submission of testimony on controlling legal principles. Id. at 387. That did not occur in this case. Kurzweil did not give a legal opinion that necessarily determined the guilt of defendant or instructed the jury on controlling legal principles. He merely gave his opinion as to whether particular payments under assumed circumstances would be taxable. The jury still had to decide whether the defendant actually stole funds from Phar-Mor and knowingly failed to report them as income before it could conclude that defendant was guilty.
33 Defendant argues that the District Court's instructions to the jury regarding the tax counts violated his Sixth Amendment rights to a jury trial, requiring reversal of his convictions on those counts. Because defendant did not object to the instructions at trial, we review for plain error under Rule 52(b) of the Federal Rules of Criminal Procedure. 6 The Supreme Court's recent opinion in Johnson v. United States, 520 U.S. 461, 117 S.Ct. 1544, 137 L.Ed.2d 718 (1997), reaffirmed the following four-part inquiry for plain error: 34 [B]efore an appellate court can correct an error not raised at trial, there must be (1) error, (2) that is plain, and (3) that seriously affect[s] substantial rights. If all three conditions are met, an appellate court may then exercise its discretion to notice a forfeited error, but only if (4) the error  ' seriously affect[s] the fairness, integrity, or public reputation of judicial proceedings. '  35 Johnson, 520 U.S. at ----, 117 S.Ct. at 1549 (citation omitted) (alterations in the original) (quoting United States v. Olano, 507 U.S. 725, 736, 113 S.Ct. 1770, 1779, 123 L.Ed.2d 508 (1993), quoting United States v. Young, 470 U.S. 1, 15, 105 S.Ct. 1038, 1046, 84 L.Ed.2d 1 (1985), in turn quoting United States v. Atkinson, 297 U.S. 157, 160, 56 S.Ct. 391, 392, 80 L.Ed. 555 (1936)). 36 Defendant finds plain error in the following jury instructions: 37 In order to sustain its burden of proof for the crime of willfully filing a false tax return as charged in Counts 107 and 108 of the indictment, the government must prove the following four essential elements beyond a reasonable doubt. 38 One. The defendant, Michael I. Monus, made and signed a tax return for the years 1990 or 1991 that contained false information as to material matter as detailed in the indictment. 39 Two. The defendant knew that this information was false. 40 Three. The return contained a written declaration that it was being signed subject to the penalties of perjury. 41 And Four. In filing the false tax return the defendant, Michael I. Monus, acted willfully. 42 At trial, defendant did not request specific instructions for the tax counts, and the record does not reflect that defendant ever informed the District Court that he thought more detailed jury instructions were required. Nevertheless, defendant now argues that the District Court erred in not giving the jury a more detailed instruction. Defendant claims that the jury should have been told that it must first decide whether the payments to the WBL and those directly to defendant constituted embezzled funds, properly considered taxable income, or whether they were loans and advances made with a consensual recognition among the parties that they must be repaid, which would not be taxable. He also argues that the court erred in not instructing the jury on the definition of embezzle and what constitutes a material matter. Defendant concedes that the jury instructions correctly described the material elements of the offense; he argues, however, that factual issues necessary to any finding of guilt were not presented to the jury. 43 The District Court correctly instructed the jury that they must find that defendant knowingly and wilfully filed a false income tax statement. The overwhelming evidence at trial showed that defendant had no intention of repaying the money that he embezzled from Phar-Mor. It showed how defendant refused to repay some advances, how he and others concealed these payments in false and fraudulent accounts, and how they removed these payments from the books through fraudulent accounting. Under these circumstances, we need not consider whether failing to give the jury a more detailed instruction on Counts 107 and 108 satisfied the first three prongs of the plain error inquiry. Even if it were error, it did not substantially affect the integrity, fairness, or public reputation of the judicial proceedings. Therefore, the jury instructions for these counts do not warrant reversal of defendant's convictions. Johnson, 520 U.S. at ----, 117 S.Ct. at 1549.