Opinion ID: 617629
Heading Depth: 3
Heading Rank: 1

Heading: Denial of Hassebrock's Motion for a Judgment of Acquittal

Text: We review de novo the district court's decision to deny Hassebrock's motion for a judgment of acquittal. United States v. Mandel, 647 F.3d 710, 717 (7th Cir.2011). When evaluating a defendant's sufficiency-of-the-evidence argument, [w]e consider the evidence in the light most favorable to the prosecution, making all reasonable inferences in its favor, and affirm the conviction so long as any rational trier of fact could have found the defendant to have committed the essential elements of the crime. United States v. Paneras, 222 F.3d 406, 410 (7th Cir.2000) (quoting United States v. Masten, 170 F.3d 790, 794 (7th Cir.1999)). We will overturn the guilty verdict only when the record contains no evidence, regardless of how it is weighed, from which the jury could find guilt beyond a reasonable doubt. United States v. Huddleston, 593 F.3d 596, 601 (7th Cir.2010). Thus, a defendant who moves for a judgment of acquittal faces a nearly insurmountable hurdle. United States v. Morris, 576 F.3d 661, 665-66 (7th Cir.2009) (quoting United States v. Pulido, 69 F.3d 192, 205 (7th Cir.1995)).
To sustain the conviction under § 7201, the evidence must show that: (1) a tax deficiency existed, (2) the defendant acted willfully, and (3) the defendant took an affirmative step to elude or defeat the payment of taxes. United States v. Beall, 970 F.2d 343, 345 (7th Cir.1992). Hassebrock challenges only the second and third elements. The crux of his argument is that his 2004 tax return was not due on April 15, 2005, and therefore his failure to file by that date does not constitute an affirmative act. During cross-examination, IRS Agent Richard Dutzel admitted that Hassebrock's extension was filed in August 2005 and that the IRS allowed it. Hassebrock thus argues that the government is estopped from arguing that he failed to file by April 15, 2005. We agree, as did the district court, with the government's three-pronged response to Hassebrock's claim. First, Hassebrock had a legal obligation to file on or before April 15, 2005, this obligation was embodied in the offenses charged, and Hassebrock did not satisfy this obligation. Second, a reasonable juror could have reached the conclusion that Hassebrock's extension was not truly approved by the IRS. The signature lines for the taxpayer and the IRS director were blank, and there is no evidence that Hassebrock received the form from the IRS. Third, the government presented evidence of other affirmative acts taken by Hassebrock, negating the significance of establishing failure to file as the affirmative act in support of liability under § 7201. For example, Dan Goggin, one of Hassebrock's attorneys, testified that Hassebrock visited his office to set up trust accounts that were not in his own name. Evidence adduced at trial demonstrated that Hassebrock placed the funds from the settlement into those accounts, that he nevertheless used the accounts for his personal use, and that the individuals named on the accounts hardly used the accounts at all. Hassebrock denies that these actions are proof of tax evasion, but an act does not need to conclusively establish that it was taken in furtherance of the tax evasion to qualify as an affirmative act. The jury was permitted to infer intent from circumstantial evidence. United States v. King, 126 F.3d 987, 993 (7th Cir.1997) (Tax evasion cases `simply require that there be some evidence from which a jury could infer an intent to mislead or conceal beyond mere failure to pay assessed taxes; it is for the jury to determine, as a matter of fact, whether the affirmative act was undertaken, in part, to conceal funds from or mislead the government.' (quoting United States v. Voigt, 89 F.3d 1050, 1090 (3d Cir.1996))). We further agree with the district court's determination that sufficient evidence was introduced at trial to support a conclusion that Hassebrock acted willfully. Sam Phillips, Hassebrock's accountant, testified that Hassebrock had come to his office to inquire about the tax liability of the settlement funds. Phillips prepared two sample returns, one that included the settlement funds and one that did not. The district court concluded, and we concur, that this evidence adequately demonstrates Hassebrock's willfulness because he knew of the higher tax liability associated with the settlement. Thus, even if we assume arguendo that Hassebrock did receive a filing extension, his conviction on Count I still rests on sufficient evidence.
To sustain a conviction under § 7203, the evidence must show that the defendant: (1) was required to file a return, (2) failed to file a return, and (3) acted willfully in failing to file. Beall, 970 F.2d at 347. The government must prove that the defendant failed to file willfully or purposefully, as distinguished from inadvertently, negligently, or mistakenly. United States v. Matosky, 421 F.2d 410, 413 (7th Cir.1970). Hassebrock argues that unrebutted evidence shows that he received an extension, that he was not required to file his 2004 taxes until October 15, 2005, and that the government failed to prove that he acted willfully in failing to file his return by April 15, 2005. The evidence regarding the granting of an extension is not as strong as Hassebrock claims. In addition to missing signatures of both Hassebrock and the IRS director, there was no evidence that Hassebrock established undue hardship, which is a prerequisite for approving extension requests made after April 15. Further, although Agent Dutzel testified that it appeared that the extension request was allowed, he lacked direct knowledge of the issue and made this comment in the context of an unrelated issue. Viewing the evidence in the light most favorable to the prosecution, as it must, the district court determined that the evidence indicated only that the extension has not been blocked from being processed and filed, not that the extension had been granted and that a reasonable juror could have concluded that Hassebrock's application was not approved. Hassebrock argues on appeal that the district court failed to explain how the jury could have found that the extension was not approved and yet indicated in the special verdict form that Hassebrock did not willfully fail to file an individual income tax return by October 15, 2005. While we admit that this is slightly puzzling, it is clear that the totality of the evidence satisfies the requirements for proving a § 7203 violation. We have held that late filing and late tax payment are immaterial on the issue of willfulness in a Section 7203 prosecution. United States v. Sawyer, 607 F.2d 1190, 1193 (7th Cir.1979) (quoting Ming, 466 F.2d at 1005). In line with this precedent, the district court stated that Hassebrock's crime was completed at 12:00:01 on April 16, 2005. In other words, regardless of whether the IRS approved the August 12, 2005 request for an extension, the IRS did not approve any extension on or before April 15, 2005, the deadline for filing his 2004 tax return. Phillips testified that Hassebrock did not ask him to file an extension during their February 2005 meeting, did not ask him to prepare a 2004 return during their May 2005 meeting, and only casually asked him to file a late return for 2004 [p]robably in 2006 sometime. Therefore, given the strong evidence that Hassebrock did not receive an extension prior to April 15, 2005 (and may not have received an extension at all), the district court correctly determined that a jury could have reasonably concluded that Hassebrock violated § 7203.