Opinion ID: 670739
Heading Depth: 3
Heading Rank: 2

Heading: Failure To Give A Cheek Instruction

Text: 26 Knapp contends the district judge's second plain error lay in failing to instruct the jury that a good faith misunderstanding of law, even if unreasonable, negates the element of willfulness required to support the charge in Count III of the indictment and would, therefore, constitute a complete defense to the section 7206 charge. In this regard, he relies on Cheek v. United States, 498 U.S. 192, 111 S.Ct. 604, 112 L.Ed.2d 617 (1991). 27 In Cheek, the government prosecuted John Cheek for tax evasion and for willfully failing to file federal tax returns, violations of 26 U.S.C. Secs. 7201 and 7203. At trial, Cheek testified that based on professional opinions about the validity of the federal income tax laws, he honestly believed he was not required to pay federal income taxes or file tax returns. Cheek, 498 U.S. at 195-96, 111 S.Ct. at 607. At the conclusion of Cheek's trial, the district judge instructed the jury that only an objectively reasonable misunderstanding of the law negates the statutory requirement that Cheek's action be willful. We upheld the use of this instruction and affirmed Cheek's convictions. See United States v. Cheek, 882 F.2d 1263, 1267 (7th Cir.1989). The Supreme Court, however, subsequently rejected this objective reasonableness standard in criminal tax cases and held that a good faith misunderstanding or a good faith belief that one is not violating the law negates willfulness, whether or not that belief is objectively reasonable. Cheek, 498 U.S. at 202-03, 111 S.Ct. at 611. 28 The argument here revolves around whether Knapp relied on a misunderstanding-of-law defense at the trial. Knapp now claims he did and that he was denied any instruction on his theory of defense. Of course, in light of Knapp's failure to challenge the lack of such an instruction, the ultimate issue is whether the failure to so instruct was plain error. 29 A defendant is entitled to an instruction on his theory of defense if: the defendant's theory is supported by the evidence; the defendant's theory is not part of the charge; and the failure to include an instruction on the defendant's theory of defense in the jury charge would deny the defendant a fair trial. United States v. Douglas, 818 F.2d 1317, 1320-21 (7th Cir.1987). The government argues that Knapp did not rely on this defense at trial, nor was such a defense supported by the evidence. Therefore, it claims that a good faith instruction would not have been warranted even had one been submitted to the district judge. 30 Given the nature of Knapp's defense at trial, the government suggests this issue is controlled by United States v. Sloan, 939 F.2d 499 (7th Cir.1991), and United States v. Bressler, 772 F.2d 287 (7th Cir.1985), cert. denied, 474 U.S. 1082, 106 S.Ct. 852, 88 L.Ed.2d 892 (1986). In both Sloan and Bressler, we held that erroneous instructions regarding a good-faith defense, which required the misunderstanding to be 'objectively reasonable', did not constitute plain error because the district court had properly instructed the jury that willfulness is a 'voluntary and intentional violation of a known legal obligation,' and because the 'evidence clearly established that the defendant did not misunderstand the law.'  Sloan, 939 F.2d at 502 (quoting Bressler, 772 F.2d at 291). Here, the jury was properly instructed on the definition of wilfulness, and the record is replete with Knapp's teachings on estate planning, lawful ways to avoid paying taxes, the tax laws, the IRS and the Constitution of the United States. A thorough review of the record reveals that, time and time again, Knapp insisted that everything he did was within the law. Knapp never claimed he misunderstood the law. Consequently, there was no clear or obvious error in the district judge's failure to give a Cheek instruction, nor did such failure, if error, deny Knapp his substantial rights. Thus, we hold no plain error occurred in this regard. 1 II. First Amendment 31 Knapp contends his actual involvement with the Hillmers was limited to verbally advising Les Monde, the Hillmers' accountant, in May of 1983. Thus, he argues he was convicted for engaging in protected free speech in violation of the First Amendment to the Constitution of the United States in light of Brandenburg v. Ohio, 395 U.S. 444, 89 S.Ct. 1827, 23 L.Ed.2d 430 (1969). In Brandenburg, the Supreme Court held that speech which merely advocates law-breaking, but incites no present harm, is protected. Brandenburg, 395 U.S. at 448-49, 89 S.Ct. at 1830-31. 32 Here, however, Knapp was specifically charged with conduct outside the scope of the First Amendment: 33 On or about April 15, 1986, in the Eastern District of Wisconsin, SANFORD G. KNAPP, the defendant, did willfully aid and assist, counsel, and advise the preparation of John Hillmer and Lois Hillmer's joint U.S. income tax return, Form 1040 for the calendar year 1985, which was false and fraudulent as to a material matter, in that the defendant advised the Hillmers' tax return preparer, Gerald Les Monde, to claim a deduction on said return for the rental of business property in an amount sufficient to eliminate profit, whereas, as the defendant then and there well knew, and had reason to know, John and Lois Hillmer had not paid such rent, and were not entitled to such a deduction. All in violation of Title 26, United States Code, Section 7206(2). 34 As thus described in the indictment, Knapp's speech and conduct constitute precisely the type of involvement in unlawful action found to be outside the scope of the First Amendment. See United States v. Kelly, 864 F.2d 569, 576-77 (7th Cir.), cert. denied, 493 U.S. 811, 110 S.Ct. 55, 107 L.Ed.2d 23 (1989) (upholding the conviction of a tax shelter promoter whose advice led to the preparation of false returns by those investing in the shelter). See also United States v. Rowlee, 899 F.2d 1275, 1279 (2d Cir.), cert. denied, 498 U.S. 828, 111 S.Ct. 87, 112 L.Ed.2d 59 (1990) (consensus among circuits is that liability for a false and fraudulent tax return cannot be avoided by invoking the First Amendment). The proof at trial showed the jury that Knapp did, in fact, commit a criminal act as charged in the indictment: Knapp willfully assisted the preparation of a false return by advising the Hillmers' tax return preparer to claim a deduction on the Hillmers' 1985 tax return to the rental of business property in an amount sufficient to eliminate profit, while knowing that the Hillmers had not paid such rent and were not entitled to such a deduction. This conduct is well beyond the mere advocacy entitled to the protection of the First Amendment. 35