Opinion ID: 2814830
Heading Depth: 3
Heading Rank: 2

Heading: willfulness, and

Text: 3. an affirmative act constituting evasion of the tax. United States v. Farr, 701 F.3d 1274, 1285 (10th Cir. 2012) (citing 26 U.S.C. § 7201). Ms. Kupfer essentially admitted the first and third elements in opening statements, conceding that she had failed to report substantial income on her tax returns. With this concession, Ms. Kupfer relied solely on a defense that she had not acted willfully. But the government’s evidence of willfulness was overwhelming, showing that Ms. Kupfer had failed to report over $790,000 in gross income, had personally deposited a check for $140,000 without reporting this income, and had obtained substantial experience in accounting and finance. In the face of that evidence, Ms. Kupfer defended on the ground that her failure to report over $790,000 in income was a mistake. In support of this argument, Ms. Kupfer offered evidence of her consensual participation in an informal audit. But the informal audit was based solely on the tax information provided voluntarily by the Kupfers, and there was no evidence suggesting that the auditors were aware of the unreported income. 13 Ms. Kupfer also offered evidence that she had relied on the services of a tax preparer. But Ms. Kupfer did not disclose the unreported income to the tax preparer, and the preparer’s engagement letter stated that ! the client bore the “responsibility to provide all of the information required for the preparation of complete and accurate returns,” and ! his services were not “designed to discover thefts or other irregularities should any exist.” Appellant’s App., vol. IV, at 658, 683. In these circumstances, the district court could reasonably conclude that the extraneous information would have been harmless. As a result, the court acted within its discretion in declining to grant a mistrial. See United States v. Hornung, 848 F.2d 1040, 1045-46 (10th Cir. 1988) (upholding the denial of a mistrial based on harmlessness because the evidence of guilt was overwhelming). IV. Calculation of the Offense Level for Sentencing The remaining issue involves the sentence. To impose the sentence, the district court started with the sentencing guidelines. In calculating the guideline range, the court increased the offense level based on § 3C1.1. This provision provides for an increase in the offense level if the defendant willfully obstructed the investigation. U.S.S.G. § 3C1.1. Ms. Kupfer challenges the application of § 3C1.1, and the government concedes error. We agree with the parties that the court erred in increasing the offense level. 14 We have held that § 3C1.1 does not apply when defendants simply tell investigators that they did not commit a crime. United States v. Urbanek, 930 F.2d 1512, 1515 (10th Cir. 1991). Ms. Kupfer did even less than that because her sin was one of omission rather than commission. She simply failed to speak up and disclose the unreported income as authorities investigated. Her failure to speak up cannot serve as the basis for an increase in the offense level under § 3C1.1. See United States v. Pelliere, 57 F.3d 936, 939 (10th Cir. 1995) (stating that “refusals to talk cannot serve as the basis for an obstruction of justice enhancement” under § 3C1.1). As a result, the district court should not have increased the offense level based on § 3C1.1. In light of the error, the government concedes that we should vacate the sentence and remand for resentencing. We agree.