Court Opinion

ID: 9493068
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:57:29.651293+00
Date Added: 2024-06-11T17:55:37.946663
License: Public Domain

MINER, Circuit Judge,
dissenting in part:
Because it seems clear to me that the experienced and knowledgeable district court judge well understood the scope of his discretionary departure authority and properly chose not to exercise it, I respectfully dissent from so much of the majority opinion as remands for reconsideration of the sentencing decision in this case. My colleagues contend that this case involves two competing doctrines: the mandate rule and the substantial deference due a district court’s departure decision. While I do not concede that these doctrines are necessarily in competition in this case, I think that the application of either doctrine requires affirmance of the district court decision.
The appellant, an experienced tax attorney and accountant, was convicted on his plea of guilty to a four-count Information charging willful failure to timely file income tax returns. There is no dispute that Tenzer failed to timely file his personal income tax returns for the years 1987 through 1990, or pay any taxes for those years. At the time he made his formal offer in compromise in the amount of $250,000, Tenzer’s tax liability was approximately $1.3 million. Although the district court first dismissed the Information on the ground that appellant had satisfied the IRS’s voluntary disclosure policy and therefore was immune from prosecution, we reversed on a finding that the offer in compromise submitted by the appellant was too little and too late to constitute compliance with the policy. See United States v. Tenzer, 127 F.3d 222 (2d Cir.1997).
The voluntary disclosure policy of the IRS offers immunity from criminal prosecution to those who voluntarily disclose their tax violations under certain conditions. One condition is that the taxpayer either pay, or make bona fide arrangements to pay, the applicable taxes and penalties. Since Tenzer had considerable assets at the time he got around to making his offer in compromise, he was advised by the IRS that a reasonable offer would be $600,000. Tenzer made an offer of $250,-000, and, when the offer was rejected for failure to include all assets, indicated that he would resubmit the same offer.' See id. at 224-26.
*45During his protracted discussions with the IRS, Tenzer failed to become current on accruing tax liabilities, and his stalling tactics were apparent to those involved in the processing of his case. All this is by way of answering the majority opinion’s apparent attempt to revise (or allow the district court to revise) the factual predicate for Tenzer’s offenses. We already have dealt with Tenzer’s voluntary disclosure defense: ■ “[I]t is clear that Tenzer was given ample opportunity, including a reasonable length of time, to comply with the voluntary disclosure policy, yet repeatedly failed to do so.” Id. at 227 (emphasis supplied). We have no occasion to revisit our conclusion that the district court erred in finding that Tenzer had made a bona fide offer to pay.
On remand, Tenzer entered a plea of guilty, admitting in any event his guilt of all the offenses with which he was charged. On the date of sentencing, the learned district court judge reviewed at great length the factors bearing on the sentence that he eventually imposed. Indeed, the detailed review of what the court characterized as “the issues presently tendered in connection with this sentencing” consumed some fifteen pages of transcript. With regard to Tenzer’s request for a downward departure, the district court prefaced its remarks as to the arguments made in that regard as follows:
The Court now has to consider the various different bases upon which the Court is being asked to depart downward and I have to start off by noting that there’s no question that the courts in this Circuit have finally gained unlimited power to depart downwardly on almost any rational basis which can be offered, and this is being done day in and day out in the district. The only issue, however, which has to be resolved by the Court, is whether the case presents a combination of facts constituting the kind or degree of mitigating circumstances not adequately taken into consideration by the [Sentencing] Commission.
The district court concluded its examination of the departure issue as follows:
So essentially I’ve considered all of the arguments being made, even those that I’ve not commented on, and I’ve concluded that I should not depart downwardly as a matter of discretion and in the public interest and so I decline to do so. 3'
Between the beginning and the end of its discussion of the arguments for downward departure, the district court touched on many factors, rejecting all of them as a basis for the departure sought. First and foremost, according to the district judge, was the claim “that the government violated Mr. Tenzer’s constitutional rights of due process by not giving him the full benefit of a highly publicized voluntarily (sic) disclosure policy which was being given to a number of other people similarly situated.” The district judge rejected Mr. Tenzer’s claim. Giving vent to his opinion “that the entire prosecution here is essentially unfair” and contrary to policies adopted and publicized by the IRS, the district judge nevertheless made the following statement: “I do not believe that these issues alone or taken together provide a reasonable basis for the Court to depart downwardly in Mr. Tenzer’s case.” Moreover, the district court opined that a judge should not “engage in nullification by departure” in sentencing merely because of its view “that the Court of Appeals panel opinion in this case was unfair or wrong”, or because “generalized fairness” requires a departure to rectify an unfair appellate decision.
Second, the district court “somewhat regretfully” declined to find a due process violation in the decision of the United States Attorney to prosecute Tenzer, acknowledging that prosecutorial discretion is confided to the United States Attorney. Next the district court rejected “the claim of so-called self-destructive procrastination” as a basis for downward departure. *46Although the court derived from its reading of the pre-sentence memorandum that this claim was being made, the court apparently was advised by counsel that this was not so. Nevertheless, the court noted that procrastination “certainly doesn’t show up in [Tenzer’s] work or life achievements and the Court does not believe that his psychological problems, whatever they are, rise to the level of justifying ... a downward departure.”
The district court then addressed diminished capacity as a ground for downward departure. Although uncertain whether this claim had in fact been advanced, the district court opined that in any event it “would not find substantiation adequate to support the exercise of its discretion to downwardly depart on that ground.” The court then turned to evidence of Tenzer’s good character, his honesty in dealing with clients and colleagues, his high ethical standards in his professional practice and his pro bono work. The district court stated that those matters would be considered “in determining a sentence within the Guideline range.” At this point in its review of departure factors, the court commented that this was a case outside the “heartland” of the Sentencing Guidelines in a way quite detrimental to Tenzer:
Very few people that this Court knows of or has seen have skipped four years in a row where they had such a substantial income and here’s a defendant who has been late as to six years and beat the tax on one of them because it became time-barred and he is, himself, a fully informed tax professional.
The district court concluded its review of the various bases for downward departure by rejecting Tenzer’s rehabilitation as “not extraordinary in any way” and by rejecting the acceptance of responsibility factor as already credited in the Guidelines computation.
We presume that a trial judge knows the potential grounds for Guidelines departures. See United States v. Diaz, 176 F.3d 52, 121-22 (2d Cir.1999). That presumption is only rebutted “in the rare situation” where there is “clear evidence of a substantial risk that the judge misapprehended the scope of his departure authority.” United States v. Brown, 98 F.3d 690, 694 (2d Cir.1996). The majority is of the opinion that the distinguished trial judge seems to have misunderstood the scope of his authority to depart in this case. How can this be so? The district judge thought (mistakenly) that he had “unlimited power to depart downwardly on almost any rational basis which can be offered.” (emphasis supplied). Can a judge who sees almost no restriction on his authority to downwardly depart be said to “misapprehend” the depth of his authority in that regard? I do not think so. What we have is a district judge who apprehended more power than he had but chose not to exercise it. Our court has established a bright-line rule that only when the district court does not realize that it has authority to depart under the Guidelines is the denial of a downward departure reviewable at all.
The majority opines that the district court misunderstood the scope of its authority to “take into account at sentencing the taxpayer’s intentions and the conduct of the parties during the negotiations.” See supra at 43. As previously noted, I do not agree that the district court misunderstood the scope of its departure authority except to the extent that it thought it had more authority than it did. Beyond that, I simply cannot subscribe to the majority view that Tenzer may have had good intentions with respect to his offer in compromise or that the government was somehow at fault in its conduct of “negotiations” with Tenzer. In the first place, there simply were no negotiations to be terminated at the time there was a decision to prosecute. If negotiations were indeed ongoing, then Tenzer would not have been out of compliance with the requirements of the voluntary disclosure policy. See Tenzer, 127 F.3d at 227. (“If the parties cannot agree within a reasonable time on a suitable arrangement for payment, then the *47IRS is justified in refusing to treat that taxpayer as a voluntary discloser.”).
Our prior decision to remand tells the true story: Tenzer’s eoúnsel was prepared to resubmit the previously rejected offer of $250,000; no taxes were paid for 1992 as required to keep current; Agent Kishlan-sky and her supervisor concluded that Tenzer was not attempting in good faith to pay his taxes, but rather was engaged in stalling tactics; Tenzer’s ' file was transferred to another office, and he was instructed to forego his resubmission until further notice; Tenzer’s attorney was not contacted regarding the resubmission, but he was informed that a criminal investigation was under way. See id., 127 F.3d at 224-25. At that point, Tenzer was prevented from jerking the IRS chain any longer, it already being apparent to all concerned that he was a candidate for criminal prosecution. The majority says that these may be “mitigating” circumstances. How can this be so? The circumstances that prevented Tenzer from negotiating were his own criminal activity and procrastination. That was the tenor of our previous opinion, and the district judge correctly understood our view of these circumstances when he imposed sentence.
By his guilty plea, Tenzer admitted that he failed to make the necessary and timely arrangements required for compliance with the voluntary disclosure policy. That factual predicate for his plea is what Ten-zer now seeks to revise, and the majority opinion gives him permission to do so. While it is true that our previous decision did not consider the circumstances of Ten-zer’s offer in the context of sentencing, it did clearly indicate that there were no “negotiations” pending at the time the case was referred for- criminal prosecution. Tenzer was waiting only for the opportunity to submit a previously rejected proposal. The majority would allow the district court to “consider[] whether the IRS’s decision to terminate negotiations, despite its previous signals to Tenzer, ... was unfair in light of its usual administration of the voluntary disclosure policy.” See supra at 44. But this would permit the district court to go against the established facts. Tenzer made no effort to comply with the voluntary disclosure policy, so there was no effort that could be “terminated” by the government. Accordingly, there was no “unfair” decision by the IRS, and it just makes no sense to me to allow the district court on remand to make a different factual finding. ■
In accordance with the Sentencing Commission formulation that each guideline should be considered as carving out a heartland or a set of typical cases, we have held that a court confronted with an atypical case, differing significantly from the norm, may consider whether a departure is warranted. See United States v. Milikowsky, 65 F.3d 4, 7 (2d Cir.1995). We have adopted the rule that district courts may determine, in unusual cases, whether the established facts that make the cases unusual “ ‘are present in sufficient kind or degree to warrant a departure.’ ” United States v. Core, 125 F.3d 74, 77 (2d Cir.1997) (quoting United States v. Rivera, 994 F.2d 942, 949 (1st Cir.1993)). What we have never said is that a given set of accepted facts establishing the crime may be replaced by another set of facts for the purpose of sentencing.
On the issue of good intentions, the majority cites United States v. Brennick, 134 F.3d 10 (1st Cir.1998), in support of its decision to remand. In that case, the First Circuit held that a district court had authority to depart downwardly in the case of a taxpayer charged with failure to pay wage withholding and social security taxes upon a showing of an “intent to delay payment only briefly.” Id. at 14. Such a showing was said to “take the case out of the heartland.” Id. That holding does not support my colleagues’ position because it involved the making of new and distinct factual findings, not a contradiction of facts previously established. The intentions of Tenzer have been shown to be anything *48but good. As to Tenzer’s intentions in regard to the voluntary disclosure policy, his insistence on resubmitting a lowball offer in compromise that he knew was unacceptable surely cannot be evidence of his intention to make a bona fide offer. His failure to comply with Agent Kishlan-sky’s directions to become current on 1992 taxes, to make monthly payments toward his tax liability and to make a compromise offer in the neighborhood of $600,000 leave no room for a finding of good intentions. The facts demonstrate an intention to stall and nothing more. As to Tenzer’s intent in regard to his failure to timely file income tax returns, the crimes with which he was charged, his guilty plea is the best evidence of his state of mind.
What is most curious to me is my colleagues’ apparent rejection of conclusions arrived at in our previous decision. While it is true that we did not deal with sentencing issues, we made some clear-cut determinations about Tenzer’s conduct. My colleagues now are doing just what Tenzer asks them to do — ignore our disagreements with the original conclusions of the district judge. The following passage from Tenzer’s reply brief on this appeal sums up his position on downward departure in a nutshell:
Tenzer showed — and the court previously found — that he had proceeded in good faith to make voluntary disclosure, including a bona fide offer in compromise, but had been thwarted by the IRS from completing that process. Because these are “mitigating circumstances of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission” and because they showed this case to be atypical of failure-to-file cases, it would be perfectly proper for the lower court to take them into account in departing downward.
The only problem with Tenzer’s argument is that we already have rejected the previous district court findings that Tenzer had “proceeded in good faith to make voluntary disclosure,” that he had made a “bona fide offer in compromise” and that he had been “thwarted” from completing the offer to the IRS. The district court on remand recognized that our previous rejection of these contentions foreclosed Tenzer from raising them on sentencing. No amount of “spin” can change what we already have determined and what the guilty plea imports in regard to Tenzer’s conduct. The failure of my colleagues to acknowledge that which the district court recognized and clearly articulated in respect to downward departure in this case compels this dissent.