Court Opinion

ID: 2793708
Source: CourtListenerOpinion
Date Created: 2015-04-14 20:01:22.489307+00
Date Added: 2024-06-11T11:11:35.760734
License: Public Domain

NOT FOR PUBLICATION

                     UNITED STATES COURT OF APPEALS                            FILED
                            FOR THE NINTH CIRCUIT                               APR 14 2015

                                                                            MOLLY C. DWYER, CLERK
                                                                             U.S. COURT OF APPEALS

UNITED STATES OF AMERICA,                         No. 13-30363

              Plaintiff - Appellee,               D.C. No. 6:12-cr-00017-CCL-1

       v.
                                                  MEMORANDUM*
BRAD CHARLES FISHER,

              Defendant - Appellant.

                   Appeal from the United States District Court
                            for the District of Montana
                 Charles C. Lovell, Senior District Judge, Presiding

                      Argued and Submitted February 5, 2015
                               Seattle Washington

Before: FISHER, BEA and MURGUIA, Circuit Judges.

      Brad Fisher appeals his conviction for tax evasion under § 7201 of the

Internal Revenue Code, 26 U.S.C. § 7201. We have jurisdiction under 28 U.S.C.

§ 1291, and we vacate and remand.

      Fisher raises a single issue on appeal, arguing the district court abused its

discretion by denying his request to instruct the jury on willful failure to pay taxes

        *
        This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
under 26 U.S.C. § 7203 as a lesser included offense. “We review a district court’s

refusal to instruct on a lesser included offense using a two part test.” United States

v. Hernandez, 476 F.3d 791, 797 (9th Cir. 2007). “First, ‘the defendant must prove

that the offense on which instruction is sought is a lesser-included offense of that

charged.’” Id. (quoting United States v. Fejes, 232 F.3d 696, 703 (9th Cir. 2000)).

“This is reviewed de novo.” Id. It is undisputed that § 7203 is a lesser included

offense of § 7201. “Second, to warrant a lesser included offense instruction ‘the

evidence at trial must be such that a jury could rationally find the defendant guilty

of the lesser offense, yet acquit him of the greater.’” Id. at 798 (quoting Schmuck

v. United States, 489 U.S. 705, 716 n.8 (1989)). “We review this step of the

inquiry for abuse of discretion.” Id.

      1.     We hold that the district court abused its discretion by failing to give

the lesser included offense instruction. Relying on Sansone v. United States, 380

U.S. 343 (1965), the court concluded that a § 7203 instruction was not required,

because: (1) the only element of § 7201 that was in dispute was willfulness; (2) the

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willfulness required for §§ 7201 and 7203 were the same; and, thus, (3) a rational

jury could not convict on § 7203 without also convicting on § 7201.1

      That, however, is precisely the reasoning we rejected in United States v.

DeTar, 832 F.2d 1110, 1113-14 (9th Cir. 1987). There we held that, for a

conviction under § 7201, “there must be ‘proof of willfulness in the sense of a

specific intent to evade or defeat the tax or its payment.’” Id. at 1114 (quoting

Edwards v. United States, 375 F.2d 862, 867 (9th Cir. 1967)). Because § 7203, by

contrast, requires only a knowing failure to pay a tax when due, DeTar held that it

is possible for a rational jury to find both willfulness under § 7203 and the absence

of willfulness under § 7201:

      a jury could find DeTar guilty of willful failure to pay because he had
      filed returns indicating a tax due [and] had not paid . . . . Such a finding
      would not have been logically inconsistent with a finding that DeTar
      lacked the specific intent to evade when he engaged in the additional
      conduct alleged by the government as a felony violation – conduct such
      as placing assets in trust and receiving only cash payments from patients.

Id. at 1114 n.4.

      1
         “The elements of attempted income tax evasion under 26 U.S.C. § 7201
are: (1) willfulness; (2) the existence of a tax deficiency; and (3) an affirmative act
constituting an evasion or attempted evasion of the tax.” United States v. Kayser,
488 F.3d 1070, 1073 (9th Cir. 2007). A failure-to-pay charge under § 7203 has
two elements: “(1) willfulness and (2) failure to pay the tax when due.” United
States v. DeTar, 832 F.2d 1110, 1113 (9th Cir. 1987) (citing Sansone, 380 U.S. at
351).
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      2.     We reject the government’s argument that a § 7203 instruction was

properly refused because no reasonable jury could have acquitted Fisher on the §

7201 charge while convicting him on the § 7203 charge. In determining whether

to give a lesser included offense instruction, we “may not weigh the evidence.”

Hernandez, 476 F.3d at 800. Here, a rational jury could have found that Fisher

knowingly and intentionally failed to pay his taxes when due (as required to violate

§ 7203) but nonetheless lacked the specific intent to evade those taxes (as required

by § 7201). A rational jury also could have found that, although Fisher intended to

delay payment, he did not intend to evade his tax obligations permanently. See

Edwards, 375 F.2d at 867.

      3.     Finally, we reject the government’s argument that the error was

harmless. The jury was instructed on tax evasion under § 7201 and on the lesser

included offense of willfully delivering a false statement to the Internal Revenue

Service under § 7207. Both §§ 7201 and 7207 require an affirmative act in

addition to the nonpayment of taxes. Without an instruction under § 7203, the jury

did not learn that willful nonpayment of taxes alone is a crime. If the jury did not

believe that Fisher engaged in any affirmative act (beyond mere nonpayment of

taxes) in violation of a known duty, but still was reluctant to allow him to get away

with ignoring his substantial tax liability, its guilty verdict may have been a

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compromise. This is sufficient prejudice to require reversal. See Hernandez, 476

F.3d at 801-02.2

      VACATED AND REMANDED.

      2
        The government’s argument that DeTar’s willfulness standard conflicts
with United States v. Bishop, 412 U.S. 346, 360 (1973), United States v.
Pomponio, 429 U.S. 10, 12 (1976) (per curiam), and Cheek v. United States, 498
U.S. 192, 201 (1991), is without merit. Those cases define willfulness as a
voluntary, intentional violation of a known legal duty. See Cheek, 498 U.S. at 201.
The legal duty at issue here is the duty not to attempt to evade taxes. Under Cheek,
therefore, willfulness under § 7201 requires a specific intent to evade taxes, as
DeTar holds.
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