Court Opinion

ID: 4180357
Source: CourtListenerOpinion
Date Created: 2017-06-23 14:15:19.637173+00
Date Added: 2024-06-11T14:25:09.484014
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                 APPROVAL OF THE APPELLATE DIVISION

                                    SUPERIOR COURT OF NEW JERSEY
                                    APPELLATE DIVISION
                                    DOCKET NO. A-4479-14T2

STATE OF NEW JERSEY,
                                      APPROVED FOR PUBLICATION
     Plaintiff-Respondent,                 June 23, 2017

v.                                       APPELLATE DIVISION

GREGORY P. COBBS,

     Defendant-Appellant.
___________________________________

         Submitted November 29, 2016 – Decided June 23, 2017

         Before Judges Fisher, Ostrer and Leone.

         On appeal from the Superior Court of New
         Jersey,   Law   Division,  Mercer County,
         Indictment No. 13-07-0893.

         Joseph E. Krakora, Public Defender, attorney
         for appellant (Jaime B. Herrera, Assistant
         Deputy Public Defender, of counsel and on
         the brief).

         Angelo J. Onofri, Acting Mercer County
         Prosecutor, attorney for respondent (Mary E.
         Stevens, Special Deputy Attorney General/
         Acting Assistant Prosecutor, of counsel and
         on the brief).

     The opinion of the court was delivered by

OSTRER, J.A.D.

     This appeal requires us to determine when the five-year

statute of limitations begins to run against a prosecution for

intentional failure to pay New Jersey taxes.        N.J.S.A. 54:52-
9(a).   Upon reconsideration, the trial court denied defendant's

motion to dismiss count one of the July 10, 2013 indictment,

which   charged     him   with    failure          to   pay    $194,817.56     in      gross

income tax for tax year 2007.                     Thereafter, defendant entered a

conditional guilty plea to that charge, and the State dismissed

count two of the indictment, which timely alleged failure to pay

$18,336 in 2008 tax.         Defendant did so after the court affirmed

denial of his application to pretrial intervention (PTI).

      Having considered the plain language of the tax law, and

applicable principles of statutory interpretation, we conclude

that the limitations period under N.J.S.A. 2C:1-6 for failure to

pay   tax   under    N.J.S.A.      54:52-9(a)           begins    to    run    when       the

defendant has failed to pay taxes when due and owing, and has

done so with the intent to evade, avoid or otherwise fail to

make timely payment.         This can occur on the day taxes are first

due, or on a later date when the necessary state of mind first

emerges.

      In this case, the indictment alleged that both non-payment

and intent coexisted as early as July 8, 2008.                      Therefore, count

one of the July 10, 2013 indictment was time-barred.                           We reject

the   State's   argument     that       the       limitations     period      was    tolled

until   February     2010,       when     defendant           engaged   in     his      last

affirmative act to evade and avoid payment.

                                              2                                     A-4479-14T2
       We   also      affirm      the   court's       denial       of    defendant's       PTI

appeal.      We therefore reverse defendant's conviction and remand

for    further        proceedings       with    respect       to     count   two     of    the

indictment.

                                               I.

       For purposes of this appeal, we assume the facts alleged in

the indictment.            State v. Morrison, 188 N.J. 2, 12-13 (2006) (on

motion      to    dismiss     indictment,           court    must    consider       evidence

presented        to   the   grand     jury     in    light    most      favorable    to    the

State); State v. Riley, 412 N.J. Super. 162, 167 (Law Div. 2009)

(on motion to dismiss indictment, court accepts facts alleged by

State).      According to count one, "on diverse dates between July

8, 2008 and February 27, 2013," defendant "fail[ed] to pay or

turn over when due" $194,817.56 in tax due for tax year 2007,

and he did so "with the intent to evade, avoid or otherwise not

make timely payment or deposit . . . ."                       Count two alleges that

between October 15, 2008 and February 27, 2013, defendant failed

to pay when due $18,336 in tax for the 2008 tax year, while

having the same state of mind.                     Neither count charged defendant

with   failing        to    pay   a   specific       amount   of     interest,      fees    or

penalties.

       The State also alleged, and defendant did not dispute for

purposes of his motion, that defendant filed his gross income

                                               3                                    A-4479-14T2
tax return on July 7, 2008.              It was due April 15, 2008 and he

did not seek an extension.          Defendant reported over $2.3 million

in taxable income, but failed to remit any tax then due, which

he calculated to be $196,065.             Defendant was thereafter given a

modest credit, producing the $194,817.56 amount stated in the

indictment.

      On February 17, 2009, an outside tax collector for the

Division of Taxation (Division), Pioneer Credit Recovery, Inc.

(Pioneer), notified defendant by mail of his tax delinquency and

sought payment of $274,453.82, consisting of $194,065 in tax;

interest    of    $16,012.28   through        March    15,    2009;       penalties      of

$38,915.20; and a recovery fee of $24,950.34.1                     Pioneer personnel

communicated with defendant by telephone multiple times between

March 2009 and February 2010.                  Defendant repeatedly promised

Pioneer and Division personnel that he would make payments, but

he   did   not.     On   February    9,       2010,   defendant          contacted     the

Division    and   said   the   proverbial       "check       was    in    the    mail"    —

actually in a Federal Express package.                 He supplied the tracking

number, but no payment was enclosed.                  The case was transferred

to   the   Attorney      General    in    April       2010.        Aside        from   his

1
  The slight differences between Pioneer's calculation of tax
owed and the amount alleged in the indictment are unexplained by
the record.

                                          4                                      A-4479-14T2
continuing non-payment, the State proffered no acts of evasion

thereafter,    although       the   indictment       referred   to    actions   on

"diverse dates" as late as February 2013.

       Over three years later, a Mercer County grand jury returned

the    two-count     indictment     against    defendant.2       Defendant      was

denied    admission      to     PTI,   and     the     trial    court   rejected

defendant's appeal.           After the plea cut-off date, see R. 3:9-

3(g), defendant filed his motion to dismiss count one as time-

barred.

       The court initially granted the motion, but reversed itself

upon the State's reconsideration motion.                  Defendant contended

the    five-year   limitations      period     under    N.J.S.A.     2C:1-6(b)(1)

began to run on April 16, 2008, the day after his taxes were

due.     The State argued the crime was complete, and the statute

of     limitations     commenced,      after     defendant      satisfied       two

elements: he failed to pay the tax when due; and he engaged in

his last affirmative act to evade or avoid payment, which was in

February 2010, when defendant falsely stated he sent a check by

Federal Express.3

2
    The State offers no explanation for the delay.
3
  Initially, the State also contended the limitations period did
not begin to run as long as taxes were due and owing. In first
granting defendant's motion, the trial court focused on and
rejected   this  argument.     On  reconsideration,   the  State
                                                     (continued)

                                        5                                A-4479-14T2
     In    ultimately   denying       defendant's    dismissal    motion,     the

court held that the Legislature intended to designate criminal

failure to pay tax under N.J.S.A. 54:52-9(a) as a continuing

crime, although it did not do so explicitly.                The court agreed

the limitations period began to run after a defendant's last act

that evidenced an intent to evade or avoid payment of tax.                      As

that occurred in February 2010, the July 10, 2013 indictment was

timely.

     Defendant thereafter entered an open, conditional plea of

guilty to count one.         In his allocution, defendant admitted he

filed   his    2007   tax    return    on   July    8,   2008;   it   reflected

$194,817.56 in tax due; he intended to avoid payment; and he

thereafter made multiple unkept promises to pay, and sent an

empty   Federal    Express    envelope      after   promising    to   enclose    a

payment.      On April 17, 2015, the court sentenced defendant, then

fifty-one years old, to five years of probation and 100 hours of

community service.      The court required restitution of $150,000,

in monthly payments of a least $500 over ten years.4

(continued)
emphasized its alternative argument that the last affirmative
act of evasion or avoidance triggered the limitations period.
4
  The court also purported to impose, in advance, 364 days of
incarceration if defendant failed to complete probation.       We
note that such a sentence is contrary to State v. Bayless, 114
N.J. 169, 175-78 (1989), which requires the trial court, at a
resentencing for violation of probation, to consider the
                                                      (continued)

                                        6                               A-4479-14T2
       This    appeal      followed.        Defendant   raises    the   following

points for our consideration:

              POINT I

              THE STATUTE OF LIMITATIONS BEGAN TO RUN ON
              JULY 7, 2008 BECAUSE FAILURE TO PAY IS A
              POINT-IN-TIME CRIME AND NOT A CONTINUING
              OFFENSE.[5]

              POINT II

              MR. COBBS' REJECTION FROM PTI CONSTITUTES A
              PATENT AND GROSS ABUSE OF DISCRETION BECAUSE
              THE PROSECUTOR INAPPROPRIATELY WEIGHED HIS
              PRIOR CONVICTION AND FAILED TO CONSIDER ALL
              RELEVANT FACTORS.

                                           II.

       As    defendant     does     not    challenge    any    trial   court   fact

findings, we review de novo, as a question of law, the court's

denial of his motion to dismiss count one of the indictment on

statute of limitations grounds.                  See State v. Cagno, 211 N.J.
488, 505-06 (2012).           The Code of Criminal Justice (Code) sets

forth guiding principles.6                Subject to various exceptions not

relevant here, "[a] prosecution for a crime must be commenced

within      five   years    after    it    is    committed."      N.J.S.A.     2C:1-

(continued)
aggravating factors found to exist at the original sentencing
and the mitigating factors affected by the probation violation.
5
    We omit sub-headings that simply outline defendant's argument.
6
  Although the crime is defined in Title 54, the State concedes
that N.J.S.A. 2C:1-6 governs.

                                            7                             A-4479-14T2
6(b)(1).     The limitations period starts the day after the crime

is committed, ibid., and the prosecution is "commenced" when an

indictment      is    found.        N.J.S.A.       2C:1-6(d).       The    statute     of

limitations is an absolute bar to untimely prosecution.                             State

v. Diorio, 216 N.J. 598, 613 (2014).

    To     determine     when       a    crime     "is    committed,"     the   statute

creates    a     dichotomy          between       "discrete     act"      crimes,     and

"continuing crimes."            Id. at 614.              "An offense is committed

either when every element occurs or, if a legislative purpose to

prohibit a continuing course of conduct plainly appears, at the

time when the course of conduct or the defendant's complicity

therein is terminated."             N.J.S.A. 2C:1-6(c).

    We must first consider whether the Legislature expressed a

purpose,    explicitly         or    impliedly,      to    treat    the    intentional

failure to pay tax as a continuing course of conduct crime, that

is, a continuing crime.                 The Code "'establishes a presumption

against finding that an offense is a continuous one.'"                          Diorio,

supra, 216 N.J. at 614-15 (quoting II The New Jersey Penal Code,

Final Report of the N.J. Criminal Law Revision Commission                                §

2C:1-6 commentary 2 at 15 (1971) (Final Report)).                          "An offense

should    not    be    considered        a    continuing      offense     'unless     the

explicit   language      of     the     substantive       offense   compels     such     a

conclusion, or the nature of the crime involved is such that

                                              8                                 A-4479-14T2
[the legislative body] must assuredly have intended that it be

treated as a continuing one.'"         Id. at 614 (quoting Toussie v.

United States, 397 U.S. 112, 115, 90 S. Ct. 858, 860, 25 L. Ed.
2d 156, 161 (1970)).

                                  A.

    We begin with the statute's plain language.                 See In re

Kollman, 210 N.J. 557, 568 (2012).         The intentional failure to

pay statute consists of two elements: first, the failure "to pay

or turn over when due any tax, fee, penalty or interest or any

part thereof required to be paid pursuant to the provisions of

the State Tax Uniform Procedure Law, [N.J.S.A.] 54:58-1 et seq.,

as amended and supplemented, or any State tax law," and, second,

"the intent to evade, avoid or otherwise not make timely payment

or deposit of any tax, fee, penalty or interest or any part

thereof."     N.J.S.A.   54:52-9(a).     The   statute   also   expressly

provides that if a taxpayer submits a bad check, a fact-finder

may infer the requisite state of mind not to pay:

            The fact that any payment was made with a
            subsequently      dishonored       negotiable
            instrument shall constitute prima facie
            evidence that the actor failed to pay within
            the meaning of subsection a. of this
            section, and the trier of fact may draw a
            permissive inference therefrom that the
            actor did not intend to make the payment.

            [N.J.S.A. 54:52-9(b).]

                                  9                               A-4479-14T2
     In short, to be criminally liable, the taxpayer must have,

first, failed to pay the tax "when due," and, second, acted

"with the intent to evade, avoid or otherwise not make timely

payment . . . ."     N.J.S.A. 54:52-9(a).         A taxpayer may satisfy

these two elements as early as the day taxes are due, which is

April 15 in the case of gross income tax.               See, e.g., N.J.S.A.

54A:8-1(a) (stating that payment of gross income tax is due

April 15).7      Although unpaid taxes may remain due and owing

after they first become due, the first element is satisfied when

the taxpayer initially fails to pay.

     We reject defendant's suggestion that the statute does not

commence until the taxpayer's late filing, in this case, July

2008.   If that were so, then the statute would never begin to

run if a taxpayer never filed.            Instead, we understand "when

due" to mean that, absent an extension of the payment date,

gross   income   taxes   are   due   on   April   15,   regardless   of    the

taxpayer's unilateral decision to file late.8

7
  The State did not allege that defendant failed to pay estimated
tax during the 2007 tax year, which would involve an earlier due
date. N.J.S.A. 54A:8-5.
8
  Under N.J.S.A. 54A:8-1(a), "the director may extend either the
filing or payment due date, or both, for any return under the
'New Jersey Gross Income Tax Act,' N.J.S.[A.] 54A:1-1 et seq.,
to coincide" with similar extensions for filing or payment of
federal personal income tax returns. This statute also permits
reasonable extensions, not greater than six months, for good
                                                     (continued)

                                     10                              A-4479-14T2
     A taxpayer may conceivably fail to pay, but do so without

the requisite intent.   For example, when a taxpayer carelessly

forgets to mail a return and payment, criminal culpability may

be absent.   Consequently, the State must also show that the

taxpayer failed to pay with an intent to evade payment.          Cf.

State v. Barasch, 372 N.J. Super. 355, 364-65 (App. Div. 2004)

(noting that the "intent to evade, avoid, or otherwise not make

timely payment" state of mind requirements in N.J.S.A. 54:52-8,

-13, and -14 were added to avoid punishing "simple carelessness

or poor business practices").9        If the taxpayer realizes the

oversight a month later, and then intentionally persists in non-

payment, the crime would be complete at that point.10

(continued)
cause.   N.J.S.A. 54A:8-1(b). Here, however, defendant did not
seek an extension for filing or paying his 2007 taxes, under
either circumstance.
9
  We need not address what other facts would defeat intent to
evade, avoid or otherwise not make timely payment. We note but
do not address the view of some federal courts that financial
inability to pay does not negate willfulness in a prosecution
for willful failure to pay taxes under 26 U.S.C.A. § 7203. See,
e.g., United States v. Blanchard, 618 F.3d 562, 571-72 (6th Cir.
2010); United States v. Easterday, 564 F.3d 1004, 1010 (9th Cir.
2009).
10
   We reject the notion that there is no violation of N.J.S.A.
54:52-9(a) if a defendant, who failed to pay a tax without the
intent when it was originally due, subsequently fails to pay
with the "intent to evade, avoid or otherwise not make timely
payment."   Ibid.  Notably, the Legislature did not include the
phrase "when due" in the mens rea element. Instead, it included
                                                    (continued)

                                 11                        A-4479-14T2
       Although N.J.S.A. 54:52-9(a) is complete upon satisfaction

of    the   two    elements    —    non-payment      and   intent    —   the     State

contends that the crime should be treated as a continuing one.

The State concedes that the intentional failure to pay statute

does not explicitly define the crime as a continuing offense.

The    State      contends    the      Legislature    nonetheless        must    have

intended that the offense be treated as a continuing one.                        Yet,

as it did before the trial court, the State has jettisoned the

argument     that    the     offense    continues     as   long     as   taxes    are

intentionally unpaid, which would mean the limitations period

would rarely run.          Rather, the State contends that an essential

element of the crime is the evasion or avoidance of payment;

consequently, the crime continues, and the limitations period

does not begin to run, until the last affirmative act of evasion

or avoidance.

       The State misinterprets the elements of the crime.                          No

affirmative act of evasion or avoidance is required, other than

non-payment of taxes when due.             The taxpayer's "intent to evade,

(continued)
the phrase "timely payment."    "Timely" means "[o]ccurring at a
suitable or opportune time; well-timed." The American Heritage
Dictionary 1271 (2d Coll. ed. 1985). A taxpayer who carelessly
overlooked payment — i.e. failed to pay tax "when due" — and
then discovered the oversight, but intentionally continued to
withhold payment — i.e. with an intent to avoid "timely payment"
— would satisfy the elements of the statute.

                                          12                               A-4479-14T2
avoid or otherwise not make timely payment," N.J.S.A. 54:52-

9(a), may certainly manifest itself in other affirmative acts of

evasion or avoidance — such as unkept promises to pay, hiding of

assets, or underreporting of income.                  However, those are not

elements    of    the   crime,    although     they      may    be    circumstantial

evidence of the taxpayer's requisite intent.

      The State's position is also belied by subsection (b) of

the statute.       Under this subsection, payment with a subsequently

dishonored       negotiable   instrument       is   prima       facie      evidence     of

failure to pay, and permits an inference of the requisite intent

not to pay.       N.J.S.A. 54:52-9(b).         In other words, the crime may

be complete, in all respects, upon payment with a dishonored

instrument.       No further proof is necessary.               This provision thus

suggests that the crime is a "discrete offense."

                                          B.

      The    State's     position     also     finds       no     support        in    the

legislative      history.     The   Legislature          passed      the    intentional

failure     to    pay   statute     in     1987     as     part      of      a   general

strengthening of criminal tax offenses.                  L. 1987, c. 76, §§ 15-

29 (now codified at N.J.S.A. 54:52-5 to -19).                           The get-tough

approach was a counterweight to the temporary tax amnesty that

the   law    established.           See    Senate        Revenue,          Finance     and

                                          13                                     A-4479-14T2
Appropriations       Committee        Statement         to        Assembly       Committee

Substitute for Assembly No. 823, at 1-2 (June 12, 1986).

     The Legislature created two sets of tax-related offenses,

distinguished      by   the    requisite         state       of    mind.         It   is    a

disorderly     persons       offense      if     a     taxpayer          "recklessly       or

negligently . . . [f]ails to pay over any tax required by any

State tax law[,]"           N.J.S.A. 54:52-6(b), or engages in other

proscribed conduct, such as "[f]ail[ing] to file any return or

report[,]"     N.J.S.A.        54:52-6(a);           filing        or     making      false

statements, N.J.S.A. 54:52-6(c); failing to withhold taxes as

required,    N.J.S.A.       54:52-6(j);        and     failing      to    keep    required

records, N.J.S.A. 54:52-6(k).11

     In contrast, it is a third-degree crime if a person fails

to pay or turn over tax "with the intent to evade, avoid or

otherwise not make timely payment . . . ."                        N.J.S.A. 54:52-9(a).

This same mens rea requirement — "intent to evade, avoid or

otherwise    not    make     timely    payment"         —    is     incorporated       into

several other provisions in the 1987 statute.                             These include

third-degree       crimes     to   file        false    or        fraudulent      returns,

N.J.S.A.    54:52-10;       maintain      or    prepare       false       or   fraudulent

11
   N.J.S.A. 54:52-6 is apparently drawn from N.J.S.A. 54:32B-
26(b), which was repealed by L. 1987, c. 76, § 39. However, the
prior law defined a disorderly persons offense without including
an express mens rea requirement.

                                          14                                       A-4479-14T2
books, N.J.S.A. 54:52-11; fail to maintain books or records,

N.J.S.A. 54:52-12; fail to collect or withhold tax, N.J.S.A.

54:52-14;12 and the fourth-degree crime to knowingly swear to,

affirm, certify or verify any false or fraudulent statement,

N.J.S.A. 54:52-19.13    The Legislature evidently contemplated that

the failure to pay taxes, as well as other violations of tax-

related obligations, may be inadvertent or careless, which would

warrant lesser sanctions as disorderly persons offenses.                   See

Barasch, supra, 372 N.J. Super. at 364-65.

     As   the   court   did   in    Barasch,   supra,    we   look   to    the

statutory   structure   of    the    1987   criminal    tax   provisions    to

discern legislative intent.         Ibid.; see also State v. Smith, 197

12
  Prior law made it a misdemeanor to fail to file a report, or
to file a false or fraudulent report "with the intent to defraud
the state or evade the payment of any tax, fee, penalty or
interest or any part thereof, which shall be due . . . ."     L.
1936, c. 263, § 601, codified at N.J.S.A. 54:52-1, and repealed
by L. 1987, c. 76, § 65. Applying a slightly different mens rea
requirement, the old law also made it a misdemeanor to
"knowingly swear to, affirm, or verify any false or fraudulent
statement with intent to evade the payment of any state tax
. . . ." L. 1936, c. 263, § 602, codified at N.J.S.A. 54:52-2,
and repealed by L. 1987, c. 76, § 65.      However, the old law
apparently did not make it a misdemeanor to fail to pay tax with
a similar state of mind requirement.
13
   The state of mind requirement in N.J.S.A. 54:52-19 uses the
formulation "intent to evade, avoid or otherwise not pay any
tax" as opposed to "otherwise not make timely payment of any
tax" used in the other provisions. Whether the indictment would
have been timely had it charged defendant with this or any other
offense is not before us.

                                      15                             A-4479-14T2
N.J. 325, 333 (2009) (stating that, in construing a statute, the

court should "draw inferences concerning the meaning from its

composition    and      structure"     (internal     quotation        marks    and

citation omitted)).       There is no indication in the structure of

the criminal tax provisions that an affirmative act of evasion

or avoidance is an essential element of the intentional failure

to pay crime under N.J.S.A. 54:52-9(a).             Rather, as noted above,

various   kinds   of    deceptive,     fraudulent,    or    evasive    acts    are

separately    criminalized      as   third-    or   fourth-degree      offenses.

See N.J.S.A. 54:52-10, -11, -14, and -19.                  We infer from this

separate treatment that the Legislature did not intend to make

affirmative acts of avoidance or evasion an essential element of

the intentional failure to pay crime; nor did the Legislature

intend that the offense would be a continuing one until the last

such affirmative act occurred.

                                       C.

       The State contends, citing United States v. Dandy, 998 F.2d
1344   (6th   Cir.     1993),   that   the    Legislature     could    not    have

intended to permit a taxpayer to avoid prosecution simply by

hiding the nature of a tax fraud scheme for five years.                   We are

unpersuaded.      Dandy involved a prosecution for filing a false

return under 26 U.S.C.A. § 7201, which states: "Any person who

willfully attempts in any manner to evade or defeat any tax

                                       16                                A-4479-14T2
imposed by this title or the payment thereof shall, in addition

to   other    penalties     provided    by     law,   be    guilty   of    a    felony

. . . ." 998 F.2d at 1349.        The court held that the limitations

period began to run upon the last affirmative evasive act.                           Id.

at 1355-56.      The court reasoned that to hold that the statute

ran upon filing "would reward [the] defendant for successfully

evading discovery of his tax fraud . . . ."                 Id. at 1355.

       First, there was no false filing in this case.                     Cf. United

States v. McGill, 964 F.2d 222, 230 (3d Cir. 1992) (stating that

evasion of assessment cases under § 7201 can be established with

the filing of a false tax return).                    In fact, the State knew

defendant failed to pay his taxes no later than when he filed

his 2007 return almost three months late, without an extension,

and reported close to $200,000 in tax due.                   Furthermore, as the

Court observed in Diorio, supra, "Our 'Code is drafted on the

theory that it is ordinarily desirable to start the running of

the period of limitation at the time when a crime is committed

rather than at the time the offense is detected or the offender

discovered.'" 216 N.J. at 620 (quoting Final Report, supra, §

2C:1-6 commentary 2 at 14).

       Second, to prove tax evasion under 26 U.S.C.A. § 7201 there

must    be:    "1)    the   existence     of     a    tax    deficiency,        2)    an

affirmative     act    constituting      an    attempt      to   evade    or    defeat

                                        17                                     A-4479-14T2
payment of the tax, and 3) willfulness."            McGill, supra, 964

F.2d at 229.     By contrast, "[w]illful failure to pay tax under §

7203 contains two elements: 1) failure to pay a tax when due,

and 2) willfulness."      Ibid.    The crime described in Dandy is

most analogous to the crime defined by N.J.S.A. 54:52-10, which

proscribes filing false or fraudulent returns.                We need not

decide when a crime under that provision is committed under

N.J.S.A. 2C:1-6, and when the limitations period begins to run.

The elements of § 7203, not § 7201, are analogous to those of

N.J.S.A. 54:52-9(a).      Section 7203 covers willful failure to

file, supply information or pay tax, stating it is a misdemeanor

for

           [a]ny person required under this title to
           pay any estimated tax or tax, or required by
           this title or by regulations made under
           authority thereof to make a return, keep any
           records, or supply any information, who
           willfully fails to pay such estimated tax or
           tax, make such return, keep such records, or
           supply such information, at the time or
           times required by law or regulations . . . .

           [26 U.S.C.A. § 7203.]

       Federal cases applying § 7203 support our interpretation of

N.J.S.A. 54:52-9(a).     In United States v. Sams, 865 F.2d 713,

714 (6th Cir. 1988), a taxpayer submitted his federal return

without payment, stating he was short of funds and intended to

make   payment   arrangements.     After   he   failed   to   do   so,   the

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government prosecuted him for willful failure to pay tax under

26 U.S.C.A. § 7203.           Ibid.      The Sixth Circuit rejected the

defendant's contention that the limitations period began, as a

matter    of   law,   when   the   tax   return   was   due.   Id.    at   715.

However, it also rejected the government's contention that it

did not run until the tax was actually paid.               Ibid.     The court

held that the crime was complete when willfulness manifested

itself, which was a fact issue.           Id. at 716.

    The court in United States v. Pelose, 538 F.2d 41, 44-45

(2d Cir. 1976), reached a similar conclusion with respect to

willful failure to file tax returns under 26 U.S.C.A. § 7203.

The court held that the crime would not be complete if the

taxpayer failed to file when due because of ill-health or lapse

of memory, but would become complete if the taxpayer persisted

in non-filing after the illness or other supervening condition

passed.    Id. at 44-45.       See also United States v. Andros, 484
F.2d 531, 532 (9th Cir. 1973) (stating, under 26 U.S.C.A. §

7203, that "[t]he period of limitation begins to run not when

the taxes are assessed or when payment is demanded, but rather

when the failure to pay the tax become willful -- an essential

element of the crime"), overruled on other grounds by United

States v. Easterday, 564 F.3d 1004, 1011 (9th Cir. 2009).

                                         19                           A-4479-14T2
    In sum, we find no support in federal case law for the

State's position.          Rather, to the extent 26 U.S.C.A. § 7203 is

analogous    to    N.J.S.A.       54:52-9(a),       federal     cases     support      the

conclusion that there are just two elements to the New Jersey

offense: the failure to pay when due, and required state of

mind.

                                          D.

    In    arguing     that    it    charged     defendant        with    a     continuing

crime, the State also misplaces reliance on the provisions that

authorize the Division to impose fees, interest and penalties on

unpaid taxes.       See N.J.S.A. 54:49-3.            We recognize that interest

and penalties accrue monthly on unpaid taxes.                        See id.; N.J.S.A.

54:49-4   (late     filing    penalty).         Interest        is    also     compounded

annually.     See N.J.S.A. 54:49-3.            While a taxpayer may commit an

intentional failure to pay tax on the day the taxes are due —

say, April 15, 2008 on 2007 taxes — a taxpayer could not commit

the intentional failure to pay interest on the overdue 2007

taxes until the State imposes the interest thereafter.

    However, the possibility of an intentional failure to pay

subsequently       charged       interest      or    fees   does        not     toll   the

limitations       period    on     the   intentional        failure       to     pay   the

underlying     tax,    which       charge      may    be    a        separate     offense

altogether.       The State did not charge defendant with intentional

                                          20                                     A-4479-14T2
failure to pay interest, penalties, or fees on his unpaid 2007

taxes — which may well have been timely.

                                           E.

    Based        on   the     foregoing     principles,     count      one    of    the

indictment was time-barred.               As the State itself alleged in the

indictment, defendant failed to pay his 2007 taxes when due —

which     was    April      15,   2008.         According   to   the    indictment,

defendant did so, beginning July 8, 2008, with the intent to

evade, avoid or otherwise not make timely payment.                      Defendant's

subsequent empty promises to pay did not toll the limitations

period.     Based on the State's allegations, which we accept as

true for purposes of the motion, the crime was committed, under

N.J.S.A. 2C:1-6, no later than July 8, 2008.

    Inasmuch as we reverse the trial court's denial of the

motion to dismiss count one, we remand for further proceedings

as to count two of the indictment, which the State dismissed

only as part of the defendant's conditional plea to count one.

                                          III.

    Finally, defendant's PTI appeal lacks sufficient merit to

warrant extended discussion in a written opinion.                            R. 2:11-

3(e)(2).        The prosecutor's rejection of defendant's application

was not a patent and gross abuse of discretion in view of the

circumstances.        See State v. K.S., 220 N.J. 190, 200 (2015).

                                           21                                 A-4479-14T2
These    included   defendant's        previous         conviction   in   1997     of   a

significant theft for which he was required to make restitution

of     $220,500,    and        serve    a        five-year     probationary        term

(conditioned on ninety days in jail) that presumably ended just

five years before defendant's failure to pay tax.                         Defendant's

claimed    inability      to    pay    any       2007   tax   was    belied   by    his

substantial earnings in 2007 and his decision to purchase a $1.2

million home in February 2008, rather than set aside funds for

taxes.     We do not minimize defendant's personal tragedy — the

illness and passing of his wife — and his personal economic

reversals, but these later events did not excuse his failure to

pay tax on his 2007 income when due.

       Reversed as to the denial of the motion to dismiss count

one.     Affirmed as to the denial of PTI.                    Remanded for further

proceedings as to count two.

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