(a) Whoever commits an offense against the United States or aids, abets, counsels, commands,induces or procures its commission, is punishable as a principal.

(b) Whoever willfully causes an act to be done which if directly performed by him or anotherwould be an offense against the United States, is punishable as a principal.

18 U.S.C. § 2

GOVERNMENT PROPOSED JURY INST. NO. 18.2-2

Principal -- To Aid, Abet, Cause, etc.

(Single Defendant)

The guilt of a defendant may be established without proof that the accused personally did everyact constituting the offense charged.

"Whoever commits an offense against the United States, or aids, abets, counsels, commands,induces, or procures its commission, is punishable as a principal."

"Whoever willfully causes an act to be done, which if directly performed by him or another wouldbe an offense against the United States, is punishable as a principal."

In other words, every person who willfully participates in the commission of a crime may be foundto be guilty of that offense. Participation is willful if done voluntarily and intentionally.

18 U.S.C. § 2

1A Kevin F. O'Malley et al., Federal Jury Practice and Instructions, §18.01 (6th ed. 2008)

Nye & Nissen v. United States, 336 U.S. 613, 618-20 (1949)

United States v. Hollis, 971 F.2d 1441, 1451-52 (10th Cir. 1992)

United States v. Horton, 847 F.2d 313, 321-22 (6th Cir. 1988)

United States v. Martin, 747 F.2d 1404, 1407 (11th Cir. 1984)

GOVERNMENT PROPOSED JURY INST. NO. 18.2-3

Principal -- To Aid, Abet, Cause, etc.

(Multiple Defendants)

In a case where two or more persons are charged with the commission of a crime, the guilt of anydefendant may be established without proof that he personally did every act constituting theoffense charged.

[JI-2]

"Whoever commits an offense against the United States, or aids, abets, counsels, commands,induces, or procures its commission, is punishable as a principal.

"Whoever willfully causes an act to be done, which if directly performed by him or another wouldbe an offense against the United States, is punishable as a principal."

In other words, every person who willfully participates in the commission of a crime may be foundto be guilty of that offense. Participation is willful if done voluntarily and intentionally.

18 U.S.C. § 2

1A Kevin F. O'Malley et al., Federal Jury Practice and Instructions, § 18.02 (6th ed. 2008)

Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164, 190 (1994)

Nye & Nissen v. United States, 336 U.S. 613, 618-20 (1949)

United States v. Horton, 847 F.2d 313, 321-22 (6th Cir. 1988)

United States v. Martin, 747 F.2d 1404, 1407 (11th Cir. 1984)

GOVERNMENT PROPOSED JURY INST. NO. 18.2-4

"Aid and Abet" -- Explained

A person may violate the law even though he or she does not personally do each and every actconstituting the offense if that person "aided and abetted" the commission of the offense.

Section 2(a) of Title 18 of the United States Code provides:

Whoever commits an offense against the United States or aids, abets, counsels,commands, induces or procures its commission, is punishable as a principal.

Before a defendant may be held responsible for aiding and abetting others in the commission of acrime, it is necessary that the government prove beyond a reasonable doubt that the defendantknowingly and deliberately associated [himself] [herself] in some way with the crime charged andparticipated in it with the intent to commit the crime.

In order to be found guilty of aiding and abetting the commission of the crime charged in [Count___ of] the indictment, the government must prove beyond a reasonable doubt that theDefendant:

One, knew that the crime charged was to be committed or was being committed;

Two, knowingly did some act for the purpose of [aiding] [commanding] [encouraging] thecommission of that crime; and

Three, acted with the intention of causing the crime charged to be committed.

Before Defendant may be found guilty as an aider or an abettor to the crime, the government mustalso prove, beyond a reasonable doubt, that someone committed each of the essential elements ofthe offense charged as detailed for you [in Instruction No. _____].

Merely being present at the scene of the crime or merely knowing that a crime is being committedor is about to be committed is not sufficient conduct for the jury to find that the defendant aidedand abetted the commission of that crime.

[JI-3]

The government must prove that the Defendant knowingly [and deliberately] associated [himself] [herself] with the crime in some way as a participant -- someone who wanted the crime to be committed -- not as a mere spectator.

18 U.S.C. § 2

1A Kevin F. O'Malley et al., Federal Jury Practice and Instructions, § 18.01 (6th Ed. 2008)

Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164, 190 (1994)

Nye & Nissen v. United States, 336 U.S. 613, 618-20 (1949)

United States v. Clifford, 979 F.2d 896, 899 (1st Cir. 1992)

United States v. Esparsen, 930 F.2d 1461, 1470 (10th Cir. 1991)

United States v. Singh, 922 F.2d 1169, 1173 (5th Cir. 1991)

United States v. Perez, 922 F.2d 782, 785 (11th Cir. 1991)

United States v. Labat, 905 F.2d 18, 23 (2d Cir. 1990)

United States v. Lindell, 881 F.2d 1313, 1323 (5th Cir. 1989)

United States v. Roan Eagle, 867 F.2d 436, 445 n.15 (8th Cir. 1989)

United States v. Lanier, 838 F.2d 281, 284 (8th Cir. 1988)

United States v. Torres, 809 F.2d 429, 433 (7th Cir. 1987)

United States v. Payne, 750 F.2d 844, 860 (11th Cir. 1985)

United States v. Lard, 734 F.2d 1290, 1298 (8th Cir. 1984)

GOVERNMENT PROPOSED JURY INST. NO. 18.2-5

Aiding and Abetting

Any person who knowingly aids, abets, counsels, commands, induces or procures the commissionof a crime is guilty of that crime. However, that person must knowingly associate [himself][herself] with the criminal venture, participate in it, and try to make it succeed.

18 U.S.C. § 2

Federal Criminal Jury Instructions of the Seventh Circuit § 5.06 (1998 ed.) (modified)

Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164, 190 (1994)

Nye & Nissen v. United States, 336 U.S. 613, 618-20 (1949)

United States v. Clifford, 979 F.2d 896, 899 (1st Cir. 1992)

United States v. Esparsen, 930 F.2d 1461, 1470 (10th Cir. 1991)

United States v. Singh, 922 F.2d 1169, 1173 (5th Cir. 1991)

United States v. Perez, 922 F.2d 782, 785 (11th Cir. 1991)

United States v. Labat, 905 F.2d 18, 23 (2d Cir. 1990)

United States v. Roan Eagle, 867 F.2d 436, 445 n.15 (8th Cir. 1989)

United States v. Lanier, 838 F.2d 281, 284 (8th Cir. 1988)

United States v. Torres, 809 F.2d 429, 433 (7th Cir. 1987)

GOVERNMENT PROPOSED JURY INST. NO. 18.2-6

Aiding and Abetting

A defendant may be found guilty of [name principal offense], even if the defendant personally didnot commit the act or acts constituting the crime but aided and abetted in its commission. Toprove a defendant guilty of aiding and abetting, the government must prove beyond a reasonabledoubt:

[JI-4]

First, the [principal offense] was committed;

Second, the defendant knowingly and intentionally aided, counseled, commanded, induced orprocured to commit _________________, and

Third, the defendant acted before the crime was completed.

It is not enough that the defendant merely associated with, or was present at the scene of thecrime, or unknowingly or unintentionally did things that were helpful to the principal.

The evidence must show beyond a reasonable doubt that the defendant acted with the knowledgeand intention of helping commit the crime.

The government is not required to prove precisely which defendant actually committed the crimeand which defendant aided and abetted.

18 U.S.C. § 2

Manual of Model Criminal Jury Instructions for the Ninth Circuit, § 5.1 (2003 ed.)

Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164, 190 (1994)

Nye & Nissen v. United States, 336 U.S. 613, 619 (1949)

United States v. Clifford, 979 F.2d 896, 899 (1st Cir. 1992)

United States v. Abreu, 962 F.2d 1425, 1429 (1st Cir. 1992)

United States v. Esparsen, 930 F.2d 1461, 1470 (10th Cir. 1991)

United States v. Singh, 922 F.2d 1169, 1173 (5th Cir. 1991)

United States v. Perez, 922 F.2d 782, 785 (11th Cir. 1991)

United States v. Labat, 905 F.2d 18, 23 (2d Cir. 1990)

United States v. Roan Eagle, 867 F.2d 436, 445 n.15 (8th Cir 1989)

United States v. Lanier, 838 F.2d 281, 284 (8th Cir. 1988)

United States v. Torres, 809 F.2d 429, 433 (7th Cir. 1987)

GOVERNMENT PROPOSED JURY INST. NO. 18.2-7

Aiding And Abetting (Agency)

The guilt of a defendant in a criminal case may be established without proof that the defendantpersonally did every act constituting the offense alleged. The law recognizes that, ordinarily,anything a person can do for himself may also be accomplished by that person through directionof another person as his or her agent, or by acting in concert with, or under the direction of,another person or persons in a joint effort or enterprise.

So, if another is acting under the direction of the defendant or if the defendant joins anotherperson and performs acts with the intent to commit a crime, then the law holds the defendantresponsible for the acts and conduct of such other persons just as though the defendant hadcommitted the acts or engaged in such conduct.

However, before any defendant may be held criminally responsible for the acts of others, it isnecessary that the accused deliberately associate himself in some way with the criminal ventureand participate in it with the intent to make the criminal venture succeed.

Of course, mere presence at the scene of a crime and knowledge that a crime is being committed

[JI-5] are not sufficient to establish that a defendant either directed or aided and abetted the crime, unless you find beyond a reasonable doubt that the defendant was a participant and not merely a knowing spectator.

In other words, you may not find any defendant guilty unless you find beyond a reasonable doubtthat every element of the offense as defined in these instructions was committed by some personor persons, and that the defendant voluntarily participated in its commission with the intent tobring about the crime.

18 U.S.C. § 2

Fifth Circuit Criminal Jury Instructions, § (2001 ed.), Section 2.06

Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, SI 7 (2003 ed.)

United States v. Ortiz, 447 F.3d 28, 32-33 (1st Cir. 2006)

United States v. Burgos, 94 F.3d 849, 869 (4th Cir. 1996)

United States v. Morrow, 977 F.2d 222, 230-31 (6th Cir. 1992) (en banc)

United States v. Esparsen, 930 F.2d 1461, 1470 (10th Cir. 1991)

United States v. Perez, 922 F.2d 782, 785 (11th Cir. 1991)

United States v. Ivey, 915 F.2d 380, 384 (8th Cir. 1990)

United States v. Lindell, 881 F.2d 1313, 1323 (5th Cir. 1989)

United States v. Roan Eagle, 867 F.2d 436, 445 n.15 (8th Cir. 1989)

United States v. Payne, 750 F.2d 844, 860 (11th Cir. 1985)

United States v. Lard, 734 F.2d 1290, 1298 (8th Cir. 1984)

United States v. Burrell, 496 F.2d 609, 610 (3d Cir. 1974)

United States v. Walker, 621 F.2d 163 (5th Cir. 1980) (approving nearly identical instruction)

GOVERNMENT PROPOSED JURY INST. NO. 18.2-8

"Mere Presence" -- Defined

Merely being present at the scene of a crime or merely knowing that a crime is being committedor is about to be committed is not sufficient conduct to find that Defendant [name] committedthat crime.

In order to find the defendant guilty of the crime, the government must prove, beyond areasonable doubt, that in addition to being present or knowing about the crime, Defendant knowingly [and deliberately] associated [himself] [herself] with the crime in some way as aparticipant -- someone who wanted the crime to be committed -- not as a mere spectator.

18 U.S.C. § 2

1A Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 16.09 (6th Ed. 2008)

United States v. Ortiz, 447 F.3d 28, 32-33 (1st Cir. 2006)

United States v. Burgos, 94 F.3d 849, 869 (4th Cir. 1996)

United States v. Morrow, 977 F.2d 222, 230-31 (6th Cir. 1992) (en banc)

United States v. Esparsen, 930 F.2d 1461, 1470 (10th Cir. 1991)

United States v. Ivey, 915 F.2d 380, 384 (8th Cir. 1990)

United States v. Lindell, 881 F.2d 1313, 1323 (5th Cir. 1989)

United States v. Payne, 750 F.2d 844, 860 (11th Cir. 1985)

United States v. Lard, 734 F.2d 1290, 1298 (8th Cir. 1984)

United States v. Burrell, 496 F.2d 609, 610 (3d Cir. 1974)

[JI-6]

GOVERNMENT PROPOSED JURY INST. NO. 18.2-9

Aiding and Abetting Engaging in a Monetary Transaction in

Property Derived from Specified Unlawful Activity

Count ____ of the indictment charges the defendant with aiding and abetting engaging in amonetary transaction in violation of federal law.

For you to find Defendant [name] guilty of this offense, it is not necessary for you to find that[he] [she] personally committed the crime [himself] [herself]. You may also find [him] [her]guilty if [he] [she] intentionally helped someone else to commit the crime. A person who doesthis is called an aider and abettor.

A person may be found guilty of engaging in a monetary transaction in property derived from aspecified unlawful activity even if [he] [she] personally did not do every act constituting theoffense charged. But for you to find Defendant [name] guilty of engaging in a monetarytransaction in property derived from a specified unlawful activity as an aider and abetter, you mustbe convinced that the government has proved each and every one of the following elementsbeyond a reasonable doubt:

(A) First, that the crime of engaging in a monetary transaction in property derived froma specified unlawful activity was committed;

(B) Second, that the defendant helped to commit the crime; and

Proof that the defendant may have known about the crime, even if [he] [she] was there when itwas committed, is not enough for you to find [him] [her] guilty. You can consider this in decidingwhether the government has proved that [he] [she] was an aider and abettor, but without more itis not enough.

What the government must prove is that the defendant did something to help the crime, with theintent that the crime be committed.

If you are convinced that the government has proved all of these elements, you may say so byreturning a guilty verdict on this charge. If you have a reasonable doubt about any one of theseelements, then you cannot find the defendant guilty of engaging in a monetary transaction inproperty derived from a specified unlawful activity as an aider and abettor.

Pattern Jury Instructions of the Sixth Circuit, Criminal Cases, § 4.01 (2005 ed.)

18 U.S.C. § 286

GOVERNMENT PROPOSED JURY INST. NO. 18.286-1

Conspiracy to Defraud the Government

With Respect to Claims (Elements)

To sustain the charge of conspiracy to defraud the government with respect to claims, thegovernment must prove the following propositions:

First, the defendant entered into a conspiracy to [obtain payment; allowance; aid in obtainingpayment; aid in obtaining allowance]¹ of claims against the United States Department of Treasury,a department of the United States, for tax refunds;²

[JI-7]

Second, the claim was false, fictitious, or fraudulent; and

Third, the defendant knew at the time that the claim was false, fictitious, or fraudulent.

If you find from your consideration of all the evidence that each of these propositions has beenproved beyond a reasonable doubt, then you should find the defendant guilty.

If, on the other hand, you find from your consideration of all the evidence that any of thesepropositions has not been proved beyond a reasonable doubt, then you should find the defendantnot guilty.

Federal Criminal Jury Instructions of the Seventh Circuit, 18 U.S.C. § 286, at p.136 (1998ed.) (modified)

NOTES

¹ Insert language to reflect the charges in the case.

² Insert language to reflect the charges in the case.

COMMENT

1 Section 286 does not require the allegation or proof of an overt act. See United States v.Umentum, 547 F.2d 987, 989-91 (7th Cir. 1976) (21 U.S.C. § 846); United States v. Cortwright,528 F.2d 168, 172 n.1 (7th Cir. 1975) (21 U.S.C. § 846).

18 U.S.C. § 287

GOVERNMENT PROPOSED JURY INST. NO. 18.287-1

False Claim -- Offense Charged

The indictment sets forth __________ counts or charges.

Count _____ charges that on or about the __________ day of ____________________, 20__, inthe ____________________ District of ____________________, the defendant,____________________, a resident of ____________________, made and presented to theUnited States Treasury Department a claim against the United States for payment, which he [she]knew to be false, fictitious, or fraudulent, by [e.g., preparing and causing to be prepared, andfiling and causing to be filed, what purported to be a federal income tax return],¹ which waspresented to the United States Treasury Department, through the Internal Revenue Service,wherein he [she] claimed [e.g., a refund of taxes]² in the amount of $__________, knowing thatclaim to be false, fictitious, or fraudulent.

Count II charges that * * *.

All in violation of Title 18, United States Code, Section 287.

NOTES

¹ The instruction should be drafted so as to reflect the charge and basis for venue as set forth inthe indictment.

² The instruction should be drafted so as to reflect the charge as set forth in the indictment.

[JI-8]

COMMENT

1 When the false claim charged was filed electronically, the prosecutor should insure that theindictment and instructions do not charge either the signing or the filing of a federal income taxreturn unless the paper Form 8453 relating to each false claim has been retrieved from the

IRS and can be introduced into evidence along with the electronic portion of the return or thedefendant used a self-selected personal identification number (PIN) in accordance with IRSinstructions when filing the return. Without the Form 8453 or the use of a PIN, the governmentcannot prove that a "tax return" was filed. For further information, see "Prosecuting ElectronicFraud" (distributed to all U.S. Attorneys on February 6, 1993, and available from the TaxDivision).

GOVERNMENT PROPOSED JURY INST. NO. 18.287-2

Statutory Language -- Section 287

Section 287 of Title 18 of the United States Code provides, in part, as follows:

Section 287. False, fictitious or fraudulent claims.

Whoever makes or presents to any person . . . in the civil . . . service of the United States, or toany department or agency thereof, any claim upon or against the United States, or any departmentor agency thereof, knowing such claim to be false, fictitious, or fraudulent, shall be . . . [guilty ofan offense against the laws of the United States].

18 U.S.C. § 287

GOVERNMENT PROPOSED Jury Inst. No. 18.287-3

18 U.S.C. 287 -- Purpose of the Statute

The objective of Congress in enacting section 287 was to assure the integrity of claims andvouchers submitted to the government and thereby protect the funds and property of thegovernment from fraudulent claims, regardless of the particular form of the claim or the particularfunction of the government department or agency against which the claim is made. Congressintended to prevent any deception that would impair, obstruct or defeat the lawful, authorizedfunctions of government departments or agencies.

1 Leonard B. Sand et al., Modern Federal Jury Instructions - Criminal, Instruction 18-2 (2008rev. ed.)

Rainwater v. United States, 356 U.S. 590 (1958)

United States v. Maher, 582 F.2d 842 (4th Cir. 1978)

GOVERNMENT PROPOSED Jury Inst. No. 18.287-4

Elements of the Offense

In order to prove the crime of making a false claim, the government must establish beyond areasonable doubt each of the following facts:

First, that on or about [insert date], the defendant knowingly made or presented a claim to [theUnited States Department of Treasury] [or insert (1) name of person or officer in the civil ormilitary service of the United States].

[JI-9]

Second, that the claim which was presented was a claim against the United States or a departmentor agency of the United States.

Third, that the claim was false, fictitious, or fraudulent.

Fourth, that the false statement contained in the claim was material.¹

Fifth, that the defendant knew that the claim was false, fictitious, or fraudulent.

1 Leonard B. Sand et al., Modern Federal Jury Instructions: Criminal, Instruction 18-3 (2008rev. ed.) (modified)

NOTE

¹ The circuits are divided as to whether materiality is an element of 18 U.S.C. § 287. However, inlight of the Supreme Court’s decision in United States v. Neder, 527 U.S. 1, 20-25 (1999),holding that materiality is an element of bank fraud, wire fraud, and mail fraud, the safer course ofaction is to include an instruction on materiality. See also United States v. Foster, 229 F.3d1196, 1196 & n.1 (5th Cir. 2000) (while expressly not deciding the issue, Fifth Circuit readsNeder to require a materiality instruction and states that “the better practice would be to give theinstruction in a § 28[7] false claim offense”). See § 22.04[2][b], supra.

GOVERNMENT PROPOSED Jury Inst. No. 18.287-5

First Element--Submission of Claim

The first element that the government must establish beyond a reasonable doubt is that thedefendant knowingly made or presented a claim to the United States Department of Treasury.

1 Leonard B. Sand et al., Modern Federal Jury Instructions: Criminal, Instruction 18-4 (2008rev. ed.) (modified)

GOVERNMENT PROPOSED Jury Inst. No. 18.287-6

Second Element -- Claim Against the United States

The second element the government must prove beyond a reasonable doubt is that the claim wasmade or presented upon or against the United States or a department or agency of the UnitedStates.

If you find that the claim received by an agency or department of the United States was one whichthe agency or department was expected to pay, then this element of the offense is satisfied.

1 Leonard B. Sand et al., Modern Federal Jury Instructions: Criminal, Instruction 18-6 (2008rev. ed.) (modified)

GOVERNMENT PROPOSED Jury Inst. No. 18.287-7

Third Element -- Claim was False, Fictitious or Fraudulent

The third element you must find beyond a reasonable doubt is that the claim was false, fictitious, or fraudulent.

[JI-10]

A claim is false if it was untrue when made and was then known to be untrue by the person making it or causing it to be made.

A claim is fictitious if it is not real or if it does not correspond to what actually happened.

A claim is fraudulent if it was falsely made or caused to be made with the specific intent to deceive.

The question you must focus on is whether the claim in question contained any entry which you find from the evidence was false, fictitious, or fraudulent. You need not find that all of the entries on the claim were false, fictitious, or fraudulent, so long as you find that there was one entry which was false, fictitious, or fraudulent.

1 Leonard B. Sand et al., Modern Federal Jury Instructions: Criminal, Instruction 18-7 (2008 rev. ed.) (modified)

GOVERNMENT PROPOSED Jury Inst. No. 18.287-8

Fourth Element -- False Statement in Claim Was Material

The fourth element the government must prove beyond a reasonable doubt is that the false statement contained in the claim was material.

A statement or representation is "material" if it has a natural tendency to influence or is capable of influencing a decision or action of the Internal Revenue Service.

To be "material" it is not necessary that the statement or representation, in fact, influence or deceive.

Kungys v. United States, 485 U.S. 759, 770 (1988)

GOVERNMENT PROPOSED Jury Inst. No. 18.287-9

Fifth Element -- Knowledge that Claim Was False

The fifth element the government must prove beyond a reasonable doubt is that the defendant had knowledge that the claim was false or fictitious or fraudulent.

An act is not done unlawfully or with knowledge of its false or fictitious or fraudulent character if it is done by mistake, carelessness, or other innocent reason.

It is not necessary, however, that the government prove that the defendant had exact knowledge of the relevant criminal provisions governing his conduct. You need only find that the defendant acted with knowledge that the claim was false or fictitious or fraudulent.¹

1 Leonard B. Sand et al., Modern Federal Jury Instructions: Criminal, Instruction 18-7 (2008 rev. ed.) (modified)

NOTE

¹ CAUTION: The courts have debated whether the government must prove that the defendant acted "willfully" (i.e., that the defendant knew he was violating the law) or that there was an intent to cause the government a loss. You should check the law of your circuit.

[JI-11]

GOVERNMENT PROPOSED Jury Inst. No. 18.287-10

False Claims Against the Government

Title 18, United States Code, Section 287, makes it a crime to knowingly make a false claim against any department or agency of the United States. The United States Department of Treasury is a department or agency of the United States within the meaning of that law.

For you to find the defendant guilty of this crime, you must be convinced that the government has proved each of the following beyond a reasonable doubt;

First: That the defendant knowingly presented to an agency of the United States a false or fraudulent claim against the United States; and

Second: That the defendant knew that the claim was false or fraudulent.

A claim is "false" or "fraudulent" if it is untrue at the time it is made and is then known to be untrue by the person making it. It is not necessary to show, however, that the government agency was in fact deceived or misled.

Third: That the false or fraudulent claim was material.

A claim is "material" if it has a natural tendency to influence, or is capable of influencing, the agency to which it was addressed. It is not necessary to show, however, that the government agency was in fact deceived or misled.

To make a claim, the defendant need not directly submit the claim to an employee or agency of the United States. It is sufficient if the defendant submits the claim to a third party knowing that the third party will submit the claim or seek reimbursement from the United States (or a department or agency thereof).

Fifth Circuit Criminal Jury Instructions, § 2.19 (2001 ed.) (modified)

GOVERNMENT PROPOSED JURY INST. NO. 18.287-11

False, Fictitious, Or Fraudulent Claims (Elements)

To sustain the charge of making a false claim, the government must prove the following propositions:

First, that the defendant (made or presented) a claim upon or against (the United States or a department or agency of the United States);

Second, that the claim was (false, fictitious, or fraudulent);

Third, that the defendant knew the claim was (false, fictitious, or fraudulent); and

Fourth, that the defendant submitted the claim with intent to defraud.¹

[Fifth, that a false or fraudulent statement in the claim was material.]²

If you find from your consideration of all the evidence that each of these propositions has been proved beyond a reasonable doubt, then you should find the defendant guilty.

[JI-12]

If, on the other hand, you find from your consideration of all the evidence that any one of these propositions has not been proved beyond a reasonable doubt, then you should find the defendant not guilty.

Federal Criminal Jury Instructions of the Seventh Circuit, 18 U.S.C. § 287, at p.137 (1998 ed.) (modified)

NOTE

¹ The Fourth and the Ninth Circuits have held that it is not necessary to prove an intent to defraud when the charge is that the defendant filed a false claim for a refund. United States v. Blecker, 657 F.2d 629 (4th Cir. 1981); United States v. Milton, 602 F.2d 231, 233 (9th Cir. 1979). See also § 22.04[3], supra.

² The circuits are divided as to whether materiality is an element of 18 U.S.C. § 287. However, in light of the Supreme Court’s decision in United States v. Neder, 527 U.S. 1, 20-25 (1999), holding that materiality is an element of bank fraud, wire fraud, and mail fraud, the safer course of action is to include an instruction on materiality. See also United States v. Foster, 229 F.3d 1196, 1196 & n.1 (5th Cir. 2000) (while expressly not deciding the issue, Fifth Circuit reads Neder to require a materiality instruction and states that “the better practice would be to give the instruction in a § 28[7] false claim offense”). See § 22.04[2][b], supra.

GOVERNMENT PROPOSED Jury Inst. No. 18.287-12

False, Fictitious, Or Fraudulent Claims

(Claims Submitted to Third Parties)

Federal Criminal Jury Instructions of the Seventh Circuit, 18 U.S.C. § 287, at p.139 (1998 ed.)

GOVERNMENT PROPOSED Jury Inst. No. 18.287-13

Making a False Claim Against the United States

The crime of making a [false] [fictitious] [fraudulent] claim against the United States, as charged in [Count _____] of the indictment, has four elements, which are:

One, the defendant [made] [presented] to (name of U.S. officer or agency) a claim against [the United States] [(name of department or agency of the United States)];

Two, the claim was [false] [fictitious] [fraudulent] in that (describe how claim was false, etc.);

Three, the defendant knew the claim was [false] [fictitious] [fraudulent]; and

Four, the [false] [fictitious] [fraudulent] matter was material¹ to (name of U.S. officer or agency).

[A claim is "false" or "fictitious" if any part of it is untrue when made, and then known to be untrue by the person making it or causing it to be made.] [A claim is "fraudulent" if any part of it is known to be untrue, and made or caused to be made with the intent to deceive the governmental agency to which submitted.]

[JI-13]

A claim is "material" if it has a natural tendency to influence, or is capable of influencing the (name of U.S. officer or agency). [However, whether a claim is "material" does not depend on whether (name of U.S. officer or agency) was actually deceived.]¹

Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit, 6.18.287 (2008 ed.)

NOTE

¹ The circuits are divided as to whether materiality is an element of 18 U.S.C. § 287. However, in light of the Supreme Court’s decision in United States v. Neder, 527 U.S. 1, 20-25 (1999), holding that materiality is an element of bank fraud, wire fraud, and mail fraud, the safer course of action is to include an instruction on materiality. See also United States v. Foster, 229 F.3d 1196, 1196 & n.1 (5th Cir. 2000) (while expressly not deciding the issue, Fifth Circuit reads Neder to require a materiality instruction and states that “the better practice would be to give the instruction in a § 28[7] false claim offense”). See § 22.04[2][b], supra.

GOVERNMENT PROPOSED Jury Inst. No. 18.287-14

Definition of Knowingly

When the word "knowingly" is used in these instructions, it means that the defendant realized what he was doing and was aware of the nature of his conduct, and did not act through ignorance, mistake or accident. [Knowledge may be proved by the defendant's conduct and by all the facts and circumstances surrounding the case.]

Federal Criminal Jury Instructions of the Seventh Circuit, 4.06 (1998 ed.) (modified).

GOVERNMENT PROPOSED Jury Inst. No. 18.287-15

Title 18, United States Code, Section 287, makes it a Federal crime or offense for anyone to knowingly make a false claim against any department or agency of the United States.

You are instructed that the [insert name of department or agency, e.g., Internal Revenue Service] is a department or agency of the United States within the meaning of that law.

The defendant can be found guilty of the offense of making a false claim against the government only if all of the following facts are proved beyond a reasonable doubt:

First: That the defendant knowingly presented to an agency of the United States a false and fraudulent claim against the United States, as charged in the indictment;

Second: That the false or fraudulent aspect of the claim related to a material fact; and

Third: the defendant acted willfully and with knowledge of the false and fraudulent nature of his claim

The making of a false or fraudulent claim is not an offense unless the falsity or fraudulent aspect of the claim relates to a “material” fact. A misrepresentation is “material” if it relates to an important fact, as distinguished from some unimportant or trivial detail, and has a natural

[JI-14] tendency to influence, or was capable of influencing, the decision of the department or agency in making a determination required to be made.

Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, OI 11.2 (2003 ed.)

GOVERNMENT PROPOSED Jury Inst. No. 18.287-16

Knowledge of Falsehood

(Deliberate Ignorance)

The fact of knowledge may be established by direct or circumstantial evidence, just as any other fact in the case.

A defendant's knowledge may be inferred from proof beyond a reasonable doubt that the defendant deliberately closed his [her] eyes to what would otherwise have been obvious to him [her].

Thus, a finding beyond a reasonable doubt of a conscious purpose to avoid enlightenment would permit an inference of knowledge. Stated another way, a defendant's knowledge of a fact may be inferred from proof beyond a reasonable doubt of his [her] deliberate blindness to the existence of the fact.

It is entirely up to you as to whether you find any deliberate closing of the eyes, and the inferences to be drawn from any such evidence. Although knowledge may be inferred from the defendant's behavior, the issue is what the defendant actually knew. A showing of mistake, carelessness, negligence, even gross negligence or recklessness, is not sufficient to support a finding of knowledge.

See United States v. MacKenzie, 777 F.2d 811, 818 n.2 (2d Cir. 1985)

COMMENTS

1 The law on "deliberate ignorance" or "willful blindness" varies from circuit to circuit. Several circuits have indicated that "deliberate ignorance" instructions are rarely appropriate. See, e.g., United States v. Mapelli, 971 F.2d 284, 286 (9th Cir. 1992); United States v. Ojebode, 957 F.2d 1218, 1229 (5th Cir. 1992); United States v. deFranciso-Lopez, 939 F.2d 1405, 1409 (10th Cir. 1991). Furthermore, several cases have found "deliberate ignorance" instructions to constitute reversible error when the evidence did not support the giving of the instruction. See, e.g., United States v. Mapelli, 971 F.2d at 287; United States v. Barnhart, 979 F.2d 647, 652-53 (8th Cir. 1992). But see United States v. Stone, 9 F.3d 934 (11th Cir. 1993).

As a result, great care should be exercised in the use of such an instruction. The law of the circuit should be carefully checked and no such instruction should be requested unless the evidence clearly supports it.

2 If the evidence does clearly support a "deliberate ignorance" instruction and a decision is made to request one, care still must be taken regarding its wording. In particular, no instruction should be requested in a criminal tax case which is inconsistent with the standard of willfulness set forth in Cheek v. United States, 498 U.S. 192, 201 (1991), that is, a voluntary, intentional violation of a known legal duty

3 Unlike the instruction set forth above, which requires actual knowledge, the "deliberate ignorance" instruction in United States v. Fingado, 934 F.2d 1163, 1166 (10th Cir. 1991), provides that the element of knowledge is established if the defendant is "aware of a high

[JI-15] probability of the existence of the fact in question unless he actually believes it does not exist." Although we believe that, in the context of a defendant's deliberate ignorance, this standard does satisfy the knowledge component of willfulness in criminal tax cases, we do not recommend its use (although, obviously, such an instruction may be used in the Tenth Circuit), because there is at least some risk that a court of appeals will hold that only a defendant's actual knowledge is sufficient.

18 U.S.C. § 371

GOVERNMENT PROPOSED Jury Inst. No. 18.371-1

Conspiracy -- Offense Charged

Count __ of the indictment charges that from on or about the ___ day of [month], 20__ , until on or about the ____ day of [month] , 20__ , in the District of _______ [and elsewhere], the defendant[s], [names], came to some type of agreement or understanding to [commit an offense against the United States, namely, (insert name of substantive offense or offenses)] [defraud the United States] [defraud the United States for the purpose of impairing, impeding, obstructing, or defeating the lawful functions of the Internal Revenue Service of the Treasury Department in the ascertainment, computation, assessment, and collection of income (or other relevant, e.g., excise) taxes]¹ and then acted to achieve the goal[s] of the alleged conspiracy or agreement or understanding in that one of its members thereafter [describe overt act or acts].

2 Kevin F. O'Malley et al., Federal Jury Practice and Instructions, § 31.01 (5th ed. 2000) (modified)

NOTE

¹The Tax Division advises against charging a conspiracy to defraud and a conspiracy to commit substantive tax offenses in the same count or indictment. This is rarely necessary and tends to unduly complicate the trial, especially with respect to the jury instructions.

COMMENT

1 The law is clear that overt acts in furtherance of a conspiracy need not be illegal in themselves. Braverman v. United States, 317 U.S. 49, 53-54 (1942); United States v. Tuohey, 867 F.2d 534, 537 (9th Cir. 1989).

However, in the case of a Klein conspiracy (e.g., "to defraud the United States for the purpose of impairing, impeding, obstructing or defeating the lawful functions of the Internal Revenue Service of the Treasury Department in the ascertainment, computation, assessment, and collection of income), while the indictment need not use any specific words, it must allege the means by which the defendants intended to accomplish the conspiracy, and those means must involve "deceit, craft, trickery, or at least * * * means that are dishonest." Hammerschmidt v. United States, 265 U.S. 182, 188 (1924).

GOVERNMENT PROPOSED Jury Inst. No. 18.371-2

Statute Defining Offense

Section 371 of Title 18 of the United States Code provides, in part, that "[i]f two or more persons conspire * * * to commit any offense against the United States, or to defraud the United States, or any agency thereof * * * and one or more of such persons do any act to effect the object of the conspiracy, * * *" an offense against the United States has been committed.

[JI-16]

18 U.S.C. § 371

2 Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 31.02 (5th ed. 2000)

GOVERNMENT PROPOSED Jury Inst. No. 18.371-3

Essential Elements of Offense --

When Conspiracy Offense Complete

In order to sustain its burden of proof for the crime of conspiracy to [describe substantive offense(s)] [defraud the United States] as charged in Count ___ of the indictment, the government must prove the following three essential elements beyond a reasonable doubt:

One: The conspiracy, agreement, or understanding to [describe substantive offense(s)] [defraud the United States], as described in the indictment, was formed, reached, or entered into by two or more persons;

Two: At some time during the existence or life of the conspiracy, agreement, or understanding, Defendant knew the purpose(s) of the agreement, and, with that knowledge, then deliberately joined the conspiracy, agreement, or understanding; and

Three: At some time during the existence or life of the conspiracy, agreement, or understanding, one of its alleged members knowingly performed one of the overt acts charged in the indictment and did so in order to further or advance the purpose of the agreement.

2 Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 31.03 (5th ed. 2000)

United States v. Falcone, 311 U.S. 205, 210 (1940)

United States v. O'Campo, 973 F.2d 1015, 1021 (1st Cir. 1992)

United States v. Wiley, 846 F.2d 150, 153-54 (2d Cir. 1988)

United States v. Rankin, 870 F.2d 109, 113 (3d Cir. 1989)

United States v. Tedder, 801 F.2d 1437, 1446 (4th Cir. 1986)

United States v. Yamin, 868 F.2d 130, 133 (5th Cir. 1989)

United States v. Bostic, 480 F.2d 965, 968 (6th Cir. 1973)

United States v. Mealy, 851 F.2d 890, 896 (7th Cir. 1988)

United States v. Cerone, 830 F.2d 938, 944 (8th Cir. 1987)

United States v. Penagos, 823 F.2d 346, 348 (9th Cir. 1987)

United States v. Gonzalez, 797 F.2d 915, 916 (10th Cir. 1986)

United States v. Cure, 804 F.2d 625, 628 (11th Cir. 1986)

United States v. Treadwell, 760 F.2d 327, 333 (D.C. Cir. 1985)

COMMENT

1 Prosecutors charging Klein conspiracies in the Ninth Circuit should be aware of United States v. Caldwell, 989 F.2d 1056 (9th Cir. 1993). In Caldwell, the Ninth Circuit held that the government must prove that the defendant used deceitful or dishonest means to defraud the United States. Id. at 1058-59.

GOVERNMENT PROPOSED Jury Inst. No. 18.371-4

Conspiracy -- Existence of an Agreement

A criminal conspiracy is an agreement or a mutual understanding knowingly made or knowingly entered into by at least two people to violate the law by some joint or common plan or course of

[JI-17] action. A conspiracy is, in a very true sense, a partnership in crime.

A conspiracy or agreement to violate the law, like any other kind of agreement or understanding, need not be formal, written, or even expressed directly in every detail.

The government must prove that Defendant and at least one other person knowingly and deliberately arrived at an agreement or understanding that they, and perhaps others, would [violate some law(s)] [defraud the United States] by means of some common plan or course of action as alleged in Count ___ of the indictment. It is proof of this conscious understanding and deliberate agreement by the alleged members that should be central to your consideration of the charge of conspiracy.

[To prove the existence of a conspiracy or an illegal agreement, the government is not required to produce a written contract between the parties or even produce evidence of an express oral agreement spelling out all of the details of the understanding. To prove that a conspiracy existed, moreover, the government is not required to show that all of the people named in the indictment as members of the conspiracy were, in fact, parties to the agreement, or that all of the members of the alleged conspiracy were named or charged, or that all of the people whom the evidence shows were actually members of a conspiracy agreed to all of the means or methods set out in the indictment.]

Unless the government proves beyond a reasonable doubt that a conspiracy, as just explained, actually existed, then you must acquit Defendant.

2 Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 31.04 (5th Ed. 2000)

United States v. Falcone, 311 U.S. 205, 210 (1940)

United States v. Labat, 905 F.2d 18, 21 (2d Cir. 1990)

United States v. DePew, 932 F.2d 324, 328 (4th Cir. 1991)

United States v. Nicoll, 664 F.2d 1308, 1315 (5th Cir. 1982)

United States v. Hopkins, 916 F.2d 207, 212 (5th Cir. 1990)

United States v. Pearce, 912 F.2d 159, 161 (6th Cir. 1990)

United States v. Schultz, 855 F.2d 1217, 1221 (6th Cir. 1988)

United States v. McNeese, 901 F.2d 585, 599 (7th Cir. 1990)

United States v. Kibby, 848 F.2d 920, 922 (8th Cir. 1988)

United States v. Powell, 853 F.2d 601, 604 (8th Cir. 1988)

United States v. Boone, 951 F.2d 1526, 1543 (9th Cir. 1992)

United States v. Gonzalez, 940 F.2d 1413, 1417 (11th Cir. 1991)

GOVERNMENT PROPOSED Jury Inst. No. 18.371-5

Conspiracy -- Membership in an Agreement

Before the jury may find that Defendant ____________________, or any other person, became a member of the conspiracy charged in Count __ of the indictment, the evidence in the case must show beyond a reasonable doubt that Defendant knew the purpose or goal of the agreement or understanding and deliberately entered into the agreement intending, in some way, to accomplish the goal or purpose by this common plan or joint action.

[If the evidence establishes beyond a reasonable doubt that Defendant knowingly and deliberately entered into an agreement to [describe substantive offense] [defraud the United States], the fact that the defendant did not join the agreement at its beginning, or did not know all of the details of

[JI-18] the agreement, or did not participate in each act of the agreement, or did not play a major role in accomplishing the unlawful goal is not important to your decision regarding membership in the conspiracy.]

Merely associating with others and discussing common goals, mere similarity of conduct between or among such persons, merely being present at the place where a crime takes place or is discussed, or even knowing about criminal conduct does not, of itself, make someone a member of the conspiracy or a conspirator.

2 Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 31.05 (5th Ed. 2000)

United States v. Flaherty, 668 F.2d 566, 580 (1st Cir. 1981)

United States v. Southland, 760 F.2d 1366, 1369 (2d Cir. 1985)

United States v. Rankin, 870 F.2d 109, 113 (3d Cir. 1989)

United States v. Norris, 749 F.2d 1116, 1121 (4th Cir. 1984) (1985)

United States v. Yanin, 868 F.2d 130, 133 (5th Cir. 1989)

United States v. Christian, 786 F.2d 203, 211 (6th Cir. 1986)

United States v. Warner, 690 F.2d 545, 550 (6th Cir. 1982)

United States v. Brown, 934 F.2d 886, 889 (7th Cir. 1991)

United States v. Zimmerman, 832 F.2d 454, 457 (8th Cir. 1987)

United States v. Esparza, 876 F.2d 1390, 1392 (9th Cir. 1989)

United States v. Medina, 940 F.2d 1247, 1250 (9th Cir. 1991)

United States v. Horn, 946 F.2d 738, 740 (10th Cir. 1991)

United States v. Lynch, 934 F.2d 1226, 1231 (11th Cir. 1991)

United States v. Andrews, 953 F.2d 1312, 1318 (11th Cir. 1992)

United States v. Dale, 991 F.2d 819, 851 (D.C. Cir. 1993)

GOVERNMENT PROPOSED Jury Inst. No. 18.371-6

"Overt Act" -- Defined

Success of Conspiracy Immaterial

In order to sustain its burden of proof under Count ___ of the indictment, the government must prove beyond a reasonable doubt that one of the members of the alleged conspiracy or agreement knowingly performed at least one overt act and that this overt act was performed during the existence or life of the conspiracy and was done to somehow further the goal(s) of the conspiracy or agreement.

The term “overt act” means some type of outward, objective action performed by one of the parties to or one of the members of the agreement or conspiracy which evidences that agreement.

Although you must unanimously agree that the same overt act was committed, the government is not required to prove more than one of the overt acts charged.

The overt act may, but for the alleged illegal agreement, appear totally innocent and legal.

2 Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 31.07 (5th Ed. 2000)

United States v. Yates, 354 U.S. 298, 334 (1957)

United States v. Arboleda, 929 F.2d 858, 865 (1st Cir. 1991)

United States v. Anderson, 611 F.2d 504, 510 (4th Cir. 1979)

United States v. Lewis, 759 F.2d 1316, 1344 (8th Cir. 1985)

United States v. Hermes, 847 F.2d 493, 495 (8th Cir. 1988)

United States v. Zielie, 734 F.2d 1447, 1456 (11th Cir. 1984)

[JI-19]

GOVERNMENT PROPOSED Jury Inst. No. 18.371-7

Conspiracy

(Regular Charge)

Title 18, United States Code, Section 371, makes it a crime for anyone to conspire with someone else to commit an offense against the laws of the United States.

The defendant is charged with conspiring to (describe the object of the conspiracy as alleged in the indictment).

A “conspiracy” is an agreement between two or more persons to join together to accomplish some unlawful purpose. It is a kind of “partnership in crime” in which each member becomes the agent of every other member.

For you to find the defendant guilty of this crime, you must be convinced that the government has proved each of the following beyond a reasonable doubt:

First: That the defendant and at least one other person made an agreement to commit the crime of (describe) as charged in the indictment;

Second: That the defendant knew the unlawful purpose of the agreement and joined in it willfully, that is, with the intent to further the unlawful purpose; and

Third: That one of the conspirators during the existence of the conspiracy knowingly committed at least one of the overt acts described in the indictment, in order to accomplish some object or purpose of the conspiracy.

One may become a member of a conspiracy without knowing all the details of the unlawful scheme or the identities of all the other alleged conspirators. If a defendant understands the unlawful nature of a plan or scheme and knowingly and intentionally joins in that plan or scheme on one occasion, that is sufficient to convict him for conspiracy even though the defendant had not participated before and even though the defendant played only a minor part.

The government need not prove that the alleged conspirators entered into any formal agreement, nor that they directly stated between themselves all the details of the scheme. Similarly, the government need not prove that all of the details of the scheme alleged in the indictment were actually agreed upon or carried out. Nor must it prove that all of the persons alleged to have been members of the conspiracy were such, or that the alleged conspirators actually succeeded in accomplishing their unlawful objectives.

Mere presence at the scene of an event, even with knowledge that a crime is being committed, or the mere fact that certain persons may have associated with each other, and may have assembled together and discussed common aims and interests, does not necessarily establish proof of the existence of a conspiracy. Also, a person who has no knowledge of a conspiracy, but who happens to act in a way which advances some purpose of a conspiracy, does not thereby become a conspirator.

18 U.S.C. § 371

Fifth Circuit Criminal Jury Instructions, § 2.20 (2001 ed.)

United States v. Hopkins, 916 F.2d 207, 212 (5th Cir. 1990)

United States v. Lewis, 902 F.2d 1176, 1181 (5th Cir. 1990)

[JI-20]

United States v. Yamin, 868 F.2d 130, 133 (5th Cir. 1989)

United States v. Holcomb, 797 F.2d 1320, 1327 (5th Cir. 1986)

United States v. Nicoll, 664 F.2d 1308, 1315 (5th Cir. 1982)

United States v. Diecidue, 603 F.2d 535, 548 (5th Cir. 1979)

Sears v. United States, 343 F.2d 139, 141-42 (5th Cir. 1965)

GOVERNMENT PROPOSED Jury Inst. No. 18.371-8

Conspiracy

A conspiracy is an agreement between two or more persons to accomplish an unlawful purpose. To sustain the charge of conspiracy, the government must prove:

First, that the conspiracy as charged in Count ____ existed, [and]

Second, that the defendant knowingly became a member of the conspiracy with an intention to further the conspiracy [, and]

[Third, that an overt act was committed by at least one conspirator in furtherance of the conspiracy.]

If you find from your consideration of all the evidence that each of these propositions has been proved beyond a reasonable doubt, then you should find the defendant guilty.

If, on the other hand, you find from your consideration of all of the evidence that any of these propositions has not been proved beyond a reasonable doubt, then you should find the defendant not guilty.

[A conspiracy may be established even if its purpose was not accomplished.]

[It is not necessary that all the overt acts charged in the indictment be proved, and the overt act proved may itself be a lawful act.]

[To be a member of the conspiracy, the defendant need not join at the beginning or know all the other members or the means by which its purpose was to be accomplished. The government must prove beyond a reasonable doubt that the defendant was aware of the common purpose and was a willing participant.]

Federal Criminal Jury Instructions of the Seventh Circuit, § 5.08 (1998 ed.)

United States v. Brown, 934 F.2d 886, 889 (7th Cir. 1991)

United States v. McNeese, 901 F.2d 585, 599 (7th Cir. 1990)

United States v. Mealy, 851 F.2d 890, 896 (7th Cir. 1988)

United States v. Noble, 754 F.2d 1324, 1327 (7th Cir. 1985)

GOVERNMENT PROPOSED Jury Inst. No. 18.371-9

Conspiracy

The defendant is charged in Count ___ of the indictment with conspiring to [describe] in violation of Section ___ of Title ___ of the United States Code. In order for the defendant to be found guilty of that charge, the government must prove each of the following elements beyond a reasonable doubt:

[JI-21]

First, beginning on or about [__________], and ending on or about [__________], there was an agreement between two or more persons to commit at least one crime as charged in the indictment; [and]

Second, the defendant became a member of the conspiracy knowing of at least one of its objects and intending to help accomplish it; [and]

Third, one of the members of the conspiracy performed at least one overt act for the purpose of carrying out the conspiracy, with all of you agreeing on a particular overt act that you find was committed.

I shall discuss with you briefly the law relating to each of these elements.

A conspiracy is a kind of criminal partnership—an agreement of two or more persons to commit one or more crimes. The crime of conspiracy is the agreement to do something unlawful; it does not matter whether the crime agreed upon was committed.

For a conspiracy to have existed, it is not necessary that the conspirators made a formal agreement or that they agreed on every detail of the conspiracy. It is not enough, however, that they simply met, discussed matters of common interest, acted in similar ways, or perhaps helped one another. You must find that there was a plan to commit at least one of the crimes alleged in the indictment as an object of the conspiracy with all of you agreeing as to the particular crime which the conspirators agreed to commit.

One becomes a member of a conspiracy by willfully participating in the unlawful plan with the intent to advance or further some object or purpose of the conspiracy, even though the person does not have full knowledge of all the details of the conspiracy. Furthermore, one who willfully joins an existing conspiracy is as responsible for it as the originators. On the other hand, one who has no knowledge of a conspiracy, but happens to act in a way which furthers some object or purpose of the conspiracy, does not thereby become a conspirator. Similarly, a person does not become a conspirator merely by associating with one or more persons who are conspirators, nor merely by knowing that a conspiracy exists.

An overt act does not itself have to be unlawful. A lawful act may be an element of a conspiracy if it was done for the purpose of carrying out the conspiracy. The government is not required to prove that the defendant personally did one of the overt acts.

Manual of Model Criminal Jury Instructions for the Ninth Circuit, § 8.16 (2003 ed.)

United States v. Caldwell, 989 F.2d 1056, 1060 (9th Cir. 1993)

United States v. Boone, 951 F.2d 1526, 1543 (9th Cir. 1992)

United States v. Esparza, 876 F.2d 1390, 1392 (9th Cir. 1989)

United States v. Penagos, 823 F.2d 346, 348 (9th Cir. 1987)

COMMENT

1 Prosecutors charging Klein conspiracies in the Ninth Circuit should be aware of United States v. Caldwell, 989 F.2d 1056 (9th Cir. 1993). The first element of the jury instruction should read:

First, [beginning on or about ____ and ending on or about ____] [starting sometime before ____] there was an agreement between two or more persons to defraud the United States by cheating the government out of money, [such as income tax payments, or property] and also an agreement

[JI-22] to defraud the United States that involved the impairing, impeding, obstructing, or defeating of the lawful functions of an agency of the government, such as the IRS, by deceit, craft, trickery, or means that are dishonest. Caldwell, 989 F.2d at 1060.

GOVERNMENT PROPOSED Jury Inst. No. 18.371-10

General Conspiracy Charge 18 U.S.C. § 371

Title 18, United States Code, Section 371, makes it a separate Federal crime or offense for anyone to conspire or agree with someone else to do something which, if actually carried out, would amount to another Federal crime or offense. So, under this law, a “conspiracy” is an agreement or a kind of “partnership” in criminal purposes in which each member becomes the agent or partner of every other member.

In order to establish a conspiracy offense it is not necessary for the Government to prove that all of the people named in the indictment were members of the scheme; or that those who were members had entered into any formal type of agreement; or that the members had planned together all of the details of the scheme or the “overt acts” that the indictment charges would be carried out in an effort to commit the intended crime.

Also, because the essence of a conspiracy offense is the making of the agreement itself (followed by the commission of any overt act), it is not necessary for the Government to prove that the conspirators actually succeeded in accomplishing their unlawful plan.

What the evidence in the case must show beyond a reasonable doubt is the following:

First: That two or more persons, in some way or manner, came to a mutual understanding to try to accomplish a common and unlawful plan, as charged in the indictment;

Second: That the Defendant, knowing the unlawful purpose of the plan, willfully joined in it;

Third: That one of the conspirators during the existence of the conspiracy knowingly committed at least one of the methods (or “overt acts”) described in the indictment; and

Fourth: That such “overt act” was knowingly committed at or about the time alleged in an effort to carry out or accomplish some object of the conspiracy.

An “overt act” is any transaction or event, even one which may be entirely innocent when considered alone, which is knowingly committed by a conspirator in an effort to accomplish some object of the conspiracy.

A person may become a member of a conspiracy without knowing all of the details of the unlawful scheme and without knowing who all of the other members are. So, if a Defendant has a general understanding of the unlawful purpose of the plan and knowingly and willfully joins in that plan on one occasion, that is sufficient to convict that Defendant for conspiracy, even though the Defendant did not participate before and even though the Defendant played only a minor part.

Of course, mere presence at the scene of a transaction or event, or the mere fact that certain persons may have associated with each other and may have assembled together and discussed common aims and interests, does not, standing alone, establish proof of a conspiracy. Also, a person who has no knowledge of a conspiracy, but who happens to act in a way which advances some purpose of one, does not thereby become a conspirator.

Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, OI 13.1 (2003 ed.)

[JI-23]

United States v. Andrews, 953 F.2d 1312, 1318 (11th Cir. 1992)

United States v. Gonzalez, 940 F.2d 1413, 1417 (11th Cir. 1991)

United States v. Lynch, 934 F.2d 1226, 1231 (11th Cir. 1991)

United States v. Cure, 804 F.2d 625, 628 (11th Cir. 1986)

United States v. Zielie, 734 F.2d 1447, 1456 (11th Cir. 1984)

GOVERNMENT PROPOSED Jury Inst. No. 18.371-11

Multiple Objects

(For Use With General Conspiracy Charge)

18 U.S.C. § 371

In this instance, with regard to the alleged conspiracy, the indictment charges that the defendants conspired [insert objects of conspiracy -- e.g., to file false income tax returns and to evade income taxes].¹ It is charged, in other words, that they conspired to commit two separate, substantive crimes or offenses.

In such a case it is not necessary for the government to prove that the defendant under consideration willfully conspired to commit both of those substantive offenses. It would be sufficient if the government proved, beyond a reasonable doubt, that the defendant willfully conspired with someone to commit one of those offenses; but, in that event, in order to return a verdict of guilty, you must unanimously agree upon which of the two offenses the defendant conspired to commit. If you cannot agree in that manner, you must find the defendant not guilty.

Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, OI 13.2 (2003 ed.) (modified)

NOTE

¹ If one of the objects of the conspiracy is to defraud the United States by impeding, impairing, and obstructing the Internal Revenue Service in its ascertainment, assessment, and collection of taxes, the better practice would be that the remainder of the instruction not talk of "offenses." Instead, the word "object" should be used. For example, "[i]t is charged, in other words, that they conspired to achieve two separate objects."

Further, the Tax Division advises against charging a conspiracy to defraud and a conspiracy to commit substantive tax offenses in the same count or indictment. This is rarely necessary and tends to unduly complicate the trial, especially with respect to the jury instructions.

GOVERNMENT PROPOSED Jury Inst. No. 18.371-12

Overt Act During Period of Conspiracy

The government must also establish beyond reasonable doubt that at least one of the overt acts alleged in the indictment¹ occurred while the conspiracy was still in existence.

2 Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 31.07 (5th ed. 2000)

United States v. Yates, 354 U.S. 298, 334 (1957), overruled on other grounds by Burks v. United States, 437 U.S. 1, 8, 18 (1978);

United States v. Arboleda, 929 F.2d 858, 865 (1st Cir. 1991)

United States v. Lewis, 759 F.2d 1316, 1344 (8th Cir. 1985)

United States v. Diecidue, 603 F.2d 535, 563 (5th Cir. 1979)

United States v. Johnson, 575 F.2d 1347, 1357 (5th Cir. 1978)

[JI-24]

NOTE

¹ Convictions have been sustained in cases where the government failed to prove the overt act alleged in the indictment, but proved an overt act that was not alleged. United States v. Fassoulis, 445 F.2d 13, 19 (2d Cir.), cert. denied, 404 U.S. 858 (1971); United States v. Armone, 363 F.2d 385 (2d Cir. 1966), cert. denied, 385 U.S. 957 (1966); United States v. Negro, 164 F.2d 168, 173 (2d Cir. 1947).

COMMENT

1 This instruction may not be necessary in a case in which the evidence shows that the conspiracy, if it existed at all, continued during the entire period indicated by the alleged overt acts. It should be given, however, if there is an issue of termination.

GOVERNMENT PROPOSED Jury Inst. No. 18.371-13

Single or Multiple Conspiracies

Count ____ of the indictment charges that defendant _______ knowingly and deliberately entered into a conspiracy to [describe substantive offense(s)] [defraud the United States].

In order to sustain its burden of proof for this charge, the government must show that the single [overall] [umbrella] [master] conspiracy alleged in Count ____ of the indictment existed. Proof of separate or independent conspiracies is not sufficient.

In determining whether or not any single conspiracy has been shown by the evidence in the case, you must decide whether common, master, or overall goals or objectives existed which served as the focal point for the efforts and actions of any members to the agreement. In arriving at this decision you may consider the length of time the alleged conspiracy existed, the mutual dependence or assistance between various persons alleged to have been its members, and the complexity of the goal(s) or objective(s) shown.

A single conspiracy may involve various people at differing levels and may involve numerous transactions which are conducted over some period of time and at various places. In order to establish a single conspiracy, however, the government need not prove that an alleged coconspirator knew each of the other alleged members of the conspiracy, nor need it establish that an alleged coconspirator was aware of each of the transactions alleged in the indictment.

Even if the evidence in the case shows that defendant _______ was a member of some conspiracy, you must acquit defendant ________ if this conspiracy is not the single conspiracy charged in the indictment.

Unless the government proves the existence of the single [overall] [umbrella] [master] conspiracy described in the indictment beyond a reasonable doubt, you must acquit defendant _________.

2 Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 31.09 (5th Ed. 2000)

Blumenthal v. United States, 332 U.S. 539, 557 (1947)

United States v. Diecidue, 603 F.2d 535, 548 (5th Cir. 1979)

United States v. Noble, 754 F.2d 1324, 1327 (7th Cir. 1985)

United States v. Massa, 740 F.2d 629, 636 (8th Cir. 1984)

United States v. Horn, 946 F.2d 738, 740 (10th Cir. 1991)

[JI-25]

GOVERNMENT PROPOSED Jury Inst. No. 18.371-14

Multiple Conspiracies

You must determine whether the conspiracy charged in the indictment existed, and, if it did, whether the defendant was a member of it. If you find that the conspiracy charged did not exist, then you must return a not guilty verdict, even though you find that some other conspiracy existed. If you find that a defendant was not a member of the conspiracy charged in the indictment, then you must find that defendant not guilty, even though that defendant may have been a member of some other conspiracy.

Fifth Circuit Criminal Jury Instructions, § 2.21 (2001 ed.)

GOVERNMENT PROPOSED Jury Inst. No. 18.371-15

Multiple Conspiracies

You must decide whether the conspiracy charged in the indictment existed, and, if it did, who at least some of its members were. If you find that the conspiracy charged did not exist, then you must return a not guilty verdict, even though you may find that some other conspiracy existed. Similarly, if you find that any defendant was not a member of the charged conspiracy, then you must find that defendant not guilty, even though that defendant may have been a member of some other conspiracy.

Manual of Model Criminal Jury Instructions for the Ninth Circuit, § 8.17 (2003 ed.)

GOVERNMENT PROPOSED Jury Inst. No. 18.371-16

Multiple Conspiracies

(For Use With General Conspiracy Charge)

You are further instructed, with regard to the alleged conspiracy offense, that proof of several separate conspiracies is not proof of the single, overall conspiracy charged in the indictment, unless one of the several conspiracies which is proved is the single conspiracy which the indictment charges.

What you must do is determine whether the single conspiracy charged in the indictment existed between two or more conspirators. If you find that no such conspiracy existed, then you must acquit the defendants of that charge. However, if you decide that such a conspiracy did exist, you must then determine who the members were; and, if you should find that a particular defendant was a member of some other conspiracy, not the one charged in the indictment, then you must acquit that defendant.

In other words, to find a defendant guilty you must unanimously find that he was a member of the conspiracy charged in the indictment and not a member of some other separate conspiracy.

Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, OI 13.3 (2003 ed.)

COMMENT

1 United States v. Diecidue, 603 F.2d 535, 548-549 (5th Cir. 1979), approved this instruction.

[JI-26]

GOVERNMENT PROPOSED Jury Inst. No. 18.371-17

Conspiracy -- Withdrawal

A person is not responsible for the conduct of another if, before the commission of a crime, he [she] terminates his [her] effort to promote or facilitate the commission of the crime, by [wholly depriving his prior efforts of effectiveness in the commission of the crime]; or [giving timely warning to the proper law enforcement authorities]; or [doing an affirmative act inconsistent with the object of the conspiracy where such act is communicated in a manner reasonably calculated to reach co-conspirators] or [making proper effort to prevent the commission of the crime].

Federal Criminal Jury Instructions of the Seventh Circuit, § 5.12 (1998 ed.)

United States v. Read, 658 F.2d 1225, 1236 (7th Cir. 1981)

GOVERNMENT PROPOSED Jury Inst. No. 18.371-18

Conspiracy (Withdrawal -- Statute of Limitations)

One of the issues in this case is whether [defendant's name] withdrew from the conspiracy.

In order to withdraw, [defendant's name] must have taken some affirmative act to terminate his effort to promote or facilitate the conspiracy, by [wholly depriving his prior efforts of effectiveness in the commission of the crime, giving timely warning to the proper law enforcement authorities, doing an affirmative act inconsistent with the object of the conspiracy where the act is communicated in a manner reasonably calculated to reach co-conspirators, making proper effort to prevent the commission of the crime].

[Defendant's name] cannot be found guilty of the conspiracy charge if he [she] withdrew from the conspiracy more than five years¹ before the indictment was returned. The indictment in this case was returned on [date]. Thus, the government must prove beyond a reasonable doubt that [defendant's name] did not withdraw from the conspiracy prior to [date].

Federal Criminal Jury Instructions of the Seventh Circuit, § 5.13 (1999 ed.)

United States v. Read, 658 F.2d 1225, 1233 (7th Cir. 1981)

NOTE

¹ The statute of limitations is six years in a conspiracy to evade income taxes and in a Klein conspiracy. See 2008 Criminal Tax Manual § 7.01[2], STATUTE OF LIMITATIONS.

GOVERNMENT PROPOSED Jury Inst. No. 18.371-19

Withdrawal From Conspiracy

Once a person becomes a member of a conspiracy, that person remains a member until that person withdraws from it. One may withdraw by doing acts which are inconsistent with the purpose of the conspiracy and by making reasonable efforts to tell the coconspirators about those acts. You may consider any definite, positive step that shows that the conspirator is no longer a member of the conspiracy to be evidence of withdrawal.

The government has the burden of proving that the defendant did not withdraw from the conspiracy before the overt act -- on which you all agreed -- was committed by some member of

[JI-27] the conspiracy.

Manual of Model Criminal Jury Instructions for the Ninth Circuit, § 8.19 (2003 ed.)

United States v. Krasn, 614 F.2d 1229, 1236 (9th Cir. 1980)

GOVERNMENT PROPOSED Jury Inst. No. 18.371-20

Withdrawal From Conspiracy

(Use With General Conspiracy Charge)

As you have been instructed, a conspiracy, like the one charged in this case, does not become a crime until two things have occurred: first, the making of the agreement; and, second, the performance of some "overt act" by one of the conspirators.

So, if a defendant enters into a conspiracy agreement but later changes his mind and withdraws from that agreement before anyone has committed an "overt act," as previously defined, then the crime was not complete at that time and the defendant who withdrew cannot be convicted -- he would be not guilty of the alleged conspiracy offense.

However, in order for you to decide that a defendant withdrew from a conspiracy you must find that the defendant took affirmative action to disavow or defeat the purpose of the conspiracy; and, as just explained, he must have taken such action before he or any other member of the scheme had committed any "overt act."

Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, OI 13.4 (2003 ed.)

United States v. Finestone, 816 F.2d 583, 589 (11th Cir.), cert. denied, 484 U.S. 948 (1987)

18 U.S.C. § 1001

GOVERNMENT PROPOSED Jury Inst. No. 18.1001-1

Concealing a Material Fact -- Offense Charged

(First Clause)

The indictment sets forth ______ counts or charges.

Count ___ of the indictment charges that on or about ___________, 20__, in the District of __________________, the defendant, _______________________, knowingly and willfully concealed or covered up a material fact from a department or agency of the United States, the Internal Revenue Service, by __________________________________.

18 U.S.C. § 1001(a)(1)

2A Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 40.01 (5th ed. 2000) (modified)

[JI-28]

GOVERNMENT PROPOSED Jury Inst. No. 18.1001-2

Making a False, Fictitious or Fraudulent Statement -- Offense Charged

(Second Clause)

The indictment sets forth ______ counts or charges.

Count ___ of the indictment charges that on or about ___________, 20__, in the District of __________________, the defendant, _______________________, knowingly made a false, fictitious, or fraudulent statement or representation concerning a material fact within the jurisdiction of a department or agency of the United States, the Internal Revenue Service, by _________________________________________________________.

18 U.S.C. § 1001

2A Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 40.05 (5th ed. 2000) (modified)

GOVERNMENT PROPOSED Jury Inst. No. 18.1001-3

Making or Using Any False Writing or Document -- Offense Charged

(Third Clause)

The indictment sets forth ______ counts or charges.

Count ___ of the indictment charges that on or about ___________, 20__, in the District of __________________, the defendant, _______________________, knowingly and willfully made or used a false writing or document containing a false, fictitious, or fraudulent statement or entry concerning a material matter within the jurisdiction of a department or agency of the United States, the Internal Revenue Service, by________________________________________.

18 U.S.C. § 1001

2A Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 40.09 (5th ed. 2000) (modified)

GOVERNMENT PROPOSED Jury Inst. No. 18.1001-4

Statute Defining Offense

Section 1001 of Title 18 of the United States Code provides, in part, as follows:

Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully [falsifies, conceals, or covers up by any trick, scheme, or device a material fact, or makes any materially false, fictitious, or fraudulent statements or representations or makes or uses any false writing or document knowing the same to contain any materially false, fictitious or fraudulent statement or entry,]¹ shall be guilty of an offense against the laws of the United States.

18 U.S.C. § 1001

2A Kevin F. O’Malley et al., Federal Jury Practice and Instructions, §§ 40.02; 40.06; 40.10 (5th ed. 2000)

[JI-29]

NOTE

¹ Select the appropriate language for the offense charged in the indictment.

GOVERNMENT PROPOSED Jury Inst. No. 18.1001-5

The Essential Elements of the Crime Charged

In order to sustain its burden of proof for the crime of knowingly and willfully [falsifying] [concealing] [covering up]¹ a material fact in a matter within the jurisdiction of an agency of the federal government as charged in Count __ of the indictment, the government must prove the following essential elements² beyond a reasonable doubt:

One: The defendant _______________ knowingly [concealed a fact by any trick, scheme or device] [made a false, fictitious, or fraudulent statement or representation to the government] [made or used a false writing or document containing a false, fictitious, or fraudulent statement] as detailed in the indictment;

Two: In so doing, the defendant _______________ acted willfully;

Three: The fact [concealed] [falsified] [covered up] was material; and

Four: The subject matter involved was within the jurisdiction of any department or agency of the United States.

[In the case of concealment, add the following element]

Five: Defendant had a legal duty to disclose the fact concealed.

Now I will give you more detailed instructions on some of these terms:

A “material” fact or matter is one that has the natural tendency to influence or is capable of influencing a decision of [insert name of government entity].

The term “using a trick, scheme or device” means acting in a way intended to deceive others.

An act is done “knowingly and willfully” if it is done voluntarily and intentionally, and not because of some mistake or other innocent reason.

A matter is “within the jurisdiction of the [executive] [legislative] [judicial] branch of the United States government” if [insert name of government entity] has the power to exercise authority in that matter.

It is not necessary that the government prove [that the defendant knew the matter was within the jurisdiction of the United States government] [that the statements were made directly to, or even received by, the United States government].

If you are convinced that the government has proved all of the elements, you should say so by returning a guilty verdict on this charge. If you have a reasonable doubt about any one of the elements, then you must find the defendant not guilty of this charge.

2A Kevin F. O’Malley et al., Federal Jury Practice and Instructions, §§ 40.03; 40.07; 40.11 (5th ed. 2000) (modified)

1A Kevin F. O’Malley et al., Fed. Jury Practice and Instructions, § 16.11 (6th ed. 2008)

[JI-30]

Pattern Criminal Jury Instructions for the District Courts of the First Circuit, 4.18.1001 (2008 ed.) (elements)

Fifth Circuit Criminal Jury Instructions, § 2.49 (2001 ed.)

Pattern Jury Instructions of the Sixth Circuit, Criminal Cases, § 13.01 (2005 ed.)

Federal Criminal Jury Instructions of the Seventh Circuit, 18 U.S.C. § 1001, at p.201 (1998 ed.)

Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit, § 6.18.1001A, B, C (2008 ed.) (elements)

Manual of Model Criminal Jury Instructions for the Ninth Circuit, § 8.66 (2003 ed.) (elements)

Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, OI 36 (2003 ed.) (elements)

See United States v. Gaudin, 515 U.S. 506, 510 (1995) (holding that "materiality" is a question for the jury, not the judge, to decide)

NOTES

¹ Choose the appropriate language depending on the crime charged: concealing a material fact from; making a false statement to; or making or using a false writing or document.

² If the offense charged relates to the first clause, concealing a material matter, there are five elements; otherwise there are four. See the law of your particular circuit as to whether the judge must instruct the jury as to the fifth element. See Section 24.03, supra.

GOVERNMENT PROPOSED Jury Inst. No. 18.1001-6

The Essential Elements of the Crime Charged

In order to sustain its burden of proof for the crime of knowingly and willfully making a false [statement] [representation] in a matter within the jurisdiction of¹ an agency of the federal government as charged in Count __ of the indictment, the government must prove the following five² essential elements beyond a reasonable doubt:

One: The defendant _______________ knowingly made a [statement] [representation] as detailed in the indictment;

Two: That [statement] [representation] was [false] [fictitious] [fraudulent];

Three: The [statement] [representation] was material;

Four: The defendant _________________ acted knowingly and willfully; and

Five: The subject matter involved was within the jurisdiction of any department or agency of the United States.

Now I will give you more detailed instructions on some of these terms:

A “material” fact or matter is one that has the natural tendency to influence or is capable of

[JI-31] influencing a decision of [insert name of government entity].

The term “using a trick, scheme or device” means acting in a way intended to deceive others.

An act is done “knowingly and willfully” if it is done voluntarily and intentionally, and not because of some mistake or other innocent reason.

Pattern Jury Instructions of the Sixth Circuit, Criminal Cases, § 13.01 (2005 ed.) (modified).

See United States v. Gaudin , 515 U.S. 506, 510 (1995) (holding that "materiality" is a question for the jury, not the judge, to decide)

NOTES

¹ Choose the appropriate language depending on the crime charged.

² The Sixth Circuit pattern instruction features five, not four elements, as is standard in many other circuits. See the law of your particular circuit to determine whether this instruction is appropriate.

GOVERNMENT PROPOSED Jury Inst. No. 18.1001-7

The Essential Elements of the Crime Charged

Title 18, United States Code, Section 1001, makes it a crime for anyone to knowingly and willfully make a false or fraudulent statement to a department or agency of the United States.

For you to find the defendant guilty of this crime, you must be convinced that the government has proved each of the following beyond a reasonable doubt:

First: That the defendant made a materially false statement [gave a materially false document] to [name department or agency of United States government];

Second: That the defendant made the statement intentionally, knowing that it was false; and

Third: That the defendant made the false statement for the purpose of misleading the [name department or agency of United States government].

It is not necessary to show that the [name department or agency of United States government] was in fact misled.

[JI-32]

Fifth Circuit Criminal Jury Instructions, § 2.49 (2001 ed.)

GOVERNMENT PROPOSED Jury Inst. No. 18.1001-8

The Essential Elements of the Crime Charged

Concealing a Material Fact

To sustain the charge of concealing a material fact, the government must prove the following propositions:

First, the defendant [concealed; covered up] a fact by trick, scheme or device;

Second, the fact was material;

Third, the defendant did so knowingly and willfully; and

Fourth, the material fact related to a matter within the jurisdiction of a federal department or agency.

If you find from your consideration of all the evidence that each of these propositions has been proved beyond a reasonable doubt, then you should find the defendant guilty.

If, on the other hand, you find from your consideration of all the evidence that any of these propositions has not been proved beyond a reasonable doubt, then you should find the defendant not guilty.

Federal Criminal Jury Instructions of the Seventh Circuit, 18 U.S.C. § 1001, p.197 (1998 ed.)

GOVERNMENT PROPOSED Jury Inst. No. 18.1001-9

The Essential Elements of the Crime Charged

Making a False Statement or Representation

To sustain the charge of making a [false; fictitious; fraudulent] [statement; representation], the government must prove the following propositions:

First, the defendant made a [false; fictitious; fraudulent] [statement; representation];

Second, the [statement; representation] was material;

Third, the [statement; representation] was made knowingly and willfully; and

Fourth, the [statement; representation] was made in a matter within the jurisdiction of a department or agency of the United States.

If you find from your consideration of all the evidence that each of these propositions has been proved beyond a reasonable doubt, then you should find the defendant guilty.

Federal Criminal Jury Instructions of the Seventh Circuit, 18 U.S.C. § 1001, p.198 (1998 ed.)

[JI-33]

GOVERNMENT PROPOSED Jury Inst. No. 18.1001-10

The Essential Elements of the Crime Charged

Making or Using a False Writing or Document

To sustain the charge of [making; using] a false [writing; document] knowing it to contain any [false; fictitious; fraudulent] [statement; entry], the government must prove the following propositions:

First, the defendant [made; used] a false [writing; document];

Second, the defendant knew the [writing; document] contained a [false; fictitious; fraudulent] [statement; entry];

Third, the [statement; entry] was material;

Fourth, the defendant [made; used] the [document; writing] knowingly and willfully; and

Fifth, the defendant [made; used] the [document; writing] within the jurisdiction of a federal department or agency.

If you find from your consideration of all the evidence that each of these propositions has been proved beyond a reasonable doubt, then you should find the defendant guilty.

Federal Criminal Jury Instructions of the Seventh Circuit, 18 U.S.C. § 1001, p.199 (1998)

GOVERNMENT PROPOSED Jury Inst. No. 18.1001-11

The Essential Elements of the Crime Charged

Concealing a Material Fact From a Government Agency

The crime of [falsifying] [concealing] a fact from a government agency, as charged in [Count ______of] the indictment, has three essential elements:

One, the defendant [falsified][concealed] a material fact, [describe material fact falsified or concealed, (e.g. the true purchase price of the ABC Building)], in [describe the matter within agency jurisdiction, (e.g. a loan closing statement submitted to XYZ Association)];

Two, the defendant did so by use of a [trick] [scheme] [device], that is, a course of action intended to deceive others; and

Three, the defendant did these acts knowingly, voluntarily and intentionally.

[Describe matter, e.g. loan closing statements submitted to the XYZ Association] are matters within the jurisdiction of the [name agency, e.g. Internal Revenue Service] which is an agency of the United States.

Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit, § 6.18.1001A (2008 ed.)

[JI-34]

GOVERNMENT PROPOSED Jury Inst. No. 18.1001-12

The Essential Elements of the Crime Charged

False Statement to Government Agency

The crime of making a materially [false] [fictitious] [fraudulent] [statement] [representation] in a matter within the jurisdiction of a government agency, as charged in [Count _____ of] the indictment, has three essential elements:

One, the defendant knowingly made a materially [false] [fictitious] [fraudulent] [statement] [representation];

Two, the [statement] [representation] was made voluntarily and intentionally; and

Three, the [statement] [representation] was made in [describe matter within agency jurisdiction, e.g. a federal income tax return].

[Statements] [representations] in [describe matter, (e.g. income tax returns)] are matters within the jurisdiction of the [name agency, (e.g. Internal Revenue Service)] which is an agency of the United States.

[A statement is "false" or "fictitious", if untrue when made, and then known to be untrue by the person making it or causing it to be made.] [A statement or representation is "fraudulent", if known to be untrue, and made or caused to be made with the intent to deceive the Government agency to which it was submitted.]

Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit, § 6.18.1001B (2008 ed.) (modified)

GOVERNMENT PROPOSED Jury Inst. No. 18.1001-13

The Essential Elements of the Crime Charged

Using a False Document

The crime of [making] [using] a false [writing] [document] in a matter within the jurisdiction of a government agency, as charged in [Count _____ of] the indictment, has three essential elements, which are:

One, the defendant knowingly [made] [used] a materially [false] [fictitious] [writing] [document] in [describe matter within agency jurisdiction, (e.g. support of claimed deductions during an audit conducted by the Internal Revenue Service)];

Two, at the time the defendant did so, he knew that the [writing] [document] contained a materially [false] [fictitious] [fraudulent] [statement] [entry]; and

Three, the defendant did these acts knowingly, voluntarily and intentionally.

[Describe matter, e.g. using a document in support of claimed deductions during an audit] is a matter within the jurisdiction of the [name agency, (e.g. Internal Revenue Service)] which is an agency of the United States.

Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit, § 6.18.1001C (2008 ed.) (modified)

[JI-35]

GOVERNMENT PROPOSED Jury Inst. No. 18.1001-14

The Essential Elements of the Crime Charged

The defendant is charged in [Count _________ of] the indictment with knowingly and willfully [making a materially false statement] [or] [using a document containing a materially false statement] in a matter within the jurisdiction of a government agency or department in violation of Section 1001 of Title 18 of the United States Code. In order for the defendant to be found guilty of that charge, the government must prove each of the following elements beyond a reasonable doubt:

First, the defendant [made a materially false statement] [used a writing which contained a materially false statement] in a matter within the jurisdiction of the [e.g., United States Treasury Department];

Second, the defendant knew that the statement was untrue; and

Third, the statement was material to the [United States Treasury Department]'s activities or decisions.

A statement is material if it could have influenced the agency's decisions or activities.

Manual of Model Criminal Jury Instructions for the Ninth Circuit, 8.66 (2003 ed.) (modified)

GOVERNMENT PROPOSED Jury Inst. No. 18.1001-15

The Essential Elements of the Crime Charged

Title 18, United States Code, Section 1001, makes it a Federal crime or offense for anyone to willfully make a materially false or fraudulent statement to a department or agency of the United States.

The defendant can be found guilty of that offense only if all of the following facts are proved beyond a reasonable doubt:

First: That the defendant knowingly [made a false statement] or [made or used a false document] in relation to a matter within the jurisdiction of a department or agency of the United States, as charged;

Second: That the [false statement] or [false document] related to a material matter; and

Third: That the defendant acted willfully with knowledge of the falsity.

A [statement] or [document] is "false" when [made] or [used] if it is untrue and is then known to be untrue by the person [making] or [using] it. It is not necessary to show, however, that the government agency was in fact deceived or misled.

[The Internal Revenue Service, Department of the Treasury, is an "agency of the United States," and the filing of documents with that agency to affect a matter or investigation concerning federal income taxes is a matter within the jurisdiction of that agency.]¹

The [making of a false statement] or [use of a false document] is not an offense unless the falsity relates to a "material" fact. A fact is "material" if it has a natural tendency to influence, or is capable of influencing, the Internal Revenue Service in investigating or auditing a tax return or in

[JI-36] verifying or monitoring the reporting of income by a taxpayer.

Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, OI 36 (2003 ed.)

See Neder v. United States, 527 U.S. 1, 15, (1999) (holding that materiality is an essential element of this crime and that the defendant has a constitutional right to have that issue submitted to the jury)

Pattern Criminal Jury Instructions for the District Courts of the First Circuit, 4.18.1001 (2008 ed.).

Fifth Circuit Criminal Jury Instructions, § 2.49 (2001 ed.)

Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit, § 6.18.1001B (2008 ed.)

Manual of Model Criminal Jury Instructions for the District Courts of the Ninth Circuit, 8.66 (2003 ed.)

NOTE

¹ Language suggested for use when the Internal Revenue Service is involved.

GOVERNMENT PROPOSED Jury Inst. No. 18.1001-16

"Conceals or Covers Up by Any Trick, Scheme, or Device -- Defined"

(18 U.S.C. 1001 - First Clause)

The phrase "conceals or covers up by any trick, scheme, or device" means any deliberate plan or course of action, or any affirmative act, or any knowing omission designed to deceive others by preventing or delaying the discovery of information.

2A Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 40.04 (5th ed. 2000)

GOVERNMENT PROPOSED Jury Inst. No. 18.1001-17

False, Fictitious or Fraudulent Statements or Representations

A false or fictitious statement or representation is an assertion that is untrue when made or when used and which is known by the person making it or using it to be untrue.

A fraudulent statement or representation is an assertion which is known to be untrue and which is made or used with the intent to deceive.

2A Kevin F. O’Malley et al., Federal Jury Practice and Instructions (5th Ed. 2000), Section 40.08; see also Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit, § 6.18.1001B (2008); Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, OI 36 (2003 ed.)

[JI-37]

GOVERNMENT PROPOSED Jury Inst. No. 18.1001-18

False, Fictitious or Fraudulent Statements or Representations

A statement is false or fictitious if untrue when made and then known to be untrue by the person making or causing it to be made.

A statement or representation is fraudulent if known to be untrue, and made or caused to be made with intent to deceive.

Federal Criminal Jury Instructions of the Seventh Circuit, 18 U.S.C. § 1001, p.200 (1998 ed.)

GOVERNMENT PROPOSED Jury Inst. No. 18.1001-19

Makes or Uses Any False Writing or Document

The phrase "makes or uses any false writing or document" means to create, to bring into existence, or to submit, or to file some type of form, report, or letter, of any kind, which is not true.

A false statement or representation is an assertion which is untrue when made or when used and which is known by the person making it or using it to be untrue.

A fraudulent statement or representation is an assertion which is known to be untrue and which is made or used with the intent to deceive.

2A Kevin F. O’Malley et al., Federal Jury Practice and Instructions (5th Ed. 2000), Section 40.12; see also Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit, § 6.18.1001C (2008 ed.)

GOVERNMENT PROPOSED JURY INST. NO. 18.1001-20

Department or Agency of the United States

The [Internal Revenue Service] is an "agency of the United States"; and statements contained in [ e.g., an affidavit submitted to an employee of the Internal Revenue Service to affect a matter or investigation concerning federal income taxes] are matters within the jurisdiction of an agency of the United States.

See, e.g., United States v. Morris, 741 F.2d 188, 190-91 (8th Cir. 1984); United States v. Fern, 696 F.2d 1269, 1273 (11th Cir. 1983); United States v. Schmoker, 564 F.2d 289, 291 (9th Cir. 1977); United States v. Johnson, 530 F.2d 52, 54-55 (5th Cir. 1976); United States v. Isaacs, 493 F.2d 1124, 1156-57 (7th Cir. 1974); United States v. Ratner, 464 F.2d 101, 104 (9th Cir. 1972); United States v. McCue, 301 F.2d 452, 455-56 (2d Cir. 1962); see also United States v. Knox, 396 U.S. 77, 80-81 & n.3 (1969) (Court simply accepted, without directly holding, the applicability of the statute to false documents submitted to the IRS).

GOVERNMENT PROPOSED JURY INST. NO. 18.1001-21

"Knowingly" - Defined

A person acts "knowingly", as that term is used in these instructions, if that person acts consciously and with awareness and comprehension and not because of ignorance, mistake or misunderstanding or other similar reason.

[JI-38]

A person who makes, submits, or uses a statement or writing which that person believes to be truthful does not "knowingly" make, submit, or use a false, fictitious, or fraudulent statement.

2A Kevin F. O’Malley et al., Federal Jury Practice and Instructions (5th Ed. 2000), Section 40.13

GOVERNMENT PROPOSED Jury Inst. No. 18.1001-22

"Willfully" - Defined

A person acts "willfully", as that term is used in these instructions, when that person acts deliberately, voluntarily, and intentionally.

2A Kevin F. O’Malley et al., Federal Jury Practice and Instructions (5th Ed. 2000), Section 40.14.

GOVERNMENT PROPOSED Jury Inst. No. 18.1001-23

Material

A statement is "material" if it has a natural tendency to influence or is capable of influencing the decision of the decisionmaker to whom it was addressed.

See United States v. Gaudin, 515 U.S. 506, 510 (1995) (holding that "materiality" is a question for the jury, not the judge, to decide)

1A Kevin F. O’Malley et al., Federal Jury Practice & Instructions § 16.11 (5th ed.)

Pattern Jury Instructions of the First Circuit, Criminal Cases, § 4.18.1001 (2008) (elements)

Fifth Circuit Criminal Jury Instructions, § 2.49 (2001 ed.) (elements)

Federal Criminal Jury Instructions of the Seventh Circuit, 18 U.S.C. 1001, p. 201 (definition) (1998 ed.)

Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit, Sections 6.18.1001A, B, C (2008 ed.) (elements)

Manual of Model Criminal Jury Instructions for the Ninth Circuit, Section 8.66 (Aug.2008) (elements)

Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, OI 36 (2003 ed.) (elements)

[JI-39]

18 U.S.C. § 1956

GOVERNMENT PROPOSED Jury Inst. No. 18.1956-1

Elements of the Offense

There are four elements to Count _____ of this indictment which the government must prove:

First, the defendant must knowingly conduct or attempt to conduct a financial transaction;

Second, the defendant must know that the property involved in the financial transaction represents the proceeds of some form of unlawful activity;

Third, the property involved in the financial transaction must, in fact, involve the proceeds of specified unlawful activity; and

Fourth, the defendant must engage in the financial transaction with the intent to engage in conduct constituting a violation of § 7201 or 7206 of the Internal Revenue Code of 1986. In this case, [add specific conduct alleged in indictment.]

18 U.S.C. § 1956(a)(1)(A)(ii)

GOVERNMENT PROPOSED Jury Inst. No. 18.1956-2

Provisions of Statute

Count ____ of the indictment charges the defendant with a violation of Title 18, U.S.C. § 1956(a)(1)(A)(ii). This statute provides in pertinent part:

(a)(1) Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity --

(A)(ii) with the intent to engage in conduct constituting a violation of § 7201 or 7206 of the Internal Revenue Code of 1986 is guilty of an offense against the United States.

18 U.S.C. § 1956(a)(1)(A)(ii)

26 U.S.C. § 7201

GOVERNMENT PROPOSED Jury Inst. No. 26.7201-1

Tax Evasion –The Nature of the Offense Charged

Count ___ of the indictment charges that on or about the ___ day of _______, 20___, in the __________ District of _________, Defendant _________ willfully attempted to evade and defeat a substantial income tax which was due [in addition to any income tax declared on the defendant’s tax return] [in addition to any income tax the defendant paid].

2B Kevin F. O'Malley et al., Federal Jury Practice and Instructions (5th Ed. 2000), Section 67.01

[JI-40]

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-2

The Statute Defining the Offense Charged

Section 7201 of the Internal Revenue Code provides, in part:

“Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall * * *”

be guilty of an offense against the laws of the United States.

2B Kevin F. O'Malley et al., Federal Jury Practice and Instructions (5th Ed. 2000), Section 67.02

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-3

The Essential Elements Of Attempt To Evade Or Defeat A Tax

To establish the offense of attempting to evade and defeat a tax, the government is required to prove beyond a reasonable doubt the following three elements:

First, a substantial income tax was due and owing from the defendant in addition to that declared in his [her] income tax return;

Second, the defendant made an affirmative attempt, in any manner, to evade or defeat an income tax, and

Third, the defendant willfully attempted to evade and defeat the tax.

The burden is always upon the prosecution to prove beyond a reasonable doubt every essential element of the crime charged; the law never imposes upon a defendant in a criminal case the burden or duty of calling any witnesses or producing any evidence.

26 U.S.C. § 7201

Spies v. United States, 317 U.S. 492 (1943)

Lawn v. United States, 355 U.S. 339, 361 (1958)

Sansone v. United States, 380 U.S. 343, 351 (1965)

United States v. Pomponio, 429 U.S. 10, 12 (1976)

Cheek v. United States, 498 U.S. 192, 195 (1991)

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-4

The Essential Elements of the Offense Charged

In order to sustain its burden of proof for the crime of willfully attempting to [evade and defeat] [the payment of] a tax, as charged in Count ___ of the indictment, the government must prove the following three (3) essential elements beyond a reasonable doubt:

One: A substantial income tax was due from Defendant ________ [in addition to that declared on the defendant's income tax return][in addition to that paid by the defendant];

Two: The defendant attempted to evade or defeat this [additional] tax as detailed in the indictment; and

[JI-41]

Three: In attempting to [evade or defeat] [evade the payment of] such [additional] tax, Defendant ________ acted willfully.

2B Kevin F. O'Malley et al., Federal Jury Practice and Instructions, § 67.03 (5th Ed. 2000) (modified)

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-5

The Essential Elements of the Offense Charged

[Defendant] is charged with income tax evasion. For you to find [defendant] guilty of this crime, the government must prove the following things beyond a reasonable doubt:

First, that [defendant] owed substantially more federal income tax for the year[s] [ ] than was indicated as due on his/her income tax return;

Second, that [defendant] intended to evade or defeat the assessment or payment of this tax; and

Third, that [defendant] willfully committed an affirmative act in furtherance of this intent.

[Fourth, that [defendant] did not have a good-faith belief that he/she was complying with the provisions of [specific provision]. A belief may be in good faith even if it is unreasonable.]

A person may not be convicted of federal tax evasion on the basis of a willful omission alone; he/she also must have undertaken an affirmative act of evasion. The affirmative act requirement can be met by [the filing of a false or fraudulent tax return that substantially understates taxable income or by other affirmative acts of concealment of taxable income such as keeping a double set of books, making false entries or invoices or documents, concealing assets, handling affairs so as to avoid keeping records, and so forth].

[Defendant] acted “willfully” if the law imposed a duty on him/her, he/she knew of the duty, and he/she voluntarily and intentionally violated that duty. Thus, if [defendant] acted in good faith, he/she cannot be guilty of this crime. The burden to prove intent, as with all other elements of the crime, rests with the government. This is a subjective standard: what did [defendant] honestly believe, not what a reasonable person should have believed. Negligence, even gross negligence, is not enough to meet the “willful” requirement.

Pattern Jury Instructions of the First Circuit, Criminal Cases, § 4.26.7201 (2008) (elements)

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-6

The Essential Elements of the Offense Charged

Title 26, United States Code, Section 7201, makes it a crime for anyone willfully to attempt to evade or defeat the payment of federal income tax.

For you to find the defendant guilty of this crime, you must be convinced that the government has proved each of the following beyond a reasonable doubt:

First: That the defendant owed substantially more tax than he reported on his [year] income tax return because he [e.g., intentionally failed to report income];

Second: That when the defendant filed that income tax return, he knew that he owed

[JI-42] substantially more taxes to the government than he reported on that return; and

Third: That when the defendant filed his [year] income tax return, he did so with the purpose of evading payment of taxes to the government.

The proof need not show the precise amount or all of the additional tax due as alleged in the indictment, but the government must prove beyond a reasonable doubt that the defendant attempted to evade or defeat payment of some substantial portion of the additional tax he knew he was required by law to pay.

Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, OI 93 (2003 ed.) (modified)

Fifth Circuit Criminal Jury Instructions § 2.95 (2001 ed.) (modified)

COMMENT

1 The circuit pattern instructions on which this instruction is based refer to the offense as attempting to evade or defeat the "payment" of federal income tax. But understating of income tax liability on a tax return is usually associated with evasion of assessment. Affirmative acts associated with evasion of payment typically involve some form of concealment of the taxpayer’s ability to pay the tax due and owing or the removal of assets from the reach of the IRS. See § 8.06[2] of this Manual. In any event, it has been held that evasion of assessment and evasion of payment are not different offenses but are different means of committing the single offense of attempted evasion. See, e.g., United States v. Mal, 942 F.2d 682, 688 (9th Cir. 1991); United States v. Masat, 896 F.2d 88, 91 (5th Cir. 1990).

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-7

The Essential Elements of the Offense Charged

To sustain a charge of attempting to evade or defeat the defendant's individual tax, the

government must prove the following propositions:

First, on April 15¹ [or date of a legal extension] of the year following the tax year, federal

income tax was due and owing by the defendant;

Second, the defendant intended to evade or defeat the ascertainment, assessment,

computation or payment of the tax; and

Third, the defendant willfully did some act in furtherance of the intent to evade tax or

payment of the tax.

If you find from your consideration or of all of the evidence that each of these propositions has been proved beyond a reasonable doubt, then you should find the defendant guilty. If, on the other hand, you find from your consideration of all the evidence that any of these propositions has not been proved beyond a reasonable doubt, then you should find the defendant not guilty.

If you find beyond a reasonable doubt that the defendant had a tax liability for a particular year, then I instruct you as a matter of law, that tax was due and owing on April 15 [or other date set by law or legal extension] of the following year.

Failure to file a tax return, without any additional act, does not establish the crime of willful attempt to evade or defeat income tax.

[JI-43]

[Where specific acts of evasion are charged, the court should consider whether to give a unanimity instruction (See Fed. Crim. Jury Instr. 7th Cir. 4.03 (1999))]

Pattern Criminal Federal Jury Instructions for the Seventh Circuit, pp. 345 - 349, November 30, 1998

NOTE

¹ Note that April 15th is the due date for individual returns. Calendar year corporate returns are due on or before the 15th day of March following the close of the calendar year; fiscal year corporate returns are due on or before the 15th day of the third month following the close of the fiscal year. 26 U.S.C. § 6072(b). If April 15th fell on a Saturday, Sunday, or legal holiday, the appropriate date in the indictment or information would be the next succeeding day that was not a Saturday, Sunday, or legal holiday. NOTE that pursuant to 26 U.S.C. 7503 the term “legal holiday” also includes any statewide holiday, and, accordingly, taxpayers who file at the Andover Service Center may get an extra day if the filing date falls on Patriots' Day in Massachusetts which is the third Monday in April. NOTE ALSO that the statutory due dates should be adjusted to account for any extensions of time for filing a return.

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-8

The Essential Elements of the Offense Charged

The crime of tax evasion as charged in [Count[s] of] the indictment has three elements:

One, the defendant owed substantial income tax in addition to that which [he] [she] reported on his return;

Two, the defendant attempted to evade and defeat that additional tax; and

Three, the defendant acted willfully.

To "attempt to evade or defeat" a tax involves two things: first, an intent to evade or defeat the tax; and second, some act willfully done in furtherance of such intent. So, the word "attempt" contemplates that the defendant knew and understood that, during the calendar year charged, [he] [she] had some income which was taxable and which he was required by law to report; but that [he] [she] nevertheless attempted to evade or defeat all or a substantial portion of the tax on that income, by willfully failing to report all [his] [her] known income which [he] [she] knew [he] [she] was required by law to state in [his] [her] return for such year; or in some other way or manner.

To "evade and defeat" a tax means to escape paying a tax by means other than lawful avoidance.

Various schemes, subterfuges, and devices may be resorted to in an attempt to evade or defeat a tax. [The one alleged in the indictment is that of filing false and fraudulent returns with the intent to evade or defeat the tax.] The statute makes it a crime to willfully attempt, in any way or manner, to evade or defeat any income tax imposed by law.

An attempt to evade an income tax for one year is a separate offense from the attempt to evade the tax for a different year.

[JI-44]

Even though the indictment alleges a specific amount of tax due for each of the calendar years, the proof need not show the precise amount of the additional tax due. The Government is only required to establish, beyond a reasonable doubt, that the defendant attempted to evade a substantial income tax, whether greater or less than the amount charged in the indictment.

[The fact that an individual's name is signed to a return means that, unless and until outweighed by evidence in the case which leads you to a different or contrary conclusion, you may find that a filed tax return was in fact signed by the person whose name appears to be signed to it. If you find proof beyond a reasonable doubt that the defendant had signed [his] [her] tax return, that is evidence from which you may, but are not required to, find or infer that the defendant had knowledge of the contents of the return.]

To act "willfully" means to voluntarily and intentionally violate a known legal duty.

(Insert paragraph describing Government's burden of proof, see Model Crim. Jury Instr. 8th Cir. 3.09 (2007).)

Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit, 6.26.7201 (2008 ed.)

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-9

The Essential Elements of the Offense Charged

The defendant is charged in [Count ________ of] the indictment with income tax evasion in violation of Section 7201 of Title 26 of the United States Code. In order for the defendant to be found guilty of that charge, the government must prove each of the following elements beyond a reasonable doubt:

First, the defendant owed more federal income tax for the calendar year [________] than was declared due on the defendant's income tax return;

Second, the defendant knew that more federal income tax was owed than was declared due on the defendant's income tax return;

Third, the defendant made an affirmative attempt to evade or defeat an income tax; and

Fourth, in attempting to evade or defeat such additional tax, the defendant acted willfully.

Manual of Model Jury Instructions for the Ninth Circuit (2003 Ed.), Section 9.35

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-10

The Essential Elements of the Offense Charged

The defendant is charged in count ____ with a violation of 26 U.S.C. section 7201.

This law makes it a crime for anyone to willfully attempt to evade or defeat the payment of federal income tax.

To find the defendant guilty of this crime you must be convinced that the government has proved each of the following beyond a reasonable doubt:

First: the defendant owed substantial income tax in addition to the tax liability which he

[JI-45] reported on his [__________] income tax return;

Second: the defendant intended to evade and defeat payment of that additional tax;

Third: the defendant committed an affirmative act in furtherance of this intent, that is he [__________]; and

Fourth: the defendant acted willfully, that is, with the voluntary intent to violate a known legal duty.

To “evade and defeat” the payment of tax means to escape paying a tax due other than by lawful avoidance.

The indictment alleges a specific amount of tax due for each calendar year charged. The proof, however, need not show the exact amount of the additional tax due. The government is required only to prove, beyond a reasonable doubt, that the additional tax due was substantial.

Criminal Pattern Jury Instructions: Tenth Circuit Pattern Crim. Jury Instr. 10th Cir. 2.92 (2006)

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-11

The Essential Elements of the Offense Charged

Section 7201 of the Internal Revenue Code (26 USC 7201) makes it a Federal crime or offense for anyone to willfully attempt to evade or defeat the payment of federal income taxes.

The Defendant can be found guilty of that offense only if all of the following facts are proved beyond a reasonable doubt:

First : That the Defendant owed substantial income tax in addition to that declared in [his] [her] tax return; and

Second : That the Defendant knowingly and willfully attempted to evade or defeat such tax.

The proof need not show the precise amount of the additional tax due as alleged in the indictment, but it must be established beyond a reasonable doubt that the Defendant knowingly and willfully attempted to evade or defeat some substantial portion of such additional tax as charged.

The word “attempt” contemplates that the Defendant had knowledge and an understanding that, during the particular tax year involved, [he] [she] had income which was taxable, and which the Defendant was required by law to report; but that [he] [she] nevertheless attempted to evade or defeat the tax, or a substantial portion of the tax on that income, by willfully failing to report all of the income which [he] [she] knew [he] [she] had during that year.

Federal income taxes are levied upon income derived from compensation for personal services of every kind and in whatever form paid, whether as wages, commissions, or money earned for performing services. The tax is also levied upon profits earned from any business, regardless of its nature, and from interest, dividends, rents and the like. The income tax also applies to any gain derived from the sale of a capital asset. In short, the term “gross income” means all income from whatever source unless it is specifically excluded by law.

On the other hand, the law does provide that funds acquired from certain sources are not subject to the income tax. The most common non-taxable sources are loans, gifts, inheritances,

[JI-46] the proceeds of insurance policies, and funds derived from the sale of an asset to the extent those funds equal the cost of the asset.

Pattern Jury Instructions: Eleventh Circuit (2003), 93.1

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-12

Tax Evasion

(26 U.S.C. § 7201)

To sustain a charge of attempting to evade or defeat the defendant's individual tax, the government must prove the following propositions:

First, on April 15 [or date of a legal extension] of the year following the tax year, federal income tax was due and owing by the defendant;

Second, the defendant intended to evade or defeat the ascertainment, assessment, computation or payment of the tax; and

Third, the defendant willfully did some act in furtherance of the intent to evade tax or payment of the tax.

If you find from your consideration or of all of the evidence that each of these propositions has been proved beyond a reasonable doubt, then you should find the defendant guilty.

Pattern Federal Jury Instructions for the Seventh Circuit (1998 ed.)

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-13

Tax Evasion

(26 U.S.C. § 7201)

The crime of tax evasion as charged in [Count[s] of] the indictment has three elements:

One, the defendant owed substantial income tax in addition to that which [he] [she] reported on his return;

Two, the defendant attempted to evade and defeat that additional tax; and

Three, the defendant acted willfully.

To "attempt to evade or defeat" a tax involves two things: first, an intent to evade or defeat the tax; and second, some act willfully done in furtherance of such intent. So, the word "attempt" contemplates that the defendant knew and understood that, during the calendar year charged, [he] [she] had some income which was taxable, and which he was required by law to report; but that [he] [she] nevertheless attempted to evade or defeat all or a substantial portion of the tax on that income, by willfully failing to report all [his] [her] known income which [he] [she] knew [he] [she] was required by law to state in [his] [her] return for such year; or in some other way or manner.

[JI-47]

To "evade and defeat" a tax means to escape paying a tax by means other than lawful avoidance.

An attempt to evade an income tax for one year is a separate offense from the attempt to evade the tax for a different year.

To act "willfully" means to voluntarily and intentionally violate a known legal duty.

Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit (2008 ed.), Section 6.26.7201

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-14

Tax Deficiency

One element of attempted tax evasion is a substantial tax deficiency or, in other words, a substantial amount of Federal income tax due and owing by the defendant over and above the amount of tax reported in the defendant's return(s). Each year must be considered separately. In other words, the defendant's tax obligation in any one year must be determined separately from his [her] tax obligations in any other year.

The defendant is charged with attempting to evade a specific amount of tax due for each of the calendar years alleged in the indictment. The proof need not show, however, the precise amount or all of the additional tax due as alleged. The government is only required to establish, beyond a reasonable doubt, that the defendant attempted to evade a substantial income tax,¹ whether greater or less than the income tax charged as due in the indictment.

United States v. Johnson, 319 U.S. 503, 517-518 (1943)

NOTE

¹ The tax deficiency need not be "substantial" in the Ninth Circuit. United States v. Marashi, 913 F.2d 724, 735 (9th Cir. 1990); Manual of Model Jury Instructions for the Ninth Circuit (2005 Ed.), Section 9.35 Comment

[JI-48]

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-15

Proof of Precise Amount of Tax Owed Not Necessary

The government must prove beyond a reasonable doubt that Defendant ________ willfully attempted to evade or defeat a substantial portion of the tax owed.

Although the government must prove a willful attempt to evade a substantial portion of tax, the government is not required to prove the precise amount of additional tax alleged in the indictment or the precise amount of (additional) tax owed.

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions (5th Ed. 2000), Section 67.07

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-16

Each Tax Year is Separate

Any willful failure to comply with the requirements of the Internal Revenue Code for one year is a separate matter from any such failure to comply for a different year. The tax obligations of the defendant in any one year must be determined separately from the tax obligations in any other year.

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions (5th Ed. 2000), Section 67.24

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-17

"Attempts in Any Manner to Evade or Defeat Any Tax -- Explained

The phrase "attempts in any manner to evade or defeat any tax" involves two things: first, the formation of an intent to evade or defeat a tax; and second, willfully performing some act to accomplish the intent to evade or defeat that tax.

The phrase "attempts in any manner to evade or defeat any tax" contemplates and charges that Defendant _________ knew and understood that during the calendar year 20__ , [he] [she] owed a substantial federal income tax [substantially more federal income tax than was declared on the defendant's federal income tax for that year][substantially more federal income tax than had been paid for that year] and then tried in some way to avoid that [additional] tax.

In order to show an "attempt(s) in any manner to evade or defeat any tax", therefore, the government must prove beyond a reasonable doubt that the Defendant _________ intended to evade or defeat the tax due and that Defendant _________ also willfully did some affirmative act in order to accomplish this intent to evade or defeat that tax.

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions (5th Ed. 2000), Section 67.04

See also Manual of Model Criminal Jury Instructions, Eighth Circuit (2007 Ed.), Section 6.26.7201 (portion)

Spies v. United States, 317 U.S. 492, 500 (1943)

Sansone v. United States, 380 U.S. 343 (1965)

[JI-49]

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-18

“Willfully” – Defined

In order to sustain its burden of proof for the crime of tax evasion as charged in Count ___ of the indictment, the government must prove beyond a reasonable doubt that Defendant _______ acted “willfully”.

To act willfully means to act voluntarily and deliberately and intending to violate a known legal duty.

Negligent conduct is not sufficient to constitute willfulness.

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions (5th Ed. 2000), Section 67.20 (modified)

The term “willfully” means the voluntary and intentional violation of a known legal duty, in other words, acting with the specific intent to avoid paying a tax imposed by the income tax laws or to avoid assessment of a tax that it was the legal duty of the defendant to pay to the government, and that the defendant knew it was his/her legal duty to pay. Pattern Federal Jury Instructions for the Seventh Circuit (1998 ed.)

An act is done wilfully if done voluntarily and intentionally with the purpose of violating a known legal duty. United States v. Sehnai, 930 F.2d 1420, 1427 (9th Cir. 1991)

COMMENTS

1 It is not necessary to define the term "willfully" in a tax case in terms of "bad purpose" or "evil motive." United States v. Pomponio, 429 U.S. 10, 12 (1976). See also 2001 Criminal Tax Manual Section 8.06[1].

2 Willfulness has the same meaning in the felony and misdemeanor sections of the Internal Revenue Code. United States v. Pomponio, 429 U.S. 10, 12 (1976).

3 For examples of conduct from which willfulness may be inferred, see 2008 Criminal Tax Manual Section 8.08[3].

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-19

Knowledge of Falsehood

(Deliberate Ignorance)

The element of knowledge may be satisfied by inferences drawn from proof that a defendant deliberately closed his eyes to what would otherwise have been obvious to him.

A finding beyond a reasonable doubt of a conscious purpose to avoid enlightenment would permit an inference of knowledge. Stated another way, a defendant's knowledge of a fact may be inferred from willful blindness to the existence of the fact.

It is entirely up to you as to whether you find any deliberate closing of the eyes and the inferences to be drawn from any such evidence. Although knowledge may be inferred from the defendant's behavior, you must still find that he had actual knowledge. However, a showing of mistake, negligence, carelessness, recklessness, or even gross negligence is not sufficient to support a finding of either willfulness or knowledge.

[JI-50]

The fact of knowledge may be established by direct or circumstantial evidence, just as any other fact in the case.

United States v. MacKenzie, 777 F.2d 811, 818 n.2 (2d Cir. 1985).

COMMENTS

1 The law on conscious avoidance, also termed "deliberate ignorance" or "willful blindness", varies from circuit to circuit. Several circuits have indicated that conscious avoidance instructions are rarely appropriate. See, e.g., United States v. Mapelli, 971 F.2d 284, 286 (9th Cir. 1992); United States v. Ojebode, 957 F.2d 1218, 1229 (5th Cir. 1992), cert. denied, 113 S. Ct. 1291 (1993); United States v. deFranciso-Lopez, 939 F.2d 1405, 1409 (10th Cir. 1991). Furthermore, several cases have found conscious avoidance instructions to constitute reversible error when the evidence did not support the giving of the instruction. See, e.g., United States v. Mapelli, 971 F.2d at 287; United States v. Barnhart, 979 F.2d 647, 652-53 (8th Cir. 1992). But see United States v. Stone, 9 F.3d 934 (11th Cir. 1993).

2 If the evidence does clearly support a conscious avoidance instruction and a decision is made to request one, care still must be taken regarding its wording. In particular, in a criminal tax case, no instruction should be requested that is inconsistent with the standard of willfulness set forth in Cheek v. United States, 498 U.S. 192, 201 (1991), that is, a voluntary, intentional violation of a known legal duty.

3 Unlike the instruction set forth above, which requires actual knowledge, the conscious avoidance instruction in United States v. Fingado, 934 F.2d 1163, 1166 (10th Cir. 1991), provided that the element of knowledge was established if the defendant was "aware of a high probability of the existence of the fact in question unless he actually believes it does not exist." Although we believe that, in the context of a defendant's conscious avoidance, this standard does satisfy the knowledge component of willfulness in criminal tax cases, we do not recommend its use (although, obviously, such an instruction may be used in the Tenth Circuit), because there is at least some risk that a court of appeals will hold that only a defendant's actual knowledge is sufficient.

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-20

When the Offense May Be Complete

If you find beyond a reasonable doubt from the evidence in the case that [a fraudulent return was filed][the defendant failed to file a return] and that this was done willfully as charged in Count _____ of the [indictment][information], then you may find that the offense charged was complete [when the fraudulent return was filed][on the date the return was due].

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions (5th Ed. 2000), Section 67.23 (modified)

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-21

No Need for Tax Assessment

If the defendant has incurred a tax liability, it exists from the date the return is due. A taxpayer's

[JI-51] tax liability exists independent of any administrative assessment. It is not necessary that a taxpayer receive a tax assessment before he is charged with a criminal violation of willful attempt to evade or defeat income tax.

Pattern Federal Jury Instructions for the Seventh Circuit, 7201[4] (1998 ed.)

Committee Comment:

This instruction should be given only if the contrary position is argued by the defendant.

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-22

Tax Evasion - Elements of the Offense (26 U.S.C. § 7201)

Count (No.) of the indictment charges the defendant (name) with income tax evasion, which is a violation of federal law.

In order to find the defendant guilty of this offense, you must find that the government proved each of the following three elements beyond a reasonable doubt:

First: That (name) had a substantial income tax deficiency;

Second: That (name) made an affirmative attempt to evade or defeat the (assessment) (payment) of the income tax; and

Third: That (name) acted willfully.

Model Criminal Jury Instructions for the Third Circuit, 6.26.7201 (2008 ed.)

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-23

Tax Evasion - Tax Deficiency Defined

The first element that the government must prove beyond a reasonable doubt is that (name) had a substantial tax deficiency due and owing, that is that (name) owed (a substantial federal income tax) (substantially more federal income tax than (he)(she) reported on (his)(her) tax return) (substantially more federal income tax than (he)(she) paid) for calendar year(s) (specify year(s)).

The government does not have to prove the exact amount that (name) owed or that (name) evaded all of the taxes charged in the indictment. The government is required to establish only that (name) owed a substantial amount of income tax during the year(s) in question, regardless whether it is more or less than the amount set forth in the indictment.

Model Criminal Jury Instructions for the Third Circuit, 6.26.7201-1 (2008 ed.)

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-24

Tax Evasion - Computation of Tax Deficiency

In order to prove a tax deficiency in this case, the government has introduced evidence that (name) received income that was omitted from (his)(her) tax return, that is, (describe the specific item of income or other evidence which is the basis for the allegation of evasion).

If you find, based on all the evidence, that the government has established beyond a reasonable doubt that (name) received income (in addition to what (he)(she) reported on

[JI-52] (his)(her) income tax return for the year in question), then you must decide whether there was a substantial tax due (in addition to what was shown to be due on the return)(in addition to what (name) paid), as a result of (name)’s (additional,) unreported income. In reaching your decision on this issue, you should consider, along with all the other evidence, the testimony introduced during the trial concerning the computation of (name)’s tax liability, when the alleged (additional) income was taken into account.

If you find, based on all the evidence, that the government has established beyond a reasonable doubt that (name) received (additional) income, and that there was a substantial tax due (in addition to what was shown to be due on (his)(her) income tax return) (in addition to what (name) paid), as a result of this (additional) income, then this first element has been satisfied.

Model Criminal Jury Instructions for the Third Circuit, 6.26.7201-2 (2008 ed.)

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-25

Tax Evasion - Affirmative Attempt to Evade or Defeat Defined

The second element that the government must prove beyond a reasonable doubt is that (name) made an affirmative attempt to evade or defeat a tax. The phrase “attempt to evade or defeat any tax” involves two things: first, the formation of an intent to evade or defeat a tax; and, second, willfully performing some act to accomplish the intent to evade or defeat that tax.

The government must first prove beyond a reasonable doubt that (name) knew and understood that during the calendar year(s) (specify year(s)), (he)(she) had a tax deficiency. The government then must prove beyond a reasonable doubt that (name) intended to evade or defeat the tax due and that (name) also willfully did some affirmative act to try to accomplish this intent to evade or defeat that tax.

An affirmative act is an act done to mislead the government with respect to the amount of taxes due and owing for the year(s) in question or to conceal income to avoid the assessment or payment of a tax. In this case, the government alleges in the indictment that (name) (describe specific affirmative act(s) alleged in the indictment). Even otherwise lawful or innocent conduct may constitute an affirmative act if you find that (name) acted with intent to conceal income or mislead the government. An act likely to mislead the government or conceal funds satisfies this element. [However, failing to file a federal tax return, standing alone, is not an affirmative attempt to evade or defeat a tax.]

[The government needs only to prove one act to satisfy this element of the offense, but you must unanimously agree on which (act was) (or acts were) committed.]

Model Criminal Jury Instructions for the Third Circuit, 6.26.7201-3 (2008 ed.)

GOVERNMENT PROPOSED JURY INST. NO. 26.7201-26

Tax Evasion - Willfully Defined

The third element the government must prove beyond a reasonable doubt is that (name) acted willfully. “Willfully” means a voluntary and intentional violation of a known legal duty. (Name)’s conduct was not willful if (he)(she) acted through negligence, mistake, accident, or due to a good faith misunderstanding of the requirements of the law. A good faith belief is one that is honestly and genuinely held.

[JI-53]

[This definition of “willfulness” applies to all of the tax offenses charged in this case.]

[However, mere disagreement with the law or belief that the tax laws are unconstitutional or otherwise invalid does not constitute a good faith misunderstanding of the requirements of the law; all persons have a duty to obey the law whether or not they agree with it.]

Model Criminal Jury Instructions for the Third Circuit, 6.26.7201-4 (2008 ed.)

26 U.S.C. § 7202

GOVERNMENT PROPOSED JURY INST. NO. 26.7202-1

Willful Failure To Truthfully Account For Or Pay Over Tax:

Nature Of The Offense Charges

Counts __ through __ of the Indictment charge that beginning on or about __________, and continuing up to and including on or about __________, in the _______ District of ______ and elsewhere, the defendant [NAME] deducted and collected federal income taxes and Federal Insurance Contributions Act (“FICA”) taxes from the wages of the employees of [BUSINESS]¹ but willfully failed to truthfully account for and pay over to the Internal Revenue Service all of the taxes withheld and due and owing to the United States on behalf of [BUSINESS] and its employees for the ________ quarter of [YEAR] and each of the four quarters of YEAR, as alleged in the Indictment.

In violation of Title 26, United States Code, Section 7202.

NOTE

¹ Where the taxpayer is a corporation, the instruction should be modified to follow the wording of the indictment.

GOVERNMENT PROPOSED JURY INST. NO. 26.7202-2

Statute Defining Offense -- 26 U.S.C. 7202

Section 7202 of the Internal Revenue Code provides, in part, as follows:

Any person required * * * to collect, account for, and pay over any tax imposed by this title who willfully fails to collect or truthfully account for and pay over such tax shall * * * be guilty [of an offense against the laws of the United States.]

26 U.S.C. § 7202

United States v. Thayer, 201 F.3d 214, 219 (3d Cir. 1999).

GOVERNMENT PROPOSED JURY INST. NO. 26.7202-3

Elements of the Offense

In order to establish the offense charged in the indictment, the government must prove the following three elements beyond a reasonable doubt:

First, the defendant was a person who had a duty to collect, truthfully account for, and pay over

[JI-54] federal income and social security taxes that the defendant was required to withhold from the wages of employees for the calendar quarter ending __________________;

Second, the defendant failed to collect or truthfully account for and pay over federal income and social security taxes that the defendant was required to withhold from the wages of employees for the calendar quarter ending __________________; and

Third, the defendant acted willfully.

26 U.S.C. § 7202

GOVERNMENT PROPOSED JURY INST. NO. 26.7202-4

Taxability of Wages

The law imposes an income tax, a social security tax, and a hospital insurance (Medicare) tax on the wages of individual employees equal to a percentage of the wages earned by the employee. To assist the government in collecting these taxes, the law requires every employer to deduct these taxes from wages paid to employees and hold them in trust for the United States. Furthermore, the withheld amounts must be deposited with an authorized financial institution or Federal Reserve Bank, at certain intervals that depend on the amounts withheld.

These “trust fund taxes” are for the exclusive use of the government and are not to be held by the employee or the employer.

The law also imposes excise taxes on every employer for social security and hospital insurance (Medicare) equal to a certain percentage of the wages paid to the employee by the employer.

26 U.S.C. § 3101(a) & (b) (imposing upon employee FICA taxes based on employee’s wages).

26 U.S.C. § 3102(a) (requiring employer to collect FICA taxes from employee wages at the time of compensation).

26 U.S.C. § 3111(a) & (b) (imposing upon employer excise taxes for social security and hospital insurance on the wages paid to employees).

26 U.S.C. § 3301 (imposing upon employer federal unemployment tax based on wages of employees).

26 U.S.C. § 3401(a).

26 U.S.C. § 3402(a) (requiring employer to withhold income taxes from wages at the time of compensation).

26 U.S.C. § 3403.

26 U.S.C. § 6302; 26 C.F.R. § 31.6302-1 (establishing the requirements for employers’ deposits of withheld income taxes and FICA taxes); 26 C.F.R. § 31.6011(a)-1 (a), -3(a) and -4(a); 26

C.F.R. § 6071(a)-1(a), and (4).

[JI-55]

Slodov v. United States, 436 U.S. 238, 243 (1978).

Brewery, Inc. v. United States, 33 F.3d 589, 591-92 (6th Cir. 1994) (financial difficulties can never constitute reasonable cause to excuse the penalties for non-payment of withholding taxes by an employer).

Gephart v. United States, 818 F.2d 469, 473 (6th Cir. 1987) (extended discussion of withholding tax requirements and responsible person test).

Jones v. United States, 60 F.3d 584, 587-88 (9th Cir. 1995).

Matter of American Biomaterials Corp., 954 F.2d 919, 920-22 (3d Cir. 1992).

Schon v. United States, 759 F.2d 614, 616 (7th Cir. 1985).

GOVERNMENT PROPOSED JURY INST. NO. 26.7202-5

Requirement To Report Withholding Of Income And Social Security Taxes

The law requires that employers file a Form 941, Employer’s Federal Quarterly Tax Return, each calendar quarter. The Form 941 reports the withholding of employee income, social security, and Medicare taxes. The employer must file this Form 941 on or before the last day of the first calendar month following the period for which it is made. Thus, for the quarter ending March 31, the Form 941 is due by April 30; for the quarter ending June 30, the Form 941 is due by July 31; for the quarter ending September 30, the Form 941 is due by October 31; and for the quarter ending December 31, the Form 941 is due by January 31.

Jones v. United States, 60 F.3d 584, 588 (9th Cir. 1995).

Matter of American Biomaterials Corp., 954 F.2d 919, 920 (3d Cir. 1992).

GOVERNMENT PROPOSED JURY INST. NO. 26.7202-6

Requirement To Pay Over Withheld Taxes To The United States

The law further requires that an employer pay over the withheld income and social security taxes, commonly known as “trust fund taxes,” to the United States before the Form 941 quarterly tax return is due. Once an employer has withheld an employee’s wages, the government deems the employee to have paid the withheld taxes.

26 U.S.C. § 3102(b) (establishing liability of employer for withheld FICA taxes and indemnifying him from employee lawsuit for said taxes).

Jones v. United States, 60 F.3d 584, 588 (9th Cir. 1995) (explaining when taxes required to be reported on each return are due and payable, and that deposits must be made periodically in federal depositories).

Matter of American Biomaterials Corp., 954 F.2d 919, 920 (3d Cir. 1992) (payroll tax returns and payment of employment taxes are due every calendar quarter).

Buffalow v. United States, 109 F.3d 570, 572 (9th Cir. 1997).

[JI-56]

GOVERNMENT PROPOSED JURY INST. NO. 26.7202-7

A Failure To Comply With Any One Of The

Three Duties Is A Violation Of The Statute

The defendant may be found guilty of violating Section 7202 if he [she] had a duty to (a) collect, (b) account for, or (c) pay over a tax and failed to comply with any one of the above-mentioned duties. In other words, the government need not prove that the defendant was responsible for all three duties. It is enough to prove that the defendant was responsible for one of the three duties. Likewise, the government need only prove that the defendant failed to comply with one of the three duties for which he [she] was responsible.

For example, a responsible person who collects taxes from his [her] employees and files Forms 941 with the Internal Revenue Service, but willfully fails to pay over the taxes to the United States, is in violation of 26 U.S.C. § 7202.

United States v. Gilbert, 266 F.3d 1180, 1185 (9th Cir. 2001) (holding that defendant was properly convicted for failing to pay over employment taxes he had collected from his employees).

United States v. Thayer, 201 F.3d 214, 220 (3d Cir. 1999) (noting that to interpret the statute in the conjunctive would lead to the incongruous result of criminalizing a failure to collect a tax, while permitting collecting the tax, reporting it to the IRS, and spending it for one’s “own selfish purposes”).

United States v. Evangelista, 122 F.3d 112, 120-22 (2d Cir. 1997).

GOVERNMENT PROPOSED JURY INST. NO. 26.7202-8

Wages - Defined

For purposes of determining withholding taxes, the law defines wages as all compensation “for services performed by an employee for his employer, including the cash value of all [compensation] paid by any [means] other than cash. . . .”

26 U.S.C. § 3401(a).

GOVERNMENT PROPOSED JURY INST. NO. 26.7202-9

Employer - Defined

An employer is the person for whom an individual performed a service, of whatever nature. If the person for whom the service was performed did not control the payment of wages, then the employer is the person who did have such control.

26 U.S.C. § 3401(d).

United States v. Thayer, 201 F.3d 214, 219 n. 6 (3d Cir. 1999).

[JI-57]

GOVERNMENT PROPOSED JURY INST. NO. 26.7202-10

Employee - Defined

An employee is defined according to the common sense use of the term, and includes an officer of a corporation.

26 U.S.C. § 3401(c).

United States v. Thayer, 201 F.3d 214, 219 n.6 (3d Cir. 1999).

GOVERNMENT PROPOSED JURY INST. NO. 26.7202-11

Person Required To Collect,

Account For, And Pay Over Tax

In order to be found guilty of the offenses charged in the information, the defendant must have been a person required to collect, truthfully account for, or pay over withheld federal income and Social Security (FICA) taxes.

An individual is such a person if he [she] was [an officer or employee of a corporation] or [a member or employee of a partnership] or [connected or associated with a business entity] in a manner such that he [she] had the authority and duty to assure that withholding taxes and social security taxes were collected, accounted for, or paid over and when.

Responsibility is a matter of status, duty, or authority, not knowledge. A responsible person need only have significant control over the company finances, not exclusive control. A person has significant control if he has the power and responsibility to determine who would get paid and who would not. An individual may be a responsible person regardless of whether he [she] does the actual mechanical work of keeping records, preparing returns, or writing checks.

26 U.S.C. § 6671(b) -- Definition of Term “Person.”

26 U.S.C. § 6672.

Slodov v. United States, 436 U.S. 238, 245 (1978).

Gephart v. United States, 818 F.2d 469, 473-74 (6th Cir. 1987) (factors in determining responsible person: (1) the duties of the officer as outlined by the corporate by-laws; (2) the ability of the individual to sign checks of the corporation; (3) the identity of the officers, directors, and shareholders of the corporation; (4) the identity of the individuals who hired and fired employees; and (5) the identity of the individual(s) who were in charge of the financial affairs of the corporation).

United States v. Jones, 33 F.3d 1137, 1139 (9th Cir. 1994).

United States v. Carrigan, 31 F.3d 130, 133 (3d Cir. 1994) (citing the above cases and factors).

Quattrone Accountants, Inc. v. IRS, 895 F.2d 921, 927 (3d Cir. 1990).

United States v. Vespe, 868 F.2d 1328, 1332 (3d Cir. 1989) (holding that a responsible person

need only have significant control over the company finances, not exclusive control).

Caterino v. United States, 794 F.2d 1, 6 n.1 (1st Cir. 1986), cert. denied, 480 U.S. 905 (1987)

[JI-58]

Godfrey v. United States, 748 F.2d 1568, 1574-75 (Fed. Cir. 1984)

Commonwealth Nat. Bank of Dallas v. United States, 665 F.2d 743, 750-51 (5th Cir. 1982)

United States v. McMullen, 516 F.2d 917, 920 (7th Cir.), cert. denied, 423 U.S. 915 (1975)

Monday v. United States, 421 F.2d 1210, 1214 (7th Cir.), cert. denied, 400 U.S. 821 (1970)

Pacific National Insurance v. United States, 422 F.2d 26, 30, 31 (9th Cir.), cert. denied, 398 U.S. 937 (1970)

D'Orazi v. United States, 71-1 U.S.T.C., para. 9270, p. 86,048; 27 A.F.T.R.2d 865, 868-869 (N.D. Cal. Nov. 5, 1970)

Datlof v. United States, 252 F. Supp. 11 (E.D. Pa.), aff'd, 370 F.2d 655 (3d Cir. 1966), cert. denied, 387 U.S. 906 (1967) (noting criteria for use in determining whether an individual is a responsible person: (a) contents of corporate by-laws; (b) ability to sign checks on the company's bank account; (c) identity of the individual who signed returns of the firm; (d) the payment of other creditors instead of the United States; (e) the identity of the officers, directors, and principal stockholders in the firm; (f) the identity of the individuals who hired and discharged employees, and (g) in general, the identity of the individual who was in control of the financial officers of the firm in question).

GOVERNMENT PROPOSED JURY INST. NO. 26.7202-12

More Than One Responsible Person

There may be more than one person connected with a [specify, corporation, partnership, or business entity] who is required to collect, account for, and pay over withholding taxes, but the existence of this same duty and responsibility in another individual would not necessarily relieve the defendant of his responsibility.

Godfrey v. United States, 748 F.2d 1568, 1575 (Fed. Cir. 1984)

Monday v. United States, 421 F.2d 1210, 1214 (7th Cir.), cert. denied, 400 U.S. 821 (1970)

White v. United States, 372 F.2d 513, 516-520 (Ct. Cl. 1967)

D'Orazi v. United States, 71-1 U.S.T.C. para. 9270, p. 86,048; 27 A.F.T.R.2d 865, 868 (N.D. Cal. Nov. 5, 1970)

GOVERNMENT PROPOSED JURY INST. NO. 26.7202-13

Willfulness

The word "willfully" means a voluntary, intentional violation of a known legal duty. In other words, the defendant must have acted voluntarily and intentionally and with the specific intent to do something he [she] knew the law prohibited; that is to say, with intent either to disobey or to disregard the law.

An omission or failure to act is "willfully" done, if done voluntarily and intentionally, and with the specific intent to fail to do something the defendant knows the law requires to be done; that is to say, with intent either to disobey or to disregard the law.

[JI-59]

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions (5th Ed. 2000), Section 67.20 (modified)

Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit, § 7.02 (2008 ed.) (Comment)

Manual of Model Jury Instructions for the Ninth Circuit, § 5.5 (2003 ed.) (Comment)

Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, Special Instr. 9 (2003 ed.) (modified)

Cheek v. United States, 498 U.S. 192, 201 (1991)

United States v. Pomponio, 429 U.S. 10, 12 (1976)

United States v. Bishop, 412 U.S. 346, 360 (1973)

COMMENTS

1 It is not necessary to define the term "willfully" in a tax case in terms of "bad purpose" or "evil motive." United States v. Pomponio, 429 U.S. 10, 12 (1976).

2 Willfulness has the same meaning in the felony and misdemeanor sections of the Internal Revenue Code. United States v. Pomponio, 429 U.S. 10, 12 (1976).

3 See also instructions on willfulness set forth as part of the instructions on 26 U.S.C. § 7201, supra.

4 In United States v. Easterday, No. 07-10347, 2008 WL 3876593, at *5 (9th Cir. Jun. 10, 2008), the Ninth Circuit held that, the government may establish willfulness under Section 7202 without proving that a defendant had the money to pay the taxes when due. The court concluded that its earlier decision in United States v. Poll, 521 F.2d 329 (9th Cir. 1975), to the extent it could be interpreted to the contrary, was inconsistent with Pomponio and was no longer binding circuit precedent.

26 U.S.C. § 7203

GOVERNMENT PROPOSED JURY INST. NO. 26.7203-1

The Nature of the Offense Charged

Count ____ of the indictment [information] charges that the defendant __________ was required by law to file a tax return for the tax year 20__, on or before the ____ day of ______, 20__, and that the defendant willfully failed to file such a return.

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 67.09 (5th ed. 2000)

[JI-60]

GOVERNMENT PROPOSED JURY INST. NO. 26.7203-2

Failure to File -- Statute

Section 7203 of Title 26 of the United States Code provides, in part, that:

Any person required * * * (by law or regulation) * * * to make a return * * * who willfully fails to * * * make such return * * * at the time or times required by law or regulations, * * * shall be guilty [of an offense against the laws of the United States].

26 U.S.C. § 7203.

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 67.10 (5th ed. 2000)

(modified).

GOVERNMENT PROPOSED JURY INST. NO. 26.7203-3

Failure To File -- The Essential Elements of the

Offense Charged

In order to sustain its burden of proof for the crime of willful failure to file a tax return as charged in Count ____ of the indictment [information], the government must prove the following three (3) essential elements beyond a reasonable doubt:

One: The defendant _________ was required by law or regulation to file a tax return concerning his [her] income for the taxable year ended December 31, 20__;

Two: The defendant failed to file such a return at the time required by law;¹ and

Three: In failing to file the tax return, the defendant __________ acted willfully.

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 67.11 (5th ed. 2000).

NOTE

¹ Returns of individuals are due April 15th of after the close of the tax year. Calendar year corporate returns are due on or before the 15th day of March following the close of the calendar year; fiscal year corporate returns are due on or before the 15th day of the third month following the close of the fiscal year. 26 U.S.C. § 6072(b). If April 15th or March 15th fell on a Saturday, Sunday, or legal holiday, the appropriate date in the indictment or information would be the next succeeding day that was not a Saturday, Sunday, or legal holiday. NOTE that pursuant to 26 U.S.C. 7503 the term “legal holiday” also includes any statewide holiday, and, accordingly, taxpayers who file at the Andover Service Center may get an extra day if the filing date falls on Patriots' Day in Massachusetts, which is the third Monday in April. ALSO NOTE that the date the return was due should include any authorized extensions of time for filing. 26 U.S.C. § 7503.

[JI-61]

GOVERNMENT PROPOSED JURY INST. NO. 26.7203-4

Failure to File –The Requirement to File a Return–Explained

A person is required to file a federal income tax return for any calendar year in which he [she] has gross income in excess of $______. Gross income means the total of all income received before making any deductions allowed by law.

Gross income includes the following: (1) compensation for services, including fees, commissions and similar items; (2) gross income derived from business; (3) gains derived from dealings in property; (4) interest; (5) rents; (6) royalties; (7) dividends; (8) alimony and separate maintenance payments; (9) annuities; (10) income from life insurance and endowment contracts; (11) pensions; (12) income from discharge of indebtedness; (13) distributive share of partnership gross income; (14) income in respect of a decedent; and (15) income from an interest in an estate or trust.

For the crime of willful failure to file a tax return, the government is not required to show that a tax is due and owing from the defendant. Nor is the government required to prove an intent to evade or defeat any taxes.

A person is required to file a return if his [her] gross income for the calendar year 20___ exceeded $_____, even though that person may be entitled to deductions from that income so that no tax is due.

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 67.12 (5th ed. 2000).

GOVERNMENT PROPOSED JURY INST. NO. 26.7203-5

Failure to Pay Tax or File Tax Return -- Offense Charged

The defendant is charged in Count _____ of the indictment with failure [to pay tax] [to file a tax return] ________ in violation of Section 7203 of Title 26 of the United States Code. In order for the defendant to be found guilty of that charge, the government must prove each of the following elements beyond a reasonable doubt:

First, the defendant [owed income tax] [had gross income of more than $_________] for the calendar year ending December 31, 20__.

Second, the defendant failed to [pay the tax] [file an income tax return] ________ by April 15, 20__;¹ and

Third, the defendant’s failure to [file an income tax return] [pay the tax] was willful and not the result of accident or negligence.

Manual of Model Criminal Jury Instructions for the Ninth Circuit, § 9.36 (2003 ed.) (modified).

NOTE

¹ If April 15th fell on a Saturday, Sunday, or legal holiday, the appropriate date in the indictment or information would be the next succeeding day that was not a Saturday, Sunday, or legal holiday. NOTE that pursuant to 26 U.S.C. 7503 the term “legal holiday” also includes any statewide holiday and, accordingly, taxpayers who file at the Andover Service Center may get an extra day if the filing date falls on Patriots' Day in Massachusetts which is the third Monday in

[JI-62] April. ALSO NOTE that the date the return was due should include any authorized extensions of time for filing. 26 U.S.C. § 7503.

GOVERNMENT PROPOSED JURY INST. NO. 26.7203-6

The Requirement to File a Tax Return

To sustain the charge of willful failure to file an [individual, partnership, corporate, trust] income [or other] tax return, the government must prove the following propositions:

First, the defendant was a person required by law to file an [individual, partnership, corporate, trust, or other] income [or other] tax return for [calendar or fiscal year in question];

Second, the defendant failed to file the return as required by law; and

Third, the defendant acted willfully.

If you find from your consideration of all the evidence as to a particular count that each of these propositions has been proved beyond a reasonable doubt, then you should find the defendant guilty of that count.

If, on the other hand, you find from your consideration of all the evidence as to a particular count that any of these propositions has not been proved beyond a reasonable doubt, then you should find the defendant not guilty of that count.

Federal Criminal Jury Instructions of the Seventh Circuit, No. 7203[1] (1998 ed.)

GOVERNMENT PROPOSED JURY INST. NO. 26.7203-7

When a Person is Obligated to File Return

A [single individual, married individual filing separately, etc.] [under] [over] 65 years old was required to make and file an individual income tax return if that individual had a gross income of $____ or more.

A married individual was required to file a federal income tax return if he/she had a separate gross income in excess of $_______ and a total gross income, when combined with that of his/her spouse, in excess of $_______ where [either] [both] [is] [are] [over] [under] 65 years old.

Any person who received more than $____ net income from business (Schedule C), was required to make and file an individual income tax return.

Federal Criminal Jury Instructions of the Seventh Circuit, No. 7203[4] (1998).

GOVERNMENT PROPOSED JURY INST. NO. 26.7203-8

When An Entity Is Obligated To File Return

I instruct you, as a matter of law, that for the years ___, a corporation [partnership, trust] was required to make and file a corporate [partnership, trust] income tax return, whether or not that corporation had income.

Federal Criminal Jury Instructions of the Seventh Circuit, No. 7203[5] (1998).

[JI-63]

GOVERNMENT PROPOSED JURY INST. NO. 26.7203-9

Time Required by Law

The second element of the offense of failure to file is that the defendant failed to file a timely income tax return for each of the years charged in the indictment [information].

The law provides that a return made on the basis of the calendar year shall be made on or before the 15th day of April, following the close of the calendar year, except that when April 15th falls on a Saturday, Sunday, or legal holiday, returns are due on the first day following April 15th which is not a Saturday, Sunday, or legal holiday.¹

If you find beyond a reasonable doubt that the defendant had the required gross income in [Year, e.g., 2002], then, as a matter of law, the defendant was required to file a tax return on or before [Date, e.g., April 15, 2003].

26 U.S.C. §§ 6072, 6081, 7503.

NOTE

¹ Returns made on the basis of a fiscal year are generally required to be filed on or before the 15th day of the fourth month following the close of the fiscal year. 26 U.S.C. § 6072(a). Calendar year corporate returns are due on or before the 15th day of March following the close of the calendar year; fiscal year corporate returns are due on or before the 15th day of the third month following the close of the fiscal year. 26 U.S.C. § 6072(b). If April 15th fell on a Saturday, Sunday, or legal holiday, the appropriate date in the indictment or information would be the next succeeding day that was not a Saturday, Sunday, or legal holiday. NOTE that pursuant to 26 U.S.C. 7503 the term “legal holiday” also includes any statewide holiday, and, accordingly, taxpayers who file at the Andover Service Center may get an extra day if the filing date falls on Patriots' Day in Massachusetts which is the third Monday in April. NOTE ALSO that the statutory due dates should be adjusted to account for any extensions of time for filing a return.

GOVERNMENT PROPOSED JURY INST. NO. 26.7203-10

Willfulness

The third and final element that the government must prove beyond a reasonable doubt in order to establish the offense of willful failure to file income tax returns is that the defendant's failure to file returns was "willful."

The word "willful" means a voluntary, intentional violation of a known legal duty. Willfulness, in the context of a failure to file an income tax return, simply means a voluntary, intentional violation of a known legal duty to make and file a return.

Cheek v. United States, 498 U.S. 192, 201-202 (1991).

United States v. Pomponio, 429 U.S. 10, 12 (1976).

COMMENTS

1 It is not necessary to define the term "willfully" in a tax case in terms of "bad purpose" or "evil motive." United States v. Pomponio, 429 U.S. 10, 12 (1976).

[JI-64]

2 Willfulness has the same meaning in the felony and misdemeanor sections of the Internal Revenue Code. United States v. Pomponio, 429 U.S. 10, 12 (1976).

3 See also instructions on willfulness set forth as a part of the instructions on 26 U.S.C. § 7201, supra.

GOVERNMENT PROPOSED JURY INST. NO. 26.7203-11

Failure To Pay -- Willfulness Defined

The specific intent of willfulness is an essential element of the offense of willful failure to pay one's income taxes. The term willfully used in connection with this offense means a voluntary, intentional violation of a known legal duty.

The failure to pay income taxes is willful if the defendant's failure to act was voluntary and purposeful and with the specific intent to fail to do what he [she] knew the law requires to be

done; that is to say, with intent to disobey or disregard the law that requires him [her] to pay federal income taxes.

On the other hand, the defendant's conduct is not willful if you find that he [she] failed to pay his [her] income taxes because of negligence (even gross negligence), inadvertence, accident, mistake, or reckless disregard for the requirements of the law, or due to his [her] good faith misunderstanding of the requirements of the law.¹

Cheek v. United States, 498 U.S. 192, 201 (1991).

United States v. Pomponio, 429 U.S. 10, 12 (1976).

United States v. Ausmus, 774 F.2d 722, 725-726 (6th Cir. 1985).

NOTE

¹ In light of the decision in Cheek v. United States, 498 U.S. 192 (1991), care should be taken to ensure that an instruction on the good faith defense does not suggest that a claimed good faith belief as to the requirements of the law or a claimed good faith mistake of law must be objectively reasonable to negate willfulness. However, instructions informing the jury that it may consider the reasonableness of a claimed belief in determining whether a defendant actually held the belief have been held to be consistent with Cheek. See, e.g., United States v. Grunewald, 987 F.2d 531, 536 (8th Cir. 1993).

GOVERNMENT PROPOSED JURY INST. NO. 26.7203-12

Good Faith Belief Defense -- Failure to File

(disagreement with law or belief law is unconstituional)

In the context of Section 7203, the element of willfulness is established by proving that the defendant had knowledge of his [her] legal obligation to file a tax return but, nevertheless, voluntarily and intentionally chose not to do what the law required.

Defendant's conduct is not "willful" if his [her] failure to file a tax return was due to negligence (even gross negligence), inadvertence, accident, mistake, or reckless disregard for the requirements of the law, or was the result of a good faith misunderstanding of the requirement of the law that he [she] file a return.

In this connection, it is for you to decide whether the defendant acted in good faith -- that is, whether he [she] sincerely misunderstood the requirements of the law -- or whether the defendant

[JI-65] knew that he [she] was required to file a return and did not do so.¹ This issue of intent, as to whether the defendant willfully failed to file an income tax return, is one which you must determine from a consideration of all the evidence in the case bearing on the defendant's state of mind.

I instruct you, however, that neither a defendant's disagreement with the law, nor his [her] own belief that the law is unconstitutional -- no matter how earnestly held -- constitutes a defense of good faith misunderstanding or mistake. It is the duty of all citizens to obey the law whether they agree with it or not.

The only purpose necessary for the government to prove in this case is the deliberate intention on the part of the defendant not to file tax returns, which he [she] knew he [she] was required to file, at the time he [she] was required by law to file them.

Cheek v. United States, 498 U.S. 192, 201 (1991).

United States v. Burton, 737 F.2d 439, 442 (5th Cir. 1984).

United States v. Koliboski, 732 F.2d 1328, 1331 (7th Cir. 1984).

United States v. Grumka, 728 F.2d 794, 797 (6th Cir. 1984).

United States v. Ness, 652 F.2d 890, 893 (9th Cir. 1981).

United States v. Miller, 634 F.2d 1134, 1135 (8th Cir. 1980).

United States v. Ware, 608 F.2d 400, 405 (10th Cir. 1979).

United States v. Edelson, 604 F.2d 232, 235 (3d Cir. 1979).

NOTE

¹ In light of the decision in Cheek v. United States, 498 U.S. 192 (1991), care should be taken to ensure that an instruction on the good faith defense does not suggest that a claimed good faith belief as to the requirements of the law or a claimed good faith mistake of law must be objectively reasonable to negate willfulness. However, an instruction informing the jury that it may consider the reasonableness of a claimed belief in determining whether a defendant actually held the belief has been held to be consistent with Cheek. See, e.g., United States v. Grunewald, 987 F.2d 531, 536 (8th Cir. 1993).

GOVERNMENT PROPOSED JURY INST. NO. 26.7203-13

Willfulness -- Good Faith Belief Defense

(claim inadequate records)

The third element which the government must prove beyond a reasonable doubt is that the defendant's failure to make the return in question was willful. The term “willful” for purposes of these instructions means a voluntary, intentional violation of a known legal duty.

The failure to make a timely return is willful if the defendant's failure to act was voluntary and purposeful and with the specific intent to fail to do that which he [she] knew the law required, that is to say, with the intent to disobey or disregard the law that requires him [her] to make a timely return.

The willfulness which the government must prove beyond a reasonable doubt does not require the government to prove that the defendant had a purpose to evade a tax or to defraud the government. The failure of a taxpayer to have or keep records adequate to permit him [her] or his [her] agents or employees to prepare accurate tax returns is no legal justification for not filing a timely income tax return. The only justification for not filing a tax return when the same is required by law to be filed is a good faith misunderstanding by the taxpayer as to his [her] legal obligation to file the return¹ or an accidental, inadvertent, careless, negligent, or even grossly negligent failure to file such return.

[JI-66]

Cheek v. United States, 498 U.S. 192, 201 (1991).

United States v. Wilson, 550 F.2d 259, 260 (5th Cir. 1977).

NOTE

¹ In light of the decision in Cheek v. United States, 498 U.S. 192 (1991), care should be taken to ensure that an instruction on the good faith defense does not suggest that a claimed good faith belief as to the requirements of the law or a claimed good faith mistake of law must be objectively reasonable to negate willfulness. However, an instruction informing the jury that it may consider the reasonableness of a claimed belief in determining whether a defendant actually held the belief has been held to be consistent with Cheek. See, e.g., United States v. Grunewald, 987 F.2d 531, 536 (8th Cir. 1993).

GOVERNMENT PROPOSED JURY INST. NO. 26.7203-14

Willfulness -- Failure to File/Good Faith Belief Defense

(disagreement with law)

Willfulness is an essential element of the crime of failure to file an income tax return. The term "willfully" used in connection with this offense means a voluntary, intentional violation of a known legal duty. Defendant's conduct is not "willful" if he [she] acted through negligence, even gross negligence, inadvertence, accident, or mistake, or due to a good faith misunderstanding of the requirements of the law.¹ However, mere disagreement with the law in and of itself does not constitute good faith misunderstanding of the requirements of the law, because it is the duty of all persons to obey the law whether or not they agree with it. Also, a person's belief that the tax laws violate his [her] constitutional rights does not constitute a good faith misunderstanding of the requirements of the law. Furthermore, a person's disagreement with the government's monetary system and policies does not constitute a good faith misunderstanding of the requirements of the law.

[Where appropriate, an explanation of the evidence introduced by the defendant and its place in the jury's deliberations may be included here. For example: The defendant has introduced evidence of advice he [she] heard given by speakers at meetings, tape recorded lectures, essays, pamphlets, court opinions, and other material that he [she] testified he [she] relied on in concluding that he [she] was not a person required to file income tax returns for the years ________ and _________.]

This evidence has been admitted solely for the purpose of aiding you in determining whether or not the defendant's failure to timely file tax returns for _______ and _______ was willful, and you should not consider it for any other purpose. You are not to consider this evidence as containing any law that you are to apply in reaching your verdicts, because all of the law applicable to this case is set forth in these instructions.

Cheek v. United States, 498 U.S. 192, 201 (1991).

United States v. Miller, 634 F.2d 1134, 1135 (8th Cir. 1980).

NOTE

¹ In light of the decision in Cheek v. United States, 498 U.S. 192 (1991), care should be taken to ensure that an instruction on the good faith defense does not suggest that a claimed good faith belief as to the requirements of the law or a claimed good faith mistake of law must be objectively reasonable to negate willfulness. However, an instruction informing the jury that it may consider the reasonableness of a claimed belief in determining whether a defendant actually

[JI-67] held the belief has been held to be consistent with Cheek. See, e.g., United States v. Grunewald, 987 F.2d 531, 536 (8th Cir. 1993).

GOVERNMENT PROPOSED JURY INST. NO. 26.7203-15

Willfulness -- Failure to File/Good Faith Belief Defense

(No income because paid in Federal Reserve Notes not in dollars)

Willfulness is an essential element of the crime of willful failure to file an income tax return. The word "willfully," used in connection with this offense, means a voluntary, intentional violation of a known legal duty, or otherwise stated, with the wrongful intent not to file a return that defendant was required by law to file and knew he [she] should have filed. There is no necessity that the government prove that the defendant had an intention to defraud it or to evade the payment of any taxes for the defendant's failure to file to be willful under this provision of the law.

Defendant's conduct is not "willful" if he [she] acted through negligence, even gross negligence, inadvertence, accident, or mistake, or due to a good faith misunderstanding of the requirements of the law.¹ It should be pointed out, however, that neither a defendant's disagreement with the law, nor his [her] belief that the law is unconstitutional -- no matter how earnestly held -- constitutes a defense of good faith misunderstanding or mistake. It is the duty of all citizens to obey the law whether they agree with it or not. The only purpose necessary for the government to prove in this case is the deliberate intention on the part of the defendant not to file tax returns, which he [she] knew he [she] was required to file, at the time he [she] was required by law to file them.

Cheek v. United States, 498 U.S. 192, 201 (1991)

United States v. Ware, 608 F.2d 400, 404-405 (10th Cir. 1979)

NOTE

¹ In light of the decision in Cheek v. United States, 498 U.S. 192 (1991), care should be taken to ensure that an instruction on the good faith defense does not suggest that a claimed good faith belief as to the requirements of the law or a claimed good faith mistake of law must be objectively reasonable to negate willfulness. However, an instruction informing the jury that it may consider the reasonableness of a claimed belief in determining whether a defendant actually held the belief has been held to be consistent with Cheek. See, e.g., United States v. Grunewald, 987 F.2d 531, 536 (8th Cir. 1993).

GOVERNMENT PROPOSED JURY INST. NO. 26.7203-16

Fifth Amendment Defense

The defendant has claimed that he [failed to file a tax return] [failed to provide information on his tax return] because of his Fifth Amendment right against self-incrimination. A valid exercise

of the Fifth Amendment privilege against self-incrimination is a complete defense to a section 7203 charge.¹ A taxpayer is not justified in [failing to file a tax return] [failing to answer questions contained on a tax return] unless the taxpayer shows substantial hazards of self-incrimination that are real and appreciable, and has cause to perceive such

danger.²

To support a claim of privilege against self-incrimination, the taxpayer cannot make a blanket Fifth Amendment claim concerning a generalized fear of criminal prosecution.³ Rather, the

[JI-68] taxpayer must assert the privilege specifically in response to particular questions and demonstrate real dangers of incrimination not remote and speculative possibilities.⁴ Thus, the Fifth Amendment privilege does not give a person the right to withhold required information when the information sought does not tend to incriminate him [her].

NOTES

¹ Garner v. United States, 424 U.S. 648, 660-62 (1976); United States v. Malquist, 791 F.2d 1399, 1401-02 (9th Cir.), cert. denied, 479 U.S. 954 (1986).

² Boday v. United States, 759 F.2d 1472, 1474 (9th Cir. 1985).

³ Boday v. United States, 759 F.2d 1472, 1474-75 (9th Cir. 1985).

⁴ Zicarelli v. New Jersey State Commission of Investigation, 406 U.S. 472, 478 (1972); accord, Heitman v. United States, 753 F.2d 33, 34-35 (6th Cir. 1984); United States v. Verkuilen, 690 F.2d 648, 654 (7th Cir. 1982) (taxpayer needed to show that his invocation of the privilege was based upon a colorable claim that he was involved in activities for which he could be criminally prosecuted and that such activities would be revealed if he supplied data on his [tax] form); United States v. Leidendeker, 779 F.2d 1417, 1418 (9th Cir. 1986) (privilege against self-incrimination does not justify a complete failure to file a return and may be asserted on a filed return only in response to specific questions on the return). See also United States v. Saussy, 802 F.2d 849, 855 (6th Cir. 1986).

GOVERNMENT PROPOSED JURY INST. NO. 26.7203-17

Tax Return Must Contain Sufficient Information

A tax form which does not contain sufficient financial information to enable the Internal Revenue Service to determine the individual’s tax liability is not a tax return within the meaning of the law.¹ Submitting a Form 1040 [or other tax return form] lacking such information does not constitute the filing of a tax return for purposes of the statute that is involved here. However, it is for you to determine whether the tax form filed by the defendant contained sufficient information to enable the Internal Revenue Service to determine defendant’s tax liability and so whether it constituted a tax return as I just defined that term.²

NOTES

¹ United States v. Upton, 799 F.2d 432, 433 (8th Cir. 1986); United States v. Malquist, 791 F.2d 1399, 1401 (9th Cir. 1986); United States v. Mosel, 738 F.2d 157, 158 (6th Cir. 1984); United States v. Vance, 730 F.2d 736, 738 (11th Cir. 1984); United States v. Stillhammer, 706 F.2d 1072, 1075 (10th Cir. 1983); United States v. Reed, 670 F.2d 622, 623-624 (5th Cir. 1982); United States v. Verkuilen, 690 F.2d 648, 654 (7th Cir. 1982); United States v. Edelson, 604 F.2d 232, 234 (3d 1979).

NOTE ALSO that there is a conflict in the circuits on whether a tax return that has all zeros for financial information constitutes a tax return for purposes of Section 7203. Compare United States v. Long, 618 F.2d 74 (9th Cir.1980) (defendant’s 1980 return was a valid return, even if erroneous, because a tax could be computed from the information contained on the form), with United States v. Mosel, 738 F.2d 157, 158 (6th Cir. 1984) (“[W]e align ourselves with those circuits which have specifically considered and rejected the Ninth Circuit's decision in Long.” (Citing United States v. Rickman, 638 F.2d 182 (10th Cir.1980); United States v. Moore, 627 F.2d 830 (7th Cir.1980), cert. denied, 450 U.S. 916 (1981); see also United States v. Smith, 618

[JI-69] F.2d 280 (5th Cir.), cert. denied, 449 U.S. 868 (1980); United States v. Grabinski, 558 F. Supp. 1324 (D. Minn.1983)).

² United States v. Saussy, 802 F.2d 849, 854-55 (6th Cir. 1986). See also United States v. Klee, 494 F.2d 394, 397 (9th Cir. 1974).

26 U.S.C. § 7205

GOVERNMENT PROPOSED JURY INST.NO. 26.7205-1

False Withholding Allowance Certificate (Form W-4)

Offense Charged -- False No. of Allowances

The [information] or [indictment] sets forth _____ counts or charges.

Count I charges that the defendant, [Defendant's Name], a resident of [City], [State], who during the calendar year 20__ was employed by [Name of Employer], and who, on or about the date of the commencement of employment by [Name of Employer], was required under the Internal Revenue laws to furnish [Name of Employer] with a signed Employee's Withholding Allowance Certificate, Form W-4, setting forth the number of withholding allowances claimed, did willfully supply a false and fraudulent Employee's Withholding Allowance Certificate, Form W-4, to [Name of Employer], on which he [she] claimed ____ withholding allowances, whereas, as the defendant then and there well knew and believed, he [she] [was not entitled to claim ____ withholding allowances]¹ or [was entitled to claim only ___ withholding allowances].¹

Count II charges that * * * .

All in violation of Title 26, United States Code, Section 7205.

26 U.S.C. § 7205

NOTE

¹ The government does not have to prove the number of [allowances] [exemptions] to which the defendant was entitled. United States v. McDonough, 603 F.2d 19, 24 (7th Cir. 1979).

GOVERNMENT PROPOSED JURY INST. NO. 26.7205-2

Statute Defining Offense

The Internal Revenue Code provides, in part, as follows:

On or before the date of the commencement of employment with an employer, the employee shall furnish the employer with a signed withholding exemption certificate relating to the number of withholding exemptions which he claims, which shall in no event exceed the number to which he is entitled.

26 U.S.C. § 3402(f)(2)(A)

Section 7205 of the Internal Revenue Code provides, in part, as follows:

Any individual required to supply information to his employer under section 3402 who willfully supplies false or fraudulent information, or who willfully fails to supply information thereunder

[JI-70] which would require an increase in the tax to be withheld under section 3402, shall * * * [be guilty of an offense against the laws of the United States].

26 U.S.C. § 7205

GOVERNMENT PROPOSED JURY INST. NO. 26.7205-3

Elements of Offense

To establish a violation of Section 7205 of the Internal Revenue Code, the government must prove beyond a reasonable doubt that:

1. The defendant was required to furnish an employer with a signed withholding exemption certificate, Form W-4, certifying information as to the defendant's tax liability and withholding tax allowances;

2. The defendant did furnish his [her] employer with a signed withholding exemption certificate, Form W-4 [or The defendant failed to supply his [her] employer with a signed withholding exemption certificate];

3. The information supplied by the defendant was false or fraudulent; and

4. The defendant acted willfully.

26 U.S.C. § 7205

United States v. Bass, 784 F.2d 1282, 1284 (5th Cir. 1986)

United States v. Herzog, 632 F.2d 469, 471-472 (5th Cir. 1980)

United States v. Olson, 576 F.2d 1267, 1271 (8th Cir. 1978)

GOVERNMENT PROPOSED JURY INST. NO. 26.7205-4

Withholding Allowances

The law requires an employee to complete an Employee's Withholding Allowance Certificate, Form W-4, so that an employer can withhold federal income tax from the employee's pay.

An Employee's Withholding Allowance Certificate, Form W-4, requires an employee to certify the total number of allowances claimed. For purposes of this case you are instructed that if you find that the defendant was an employee, then the defendant was entitled to claim [set forth applicable allowances based on the evidence, e.g., one allowance for himself [herself], one allowance for his [her] spouse, one allowance for each dependent, etc.]¹

26 U.S.C. § 3402(f)

26 C.F.R. § 31.3402(f)(1)-1 (2007)

NOTE

¹ Reference should be made to 26 C.F.R. § 3402(f)(1) and a determination made as to which withholding allowances are applicable based on the evidence in the case.

[JI-71]

GOVERNMENT PROPOSED JURY INST. NO. 26.7205-5

Exempt Status

An exemption from withholding may be claimed by an employee on his [her] Employee's Withholding Allowance Certificate, Form W-4, only if the employee:

(1) incurred no liability for income tax for the preceding taxable year; and

(2) anticipates that he [she] will incur no liability for income tax for the current taxable year.

26 U.S.C. § 3402(n)

26 C.F.R. § 31.3402(n)-1 (2007)

GOVERNMENT PROPOSED JURY INST. NO. 26.7205-6

Withholding Allowances (Exempt Status)

Withholding Allowances. The indictment charges that the defendant submitted false and fraudulent Employee's Withholding Allowance Certificates, Forms W-4, to his [her] employer. In this regard, I charge you that all employees are required by law and regulations to furnish their employer with a signed Employee's Withholding Allowance Certificate, Form W-4, on or before the date of commencement of employment with that employer, indicating the number of withholding allowances which the employee claims. The number of allowances claimed on the Form W-4 may not exceed the number to which the individual is entitled.

A Form W-4 is false and fraudulent if it was used to supply false or fraudulent information regarding the appropriate number of allowances. Thus, if you find that the defendant submitted to his [her] employer a Form W-4 claiming more allowances than those to which the defendant was entitled by law, then you may find that the defendant has submitted a false and fraudulent Form W-4.

Exempt Status. Under some circumstances, an individual is entitled to claim total exemption from the withholding of federal taxes.

To properly claim exempt status, however, the individual must certify in a Form W-4 that he or she did not owe federal income tax for the preceding tax year and that he or she does not expect to owe any federal income tax for the current tax year. Thus, if you find that the defendant did owe income tax for the calendar year preceding the year in which the defendant filed a Form W-4 claiming exempt status or that the defendant did expect to owe an income tax for the calendar year in which the defendant filed the Form W-4 claiming exempt status, then you may find that the Form W-4 on which the defendant claimed exempt status was false and fraudulent.

26 U.S.C. §§ 3402, 7205

United States v. Grumka, 728 F.2d 794, 797 (6th Cir. 1984)

United States v. Annunziato, 643 F.2d 676, 677 (9th Cir. 1981)

United States v. Shields, 642 F.2d 230, 231 (8th Cir. 1981)

United States v. Herzog, 632 F.2d 469, 473 (5th Cir. 1980)

[JI-72]

GOVERNMENT PROPOSED JURY INST. NO. 26.7205-7

False or Fraudulent

The government charges that the information supplied by the defendant in the Form W-4 filed with his [her] employer was false and fraudulent in that the defendant reported that he [she] was entitled to [exempt status] or [number claimed] allowances.

Information is false if it was untrue when made and was then known to be untrue by the person then supplying the information or causing such information to be supplied. Information is fraudulent if it is supplied or caused to be supplied with the intent to deceive.

It is sufficient if the evidence establishes beyond a reasonable doubt that the information supplied by the defendant in the Form W-4 furnished to his [her] employer was either false or fraudulent. The evidence need not establish that it was both false and fraudulent.

1A Kevin F. O’Malley et al., Federal Jury Practice and Instructions, §§ 16.06 (False -- Defined), 16.08 (Fraudulent -- Defined) (6th ed. 2008).

2 Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 30.05 (False, fictitious, or fraudulent -- Defined) (5th ed. 2000).

United States v. Buttorff, 572 F.2d 619, 625 (8th Cir.), cert. denied, 437 U.S. 906 (1978)

United States v. Peterson, 548 F.2d 279, 280 (9th Cir. 1977)

United States v. Smith, 484 F.2d 8, 10 (10th Cir. 1973), cert. denied, 415 U.S. 978 (1974)

GOVERNMENT PROPOSED JURY INST. NO. 26.7205-8

Willfulness -- Section 7205

To find the defendant guilty of violating Section 7205, you must not only find that the defendant did the acts of which the defendant stands accused, but you must also find that the defendant did the acts willfully.

The word "willfully," as used in this statute, means a voluntary, intentional violation of a known legal duty. In other words, the defendant must have acted voluntarily and intentionally and with the specific intent to do something he [she] knew the law prohibits, that is to say, with intent either to disobey or to disregard the law.

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 67.20 (5th ed. 2000).

Cheek v. United States, 498 U.S. 192, 201 (1991)

United States v. Bishop, 412 U.S. 346, 360 (1973)

United States v. Pomponio, 429 U.S. 10, 12 (1976)

COMMENTS

1 It is not necessary to define the term "willfully" in a tax case in terms of "bad purpose" or "evil motive." United States v. Pomponio, 429 U.S. 10, 12 (1976). See also 2008 Criminal Tax Manual Section 8.08[1], supra.

2 Willfulness has the same meaning in the felony and misdemeanor sections of the Internal Revenue Code. United States v. Pomponio, 429 U.S. 10, 12 (1976).

[JI-73]

3 See also instructions on willfulness set forth as a part of the instructions on 26 U.S.C. § 7201, supra.

GOVERNMENT PROPOSED JURY INST. NO. 26.7205-9

Knowledge Of Contents Of Form W-4

If you find beyond a reasonable doubt from the evidence in the case that the defendant signed and submitted a Form W-4, then you may draw the inference and find that the defendant had knowledge of the contents of the Form W-4.

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 67.18 (5th ed. 2000).

United States v. Ruffin, 575 F.2d 346, 354 (2d Cir. 1978)

COMMENT

1 Be careful that the language in the instruction does not go beyond allowing a permissible inference. The jury should not be instructed that it can presume from the defendant’s signature on the Form W-4 that the defendant knew of the contents of the Form W-4. See United States v. Trevino, 419 F.3d 896, 902 (9th Cir. 2005).

26 U.S.C. § 7206(1)

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(1)-1

Offense Charged

The indictment sets forth ____ counts or charges.

Count I charges that on or about the ____ day of _____, 20__ , in the _____________

District of _______ , the defendant, _____________, a resident of [City], [State],

did willfully make and subscribe [Describe Document], which was verified by a written declaration that it was made under the penalties of perjury and was filed with the Director, Internal Revenue Service Center, at [City], [State], which said [Describe Document] he [she] did not believe to be true and correct as to every material matter in that the [Describe Document and False Fact(s)], whereas, he [she] then and there well knew and believed, [Describe Correct Fact(s)].

Count II charges that * * *.

All in violation of Title 26, United States Code, Section 7206(1).

26 U.S.C. § 7206(1)

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 67.13 (5th ed. 2000).

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(1)-2

False Return -- Statute Involved

Section 7206(1) of the Internal Revenue Code provides, in part, as follows:

Any person who -- * * * [w]illfully makes and subscribes any return, statement, or other

[JI-74] document, which contains or is verified by a written declaration that it is made under the penalties of perjury, and which he does not believe to be true and correct as to every material matter * * * shall be guilty [of an offense against the laws of the United States].

26 U.S.C. § 7206(1)

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 67.14 (5th ed. 2000).

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(1)-3

Elements of Section 7206(1)

(False Income Tax Return)

The gist of the offense[s] charged in Count[s] ____________ [and _____________] of the indictment is the willful making and subscribing by the defendant[s] of his [her] [their] personal income tax return[s] for the year[s] _____________ [and ________________], which contains [contain] a written declaration that it [they] was [were] made under the penalties of perjury, and which the defendant did not believe to be true and correct as to every material matter. [Each year, that is _____________and ________________, is to be considered separately by you.]

To prove a violation, the government must establish each of the following four (4) elements beyond a reasonable doubt:

1. The defendant made, or caused to be made, and signed (subscribed) an income tax return for the year in question that was false as to a material matter.

2. The return contained a written declaration that it was made under the penalties of perjury.

3. The defendant did not believe the return to be true and correct as to the material matter[s] charged in the indictment; 1 and

4. The defendant made, or caused to be made, and signed (subscribed) the return willfully.

26 U.S.C. § 7206(1)

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 67.15 (5th ed. 2000) (modified).

United States v. Bishop, 412 U.S. 346, 350, 359 (1973)

United States v. Pomponio, 429 U.S. 10 (1976)

United States v. Griffin, 524 F.3d 71, 75-76 (1st Cir. 2008)

United States v. Monteiro, 871 F.2d 204, 208 (1st Cir. 1989)

United States v. Drape, 668 F.2d 22, 25 (1st Cir. 1982)

United States v. Aramony, 88 F.3d 1369, 1382 (4th Cir. 1996)

United States v. Clayton, 506 F.3d 405, 410, 413 (5th Cir. 2007) (per curiam), cert. denied, 128 S.Ct. 1874 (2008)

Hoover v. United States, 358 F.2d 87, 88 (5th Cir. 1966)

United States v. Sassak, 881 F.2d 276, 278 (6th Cir. 1989)

United States v. Duncan, 850 F.2d 1104 (6th Cir. 1988)

United States v. Gurtunca, 836 F.2d 283, 287 (7th Cir. 1987)

United States v. Whyte, 699 F.2d 375, 381 (7th Cir. 1983)

United States v. Oggoian, 678 F.2d 671, 673 (7th Cir. 1982)

United States v. Hedman, 630 F.2d 1184, 1196 (7th Cir. 1980)

United States v. Holland, 880 F.2d 1091, 1096 (9th Cir. 1989)

United States v. Marabelles, 724 F.2d 1374, 1380 (9th Cir. 1984)

[JI-75]

United States v. Brooksby, 668 F.2d 1102 (9th Cir. 1982)

United States v. Owen, 15 F.3d 1528, 1532 (10th Cir. 1994)

United States v. Kaiser, 893 F.2d 1300, 1305 (11th Cir. 1990)

NOTE

1 It has been held that an instruction can specify the material matters charged in the indictment. Thus, in United States v. Oggoian, 678 F.2d 671, 673 (7th Cir. 1982), the court upheld the following instruction given by the trial court:

The second element that has to be proved is that the tax return was false as to a material matter. That is, it contained an understatement of adjusted gross income.

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(1)-4

False Return -- Essential Elements

(False Income Tax Return)

Now, to prove the charge that is contained in each of these [] counts of the indictment, the government must establish each of four propositions beyond a reasonable doubt.

The first one is that the defendant made, or caused to be made, and that the defendant signed, the federal tax return for the year in question, an income tax return.

The second element that has to be proved is that the tax return was false as to a material matter.

Third, that when the defendant made, or caused to be made, and when the defendant signed, the return, he did so willfully and knowingly.

Fourth, that the return contained a written declaration that it was made under the penalties of perjury.

It is not enough for the government to prove simply that the tax return is erroneous. If you find from your consideration of all the evidence, that each of the four numbered propositions has been proved beyond a reasonable doubt as to any count of the indictment, then you should find the defendant guilty of that count.

If, on the other hand, you find from your consideration of all the evidence that any of those propositions has not been proved beyond a reasonable doubt as to any count of the indictment, then you should find the defendant not guilty as to that count.

COMMENT

The above instruction is quoted with approval in United States v. Oggoian, 678 F.2d 671, 673 (7th Cir. 1982), with the court "finding that the charge as a whole covered the essential elements of the offenses [under 26 U.S.C. § 7206(1)], including knowledge of the appellant that the returns were false as to material matters." Oggoian, 678 F.2d at 674.

See also Sansone v. United States, 380 U.S. 343, 352 (1965)

[JI-76]

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(1)-5

False Return - Essential Elements

(False Income Tax Return)

The defendant is charged in [Count ___ of] the indictment with filing a false tax return in violation of Section 7206(1) of Title 26 of the United States Code. In order for the defendant to be found guilty of that charge, the government must prove each of the following elements beyond a reasonable doubt:

First, the defendant made and signed a tax return for the year [year] that he knew contained false information as to a material matter;

Second, the return contained a written declaration that it was being signed subject to the penalties of perjury; and

Third, in filing the false tax return, the defendant acted willfully.

Manual of Model Criminal Jury Instructions for the Ninth Circuit, No. 9.37 (2003 ed.)

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(1)-6

False Return -- Essential Elements

(False Income Tax Return)

To sustain the charge that the defendant willfully made [and caused to be made] a false

individual [corporate, partnership, trust] income tax return, the government must prove the

following propositions:

First, the defendant made [or caused to be made] the income tax return;

Second, the defendant signed the income tax return, which contained a written declaration

that it was made under penalties of perjury;

Third, the defendant filed the income tax return [or caused the income tax return to be filed] with the Internal Revenue Service;

Fourth, the income tax return was false as to a material matter, as charged in the count; and

Fifth, when the defendant made and signed the tax return, the defendant did so willfully and did not believe that the tax return was true, correct and complete as to every material matter.

If you find from your consideration of all the evidence that each of these propositions has

been proved beyond a reasonable doubt as to the particular count, then you should find the

defendant guilty of the particular count.

If, on the other hand, you find from your consideration of all the evidence that any of these propositions has not been proved beyond a reasonable doubt as to the particular count, then you should find the defendant not guilty of that particular count.

[JI-77]

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(1)-7

Subscribed -- Defined

Proof of Signing of Return

The word "subscribe" simply means the signing of one's name to a document.

"The fact that an individual's name is signed to a return * * * shall be prima facie evidence for all purposes that the return * * * was actually signed by him," which is to say that, unless and until outweighed by evidence in the case which leads you to a different or contrary conclusion, you may find that a filed tax return was in fact signed by the person whose name appears to be signed to it.

26 U.S.C. § 6064

Cashio v. United States, 420 F.2d 1132, 1135 (5th Cir. 1969)

United States v. Wainwright, 413 F.2d 796, 802 n.3 (10th Cir. 1969)

United States v. Carrodeguas, 747 F.2d 1390, 1396 (11th Cir. 1982)

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(1)-8

Subscribed-Defined

Section 6064 of Title 26 of the United States Code provides, in part, that:

The fact that an individual's name is signed to a return … shall be prima facie evidence for all purposes that the return … was actually signed by him.

In other words, you may infer and find that a tax return was, in fact, signed by the person whose name appears to be signed to it. You are not required, however, to accept any such inference or to make any such finding.

If you find beyond a reasonable doubt from the evidence in the case that Defendant signed the tax return in question, then you may also draw the inference and may also find, but are not required to find, that Defendant knew of the contents of the return that [he] [she] signed.

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 67.22 (5th. ed. 2000).

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(1)-9

Subscribed-Defined

In general, the word "subscribe" simply means to sign one's name to a document. In the case of an electronically filed return, an electronic signature made in accordance with guidance published by the Internal Revenue Service is for all purposes the same as a written signature on a paper tax return.¹

The fact that an individual's name is signed to a return means that, unless and until outweighed by evidence in the case which leads you to a different or contrary conclusion, you may find that a filed tax return was in fact signed by the person whose name appears to be signed to it. If you find proof beyond a reasonable doubt that the defendant had signed [his] [her] tax return, that is evidence from which you may, but are not required to, find or infer that the defendant had knowledge of the contents of the return.

[JI-78]

26 U.S.C. 6061(b)

Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit, Instructions 6.26.7201 & 6.26.7206 (2007 ed.) (modified).

NOTE

¹ The prosecutor should also propose an instruction setting forth the IRS guidance in effect at the time of the filing of the electronic return at issue.

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(1)-10

Materiality

A statement or representation is "material" if it has a natural tendency to influence or is capable of influencing a decision or action of [the Internal Revenue Service].

To be "material" it is not necessary that the statement or representation, in fact, influence or deceive.

1A Kevin F. O’Malley et al., Federal Jury Practice And Instructions, § 16.11 (6th ed. 2008).

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(1)-11

Omission of Material Matter

An income tax return may be materially false not only because of a misstatement of a material matter, but also because of an omission of a material matter.

United States v. Griffin, 524 F.3d 71, 76 (1st Cir. 2008)

Siravo v. United States, 377 F.2d 469, 472 (1st Cir. 1967)

United States v. Taylor, 574 F.2d 232, 235-236 (5th Cir. 1978)

United States v. Cohen, 544 F.2d 781, 783 (5th Cir. 1977)

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(1)-12

Proof Of One False Material Item Enough

The indictment charges in Count ______ that the defendant's income tax return for the year ______ was false in [e.g., three] material respects, i.e., [state false material matters, e.g., understatement of potential fees, understatement of interest income, and understatement of capital gains].

You are instructed that it is sufficient if you find that the government has established beyond a reasonable doubt that any one of these items was both material and falsely reported on the defendant's return. In other words, the government does not have to prove that all of the items were false and material: proof of the falsity and materiality of a single item is sufficient. You must unanimously agree on that item. On the other hand, if you unanimously find that none of these items was material and falsely reported on the defendant's return, then you should acquit the defendant.

Griffin v. United States, 502 U.S. 46, 49 (1991)

Silverstein v. United States, 377 F.2d 269, 270 n.3 (1st Cir. 1967)

[JI-79]

United States v. Null, 415 F.2d 1178, 1181 (4th Cir. 1969)

United States v. Rayor, 204 F. Supp. 486, 491 (S.D. Cal. 1962)

See United States v. Gaudin, 515 U.S. 506, 510 (1995) (holding that "materiality" is a question for the jury, not the judge, to decide); Neder v. United States, 527 U.S. 1, 15 (1999).

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(1)-13

Proof of Tax Deficiency Not Required

You are instructed that in proving that the defendant violated Section 7206(1), the government does not have to prove that there was a tax due and owing for the year(s) in issue. Whether the government has or has not suffered a pecuniary or monetary loss as a result of the alleged return is not an element of Section 7206(1).

2B Kevin F. O'Malley et al., Federal Jury Practice and Instructions, § 56.12 (5th ed. 2000)

Silverstein v. United States, 377 F.2d 269, 270 (1st Cir. 1967)

United States v. Olgin, 745 F.2d 263, 272 (3d Cir. 1984)

United States v. Johnson, 558 F.2d 744, 747 (5th Cir. 1977)

United States v. Ballard, 535 F.2d 400, 404 (8th Cir.) cert. denied, 429 U.S. 918 (1976)

United States v. Marashi, 913 F.2d 724 (9th Cir. 1990)

United States v. Marabelles, 724 F.2d 1374, 1380 (9th Cir. 1984)

United States v. Carter, 721 F.2d 1514, 1539 (11th Cir.), cert. denied, 469 U.S. 819 (1984)

See also Sansone v. United States, 380 U.S. 343, 352 (1965) (addressing 26 U.S.C. § 7207, which has same materiality language as § 7206(1)).

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(1)-14

Willfulness -- Section 7206(1)

To find the defendant guilty of violating Section 7206(1), you must not only find that he [she] did the acts of which he [she] stands charged, but you must also find that the acts were done willfully by the defendant.

The word "willfully," as used in this statute, means a voluntary, intentional violation of a known legal duty. In other words, the defendant must have acted voluntarily and intentionally and with the specific intent to do something he [she] knew the law prohibited, that is to say, with intent either to disobey or to disregard the law.

In determining the issue of willfulness, you are entitled to consider anything done or omitted to be done by the defendant and all facts and circumstances in evidence that may aid in the determination of his [her] state of mind. It is obviously impossible to ascertain or prove directly the operations of the defendant's mind; but a careful and intelligent consideration of the facts and circumstances shown by the evidence in any case may enable one to infer what another's intentions were in doing or not doing things. With the knowledge of definite acts, we may draw definite logical conclusions.

We are, in our daily affairs, continuously called upon to decide from the acts of others what their intentions or purposes are, and experience has taught us that frequently actions speak more clearly than spoken or written words. To this extent, you must rely in part on circumstantial evidence in determining the guilt or innocence of the defendant.

[JI-80]

In this regard, there are certain matters that you may consider as pointing to willfulness, if you find such matters to exist in this case. By way of illustration only, willfulness may be inferred from conduct such as [set forth examples appropriate under the evidence, e.g., making false entries or alteration, or false invoices or documents, concealing assets or covering up sources of income, handling one's affairs to avoid making the records usual in transactions of the kind] and any conduct the likely effect of which would be to mislead or to conceal.

I give you these instances simply to illustrate the type of conduct you may consider in determining the issue of willfulness. I do not by this instruction mean to imply that the defendant did engage in any such conduct. It is for you as the trier of the facts to make this determination as to whether the defendant did or did not.

2B Kevin F. O'Malley et al., Federal Jury Practice and Instructions, § 67.20 (5th ed. 2000)

Third Circuit Model Criminal Jury Instructions, § 6.26.7201-4 (2008 ed.)

Fifth Circuit Criminal Jury Instructions, § 2.96 (note) (2001 ed.)

Criminal Federal Jury Instructions of the Seventh Circuit, 26 U.S.C. § 7206 (Definition of Willfully), at 357 (1998)

Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit, §§ 6.26.7206, 7.02 (committee comments) (2008 ed.)

Manual of Model Jury Instructions for the Ninth Circuit, § 9.35 (comment) (2003 ed.)

Tenth Circuit Criminal Jury Instructions, § 2.93 (2005 ed.)

Cheek v. United States, 498 U.S. 192, 201 (1991)

United States v. Pomponio, 429 U.S. 10, 12 (1976)

United States v. Bishop, 412 U.S. 346, 360 (1973)

Spies v. United States, 317 U.S. 492, 499 (1943)

United States v. Ashfield, 735 F.2d 101, 105 (3d Cir. 1984)

United States v. Conforte, 624 F.2d 869, 875 (9th Cir. 1980)

United States v. Ramsdell, 450 F.2d 130, 133-34 (10th Cir. 1971)

United States v. Spinelli, 443 F.2d 2, 3 (9th Cir. 1971)

COMMENTS

2 Willfulness has the same meaning in the felony and misdemeanor sections of the Internal Revenue Code. United States v. Pomponio, 429 U.S. 10, 12 (1976).

3 See also instructions on willfulness set forth as a part of the instructions on 26 U.S.C. § 7201, supra.

[JI-81]

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(1)-15

Willfully -- Good Faith Defense

The word "willfully," as that term has been used from time to time in these instructions, means a voluntary, intentional violation of a known legal duty. Mere negligence, even gross negligence, accident, or inadvertence is not sufficient to establish willfulness.

[If a person in good faith believes that an income tax return, as prepared by him [her], truthfully reports the taxable income and allowable deductions of the taxpayer under the internal revenue laws, he [she]cannot be guilty of "willfully" making or subscribing a false or fraudulent return.]¹

Cheek v. United States, 498 U.S. 192, 201 (1991)

United States v. Garcia, 762 F.2d 1222, 1224 (5th Cir. 1985)

NOTE

¹ The second paragraph of this instruction is not appropriate unless there is evidence of a good faith belief defense. In light of the decision in Cheek v. United States, 498 U.S. 192 (1991), care should be taken to ensure that an instruction on the good faith defense does not suggest that a claimed good faith belief as to the requirements of the law or a claimed good faith mistake of law must be objectively reasonable to negate willfulness. However, instructions informing the jury that it may consider the reasonableness of a claimed belief in determining whether a defendant actually held the belief have been held to be consistent with Cheek. See, e.g., United States v. Grunewald, 987 F.2d 531, 536 (8th Cir. 1993).

COMMENTS

1 It is not necessary to define the term "willfully" in a tax case in terms of "bad purpose" or "evil motive" in a tax case. United States v. Pomponio, 429 U.S. 10, 12 (1976).

2 Willfulness has the same meaning in the felony and misdemeanor sections of the Internal Revenue Code. United States v. Pomponio, 429 U.S. 10, 12 (1976).

3 See also instructions on good faith belief defense set forth as a part of the instructions on 26 U.S.C. § 7203, supra.

26 U.S.C. § 7206(2)

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(2)-1

Preparing False Return -- Offense Charged

The indictment sets forth ___ counts or charges.

Count I charges that on or about ____________, in the District of _______________, the defendant, _________________________, did willfully aid and assist in, and procure, counsel, and advise the preparation and presentation to the Internal Revenue Service of an income tax return¹ [of one [Taxpayer's Name]]² for the calendar year _________________ that was false and fraudulent as to a material matter in that in said return¹ it was represented that the said taxpayer² was entitled under the provisions of the internal revenue laws [to claim deductions³ in the total sum of $______________ ;] whereas, as the defendant then and there well knew and believed,

[JI-82] the [total deductions]³ which the said taxpayer² was lawfully entitled to claim for said calendar year were [in the total sum of not more than $__________________ .]

Count II charges * * *.

All in violation of Title 26, United States Code, Section 7206(2).

26 U.S.C. § 7206(2)

See United States v. Gaudin, 515 U.S. 506, 510 (1995) (holding that "materiality" is a question for the jury, not the judge, to decide), and Neder v. United States, 527 U.S. 1, 15 (1999).

NOTES

¹ Section 7206(2) is not limited to returns but can apply to an "affidavit, claim, or other document." 26 U.S.C. § 7206(2). Where the offense involves such a document, the instruction should be modified accordingly.

² The above instruction encompasses a situation in which the defendant is not the taxpayer but is, e.g., a return preparer. If the defendant is the taxpayer, then the instruction should be modified by deleting the phrase "of one " and by substituting the "defendant" in those portions of the instruction that refer to the "taxpayer."

³ The above instruction is framed in terms of false deductions. If income or some other item is charged as false, the instruction should be modified -- e.g., in that in said return it was represented that the said taxpayer had a gross income of $______________ ; whereas, as the defendant then and there well knew and believed * * *.

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(2)-2

Statute Defining Offense

Section 7206(2) of the Internal Revenue Code provides, in part, as follows:

Any person who -- * * * [w]illfully aids or assists in, or procures, counsels, or advises the preparation or presentation under * * * the internal revenue laws, of a return,¹ * * * which is fraudulent or is false as to any material matter * * * shall be guilty (of an offense against the laws of the United States).

26 U.S.C. § 7206(2)

NOTE

¹ Section 7206(2) also applies to an "affidavit, claim, or other document" and where appropriate, the instruction should be modified.

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(2)-3

Elements of Offense

Three essential elements are required to be proved in order to establish the offense charged in the indictment:

First: The act or acts of aiding, or assisting in, or procuring, or counseling, or advising, the preparation, or the presentation, of an income tax return¹ that is false or fraudulent as to a

[JI-83] material matter, as charged;

Second: Doing such act or acts with knowledge that the income tax return in question was false or fraudulent, as charged; and

Third: Doing such act or acts willfully.

A "false" tax return is a return that was untrue when made and was then known to be untrue by the person making it or causing it to be made.

A "fraudulent" tax return is a return made or caused to be made with the intent to deceive.

As stated before, the burden is always upon the prosecution to prove beyond a reasonable doubt every essential element of the crime charged; the law never imposes upon a defendant in a criminal case the burden or duty of calling any witnesses or producing any evidence.

26 U.S.C. § 7206(2)

United States v. Smith, 424 F.3d 992, 1009 (9th Cir. 2005), cert. denied, 547 U.S. 1008 (2006)

United States v. Gambone, 314 F.3d 163, 174 (3d Cir. 2003)

United States v. Aramony, 88 F.3d 1369, 1382 (4th Cir. 1996)

United States v. Klausner, 80 F.3d 55, 59 (2d Cir. 1996)

United States v. Salerno, 902 F.2d 1429, 1432 (9th Cir. 1990)

United States v. Sassak, 881 F.2d 276, 278 (6th Cir. 1989)

United States v. Hooks, 848 F.2d 785, 788-89 (7th Cir. 1988)

United States v. Perez, 565 F.2d 1227, 1233-34 (2d Cir. 1977)

United States v. Crum, 529 F.2d 1380, 1382 n.2 (9th Cir. 1976)

NOTE

¹ Section 7206(2) also applies to an "affidavit, claim, or other document" and where appropriate, the instruction should be modified.

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(2)-4

Knowledge or Consent of Taxpayer

Section 7206(2) of the Internal Revenue Code (26 U.S.C. § 7206(2)) further provides that a person may be guilty of the offense of aiding or assisting in, or procuring the preparation or presentation of a false or fraudulent return, regardless of "whether or not such falsity or fraud is with the knowledge or consent of the (taxpayer) * * *."

26 U.S.C. § 7206(2)

United States v. Jennings, 51 Fed. Appx. 98, 99-100 (4th Cir. 2002) (per curiam) (unpublished)

United States v. Nealy, 729 F.2d 961, 963 (4th Cir. 1984)

[JI-84]

Accord United States v. Wolfson, 573 F.2d 216, 225 (5th Cir. 1978).

See also United States v. Motley, 940 F.2d 1079, 1084 (7th Cir. 1991); United States v. Zimmerman, 832 F.2d 454, 457 (8th Cir. 1987); United States v. Greger, 716 F.2d 1275, 1278 (9th Cir. 1983), cert. denied, 465 U.S. 1007 (1984); United States v. Crum, 529 F.2d 1380, 1382 (9th Cir. 1976); United States v. Kopituk, 690 F.2d 1289, 1333 (11th Cir. 1982), cert. denied, 463 U.S. 1209 (1983); cf. United States v. Hooks, 848 F.2d 785, 791 (7th Cir. 1988) (defendant willfully caused tax preparer to file a false estate tax return and therefore violated Section 7206(2), regardless of whether tax preparer knew of falsity or fraud).

It is important to note that it may be be necessary to instruct the jury on the requirements for accomplice testimony. Hull v. United States, 324 F.2d 817, 823 (5th Cir. 1963).

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(2)-5

Signing of Returns

Knowledge of Taxpayer Irrelevant

In making a determination as to whether the defendant aided or assisted in or counseled, advised, or generated or set in motion certain acts or the preparation of documents resulting in the preparation or presentation of fraudulent or false tax returns, the fact that the defendant did not sign and did not prepare the income tax returns in question is not material to your consideration.

And it is not necessary for the government to prove that any taxpayer whose returns were fraudulent or false had knowledge of the falsity of the returns. In this respect, I instruct you as a matter of law, that if you find beyond a reasonable doubt that the defendant knowingly and willfully furnished, prepared, or caused to be prepared, false and fraudulent documents (and offered false advice), which the defendant knew would be relied on in the preparation of income tax returns and would result in [understated income] or [false or overstated deductions] on the returns named in Counts ______, and ______ of the Indictment, then the government has met its burden of proof under this element of the offense.

26 U.S.C. § 7206(2)

United States v. Nealy, 729 F.2d 961, 963 (4th Cir. 1984).

Accord United States v. Wolfson, 573 F.2d 216, 225 (5th Cir. 1978); see also United States v. Dunn, 961 F.2d 648, 651 (7th Cir. 1992); United States v. Motley, 940F.2d 1079, 1084 (7th Cir. 1991); United States v. Zimmerman, 832 F.2d 454, 457 (8th Cir. 1987); United States v. Greger, 716 F. 2d 1275, 1278 (9th Cir. 1983), cert. denied, 465 U.S. 1007 (1984); United States v. Crum, 529 F.2d 1380, 1382 (9th Cir. 1976); United States v. Kopituk, 690 F.2d 1289, 1333 (11th Cir. 1982), cert. denied, 463 U.S. 1209 (1983); cf. United States v. Hooks, 848 F.2d 785, 791 (7th Cir. 1988) (defendant willfully caused tax preparer to file a false estate tax return and therefore violated Section 7206(2), regardless of whether tax preparer knew of falsity or fraud).

It is important to note that it may be necessary to instruct the jury on the requirements for accomplice testimony. Hull v. United States, 324 F.2d 817, 823 (5th Cir. 1963).

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(2)-6

Willfulness

To find the defendant guilty of violating Section 7206(2), you must not only find that he [she] did the acts of which he [she] stands charged, but you must also find that the acts were done willfully by the defendant.

[JI-85]

The word "willfully," as used in this statute, means a voluntary, intentional violation of a known legal duty. In other words, the defendant must have acted voluntarily and intentionally and with the specific intent to do something he [she] knew the law prohibited, that is to say, with intent either to disobey or to disregard the law.

In this regard, there are certain matters that you may consider as pointing to willfulness, if you find such matters to exist in this case. By way of illustration only, willfulness may be inferred from conduct such as [set forth examples appropriate under the evidence, e.g., making false entries or alteration, or false invoices or documents, concealment of assets or covering up sources of income, handling one's affairs to avoid making the records usual in transactions of the kind] and any conduct the likely effect of which would be to mislead or to conceal.

1A Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 17.07 (6th ed. 2006) (modified and supplemented)

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 67.20 (5th Ed. 2000) (modified)

Fifth Circuit Criminal Jury Instructions, § 2.96 (2001 ed.) (Note)

Federal Criminal Jury Instructions of the Seventh Circuit (1998 ed.), Section 4.09 (comment)

Federal Criminal Jury Instructions of the Seventh Circuit (1998 ed.), 26 U.S.C. § 7201 (Definition of Willfully)

Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit, § 7.02 (2008 ed.) (Comment)

Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, Basic Instruction No. 9.1 (2003 ed.) (modified)

Cheek v. United States, 498 U.S. 192, 201 (1991)

United States v. Pomponio, 429 U.S. 10, 12 (1976)

United States v. Bishop, 412 U.S. 346, 360 (1973)

Spies v. United States, 317 U.S. 492, 499 (1943)

[JI-86]

United States v. Ashfield, 735 F.2d 101, 105 (3d Cir.), cert. denied sub nom., Storm v. United States, 469 U.S. 858 (1984)

United States v. Conforte, 624 F.2d 869, 875 (9th Cir. 1980), cert. denied, 449 U.S. 1012 (1980)

United States v. Ramsdell, 450 F.2d 130, 133-134 (10th Cir. 1971)

United States v. Spinelli, 443 F.2d 2, 3 (9th Cir. 1971)

COMMENTS

1 It is not necessary to define the term "willfully" in a tax case in terms of "bad purpose" or "evil motive." United States v. Pomponio, 429 U.S. 10, 12 (1976). See also Section 8.08[1], supra.

2 Willfulness has the same meaning in the felony and misdemeanor sections of the Internal Revenue Code. United States v. Pomponio, 429 U.S. 10, 12 (1976).

3 See also instructions on willfulness set forth as a part of the instructions on 26 U.S.C. § 7201, supra.

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(2)-7

"Willfully" -- To Act or to Omit

In order to sustain its burden of proof for the crime of violating Section 7206(2), as charged in Count[s] _____ of the indictment, the Government must prove beyond a reasonable doubt not only that the defendant committed the acts alleged in the charge[s], but also that the defendant acted willfully.

An act or failure to act is "willful" if it is a voluntary and intentional violation of a known legal duty.

Accidental, inadvertent or negligent, even grossly negligent, conduct does not constitute willful conduct.

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 67.20 (5th Ed. 2000) (modified)

COMMENT

1 It is not necessary to define the term "willfully" in a tax case in terms of "bad purpose" or "evil motive." United States v. Pomponio, 429 U.S. 10, 12 (1976).

2 Willfulness has the same meaning in the felony and misdemeanor sections of the Internal Revenue Code. United States v. Pomponio, 429 U.S. 10, 12 (1976).

3 See also instructions on willfulness set forth as a part of the instructions on 26 U.S.C. § 7201, supra.

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(2)-8

Willfulness

In the context of Section 7206(2), willfulness connotes a voluntary, intentional violation of a known legal duty. Proof of evil motive or bad intent is not required. This showing of willfulness will most often be made by circumstantial evidence, because direct proof of willfulness may not be readily available.

[JI-87]

[At this point, consistent with the evidence in the case, the jury may be given an illustration of the type of evidence from which willfulness may be inferred, as follows:] For example, you may find that the defendant acted willfully from the evidence of the witnesses showing cumulatively a repetitious overstatement of deductions by the defendant.

See United States v. Brown, 548 F.2d 1194, 1199 (5th Cir. 1977)

26 U.S.C. § 7206(4)

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(4)-1

Concealing Property -- Offense Charged

The indictment sets forth _____ counts or charges.

Count I charges that on or about ________________, 20__, in the _______________ District of ________________, the defendant, ________________, willfully concealed goods and commodities, to wit, [Describe goods and commodities concealed] for and in respect of which a tax of the United States was imposed,¹ with the intent to evade or defeat the assessment or collection of said tax.

2 Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 67.01 (5th Ed. 2000) (modified)

NOTE

¹ Section 7206(4) also provides "or any property upon which levy is authorized by Section 6331." Where appropriate, the instruction should be modified to follow the wording of the indictment.

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(4)-2

Statute Defining Offense

Section 7206(4) of the Internal Revenue Code provides, in part, as follows:

Any person who -- . . . [r]emoves, deposits, or conceals, or is concerned in removing, depositing, or concealing, any goods or commodities for or in respect whereof any tax is or shall be imposed, or any property upon which levy is authorized by section 6331, with intent to evade or defeat the assessment or collection of any tax imposed by this title * * * shall be guilty [of an offense against the laws of the United States].

26 U.S.C. § 7206(4)

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(4)-3

Concealment of Property -- Elements

In order to sustain its burden of proof for the crime of willfully concealing various properties as described in the indictment, the government must prove the following three elements beyond a reasonable doubt:

One: There was an outstanding assessment for income taxes against the defendant;

Two: The defendant owned or had an interest in the property in question upon which levy was

[JI-88] authorized;

Three: The defendant removed, deposited or concealed, or was concerned in removing, depositing or concealing the property in question; and

Four: The defendant had the intention to evade and defeat the collection of the assessed taxes.

26 U.S.C. § 7206(4)

See also Section 14.04, supra.

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(4)-4

Concealing Property -- Levy Authorized

Section 6331 of the Internal Revenue Code provides, in part:

If any person liable to pay any tax neglects or refuses to pay the same within 10 days after notice and demand, it shall be lawful . . . to collect such tax . . . by levy upon all property and rights to property (except such property as is exempt . . .) belonging to such person or on which there is a lien provided in this chapter for the payment of such tax. . . .

Certain property is exempt from levy for taxes. So far as you are concerned, the following is exempt: [refer to Section 6334 to determine the appropriate exemptions with respect to the issues and evidence in a given case.]

26 U.S.C. §§ 6331 and 6334

26 U.S.C. § 7206(5)

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(5)-1

Offense Charged

The indictment sets forth ___________ counts or charges.

Count ___ charges that on or about the _________ day of __________, 20 __, in the _____________ District of ______________, in connection with [an offer in compromise, or a compromise, or a closing statement] relating to his [her] liability for [type of tax] taxes due and owing by him [her] to the United States of America for the calendar year(s) __________, did willfully conceal from [Specify particular officer, with job title] and all other proper officers and employees of the United States, [Describe property belonging to taxpayer or other person liable for the tax] or did willfully ["receive" "withhold" "destroy" "mutilate" or "falsify," Describe book, document or record involved].

26 U.S.C. § 7206(5)

[JI-89]

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(5)-2

Statute Defining Offense

Section 7206(5) of the Internal Revenue Code provides, in part, as follows:

Any person who -- * * * [i]n connection with any compromise * * *, or offer of such compromise, or in connection with any closing agreement * * *, or offer to enter into any such agreement, willfully * * * conceals from any officer or employee of the United States any property belonging to the estate of a taxpayer or other person liable in respect of the tax, or * * * [r]eceives, withholds, destroys, mutilates, or falsifies any book, document, or record, relating to the estate or financial condition of the taxpayer or other person liable in respect of the tax; shall be guilty [of an offense against the laws of the United States].

26 U.S.C. § 7206(5)

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(5)-3

Essential Elements

To establish the offense charged in the indictment, the government must prove the following elements beyond a reasonable doubt:

First: in connection with a closing agreement, or offer to enter into a closing agreement, in respect of an internal revenue tax, as provided for in 26 U.S.C. § 7121; or in connection with a compromise, or an offer of compromise, of a civil or criminal case arising under the internal revenue laws, as provided for in 26 U.S.C. § 7122;

Second: the defendant concealed from an employee of the United States any property belonging to the estate of a taxpayer or other person liable for the tax, or the defendant withheld, falsified, or destroyed records, or made a false statement, relating to the estate or financial condition of the taxpayer or other person liable for the tax; and

Third: the defendant acted willfully.

26 U.S.C. § 7206(5)

GOVERNMENT PROPOSED JURY INST. NO. 26.7206(5)-4

Willfulness

To find the defendant guilty of violating Section 7206(5), you must not only find that he [she] did the acts complained of and of which he [she] stands charged, but you must also find that the acts were done willfully by him [her].

[JI-90] circumstances shown by the evidence in any case may enable one to infer what another's intentions were in doing or not doing things. With the knowledge of definite acts, we may draw definite logical conclusions.

In this regard, there are certain matters that you may consider as pointing to willfulness, if you find such matters to exist in this case. By way of illustration only, willfulness may be inferred from conduct such as [set forth examples appropriate under the evidence, e.g., making false entries or alteration, or false invoices or documents, concealment of assets or covering up sources of income, handling one's affairs to avoid making the records usual in transactions of the kind] and any conduct the likely effect of which would be to mislead or to conceal.

1A Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 17.07 (6th Ed. 2006) (modified and supplemented)

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 67.20 (5th Ed. 2000) (modified)

Fifth Circuit Criminal Jury Instructions, § 2.96 (1998 ed.) (Note)

Federal Criminal Jury Instructions of the Seventh Circuit, § 4.09 (1998 ed.)

Federal Criminal Jury Instructions of the Seventh Circuit, 26 U.S.C. 7201 (Definition of Willfully) (modified)

Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit (1992 Ed.), § 7.02 (Comment)

Manual of Model Criminal Jury Instructions for the Ninth Circuit, § 5.5 (2003 ed.) (Comment)

Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, BI 9.1 (2003 ed.) (modified)

Cheek v. United States, 498 U.S. 192, 201 (1991)

United States v. Pomponio, 429 U.S. 10, 12 (1976)

United States v. Bishop, 412 U.S. 346, 360 (1973)

Spies v. United States, 317 U.S. 492, 499 (1943)

United States v. Ashfield, 735 F.2d 101, 105 (3d Cir.), cert. denied sub nom., Storm v. United States, 469 U.S. 858 (1984)

United States v. Conforte, 624 F.2d 869, 875 (9th Cir. 1980), cert. denied, 449 U.S. 1012 (1980)

United States v. Ramsdell, 450 F.2d 130, 133-134 (10th Cir. 1971)

United States v. Spinelli, 443 F.2d 2, 3 (9th Cir. 1971)

[JI-91]

COMMENTS

1 It is not necessary to define the term "willfully" in a tax case in terms of "bad purpose" or "evil motive." United States v. Pomponio, 429 U.S. 10, 12 (1976). See also Section 8.08, supra.

2 Willfulness has the same meaning in the felony and misdemeanor sections of the Internal Revenue Code. United States v. Pomponio, 429 U.S. 10, 12 (1976).

3 See also instructions on willfulness set forth as a part of the instructions on 26 U.S.C. § 7201, supra.

26 U.S.C. § 7207

GOVERNMENT PROPOSED JURY INST. NO. 26.7207-1

False Document -- Offense Charged

The information or indictment sets forth _____ counts or charges.

Count___ charges that on or about the __________ day of ____________, 20__, in the District of , the defendant, ______________________, a resident of ____________________ did willfully file a document with the Internal Revenue Service, United States Treasury Department, at ___________________, which the defendant knew to be false as to a material matter.

2B Kevin F. O'Malley et al., Federal Jury Practice and Instructions, § 67.16 (5th Ed. 2000) (modified)

GOVERNMENT PROPOSED JURY INST. NO. 26.7207-2

Statute Defining Offense

Section 7207 of the Internal Revenue Code provides, in part, as follows:

Any person who willfully delivers or discloses, to the Secretary [of the Treasury] any list, return, account, statement or other document, known by him to be false as to any material matter, shall be [guilty of an offense against the United States].

26 U.S.C. § 7207

2B Kevin F. O'Malley et al., Federal Jury Practice and Instructions, § 67.17 (5th Ed. 2000) (modified)

GOVERNMENT PROPOSED JURY INST. NO. 26.7207-3

False Document -- Essential Elements

In order to sustain its burden of proof for the crime of filing a false document as charged in Count __ of the indictment [information], the government must prove the following three elements beyond a reasonable doubt:

One: The defendant _________ filed a document with the Internal Revenue Service that contained false information, as detailed in the indictment [information], as to a material matter;

Two: The defendant knew that this information contained in this document was false; and

[JI-92]

Three: In filing this false document, the defendant __________ acted willfully.

2B Kevin F. O'Malley et al., Federal Jury Practice and Instructions, § 67.18 (5th ed. 2000)

GOVERNMENT PROPOSED JURY INST. NO. 26.7207-4

Not Necessary to Show Any Additional Tax Due

Although the government is required to prove beyond a reasonable doubt that the defendant willfully filed a false document as charged in Count ___ of the indictment [information], the government is not required to prove that any additional tax was due to the government or that the government was deprived of any tax revenues by reason of any filing of any false return.

2B Kevin O'Malley, Federal Jury Practice and Instructions, § 67.19 (5th ed. 2000)

GOVERNMENT PROPOSED JURY INST. NO. 26.7207-5

Willfulness

To find the defendant guilty of violating Section 7207, you must not only find that he [she] did the acts of which he [she] stands charged, but you must also find that the acts were done willfully by him [her].

In this regard, there are certain matters that you may consider as pointing to willfulness, if you find such matters to exist in this case. By way of illustration only, willfulness may be inferred from conduct such as [set forth examples appropriate under the evidence, e.g., making false entries or alteration, or false invoices or documents, concealment of assets or covering up sources of income, handling one's affairs to avoid making the records usual in transactions of the kind] and any conduct the likely effect of which would be to mislead or to conceal.

[JI-93]

1A Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 17.07 (modified and supplemented) (6th ed. 2008)

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 67.20 (modified) (5th ed. 2000)

Fifth Circuit Criminal Jury Instructions, § 2.95 (2001 ed.) (Note)

Federal Criminal Jury Instructions of the Seventh Circuit, 26 U.S.C. 7201 (Definition of Willfully) (1998 ed.)

Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit, § 7.02 (2008 ed.) (Comment)

Manual of Model Jury Instructions for the Ninth Circuit, § 5.5 (2003 ed.) (Comment)

Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, BI 9.1 (2003 ed.) (modified)

Cheek v. United States, 498 U.S. 192, 201 (1991)

United States v. Pomponio, 429 U.S. 10, 12 (1976)

United States v. Bishop, 412 U.S. 346, 360 (1973)

Spies v. United States, 317 U.S. 492, 499 (1943)

United States v. Ashfield, 735 F.2d 101, 105 (3d Cir.), cert. denied sub nom., Storm v. United States, 469 U.S. 858 (1984)

United States v. Conforte, 624 F.2d 869, 875 (9th Cir. 1980), cert. denied, 449 U.S. 1012 (1980)

United States v. Ramsdell, 450 F.2d 130, 133-134 (10th Cir. 1971)

United States v. Spinelli, 443 F.2d 2, 3 (9th Cir. 1971)

COMMENTS

1 It is not necessary to define the term "willfully" in a tax case in terms of "bad purpose" or "evil motive." United States v. Pomponio, 429 U.S. 10, 12 (1976). See also Section 8.08[1], supra.

2 Willfulness has the same meaning in the felony and misdemeanor sections of the Internal Revenue Code. United States v. Pomponio, 429 U.S. 10, 12 (1976).

3 See also instructions on willfulness set forth as a part of the instructions on 26 U.S.C. § 7201, supra.

26 U.S.C. § 7212(a) (Omnibus Clause)

GOVERNMENT PROPOSED JURY INST. NO. 26.7212(a)-1

Statute Defining Offense

Count __________ of the indictment charges the defendant with violating 26 U.S.C. § 7212(a). That statute makes it a crime for anyone to corruptly obstruct or impede, or endeavor to obstruct or impede, the due administration of the Internal Revenue laws.

26 U.S.C. § 7212(a)

[JI-94]

GOVERNMENT PROPOSED JURY INST. NO. 26.7212(a)-2

Elements of Section 7212(a)

In order for you to find the defendant guilty of this charge, the Government must prove each of the following elements beyond a reasonable doubt:

First: The defendant in any way corruptly;

Second: Endeavored to;

Third: Obstruct or impede the due administration of the Internal Revenue Laws.

United States v. Wilson, 118 F.3d 228, 234 (4th Cir. 1997)

United States v. Williams, 644 F.2d 696, 699 (8th Cir. 1981)

GOVERNMENT PROPOSED JURY INST. NO. 26.7212(a)-3

Definition of "Endeavor"

Endeavor means to knowingly and intentionally act or to knowingly and intentionally make any effort which has a reasonable tendency to bring about the desired result.

United States v. Kelly, 147 F.3d 172, 177 (2d Cir. 1998)

United States v. Dowell, 430 F.3d 1100, 1110 (10th Cir. 2005)

See also United States v. Palivos, 486 F.3d 250, 258 (7th cir. 2007) (obstruction of justice)

GOVERNMENT PROPOSED JURY INST. NO. 26.7212(a)-4

Endeavor - Defined

An endeavor is any effort or any act or attempt to effectuate an arrangement or to try to do something, the natural and probable consequences of which is to obstruct or impede the due administration of the Internal Revenue Laws.

United States v. Frank, 354 F.3d 910, 922 (8th Cir. 2004) (obstruction of justice)

United States v. Silverman, 745 F.2d 1386, 1396 n. 12 (11th Cir. 1984) (obstruction of justice)

Instruction used in United States v. Dykstra , 991 F.2d 450, 453 (8th Cir. 1993) (but not addressed in court of appeals decision)

GOVERNMENT PROPOSED JURY INST. NO. 26.7212(a)-5

Success not necessary

It is not necessary for the government to prove that the "endeavor" was successful or in fact achieved the desired result.

United States v. Cioffi, 493 F.2d 1111, 1118-19 (2d Cir. 1974)

United States v. Williams, 644 F.2d 696, 699 n.14 (8th Cir. 1981)

2A Kevin F. O'Malley, Federal Jury Practice and Instructions, § 48.05 (5th Ed. 2000)

[JI-95]

GOVERNMENT PROPOSED JURY INST. NO. 26.7212(a)-6

Definition of "Corruptly"

To act “corruptly” is to act with the intent to secure an unlawful advantage or benefit either for oneself or for another.

United States v. Saldana, 427 F.2d 298, 204-05 (5th Cir. 2005);

United States v. Winchell, 129 F.3d 1093, 1098 (10th Cir. 1997);

United States v. Valenti, 121 F.3d 327, 331 (7th Cir. 1997);

United States v. Wilson, 118 F.3d 228, 234 (4th Cir. 1997);

United States v. Workinger, 90 F.3d 1409, 1414 (9th Cir. 1996);

United States v. Dykstra, 991 F.2d 450, 453 (8th Cir. 1993);

United States v. Popkin, 943 F.2d 1535, 1540 (11th Cir. 1991);

United States v. Reeves, 752 F.2d 995, 1001 (5th Cir. 1985).

GOVERNMENT PROPOSED JURY INST. NO. 26.7212(a)-7

Definition of "Obstruct or Impede"

To "obstruct or impede" is to hinder or prevent from progress, check, stop, also to retard the progress of, make accomplishment difficult and slow.

Black's Law Dictionary pg. 972 (5th Ed. 1979)

26 U.S.C. § 7215

GOVERNMENT PROPOSED JURY INST. NO. 26.7215-1

Failure to Deposit Withholding Taxes -- Offense Charged

The [information or indictment] sets forth counts ____ or charges.

It is charged in the [information or indictment] as follows:

1. That during the period ___________, 20__ , to _______________, 20__ , in the _________________ District of _______________, the defendant, _________________, was an employer of labor required under the provisions of the Internal Revenue Code to collect, account for, and pay over to the United States federal income taxes and Federal Insurance Contributions Act (F.I.C.A.) taxes withheld from wages.

2. That the defendant did fail at the time and in the manner prescribed by the Internal Revenue Code, and Regulations promulgated pursuant thereto, to collect, truthfully account for, and pay over and to make deposits and payments of the said withheld taxes to the United States, which were due and owing for the quarters ending __________________, 20__ ,_________________ , 20__ , __________________, 20__ , and ________________, 20__ .

3. That on _________________, 20__ , the defendant was notified of such failure by notice delivered in hand to him [her] as provided by Title 26, United States Code, Section 7512, which notice advised him [her] that he [she] was required to collect the aforesaid taxes that became collectible after the delivery of such notice, and, not later than at the end of the second banking day after such collection, to deposit said taxes in a separate bank account established by him [her] in trust for the United States to be kept therein until paid over to the United States.

[JI-96]

4. That within the District of ______________, the defendant unlawfully failed to comply with the provisions of Title 26, United States Code, Section 7512, in that, after receiving the notice referred to in paragraph 3, he [she] paid wages and was required to collect and deposit the said taxes, but failed to deposit the taxes in a separate bank account in trust for the United States, by the dates and in the amounts hereinafter specified:

DATE WAGES DATE DEPOSIT AMOUNT OF

COUNT PAID REQUIRED DEPOSIT REQUIRED

I. $

II. $

III. $

IV. $

All in violation of Title 26, United States Code, Section 7215.

26 U.S.C. § 7215

GOVERNMENT PROPOSED JURY INST. NO. 26.7215-2

Statutes Defining Offense

The [information or indictment] charges a failure to comply with the requirements of Section 7512(b) of the Internal Revenue Code, which are as follows:

Any person who is required to collect, account for, and pay over any [withholding taxes], * * * if notice has been delivered to such person [for failure to comply], * * * shall collect the [withholding] taxes * * * which became collectible after delivery of such notice¹, shall (not later than the end of the second banking day after any amount of such taxes is collected) deposit such amount in a separate account in a bank * * *, and shall keep the amount of such taxes in such account until payment over to the United States. Any such account shall be designated as a special fund in trust for the United States, payable to the United States by such person as trustee.

26 U.S.C. § 7512(b)

Section 7215 of the Internal Revenue Code provides, in part, as follows:

(a) Penalty. -- Any person who fails to comply with any provision of section 7512(b) shall * * * be guilty [of an offense against the laws of the United States].

(b) Exceptions. -- This section shall not apply --

(1) to any person, if such person shows that there was reasonable doubt as to (A) whether the law required collection of tax, or (B) who was required by law to collect tax, and

(2) to any person, if such person shows that the failure to comply with the provisions of section 7512(b) was due to circumstances beyond his control.

For purposes of paragraph (2), a lack of funds existing immediately after the payment of wages (whether or not created by the payment of such wages) shall not be considered to be circumstances beyond the control of a person.

26 U.S.C. § 7215

[JI-97]

NOTE

¹ Section 7512(a) provides that, in the case of a corporation, partnership, or trust, notice delivered in hand to an officer, partner, or trustee shall, for purposes of the section, be deemed to be notice delivered in hand to such corporation, partnership, or trust and to all officers, partners, trustees, and employees thereof.

GOVERNMENT PROPOSED JURY INST. NO. 26.7215-3

Essential Elements of Offense

The essential elements of the offense charged in Count ____ of the indictment [information], each of which must be proved beyond a reasonable doubt, are as follows:

First, that during the period from ______________, 20__, to _________________, 20__, the defendant, ____________________, was an employer of labor and, as such, was required to collect, account for, and pay over to the United States federal income and F.I.C.A. taxes withheld from the wages of his [her] employees;

[First, that during the period from _________________, 20__, to __________________, 20__, the defendant, __________________, was a person in such a relationship to _______________ Corporation that he [she] was a person required to collect, account for, and pay over the federal income and F.I.C.A. taxes withheld from the wages of the employees of ______________________ Corporation;]

Second, that prior to ________________, 20__, the defendant failed to collect, truthfully account for, or pay over such taxes, or failed to make deposits, payments, or returns of such taxes at the time and in the manner prescribed by law or regulations;

Third, that on ________________, 20__, the defendant was notified by a notice delivered in hand of the failure to do so;

Fourth, that said notice directed the defendant to establish a separate bank account in trust for the United States, to deposit such taxes in the separate bank account not later than two banking days after the taxes were collected or withheld, and to keep such taxes deposited in the bank account until payment to the United States; and

Fifth, that on _______________, 20__, two banking days after the collection of the taxes, the defendant failed to deposit the amount of $____________ in federal income and F.I.C.A. taxes collected from the wages of his [her] employees in a separate bank account in trust for the United States.

Now, the essential elements of Counts ____, _________, and ________ of the indictment [information] are the same as in Count ___, except they differ as to the date of the alleged failure to make the bank deposit and the amount of the taxes withheld from the employee's wages. The date and amount as to each count appear in the indictment [information], which you will take with you to the jury room, and the Court will not repeat them at this time.

United States v. Hemphill, 544 F.2d 341, 343-344 (8th Cir. 1976)

United States v. Erne, 576 F.2d 212, 213 (9th Cir. 1978)

United States v. Polk, 550 F.2d 566, 567 (9th Cir. 1977)

[JI-98]

GOVERNMENT PROPOSED JURY INST. NO. 26.7215-4

Withholding Taxes

This case involves federal withholding taxes. Under the law, an employer is required to withhold certain amounts from the wages paid to its employees. The amounts withheld are for federal income taxes and for F.I.C.A. taxes, which are also known as Social Security taxes. When the employees file their personal income tax returns, they compute what they owe and credit against this the amount of income tax their employer withheld from their wages during the year. I am sure you are all aware of the standard W-2 Form prepared by employers showing how much was withheld from wages during the year, which is then attached by the employee to his or her personal income tax return.

When an employer pays wages to an employee, the employer must set aside the amounts to be withheld in a trust fund for the government since these amounts are to be credited, in whole or in part, to the income tax and Social Security accounts of the employee. By trust fund, I mean that such withheld amounts do not belong to the employer but are merely held by the employer for the benefit of the government until paid over to the government and then credited to the accounts of the employees for income tax and Social Security purposes.

D'Orazi v. United States, 71-1 U.S.T.C., ¶9270, pp. 86,046-86,048; 27 A.F.T.R.2d 865, 866-68

(N.D. Cal. Nov. 5, 1970)

Neale, Sr. v. United States, 13 A.F.T.R.2d 1721, 1722 (Kan. April 29, 1964)

26 U.S.C. §§ 3101, 3102, 3401, 3402, 3403 6302(c), & 7501

GOVERNMENT PROPOSED JURY INST. NO. 26.7215-5

Person Required to Collect, Account For, and Pay Over Tax

In order to be found guilty of the offenses charged in the indictment [information], the defendant must have been a person required to collect, account for, and pay over withheld federal income and F.I.C.A. taxes. An individual is such a person if he [she] is connected or associated with a corporate employer in such a manner that he [she] has the ultimate authority over the corporation, or the power to assure that the withholding taxes are paid, or the power to determine which bills will be paid and when, or significant control over the financial decision-making process within the corporation. Such a person may be either an officer, employee, member of the board of directors, or shareholder of the corporation. He [she] may be a person required to collect, account for, and pay over withheld taxes whether or not he [she] does the actual mechanical work of keeping records, preparing returns, or writing checks.

26 U.S.C. § 7343

United States v. McMullen, 516 F.2d 917, 920-921 (7th Cir. 1975)

Pacific National Insurance v. United States, 422 F.2d 26 (9th Cir. 1970)

United States v. Graham, 309 F.2d 210 (9th Cir. 1962)

D'Orazi v. United States, 71-1 U.S.T.C., ¶9270, p. 86,048; 27 A.F.T.R.2d 865, 868-869 (N.D. Cal. Nov. 5, 1970)

[JI-99]

GOVERNMENT PROPOSED JURY INST. NO. 26.7215-6

Defendant Cannot Delegate Responsibility

If the defendant was a person required to collect, account for, and pay over withholding taxes at the time the notice directing him [her] to make deposits of the taxes to a special bank account in trust for the United States was served upon him [her], then he [she] was under a duty to make such deposits and could not relieve himself [herself] of that duty by attempting to delegate it to another corporate officer or employee.

Mazo v. United States, 591 F.2d 1151, 1155 (5th Cir. 1979)

United States v. Leuschner, 336 F.2d 246, 248 (9th Cir. 1964)

Levy v. Tomlinson, 249 F. Supp. 659, 661 (S.D. Fla. 1965)

Jackson v. United States, 19 A.F.T.R.2d 1579, 1582 (S.D. Ind. Feb. 16, 1965)

D'Orazi v. United States, 71-1 U.S.T.C., ¶9270, p. 86,048; 27 A.F.T.R.2d 865, 869 (N.D. Cal. Nov. 5, 1970)

GOVERNMENT PROPOSED JURY INST. NO. 26.7215-7

More Than One Responsible Person

There may be more than one person connected with a corporation who is required to collect, account for, and pay over withholding taxes, but the existence of this same duty and responsibility in another individual has no effect on the responsibility of either individual.

Monday v. United States, 421 F.2d 1210, 1214 (7th Cir. 1970)

White v. United States, 372 F.2d 513, 516-520 (Ct. Cl. 1967)

D'Orazi v. United States, 71-1 U.S.T.C., ¶9270, p. 86,047; 27 A.F.T.R.2d 865, 868 (N.D. Cal. Nov. 5, 1970)

GOVERNMENT PROPOSED JURY INST. NO. 26.7215-8

Proof of Exact Amounts Not Required

The government need not prove, as to each count of the indictment [information], a failure to deposit the exact amount of taxes alleged in that count. It is sufficient for the government to prove beyond a reasonable doubt as to each count of the indictment [information] that there was a failure to deposit any amount of taxes collected and withheld from employee's wages that the defendant should have deposited in a separate bank account in trust for the United States.

United States v. Gay, 576 F.2d 1134, 1138 (5th Cir. 1978)

GOVERNMENT PROPOSED JURY INST. NO. 26.7215-9

Exception -- Circumstances Beyond Control

The law provides an exception to the statute where the defendant can show that the failure to collect, deposit, and keep the taxes in the separate bank account was due to circumstances beyond his [her] control. For this purpose, however, a lack of funds existing immediately after the payment of wages, whether or not resulting from the payment of the wages, is not to be considered circumstances beyond a person's control. For example, assume an employer has gross payroll requirements of $1,000, of which $100 is required to be withheld as income taxes and deposited in the separate bank account. If the employer only had $900 on hand and paid out this entire amount in wages, withholding and depositing nothing, the fact that the net wages due

[JI-100] equals the cash on hand would not constitute circumstances beyond a person's control.

A lack of funds occurring after the payment of wages, so long as it was not immediately after such payment, would qualify under this exception if it were due to circumstances beyond the person's control. Examples of circumstances beyond the control of the person within the period of time between the payment of wages and the time the person was required to deposit the funds include theft, embezzlement, destruction of the business from fire, flood, or other casualty, or the failure of a bank in which the person had deposited the funds prior to transferring them to the trust account for the government. However, a lack of funds immediately after the payment of wages resulting, for example, from the payment of creditors would not be considered circumstances beyond the person's control.

This does not, however, impose upon the defendant the burden of producing proof of a circumstance beyond his [her] control, or any other evidence. The burden is always upon the government to prove guilt beyond a reasonable doubt.

26 U.S.C. § 7215(b)

United States v. Randolph, 588 F.2d 931, 932-933 (5th Cir. 1979)

United States v. Plotkin, 239 F. Supp. 129, 131-132 (E.D. Wis. 1965)

S. Rep. No. 85-1182 (1958), as reprinted in 1958 U.S.C.C.A.N. 2187, 2191-92

Methods of Proof

GOVERNMENT PROPOSED JURY INST. NO. MP-1

Specific Items Method of Proof

(Unreported Income)

To establish the first element of the offense charged, the receipt by the defendant of unreported income upon which a substantial amount of tax was due and owing, the government has presented evidence under the "specific items" method of proof. The "specific items" method simply consists of offering evidence of particular or specific amounts of taxable income received by the defendant during a tax year, with evidence that the defendant did not include those amounts in his [her] tax return for that year, together with evidence concerning the defendant's knowledge of the omission and his [her] intent and willfulness in attempting to evade payment of tax by the omission.

United States v. Beck, 59-2 U.S.T.C., para. 9486, p. 73,115 (W.D. Wash. Feb. 19, 1959), aff'd in part and rev'd in part on other grounds, 298 F.2d 622 (9th Cir. 1962)

GOVERNMENT PROPOSED JURY INST. NO. MP-2

Specific Items Method

To prove that substantial additional tax was due, the government must prove beyond a reasonable doubt that (a) the defendant received substantial income in addition to what he [she] reported on his [her] income tax return, and (b) there was tax due in addition to what was shown to be due on the return.

In order to prove that the defendant received substantial additional income that was omitted from his [her] tax return, the government in this case has introduced evidence of [describe the specific items of income or other evidence which is the basis for the allegation of evasion].

[JI-101]

If you find, based on all the evidence, that the government has established beyond a reasonable doubt that the defendant received substantial income in addition to that reported on his [her] income tax return for the year in question, then you must decide whether, as a result of the defendant's additional, unreported income, there was tax due in addition to what was shown to be due on the return. In reaching your decision on this issue, you should consider, along with all the other evidence, the expert testimony introduced during the trial concerning the computation of the defendant's additional tax liability when the alleged additional income was taken into account.

If you find, based on all the evidence, that the government has established beyond a reasonable doubt that the defendant received substantial additional income and that, as a result of this additional income, there was tax due in addition to what was shown to be due on his income tax return, then this first element has been satisfied.

3 Leonard B. Sand et al., Modern Federal Jury Instructions - Criminal, Instruction 59-5 (2008 rev. ed.)

GOVERNMENT PROPOSED JURY INST. NO. MP-3

Net Worth Method of Proof

Theory

To establish the understatement of tax for the evasion counts for the years ____, ____, and ____, the government relies upon proof by the “net worth” method. I should explain that a person's "net worth" is the difference between his [her] assets and his [her] liabilities at any given date. It is the difference between what he [she] owns and what he [she] owes at that time. If a person has more assets at the end of the year than at the beginning of the year and if that person's liabilities remain the same or decrease, then his [her] net worth has obviously increased. However, only the cost price of the assets is to be considered. Mere increases in market value that have not been realized must not be taken into account.

[In this case, the defendant is married, and is charged with filing false joint income tax returns for the defendant and his [her] spouse. The government accordingly has introduced evidence purporting to reflect their joint net worth and expenditures.]¹

The theory of the net worth method of proof is that if the government proves beyond a reasonable doubt that the defendant's net worth, as I have just defined it, has increased during the taxable year, then it may be inferred that the defendant had receipts of either money or property during the year; and if the government satisfies you beyond a reasonable doubt that the defendant had a source of taxable income and that the receipts did not come from nontaxable sources, then you may find that the receipts constituted taxable income to the defendant.

If you also find that the government proved that the defendant spent money on items that did not add to the defendant's net worth at the end of the year (items such as living expenses and taxes), then it may be inferred that those expenditures also came from funds received during the year. Consequently, such expenditures also may be taken into account in determining the amount of the defendant's taxable income for the year, provided they were not deductible expenditures which the defendant was entitled to claim as deductions in computing taxable income on his [her] return.

In this case, the government has undertaken to prove what the defendant was worth at the beginning of each year involved and what he [she] was worth at the end of that year, so as to show that his [her] net worth increased during the year. The government also has introduced

[JI-102] other evidence, which, if you believe it, would tend to establish money paid out by the defendant for such non-deductible items as federal income taxes, living expenses, and other personal expenditures.

The government claims that the sum of the defendant's net worth increases and non-deductible expenditures for each year, less adjustments, as shown by the government's evidence, represents the defendant's correct taxable income for that year. The resulting figures are alleged by the government to be a reasonable approximation of what the defendant should have reported on his [her] income tax return.

As I have already told you, an attempt to evade income tax for one year is a separate offense from an attempt to evade the tax for a different year. So you must consider the evidence as to each year separately in arriving at your verdict.

Opening Net Worth

Now, I want to point out to you that because the net worth method of proving unreported income involves a comparison of the beginning and ending net worth of the defendant in each prosecution year, the result cannot be correct unless the beginning point, or the opening net worth, is reasonably accurate. You will readily appreciate that if, at the beginning point, the defendant actually owned substantial assets that the government has failed to include in its computations, apparent increases in net worth during the indictment years may be no more than the disclosure of money previously saved or the result of a change in the form of other assets that the defendant owned at the beginning of the year and that the government did not take into account. For example, a taxpayer might have had a substantial amount of cash on hand (not in a bank) which he [she] 1 had saved up in prior years and which he [she] used to acquire assets or make purchases or other expenditures during a prosecution year. In that case, an apparent increase in the defendant's net worth might be only the result of a conversion of prior accumulated cash into tangible property. Similarly, cash on hand accumulated from prior years may have been used to make non-deductible expenditures. You must, therefore, in order to convict, be satisfied that the government's evidence establishes an opening net worth with reasonable certainty as of the beginning of the year.

On the other hand, the government is not required to refute all possible speculation that, at the beginning of the year, the defendant might have had assets the investigation failed to disclose; nor is the government required to prove the exact cost of the assets owned by the defendant at the starting point or the precise amount of his [her] undeposited cash on hand. It is enough if the government, although unable to determine the exact cost of the assets owned by the defendant at the beginning of the year, can show beyond a reasonable doubt that such assets were insufficient to account for the subsequent increases in the defendant's net worth.

The burden rests originally upon the government, and the burden remains upon the government, to establish an opening net worth with reasonable certainty.

In this case the government has endeavored to prove that the defendant [and his (her) spouse]¹ did not have any assets at the beginning of the year other than those disclosed as a result of its investigation by [e.g., tracing the financial and income tax return filing history of the defendant (and his spouse) and by introducing into evidence the defendant's own statements]. The evidence introduced by the government of the defendant's [income tax returns and] financial history in years prior to those named in the indictment may be considered by you only for such light as it may shed on the innocence or guilt of the defendant during the years charged in the indictment.

In determining whether or not the opening net worth is reasonably accurate, you may consider whether the government has tracked down all "reasonable leads" or explanations, if any,

[JI-103] suggested to the government by the defendant (or his [her] representative) during the investigation, which tend to establish the defendant's innocence.

If you are satisfied that any such reasonable leads and explanations have been exhausted or refuted, then this would be evidence which you could consider in determining whether the opening net worth included all of the defendant's assets. Obviously, improbable explanations would not be entitled to as much weight as plausible and reasonable explanations. If you should find that the government's investigation has failed to refute what seem to you to be plausible explanations, then such failure may be considered by you in determining the validity of the opening net worth.

If you find that the government has not established the opening net worth of the defendant to a reasonable certainty as of the beginning of any year named in the indictment, then you will return a verdict of not guilty as to any such count of the indictment.

If you find as to any year that the funds reflected in increased net worth and expenditures are not substantially in excess of the income reported by the defendant on his [her] return for that year, or if you have a reasonable doubt as to whether such funds are substantially in excess of the reported income, then you will return a verdict of not guilty as to any such count of the indictment.

If you find, on the other hand, that the government has established the opening net worth of the defendant to a reasonable certainty as of the beginning of any year named in the indictment, and if you also are convinced beyond a reasonable doubt that the funds reflected in increased net worth and expenditures during that year are substantially in excess of the income reported on the defendant's tax return, then you will proceed to inquire whether the government has established that those funds represented taxable income on which the defendant willfully attempted to evade or defeat the tax.

Current Taxable Income

The burden is on the government to establish beyond a reasonable doubt that the funds reflected in the defendant's increased net worth and non-deductible expenditures arose from taxable, rather than nontaxable, sources.

In this connection, I charge you that the federal income tax is levied on gains, profits, and income derived from salaries, wages, or compensation for personal services, of whatever kind and in whatever form paid, or from professions, vocations, trades, businesses, commerce, or sales, or dealings in property; also from interest, rents, dividends, securities, or the transaction of any business, legal or illegal, carried on for gain or profit, or gains or profits and income derived from any source whatever.

The law states, however, that certain kinds of funds do not constitute income. Since no income tax is levied on such funds, they need not and should not be reported as income. These funds include gifts, inheritances, proceeds of loans, [and certain other miscellaneous items which are not pertinent here].

As I have previously stated, the burden rests upon the government to prove beyond a reasonable doubt that the funds reflected in increased net worth and expenditures arose from a taxable source or sources, or that the funds did not come from nontaxable sources. In other words, the government must establish either a likely source of income from which you believe the net worth increases and expenditures sprang, or that nontaxable sources of income have been negated as a source of the net worth increases and expenditures.

[JI-104]

If you find that the defendant offered timely explanations of the source[s] of his [her] funds, and that the stated source[s] was [were] reasonably susceptible of being checked, the government may not disregard the defendant’s explanation. You may take into consideration any failure by the government to pursue such explanations, if any were made, or the results of any investigation made by the government into the truth of the explanations. On the other hand, where relevant leads are not forthcoming, the government is not required to negate every conceivable source of nontaxable funds, and if the defendant failed to supply information in that regard, you may take such failure into account. The defendant is not required, however, to provide any explanations to prove the source of his net worth, for, as I have said, the burden is on the government to prove that the increases arose from taxable sources.

This instruction is based on the rationale of the courts in the following decisions:

Holland v. United States, 348 U.S. 121 (1954)

Friedberg v. United States, 348 U.S. 142 (1954)

United States v. Calderon, 348 U.S. 160 (1954)

United States v. Massei, 355 U.S. 595 (1957)

United States v. Johnson, 319 U.S. 503 (1942)

United States v. Sorrentino, 726 F.2d 876, 879, 880 (1st Cir. 1984)

United States v. Koskerides, 877 F.2d 1129, 1137 (2d Cir. 1989)

United States v. Breger, 616 F.2d 634, 635 (2d Cir. 1980)

United States v. Terrell, 754 F.2d 1139, 1144 (5th Cir. 1985)

United States v. Schafer, 580 F.2d 774, 775 (5th Cir. 1978)

United States v. Anderson, 642 F.2d 281, 285 (9th Cir. 1981)

NOTE

¹ Where the defendant was married and filed joint returns and the net worth computation reflects a joint net worth, then appropriate language should be used in the instruction. This would also apply where both a husband and wife are charged.

GOVERNMENT PROPOSED JURY INST. NO. MP-4

The "Net Worth Method" of Determining Income - Explained

To establish a substantial understatement of the tax on the income tax return of the defendant for the year[s] ____, the government has relied upon proof by the so-called "net worth method" of determining income for that particular period. This "net worth method," if used correctly, is an indirect or circumstantial way to reliably determine income.

A person's "net worth" is the difference between that person's total assets and total liabilities on any given day. Said another way, a person's net worth is the difference between what a person owns and what that person owes at any particular time. If a person had more assets at the end of the year than at the beginning of that year, and if that person's liabilities remained the same during that same year, then that person's net worth has increased.

In determining net worth, however, only the cost price of the defendant's assets is to be considered. Mere increases in market value that have not been actually realized through sale or conversion into cash must not be taken into account in computing net worth in a case such as this.

If the evidence in the case shows beyond a reasonable doubt that the defendant's net worth, computed in this manner, has increased during the year[s] in question, then the jury may find that the defendant had receipts of either money or property during that year. If the evidence in the

[JI-105] case also establishes beyond a reasonable doubt that the defendant had one or more sources of taxable income and that the receipts just referred to did not come from non-taxable income, then the jury may find that such receipts constituted taxable income to the defendant during that period.

To show that the defendant's net worth increased in this case, the government has undertaken to prove the defendant's net worth at the beginning of the year 20__ , and also attempted to prove the defendant's net worth at the end of that same year. The government has also introduced evidence in an effort to prove that the defendant paid out various amounts of money during the taxable year for such non-deductible items as personal and living expenses.

Because the "net worth method" of determining income involves a comparison of the net worth of the defendant at the beginning and again at the end of the year in question, the result cannot be accepted as correct unless this starting net worth figure, the beginning point, is reasonably accurate. Although the government is not required to prove the exact value of each and every asset owned by the defendant at the starting point, the evidence must establish beyond a reasonable doubt that all assets owned by the defendant at the starting point were not sufficient to account for any apparent subsequent increase in the defendant's net worth. Said another way, the evidence in the case must establish beyond a reasonable doubt that the defendant's assets at the beginning of the year, plus the defendant's reported income for that same taxable year, do not add up to an amount sufficient to account for the increases in net worth plus non-deductible expenditures during that same year.

The government contends that any increases in the net worth of the defendant during the taxable year 20__ , plus any non-deductible expenditures by the defendant for that year as shown by the evidence in the case, represent the defendant's true and correct net income for that year. These resulting figures are alleged by the government to be a reasonable approximation of what the defendant should have reported on his [her] income tax return for the calendar year 20__ .

The burden is always upon the government to establish beyond a reasonable doubt that any amounts reflected in defendant's increased net worth plus non-deductible expenditures were from taxable, rather than non-taxable, sources. In this regard, you are instructed that federal income tax is levied on income derived from compensation for personal services of every kind, and in whatever form paid, as well as on income from interest, dividends, gains, profits, [and certain other items not pertinent to this case].

The law provides, however, that funds or property received from certain sources do not constitute taxable income. Since no federal income tax is levied on such funds or property, such funds or property do not need to be reported as income. Non-taxable funds or non-taxable property include such items as gifts, inheritances, the proceeds of life insurance policies, loans, [and certain other items not pertinent to this case].

If it appears from the evidence in the case that during the course of the investigation of his [her] income tax return and before the trial of this case, the defendant offered to Treasury agents certain explanations of the sources of certain funds or property and these sources of funds or property were reasonably capable of being checked and verified by Treasury agents, the government may not unreasonably disregard such explanations. In evaluating the evidence in this case you may take into consideration any failure of the government to reasonably investigate the truth of any such explanations as well as the trustworthiness of the explanations provided.

On the other hand, the government is not required, without suggestion or explanation from the defendant, to investigate every conceivable source of non-taxable funds. If it appears from the evidence in the case that the defendant did not provide an explanation as to the source or sources of any increase in his [her] net worth, then the jury may consider such failure as one of the

[JI-106] circumstances in evidence in the case, bearing in mind always that the law never imposes upon a defendant in a criminal case the burden or duty to offer or produce any evidence. The burden is always upon the government to establish beyond a reasonable doubt from the evidence in the case every essential element of the crime charged, including the claim that any increase in the defendant's net worth was from taxable sources.

If the jury should find that the evidence in the case does not establish the net worth of the defendant to a reasonable degree of certainty at the beginning any of the years charged in the indictment, then the jury should find the defendant not guilty as to that year. If the jury should find that any increase in net worth for a particular year is not substantially in excess of the income reported by the defendant on his [her] return for that year, then the jury should find the defendant not guilty as to that year.

On the other hand, if the evidence in the case establishes beyond a reasonable doubt the amount of the net worth of the defendant as of the beginning of the particular calendar year charged in a Count of the indictment, and further establishes beyond a reasonable doubt that funds reflected in any increased net worth, plus the defendant's expenditures, during the same year substantially exceed the income reported on the defendant's tax return, the jury should then proceed to determine whether the evidence in the case also establishes beyond a reasonable doubt that such additional funds represented taxable income, and then proceed to determine whether the government has proven that the defendant acted willfully in attempting to evade or defeat the additional tax, as charged in Count[s] ___ of the indictment.

2B Kevin F. O'Malley et al., Federal Jury Practice and Instructions, § 67.05 (modified) (5th ed. 2000)

GOVERNMENT PROPOSED JURY INST. NO. MP-5

Net Worth Method

In this case the Government relies upon the so-called “net worth method” of proving unreported income.

A person's “net worth” at any given date is the difference between such person's total assets and total liabilities on that date. It is the difference between what one owns and what one owes (measuring the value of what one owns by its cost rather than unrealized increases in market value).

If the evidence establishes beyond a reasonable doubt that the Defendant's net worth increased during a taxable year, then you may infer that the Defendant had receipts of money or property during that year; and if the evidence also establishes that those receipts cannot be accounted for by non-taxable sources, then you may further infer that those receipts were taxable income to the Defendant.

In addition to the matter of the Defendant's net worth, if the evidence establishes beyond a reasonable doubt that the Defendant spent money during the year on living expenses, taxes and other expenditures, which did not add to the Defendant's net worth at the end of the year, then you may infer that those expenditures also came from funds received during the year; and, again, if the evidence establishes that those receipts cannot be accounted for by non-taxable sources, then you may further infer that those funds were also taxable income to the Defendant (provided, of course, the expenditures were not for items which would be deductible on the Defendant's tax return).

[JI-107]

Because the “net worth method” of proving unreported income involves a comparison of the Defendant's net worth at the beginning of the year and the Defendant's net worth at the end of the year, the result cannot be accepted as correct unless the starting net worth is reasonably accurate. In that regard the proof need not show the exact value of all the assets owned by the Defendant at the starting point so long as it is established that the assets owned by the Defendant at that time were insufficient by themselves to account for the subsequent increases in the Defendant's net worth. So, if you should decide that the evidence does not establish with reasonable certainty what the Defendant's net worth was at the beginning of the year, you should find the Defendant not guilty.

In determining whether or not the claimed net worth of the Defendant at the starting point (or the beginning of the year) is reasonably accurate, you may consider whether Government agents sufficiently investigated all reasonable “leads” suggested to them by the Defendant, or which otherwise surfaced during the investigation, concerning the existence and value of other assets. If you should find that the Government's investigation has either failed to reasonably pursue, or to refute, plausible explanations advanced by the Defendant or which otherwise arose during the investigation concerning other assets the Defendant had at the beginning of the year (or other non-taxable sources of income the Defendant had during the year), then you should find the Defendant not guilty. Notice, however, that this duty to reasonably investigate applies only to suggestions or explanations made by the Defendant, or to reasonable leads that otherwise turn up; the Government is not required to investigate every conceivable asset or source of non-taxable funds.

If you decide the evidence in the case establishes beyond a reasonable doubt the maximum possible amount of the Defendant's net worth at the beginning of the tax year, and further establishes that any increase in the Defendant's net worth at the end of that year, together with non-deductible expenditures made during the year, did substantially exceed the amount of income reported on the Defendant's tax return for that year, you should then proceed to decide whether the evidence also establishes beyond a reasonable doubt that such additional funds represented taxable income (that is, income from taxable sources) on which the Defendant willfully attempted to evade and defeat the tax as charged in the indictment.

Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, OI 93.2 (2003 ed.)

GOVERNMENT PROPOSED JURY INST. NO. MP-6

Expenditures Method of Proof

Theory

The government has introduced evidence of the expenditures method of proof to establish that the taxable income reported by the defendant on his [her] income tax returns is not true and correct. By this method, the government seeks to establish that the defendant¹ spent an amount greater than the amount reported on his [her] income tax returns as being available for spending. In other words, the government claims that the defendant could not have spent the amount that he [she] did in a given year unless he [she] had more income than the defendant reported on his [her] return for that year.

Under the expenditures method, the first step is to add up and total the amounts that the defendant spent during a given year. The next step is to subtract from the total amount spent: (1)

[JI-108] any funds that the defendant had on hand at the beginning of the year which were spent during the year; (2) any monies received by a conversion into cash of assets that were on hand at the beginning of the year; and (3) any nontaxable funds received during the year.

The government claims that a reasonable approximation of the taxable income the defendant should have reported is the amount remaining after personal deductions, exemptions, and adjustments are subtracted from the defendant's income computed on the basis I have just explained to you.

Opening Net Worth

Now, I want to go over some of the points I have just mentioned. As I previously said, under the expenditures method, you subtract from the total amount spent any funds the defendant had on hand at the beginning of the year and any monies received by converting into cash assets that were on hand at the beginning of the year. Another way of saying this is that a starting point or opening net worth must be established so that the defendant is not improperly charged with spending that reflects only what he [she] earned or had from prior years.

You will readily appreciate that if the defendant actually owned substantial assets at the beginning point which the government has failed to consider in its computations, apparent spending of income during the indictment years may be no more than the disclosure of money previously saved or the result of a conversion into cash of assets the defendant owned at the beginning of the year.

For example, a taxpayer might have had a substantial amount of cash on hand that he [she] had saved up in prior years and used to make purchases or other expenditures during a prosecution year. In that case, an apparent spending out of income during the year might be only the result of spending money earned in a prior year. You must, therefore, be satisfied that the government's evidence establishes that the defendant has been given credit for any cash on hand that he [she] had as well as for any cash realized from the conversion into cash of assets that he [she] had on hand.

However, the government is not required to refute all possible speculation that the defendant might have converted into cash assets that he [she] had at the beginning of the year that the investigation failed to disclose; nor is it necessary for the government to prove the precise amount of cash on hand that the defendant had at the beginning of the year. It is enough if the government can show beyond a reasonable doubt that cash on hand and the conversion of assets into cash do not account for the expenditures of the defendant during the taxable year.

The burden rests originally upon the government, and the burden remains upon the government, to establish an opening net worth with reasonable certainty.

In this case, the government has attempted to prove that the defendant did not have any cash on hand or assets at the beginning of the year that he [she] later converted into cash, other than those disclosed as a result of its investigation by, among other things, tracing the financial history of the defendant. The evidence introduced by the government of the defendant's [income tax return(s) and] financial history in years prior to those named in the indictment may be considered by you for such light as it may shed on the innocence or guilt of the defendant during the years named in the indictment.

In determining whether or not the opening net worth is reasonably accurate, you may consider whether the government has tracked down "reasonable leads" or explanations, if any, suggested to the government by the defendant (or his [her] representative) during the investigation, which tend to establish the defendant's innocence.

[JI-109]

If you are satisfied that any such reasonable leads and explanations have been exhausted or refuted, then this would be evidence that you could consider in determining whether the opening net worth relied on by the government is reasonably accurate. Obviously, improbable explanations would not be entitled to as much weight as plausible and reasonable explanations. If you should find that the government's investigation has failed to refute what seem to you to be plausible explanations, such failure may be considered by you in determining the validity of the opening net worth.

If you find that the government has not established the opening net worth of the defendant to a reasonable certainty as of the beginning of any year named in the indictment, then you will find that the defendant is not guilty of reporting a taxable income that is not true and correct for that year.

If you find as to any year that the funds spent by the defendant are not substantially in excess of the taxable income reported by the defendant on his [her] return for that year, or if you have a reasonable doubt as to whether such funds are substantially in excess of reported taxable income, then you will find that the defendant is not guilty of reporting a taxable income that is not true and correct for that year .

If you find, on the other hand, that the government has established the net worth of the defendant to a reasonable certainty as of the beginning of any year named in the indictment, and if you are also convinced beyond a reasonable doubt that the expenditures established by the government during that year are substantially in excess of the income reported on the defendant's tax return, then you will proceed to inquire whether the government has established that those funds represented income.

Current Taxable Income

The burden is on the government to establish beyond a reasonable doubt that the funds reflected in the defendant's expenditures arose from taxable, rather than nontaxable, sources.

In this connection, I charge you that the federal income tax is levied on gains, profits, and income derived from salaries, wages, or compensation for personal services, of whatever kind and in whatever form paid, or from professions, vocations, trades, businesses, commerce, or sales, or dealings in property; also from interest, rent, dividends, securities, or the transaction of any business, [legal or illegal], carried on for gain or profit, or gains or profits and income derived from any source whatever.

As I have previously stated, the burden rests upon the government to prove beyond a reasonable doubt that the funds reflected in the defendant's expenditures arose from a taxable source or sources or that the funds did not come from nontaxable sources. In other words, expenditures alone do not establish the receipt of taxable income unless the evidence shows either: (1) a likely source of income from which you believe they sprang; or (2) that the government has established that the defendant did not have a nontaxable source of income which would account for the expenditures.

If you find that the defendant offered timely explanations of the source of his [her] funds, which were reasonably susceptible of being checked, the government may not disregard them; and you may take into consideration any failure by the government to investigate such explanations, if

[JI-110] any were made, or the results of any investigation made by the government into the truth of the explanations. On the other hand, where relevant leads are not forthcoming, the government is not required to negate every conceivable source of nontaxable funds, and if the defendant failed to supply information in that regard, you may take that failure into account. The defendant is not required, however, to provide any explanations or to prove the source of his [her] funds, for, as I have said, the burden is on the government to prove that the funds used for expenditures arose from taxable sources.

This instruction is based on the rationale of the courts in the following decisions:

Taglianetti v. United States, 398 F.2d 558, 562 (1st Cir. 1968), aff'd., 394 U.S. 315 (1969)

United States v. Citron, 783 F.2d 307, 315 (2d Cir. 1986)

United States v. Breger, 616 F.2d 634, 635 (2d Cir. 1980)

United States v. Marshall, 557 F.2d 527, 529 (5th Cir. 1977)

United States v. Newman, 468 F.2d 791, 793 (5th Cir. 1972)

United States v. Penosi, 452 F.2d 217, 219 (5th Cir. 1971)

United States v. Caswell, 825 F.2d 1228, 1231-32 (8th Cir. 1987)

United States v. Pinto, 838 F.2d 426, 431-32 (10th Cir. 1988)

The instruction is also based on the rationale of the following decisions involving the net worth method, which is essentially the same as the expenditures method, Taglianetti v. United States, 398 F.2d at 562:

Holland v. United States, 348 U.S. 121 (1954)

Friedberg v. United States, 348 U.S. 142 (1954)

United States v. Calderon, 348 U.S. 160 (1954)

United States v. Massei, 355 U.S. 595 (1957)

United States v. Johnson, 319 U.S. 503 (1942)

United States v. Sorrentino, 726 F.2d 876, 879, 880 (1st Cir. 1984)

United States v. Breger, 616 F.2d 634, 635 (2d Cir. 1980)

United States v. Terrell, 754 F.2d 1139, 1144 (5th Cir. 1985)

United States v. Schafer, 580 F.2d 774, 775 (5th Cir. 1978)

United States v. Anderson, 642 F.2d 281, 285 (9th Cir. 1981)

NOTE

¹ The instruction should be modified in those instances where a joint return is involved and also where the net worth computation reflects the joint net worth of a husband and wife, or, in rare instances, the joint net worth of a defendant and a third party.

GOVERNMENT PROPOSED JURY INST. NO. MP-7

Cash Expenditures Method

In this case the Government relies upon the so-called “cash expenditures method” of proving unreported income. The theory of this method of proof is that if a taxpayer's expenditures and disbursements for a particular taxable year, together with any increase in net worth exceed the total of the taxpayer's reported income together with non-taxable receipts and available cash at the beginning of the year, then the taxpayer has understated [his] [her] income.

The “cash expenditures method” necessarily involves not only the examination of the Defendant's expenditures and disbursements during the taxable year, but also an examination of the Defendant's “net worth” at the beginning and at the end of that year.

[JI-111]

[The remainder of this instruction should consist of the text of Proposed Instruction No. MP-5, supra, from the second paragraph to the end of that instruction.]

Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, OI 93.4 (2003 ed.)

GOVERNMENT PROPOSED JURY INST. NO. MP-8

Cash Expenditures Method

To establish a substantial understatement of the tax on the income tax return of Defendant for the year[s] ______ , the government has relied upon proof by the so-called “cash expenditures method” of determining income for that particular period. This “cash expenditures method,” if done correctly, is an indirect or circumstantial way to reliably determine income.

In this method of proof, if a taxpayer's expenditures and disbursements for a particular taxable year, together with any increase in net worth, exceed the total of reported income together with non-taxable receipts for that same year and available cash at the beginning of the year, then the taxpayer has unreported income.

A person's net worth is the difference between a person's total assets and that person's total liabilities on any given date. Said another way, net worth is the difference between what a person owns and what that person owes at any particular time.

The “cash expenditures method” necessarily involves not only the examination of the defendant's expenditures and disbursements during the taxable year in question, but also an examination of the defendant's net worth at the beginning and again at the end of that year.¹

2B Kevin F. O'Malley et al., Federal Jury Practice and Instructions, § 67.06 (5th ed. 2000)

NOTE

¹ Notes following this jury instruction in O'Malley state, “The pertinent portions of the instruction on the ‘Net Worth Method’, Section 67.5, should be given to the jury in conjunction with this instruction.” Thus, the prosecutor should consult the above net worth instructions for appropriate language to include. While the expenditures method is a "variant of the net worth method," there are certain different elements involved in their presentation, including the showing of net worth required. Under the expenditures method, "net worth need not be established by a formal net worth statement. Rather, accurate inclusion of diminution of resources serves the function of enabling the jurors to determine if expenditures were financed by liquidation of assets, depletion of a cash hoard, or unreported income." United States v. Citron, 783 F.2d 307, 315 (2d Cir. 1986); see Taglianetti v. United States, 398 F.2d 558, 562 (1st Cir. 1968), aff'd, 394 U.S. 316 (1969); United States v. Caswell, 825 F.2d 1228, 1232 (8th Cir. 1987); United States v. Pinto, 838 F.2d 426, 432 (10th Cir. 1988).

GOVERNMENT PROPOSED JURY INST. NO. MP-9

Bank Deposits (Plus Cash Expenditures) Method¹

To prove the alleged understatements of taxable income, the government relies upon the bank deposits [plus cash expenditures] method of proof.²

To use this method of proof, the government must establish that the defendant was engaged in an income-producing activity during the tax years in issue and that, during the course of such

[JI-112] activity, regular and periodic deposits having the inherent appearance of current income were made into bank accounts in the defendant's name or under his [her] dominion and control.

Deposits into such accounts are totaled. Non-income transactions, such as transfers between bank accounts, redeposits, and deposits of nontaxable amounts, such as loan proceeds, gifts, inheritances, or prior accumulations, are subtracted from the total deposits. [To this total is added any additional undeposited income that the defendant received during the tax year in issue and any cash or currency expenditures made with undeposited funds not derived from a nontaxable source.]³

The appropriate deductions, exclusions, exemptions, and credits to which the defendant is entitled then are subtracted, leaving an amount the government contends to be the corrected taxable income for the tax year in issue. This amount is then used to compute the corrected tax due and owing for the year, which is then compared with the actual tax paid in order to establish the alleged understatement of taxes.

If you find that the defendant’s bank deposits [plus undeposited income and cash expenditures]³ establish for a tax return in issue a taxable income figure that exceeds the taxable income reported on the tax returns for the years involved, you will proceed to inquire whether the government has established that those excess deposits [and other funds received or spent but not deposited]³ represent additional taxable income on which the defendant willfully attempted to evade or defeat the tax. In this connection, if the government has established that the defendant was engaged in an income-producing business or activity, that he [she] was making regular and periodic deposits of money to bank accounts in his [her] name or under his control, that the deposits and other funds received and available for deposit have the appearance of income, then you may, but are not required to, draw the inference that these deposits [and other funds available for deposit] represented income during the year in question.

Explanations or "leads" as to the source of the funds used or available for deposits during the prosecution years, such as cash-on-hand,¹ gifts, loans, or inheritances, may be offered to the government by or on behalf of the defendant. If such leads are relevant, reasonably plausible, and reasonably susceptible of being checked, then the government must investigate into the truth of the explanations. Additionally, leads must be furnished well in advance of trial for the government to be obligated to investigate them or to include them in the government's computations. However, if no such leads are provided, the government is not required to negate every conceivable source of nontaxable funds.

The government claims that it has correctly taken into account all of the factors which I have mentioned and that the bank deposits plus undeposited income and cash expenditures result in a figure that fairly approximates the defendant's true individual taxable income for the calendar years 20__ and 20__.

This instruction is based on the rationale, and not the actual language, of the opinions below:

United States v. Morse, 491 F.2d 149, 151 (1st Cir. 1974)

United States v. Slutsky, 487 F.2d 832, 840 (2d Cir. 1973)

United States v. Nunan, 236 F.2d 576, 587 (2d Cir. 1956)

United States v. Venuto, 182 F.2d 519, 521 (3d Cir. 1950)

Morrison v. United States, 270 F.2d 1, 2 (4th Cir. 1959)

Skinnett v. United States, 173 F.2d 129 (4th Cir. 1949)

United States v. Conaway, 11 F.3d 40, 43-44 (5th Cir. 1993)

United States v. Tafoya, 757 F.2d 1522, 1528 (5th Cir. 1985)

United States v. Normile, 587 F.2d 784, 785 (5th Cir. 1979)

United States v. Boulet, 577 F.2d 1165, 1167 (5th Cir. 1978)

[JI-113]

United States v. Horton, 526 F.2d 884, 887 (5th Cir. 1976)

United States v. Parks, 489 F.2d 89, 90 (5th Cir. 1974)

United States v. Moody, 339 F.2d 161, 162 (6th Cir. 1964)

United States v. Ludwig, 897 F.2d 875, 878-882 (7th Cir. 1990)

United States v. Esser, 520 F.2d 213, 216 (7th Cir. 1975)

United States v. Stein, 437 F.2d 775, 779 (7th Cir. 1971)

United States v. Lacob, 416 F.2d 756, 759 (7th Cir. 1969)

United States v. Mansfield, 381 F.2d 961, 965 (7th Cir. 1967)

United States v. Abodeely, 801 F.2d 1020, 1024-1025 (8th Cir. 1986)

United States v. Vannelli, 595 F.2d 402, 404 (8th Cir. 1979)

United States v. Stone, 770 F.2d 842, 844 (9th Cir. 1985)

United States v. Soulard, 730 F.2d 1292, 1296 (9th Cir. 1984)

United States v. Hall, 650 F.2d 994, 999 (9th Cir. 1981)

United States v. Helina, 549 F.2d 713, 720 (9th Cir. 1977)

Percifield v. United States, 241 F.2d 225, 229 & n.7 (9th Cir. 1957)

United States v. Bray, 546 F.2d 851, 853 (10th Cir. 1976).

NOTES

¹ CAUTION: The above instruction does not include an instruction on cash on hand. In those instances where the bank deposits computation includes cash expenditures or currency deposits, the cases indicate that the government must establish a beginning cash on hand figure. See Section 33.08, supra. In such a case, the above instruction should be supplemented with a cash on hand instruction. For an example of a cash on hand instruction, see Proposed Jury Instruction 272 below.

² The material in brackets applies to cases that include cash or currency expenditures.

³ The material in brackets applies to cases that include both cash or currency expenditures and undeposited income. Where only one is included in a case, the bracketed language should be modified accordingly.

GOVERNMENT PROPOSED JURY INST. NO. MP-10

Bank Deposits Method

In this case the Government relies upon what is called the “bank deposits method” of proving unreported income.

This method of proof proceeds on the theory that if a taxpayer is engaged in an income producing business or occupation and periodically deposits money in bank accounts in the taxpayer's name or under the taxpayer's control, an inference arises that such bank deposits represent taxable income unless it appears that the deposits represented re-deposits or transfers of funds between accounts, or that the deposits came from non-taxable sources such as gifts, inheritances or loans. This theory also contemplates that any expenditures by the Defendant of cash or currency from funds not deposited in any bank and not derived from a non-taxable source, similarly raises an inference that such cash or currency represents taxable income.

Because the “bank deposits method” of proving unreported income involves a review of the Defendant's deposits and cash expenditures that came from taxable sources, the Government must establish an accurate cash-on-hand figure for the beginning of the tax year. The proof need not show the exact amount of the beginning cash-on-hand so long as it is established that the Government's claimed cash-on-hand figure is reasonably accurate. So, if you should decide that

[JI-114] the evidence does not establish with reasonable certainty what the Defendant's cash-on-hand was at the beginning of the year, you should find the Defendant not guilty.

In determining whether or not the claimed cash-on-hand of the Defendant at the starting point (or the beginning of the year) is reasonably accurate, you may consider whether Government agents sufficiently investigated all reasonable “leads” suggested to them by the Defendant, or which otherwise surfaced during the investigation, concerning the existence of other funds at that time. If you should find that the Government's investigation has either failed to reasonably pursue, or to refute, plausible explanations which were advanced by the Defendant, or which otherwise arose during the investigation, concerning the Defendant's cash-on-hand at the beginning of the year, then you should find the Defendant not guilty. Notice, however, that this duty to reasonably investigate applies only to suggestions or explanations made by the Defendant, or to reasonable leads that otherwise turn up; the Government is not required to investigate every conceivable source of non-taxable funds.

If you decide that the evidence in the case establishes beyond a reasonable doubt that the Defendant's bank deposits together with non-deductible cash expenditures during the year did substantially exceed the amount of income reported on the Defendant's tax return for that year, you should then proceed to decide whether the evidence also establishes beyond a reasonable doubt that such additional deposits and expenditures represented taxable income (that is, income from taxable sources) on which the Defendant willfully attempted to evade and defeat the tax as charged in the indictment.

Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, OI 93.3 (2003 ed.)

GOVERNMENT PROPOSED JURY INST. NO. MP-11

The "Bank Deposits Method" of Determining Income - Explained

To establish a substantial understatement of the tax on the income tax return of Defendant for the year[s] 20__, the government has relied upon proof by the so-called “bank deposits method” of determining income during a particular period. This “bank deposits method”, done correctly, is an indirect or circumstantial way to reliably determine income.

The theory of this method of proof is that if a taxpayer is engaged in an activity that produces income and if that taxpayer periodically deposits money in bank accounts under the taxpayer's name, or under the taxpayer's control, it may be inferred, unless otherwise explained, that these bank deposits represent taxable income. If there are expenditures of cash by the taxpayer from funds not deposited in any bank and not from any non-taxable source, such as by gift or from inheritance, it may be inferred, unless otherwise explained, that this cash represents unreported income.

In this method of proof, a taxpayer's bank deposits for the tax year are totaled, with adjustments made for funds in transit at the beginning and again at the end of that year. Any “non-income” deposits are excluded from this total and income which has not been deposited is included in the total. This procedure provides a gross income figure.

Income tax is then calculated in the usual way with legitimate credits and legitimate deductions taken into account. If the resulting figure is greater than that which the taxpayer reported on [his] [her] tax return for that year, then that taxpayer has unreported income in that amount.

Because the “bank deposits method” of determining income involves a review of bank deposits and cash expenditures during a taxable year, the government must establish with a reasonable degree of certainty an accurate “cash on hand” figure for the beginning of the tax year in

[JI-115] question. The government is not required to prove an exact “cash on hand” figure, but must prove a figure that is reasonably accurate.

If, therefore, you do not find that the government has established to a reasonable degree of certainty what the defendant's “cash on hand” was at the beginning of the year 20__, then you should find the defendant not guilty.

If on the other hand, you find that the government has proven to a reasonable degree of certainty what the defendant's “cash on hand” was at the beginning of the year 20__, you must then proceed to decide whether the evidence in the case establishes beyond a reasonable doubt that the bank deposits and non-deductible cash expenditures of Defendant substantially exceeded the amount reported on [his][her] tax return for that year. If so, you should then proceed to decide whether or not the government has proven, beyond a reasonable doubt, that the defendant willfully attempted to evade or defeat the additional tax as charged in Count of the indictment.

2B Kevin F. O'Malley et al., Federal Jury Practice and Instructions, § 67.07 (5th ed. 2000)

Miscellaneous

GOVERNMENT PROPOSED JURY INST. NO. Misc-1

Consider Each Count Separately

A separate crime is charged in each count of the indictment. Each charge, and the evidence pertaining to it, should be considered separately by the jury. The fact that you may find [the] [a] defendant guilty or not guilty as to one of the counts should not control your verdict as to any other count.

1A Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 12.12 (6th ed. 2008)

GOVERNMENT PROPOSED JURY INST. NO. Misc-2

Separate Consideration Of Multiple Counts

A separate crime is charged against the defendant in each count. You must decide each count separately. Your verdict on one count should not control your verdict on any other count.

Manual of Model Jury Instructions for the Ninth Circuit, § 3.12 (2003 ed.)

GOVERNMENT PROPOSED JURY INST. NO. Misc-3

Consider Each Count And Each Defendant Separately

A separate crime is alleged against [each][one or more] of the defendants in each count of the indictment. Each alleged offense, and any evidence pertaining to it, should be considered separately by the jury. The fact that you find one defendant guilty or not guilty of one of the offenses charged should not control your verdict as to any other offense charged against that defendant or against any other defendant.

You must give separate and individual consideration to each charge against each defendant.

1A Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 12.13 (6th ed. 2008)

[JI-116]

GOVERNMENT PROPOSED JURY INST. NO. Misc-4

Separate Consideration Of Each Count And Each Defendant

A separate crime is charged against one or more of the defendants in each count. The charges have been joined for trial. You must decide the case of each defendant on each crime charged against that defendant separately. Your verdict on any count as to any defendant should not control your verdict on any other count or as to any other defendant.

All of the instructions apply to each defendant and to each count (unless a specific instruction states that it applies only to [a specific defendant][or][a specific count]).

Manual of Model Criminal Jury Instructions for the Ninth Circuit, § 3.14 (2003 ed.)

GOVERNMENT PROPOSED JURY INST. NO. Misc-5

Give Each Defendant Separate Consideration

It is your duty to give separate and personal consideration to the case of each defendant. When you do so, you should analyze what the evidence in the case shows with respect to that defendant, leaving out of consideration entirely any evidence admitted solely against some other defendant or defendants.

Each defendant is entitled to have his [her] case determined from evidence as to his [her] own acts, statements, and conduct and any other evidence in the case which may be applicable to him [her].

The fact that you return a verdict of guilty or not guilty as to one defendant should not, in any way, affect your verdict regarding any other defendant.

1A Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 12.14 (6th ed. 2008)

GOVERNMENT PROPOSED JURY INST. NO. Misc-6

Separate Consideration For Each Defendant

Even though the defendants are being tried together, you must give each of them separate

consideration. In doing this, you must analyze what the evidence shows about each defendant [,

leaving out of consideration any evidence that was admitted solely against some other defendant

or defendants]. Each defendant is entitled to have his/her case decided on the evidence and the

law that applies to that defendant.

Federal Criminal Jury Instructions of the Seventh Circuit, § 4.05 (1998 ed.)

GOVERNMENT PROPOSED JURY INST. NO. Misc-7

Separate Consideration For Each Defendant

Although the defendants are being tried together, you must give separate consideration to each defendant. In doing so, you must determine which evidence in the case applies to each defendant, disregarding any evidence admitted solely against some other defendant[s]. The fact that you may find one of the defendants guilty or not guilty should not control your verdict as to any other defendant[s].

[JI-117]

Manual of Model Criminal Jury Instructions for the Ninth Circuit, § 1.14 (2003 ed.)

GOVERNMENT PROPOSED JURY INST. NO. Misc-8

Caution -- Consider Only Crime Charged

You are here to decide whether the government has proved beyond a reasonable doubt that

the defendant is guilty of the crime charged. The defendant is not on trial for any act, conduct, or

offense not alleged in the indictment. Neither are you concerned with the guilt of any other person or persons not on trial as a defendant in this case, except as you are otherwise instructed.

Fifth Circuit Criminal Jury Instructions, No. 1.19 (2001 ed.)

GOVERNMENT PROPOSED JURY INST. NO. Misc-9

Caution -- Punishment

(Single Defendant -- Single Count)

If a defendant is found guilty, it will be my duty to decide what the punishment will be. You should not be concerned with punishment in any way. It should not be a part of your consideration or discussions.

Fifth Circuit Criminal Jury Instructions, No. 1.20 (2001 ed.)

GOVERNMENT PROPOSED JURY INST. NO. Misc-10

Caution -- Punishment

(Single Defendant -- Single Count)

I caution you, members of the jury, that you are here to determine from the evidence in this case whether the defendant is guilty or not guilty. The defendant is on trial only for the specific offense alleged in the indictment.

Also, the question of punishment should never be considered by the jury in any way in deciding the case. If the defendant is convicted the matter of punishment is for the judge to determine.

Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, BI 10.1 (2003 ed.)

GOVERNMENT PROPOSED JURY INST. NO. Misc-11

Caution -- Punishment

(Single Defendant -- Multiple Counts)

A separate crime or offense is charged in each count of the indictment. Each count, and the evidence pertaining to it, should be considered separately. The fact that you may find the defendant guilty or not guilty as to one of the offenses charged should not control your verdict as to any other offense charged.

Fifth Circuit Criminal Jury Instructions, No. 1.21 (2001 ed.)

[JI-118]

GOVERNMENT PROPOSED JURY INST. NO. Misc-12

Caution -- Punishment

(Single Defendant -- Multiple Counts)

A separate crime or offense is charged in each count of the indictment. Each charge and the evidence pertaining to it should be considered separately. The fact that you may find the defendant guilty or not guilty as to one of the offenses charged should not affect your verdict as to any other offense charged.

I caution you, members of the jury, that you are here to determine from the evidence in this case whether the defendant is guilty or not guilty. The defendant is on trial only for those specific offenses alleged in the indictment.

Also, the question of punishment should never be considered by the jury in any way in deciding the case. If the defendant is convicted the matter of punishment is for the Judge alone to determine.

Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, BI 10.2 (2003 ed.)

GOVERNMENT PROPOSED JURY INST. NO. Misc-13

Caution -- Punishment

(Multiple Defendants -- Single Count)

The case of each defendant and the evidence pertaining to that defendant should be considered separately and individually. The fact that you may find one of the defendants guilty or not guilty should not control your verdict as to any other defendant.

Fifth Circuit Criminal Jury Instructions, No. 1.22 (2001 ed.)

GOVERNMENT PROPOSED JURY INST. NO. Misc-14

Caution -- Punishment

(Multiple Defendants -- Single Count)

The case of each defendant and the evidence pertaining to each defendant should be considered separately and individually. The fact that you may find any one of the defendants guilty or not guilty should not affect your verdict as to any other defendant.

I caution you, members of the jury, that you are here to determine from the evidence in this case whether each defendant is guilty or not guilty. Each defendant is on trial only for the specific offense alleged in the indictment.

Also, the question of punishment should never be considered by the jury in any way in deciding the case. If a defendant is convicted the matter of punishment is for the Judge alone to determine later.

Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, BI 10.3 (2003 ed.)

[JI-119]

GOVERNMENT PROPOSED JURY INST. NO. Misc-15

(Multiple Defendants -- Multiple Counts)

A separate crime is charged against one or more of the defendants in each count of the indictment. Each count, and the evidence pertaining to it, should be considered separately. The case of each defendant should be considered separately and individually. The fact that you may find one or more of the accused guilty or not guilty of any of the offenses charged should not control your verdict as to any other offense or any other defendant. You must give separate consideration as to each defendant.

Fifth Circuit Criminal Jury Instructions, No. 1.23 (2001 ed.)

GOVERNMENT PROPOSED JURY INST. NO. Misc-16

Caution -- Punishment

(Multiple Defendants -- Multiple Counts)

A separate crime or offense is charged against one or more of the defendants in each count of the indictment. Each charge, and the evidence pertaining to it, should be considered separately. Also, the case of each defendant should be considered separately and individually. The fact that you may find one or more of the defendants guilty or not guilty of any of the offenses charged should not affect your verdict as to any other offense or any other defendant.

Also, the question of punishment should never be considered by the jury in any way in deciding the case. If the defendant is convicted the matter of punishment is for the Judge alone to determine later.

Pattern Jury Instructions: Eleventh Circuit, Criminal Cases, BI 10.4 (2003 ed.)

GOVERNMENT PROPOSED JURY INST. NO. Misc-17

"On Or About" -- Explained

The indictment charges that the offense alleged [in Count _________] was committed "on or about" a certain date.

Although it is necessary for the government to prove beyond a reasonable doubt that the offense was committed on a date reasonably near the date alleged in [Count ______ of] the indictment, it is not necessary for the government to prove that the offense was committed precisely on the date charged.

1A Kevin F. O'Malley, Federal Jury Practice and Instructions, § 13.05 (6th Ed. 2008)

Fifth Circuit Criminal Jury Instructions, No. 1.18 (2001 ed.)

[JI-120]

GOVERNMENT PROPOSED JURY INST. NO. Misc-18

Date Of Crime Charged

The indictment charges that the offense was committed "on or about" _______. The

government must prove that the offense happened reasonably close to that date but is not

required to prove that the alleged offense happened on that exact date.

Federal Criminal Jury Instructions of the Seventh Circuit, § 4.04 (1998 ed.)

1A Kevin F. O'Malley et al, Federal Jury Practice and Instructions, § 13.05, notes (6th ed. 2008)

GOVERNMENT PROPOSED JURY INST. NO. Misc-19

Each Tax Year is Separate

2B Kevin F. O'Malley et al., Federal Jury Practice and Instructions, § 67.24 (5th ed. 2000)

GOVERNMENT PROPOSED JURY INST. NO. Misc-20

Proof of Precise Amount of Tax Owed Not Necessary

The government must prove beyond a reasonable doubt that the defendant willfully attempted to evade or defeat a substantial portion of the tax owed.

Kevin F. O'Malley, et al., Federal Jury Practice and Instructions, § 67.08 (5th Ed. 2000)

GOVERNMENT PROPOSED JURY INST. NO. Misc-21

Not Necessary to Show Any Additional Tax Due

Although the government is required to prove beyond a reasonable doubt that the defendant willfully filed a false document as charged in Count ____ of the indictment [information], the government is not required to prove that any additional tax was due to the government or that the government was deprived of any tax revenues by reason of any filing of any false return.

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 67.19 (5th Ed. 2000)

[JI-121]

GOVERNMENT PROPOSED JURY INST. NO. Misc-22

Funds or Property From Unlawful Sources

There has been evidence in this case that the defendant received funds or property from unlawful sources.

In determining the issue of the taxable income of the defendant, no distinction is made between income derived from lawful or unlawful sources. Funds or property received from unlawful or illegal sources, therefore, are treated in the same manner as funds or property from lawful or legal sources.

2B Kevin F. O’Malley et al., Federal Jury Practice and Instructions, § 67.21 (5th Ed. 2000)

26 U.S.C. § 61

James v. United States, 366 U.S. 213 (1961)

Rutkin v. United States, 343 U.S. 130 (1952)

GOVERNMENT PROPOSED JURY INST. NO. Misc-23

Computation of Tax Deficiency

The first step in arriving at an individual’s taxable income is to determine the gross income of that individual. Gross income generally means all income from whatever source derived. Gross income includes, but is not limited to, compensation for services, such as wages, salaries, fees, or commissions, income derived from a trade or business, gains from dealings in property, interest, royalties, and dividends. Gross income includes both lawful and unlawful earnings.

After having determined an individual’s gross income, the next step in arriving at the income upon which the tax is imposed is to subtract from the gross income such deductions and losses as the law provides. In this connection, an individual is permitted to deduct from gross income all of the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business or other profit-seeking endeavors, to the extent those expenses are not reimbursed by the business.

The amount remaining after subtracting the allowable deductions and losses from gross income is termed “adjusted gross income.” In arriving at income upon which the tax is imposed, the individual is permitted to deduct from adjusted gross income either the zero bracket amount allowed by law or, in the alternative, amounts paid during the year for itemized deductions, which are limited by law, such as medical expenses, state income and property taxes, interest, charitable contributions, and other miscellaneous items. An individual is then allowed a deduction for each qualified exemption. The resulting figure is termed “taxable income,” that is to say, the sum on which the income tax is normally imposed.

26 U.S.C. §§ 61 through 223 (Corporations, 26 U.S.C. §§ 61 through 281)

GOVERNMENT PROPOSED JURY INST. NO. Misc-24

Accrual Method of Accounting

Taxable income is computed by using the same method of accounting that the taxpayer used to compute his [her] income, as long as that accounting method clearly reflects income. In this case, the defendant reported taxable income and deductible expenses on the accrual method of accounting.

Under the accrual method of accounting, income is to be included in the taxable year when all events have occurred which fix the right to receive such income and the amount of the income can be determined with reasonable accuracy. Similarly, deductions are allowable for the taxable year in which all the events have occurred which establish the fact of liability giving rise to such deduction and the amount of the deduction can be determined with reasonable accuracy. When income is actually received or an expense is actually paid is irrelevant in the accrual method of

[JI-122] accounting.

26 U.S.C. §§ 446, 461(a)

Treasury Regulations on Income Tax (1986 Code), Sec. 1.461-1(a)(2) (26 C.F.R.)

GOVERNMENT PROPOSED JURY INST. NO. Misc-25

Corporate Diversions

Gains or profits and income derived from any source whatever are included in gross income for the purpose of taxation of income. This includes both lawful and unlawful gains.

You have heard evidence that the defendant was a shareholder in and diverted cash or other property from the [insert name of corporation], a corporation.

If you find that the defendant was a shareholder in the [insert name of corporation] and obtained cash or other property from the corporation, then you should proceed to determine whether this was income to the defendant.

In regard to this, you must first determine whether the defendant had complete control over the cash or other property he [she] obtained from the corporation, took it as his [her] own, and treated it as his [her] own, so that as a practical matter he [she] derived economic value from the money or property received. If you find this to be the case, then the money or property received by the defendant may [constitute] [be] income.

The defendant has introduced evidence to establish that [describe defense, e.g., money (or property) was held by the defendant for legitimate corporate purposes, constituted a loan or repayment of a loan, or constituted a nontaxable return of the defendant’s investment in the corporation] and therefore was not income to the defendant for tax purposes.

In determining whether the defendant received any income from his [her] corporation, you are instructed as follows:

1. Loan. If you find that funds taken by the defendant (or any part thereof) were a loan from the corporation that was to be repaid or were repayment by the corporation of a loan from the defendant, then to the extent that the distribution was a loan or loan repayment, it would not be income to the defendant.

2. Return of Investment (or return of capital). If the funds constituted a distribution from the corporation and the distribution was with respect to the corporation’s stock, and if the accumulated earnings and profits of the corporation and the earnings and profits of the corporation for the taxable year in issue were not great enough in amount to account for the distribution, all or a portion of the distribution may constitute a nontaxable return of the defendant’s investment in the corporation. The amount of a distribution that is not accounted for by a corporation’s earnings and profits is a return of capital, and not taxable to a shareholder,

[JI-123] to the extent of the shareholder’s investment. The amount of such a distribution in excess of the shareholder’s investment is capital gain income to the shareholder, which is taxable.

A payment to a shareholder is not automatically a distribution with respect to the corporation’s stock. To constitute such a distribution, a distribution must be made to a shareholder because of his ownership of the corporation’s stock and be paid to the shareholder in his capacity as such. Therefore, a payment does not qualify as a distribution with respect to stock if, for example, the corporation pays an individual shareholder in his capacity as a debtor, creditor, employee, or vendee, or under other circumstances where the individual’s status as a shareholder is incidental, such as embezzlement or misappropriation. Facts with a bearing on whether a distribution is with respect to a corporation’s stock include the distribution of stock ownership and conditions of corporate employment (whether, for example, a shareholder's efforts on behalf of a corporation amount to a good reason to treat a payment as salary). [Point to additional facts of the case that support the conclusion that a diversion is not a distribution with respect to stock.]

It is for you the jury to decide whether the circumstances surrounding a receipt of funds, including the intent of the defendant and the corporation, establish that the funds received by the defendant constituted income or a loan or return of the defendant’s investment.

Boulware v. United States, 128 S. Ct. 1168 (2008)

United States v. D’Agostino, 145 F.3d 69, 72-73 (2d Cir. 1998)

United States v. Ruffin, 575 F.2d 346, 351 n.6 (2d Cir. 1978)

United States v. Leonard, 524 F.2d 1076, 1082-1084 (2d Cir. 1975)

DiZenzo v. Commissioner Of Internal Revenue, 348 F.2d 122, 125-127 (2d Cir. 1965)

GOVERNMENT PROPOSED JURY INST. NO. Misc-25b

Corporate Diversions (2)¹

Gains or profits and income derived from any source whatever are included in gross income for the purpose of taxation of income. This includes both lawful and unlawful gains.

You have heard evidence that the defendant was a stockholder in and received cash or other property from the [insert name of corporation], a corporation.

If you find that the defendant was a stockholder in the [insert name of corporation] and obtained cash or other property from the corporation, then you should proceed to determine whether this was income to the defendant.

In this connection, you must first determine whether the defendant had complete control over the cash or other property he [she] obtained from the corporation, took it as his [her] own, and treated it as his [her] own, so that as a practical matter he [she] derived economic value from the money or property received. If you find this to be the case, then the money or property received by the defendant would be income; if you do not find this to be the case, then the money or property obtained by the defendant would not be income to the defendant.

Boulware v. United States, 128 S. Ct. 1168 (2008)

United States v. D’Agostino, 145 F.3d 69, 72-73 (2d Cir. 1998)

United States v. Ruffin, 575 F.2d 346, 351 n.6 (2d Cir. 1978)

United States v. Leonard, 524 F.2d 1076, 1082-1084 (2d Cir. 1975)

DiZenzo v. Commissioner Of Internal Revenue, 348 F.2d 122, 125-127 (2d Cir. 1965)

[JI-124]

NOTE

¹ This instruction should not be used if there is evidence of a basis for finding diverted funds to be nontaxable other than that the defendant held the funds on behalf of the corporation and expended them only for legitimate corporate purposes. For an instruction explaining the bases for finding funds nontaxable, such as a claim that diverted funds were loans or repayment of loans, see the instructions above and below.

GOVERNMENT PROPOSED JURY INST. NO. Misc-26

Constructive Dividends¹

The government has introduced evidence to establish that the defendant was a shareholder in [insert name of corporation], a corporation, and [e.g., obtained money or property from the corporation] and/or [caused the corporation to spend money for personal purposes of the defendant]² which represented a [dividend] [and/or capital gain income]³ that should have been reported on the defendant's return.

The defendant has introduced evidence to establish that [describe defense, e.g., money (or property) obtained by the defendant from the corporation and expenditures made by the corporation for personal purposes of the defendant] was not income to the defendant but [e.g., a loan from the corporation or a nontaxable return of the defendant’s investment in the corporation].⁴

In determining whether the defendant received any income from his [her] corporation, you are instructed as follows:

1. Dividend. A distribution by a corporation to or for the benefit of a stockholder that is not a loan is reportable as a dividend to the extent that the distribution (or any part thereof) could have been paid out of the accumulated earnings and profits of the corporation; or out of the earnings and profits of the corporation for the taxable year in issue.

2. Return of Capital. If the accumulated and current earnings and profits of the corporation are not great enough in amount to account for all, or a part of, the distribution to the defendant, then that portion of the distribution which could not be paid out of earnings and profits would be a nontaxable return of capital up to the amount of money invested in the corporation by the defendant.

3. Capital Gain Income. Finally, any portion of the distribution which exceeds both the accumulated earnings and profits of the corporation and the amount the defendant had invested in the corporation, would be capital gain income to the defendant.

[4. Loan. If you find that a distribution received by the defendant (or any part thereof) was a loan from the corporation that was to be repaid, then to the extent that the distribution was a loan, it would not be income to the defendant.]⁵

Boulware v. United States, 128 S. Ct. 1168 (2008)

United States v. D’Agostino, 145 F.3d 69, 72-73 (2d Cir. 1998)

United States v. Thetford, 676 F.2d 170, 175 n.5 (5th Cir. 1982), cert. denied, 459 U.S. 1148 (1983)

Bernstein v. United States, 234 F.2d 475, 480-482 (5th Cir.), cert. denied, 352 U.S. 915 (1956)

[JI-125]

NOTES

¹ This instruction may be given in those situations where the government’s theory of the case is that diverted funds constituted a constructive dividend but the defendant has introduced evidence to the effect that there were no corporate earnings or profits from which a dividend could have been paid.

² Select language and alternatives that reflect the evidence introduced by the government.

³ Select language and alternatives that reflect the evidence introduced by the government.

⁴ If the defense evidence is to the effect that the defendant received no money or property from the corporation and no expenditures were made for personal purposes of the defendant, this portion of the instruction should be modified accordingly.

⁵ This portion of the instruction is to cover those situations where evidence has been introduced of a loan defense. Another instruction concerning loans is set forth below.

GOVERNMENT PROPOSED JURY INST. NO. Misc-27

Loan -- Explained

A loan that the parties to the loan agree is to be repaid does not constitute gross income as that term is defined by the Internal Revenue Code. However, merely calling a transaction a loan is not sufficient to make it such. When money is acquired and there is no good faith intent on the part of the borrower to repay the funds advanced, such funds are income under the income tax laws and are taxable as such.

United States v. Mann, 161 F.3d 840, 854 (5th Cir. 1998)

United States v. Swallow, 511 F.2d 514, 522 n.7 (10th Cir.), cert. denied, 423 U.S. 845 (1975)

See also United States v. Rosenthal, 454 F.2d 1252 (2d Cir. 1972), cert. denied, 406 U.S. 931 (1972)

United States v. Rosenthal, 470 F.2d 837, 841-842 (2d Cir. 1972), cert. denied, 412 U.S. 909 (1973)

United States v. Rochelle, 384 F.2d 748, 751 (5th Cir. 1967), cert. denied, 390 U.S. 946 (1968)

GOVERNMENT PROPOSED JURY INST. NO. Misc-28

Gift -- Defined

It is for you, the jury, to decide whether certain funds are taxable or nontaxable as gifts to the defendant. In determining whether a payment of money or property to the defendant is a nontaxable gift, you should look to the intent of the parties at the time the payment was made, particularly the intent of the person making the payment.

A gift proceeds from a detached and disinterested generosity arising from affection, respect, admiration, charity, or like impulses. In this regard, the most critical consideration is the transferor’s or donor’s intention. What controls is the intention with which the payment, however voluntary, was made.

If a payment in funds or in property from one person to another proceeds primarily from a duty, either moral or legal, that payment is not a gift. Likewise, if the payment acts as an incentive for an anticipated benefit of an economic nature, then such payment is not a gift. Similarly, where

[JI-126] the payment is in return for services rendered, it is not a gift. It does not matter whether the donor derives economic benefit from the payment.