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Criminal Law and Procedure

Convicted Politician Did Not Lay a Proper Foundation For Proffered Indirect Testimony of Lack of Intent

In United States v. Beavers, ___ F.3d ___, 2014 U.S. App. LEXIS 12469 (7th Cir. 2014), here, the defendant was convicted of multiple counts of tax fraud. The facts are within a range of what might be expected given his profession -- money flowed to him and he did not report or pay tax on it.

The interesting part of the case relates to the key element for tax fraud that the defendant act willfully -- with intent to violate a known legal duty. How does a defendant unwilling to testify as to his intent -- thus invoking his Fifth Amendment privilege -- introduce indirect evidence of his lack of intent to blunt the Government's indirect proof of his intent? (Similar issues going to the willfulness element are, for example, reliance on tax practitioner (how can the defendant put his reliance in play without testifying). Can the defendant effectively mount the "defense" without taking the stand? This issue often comes up in the context of a defense request for a jury instruction on good faith -- an instruction meant to emphasize something inherent in the willfulness element, that if the defendant acted in good faith he did not act willfully. I offer the following from my Federal Tax Crimes Book (footnotes omitted):

The so-called good faith defense – sometimes the Cheek good faith defense – is technically not a defense. The Government must prove willfulness. Willfulness does not exist if the defendant acted in good faith with a belief that the law did not impose the legal obligation he is alleged to have violated. Does that mean that the Government, in order to prove willfulness, must disprove good faith as to the legal requirement? Logically, it would and, certainly most of the time, the Government’s proof of willfulness will in fact be sufficient to permit the jury to infer beyond a reasonable doubt that the defendant lacked good faith.

Defendants who want to emphasize their good faith with the hope that the evidence bearing on good faith will at least dissuade the jury from finding willfulness beyond a reasonable doubt. Thus, they will want the judge, by separate instruction, to instruct that good faith negates willfulness. That good faith nuance, while implicit in the general willfulness instruction, is not as explicit as defendants desire. Generally, courts will give the specific good faith instruction only if the evidence somehow affirmatively puts good faith in play – makes it a real issue for the jury. How does the defendant do that? The most direct way is for the defendant to testify as to his or her good faith. But, in order to do that, the defendant will be subject to cross-examination; frequently, the defense team will conclude that the potential benefits of the defendant testifying (including the good faith opportunity) are less than the risks of the defendant testifying. So the defendant will not testify. Notwithstanding some noises that the defendant is required to testify to put good faith in play, the courts soundly reject that notion. Other circumstantial evidence, including perhaps lay opinion evidence as to the defendant’s mental state, may be sufficient to put that issue in play and, if it does, the trial judge should give the instruction.

So, basically, the Government must prove intent beyond a reasonable doubt via circumstantial evidence in the absence of the defendant's testimony. In appropriate cases, the defendant should be able to do so also, provided that he gets to the jury by laying the proper foundation.

With that, let's turn to Beavers, [enhanced version available to subscribers].

View Jack Townsend's opinion in its entirety on the Federal Tax Crimes blog site.

For additional insight, explore Tax Crimes, authored by Jack Townsend and available at the LexisNexis® Store


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