In United States v. Basile, 2014 U.S. App. 12388 (3d Cir. 2014), here, the defendants, husband and wife, chiropractors, engaged an asset protection firm who put them into offshore entities and bank accounts to avoid tax. The defendants took other actions to obscure their income and avoid tax. The defendants were intransigent in dealing with the IRS; their intransigence led to criminal prosecution.
As often the case, their principal defense was the Cheek willfulness defense -- that the defendants did not intend to violate a known legal duty. The jury convicted. On appeal, the defendants asserted that the instructions were deficient. The Court of Appeals held, [enhanced version available to lexis.com subscribers], (one footnote omitted; bold face supplied by JAT):
First, the Basiles argue that the instructions wrongly permitted the jury to reject their good-faith defense if jurors found their beliefs objectively unreasonable, in violation of Cheek v. United States, 498 U.S. 192 (1990), [enhanced version available to lexis.com subscribers]. We disagree.
The jury instructions stated:
A belief need not be objectively reasonable to be held in good faith; nevertheless, you may consider whether the Defendant's stated belief about the tax statutes was reasonable as a factor in deciding whether the belief was honestly or genuinely held.
View Jack Townsend's opinion in its entirety on the Federal Tax Crimes blog site.
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