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United States v.
Flitcraft |
UNITED STATES OF AMERICA, APPELLEE
v.
ROBERT W. FLITCRAFT AND REBECCA A.
FLITCRAFT, APPELLANTS
No. 86-2158
Summary Calendar
United States Court of Appeals, Fifth
Circuit
October 24, 1986
803 F.2d 184 (5th Cir. 1986)
John S. Newberry, Gladstone, Tex., for
appellants.
Bob Wortham, U.S. Atty., J. Michael
Bradford, Paul E. Naman, Asst. U.S. Attys., Beaumont, Tex., for
appellee.
Appeal from the United States District
Court for the Eastern District of Texas.
Before REAVLEY, JOHNSON, and DAVIS,
Circuit Judges.
JOHNSON, Circuit Judge:
Robert W. Flitcraft and his wife Rebecca
appeal their convictions for failing to file tax returns and filing
false withholding exemption certificates under 26 U.S.C. §§ 7203 and
7205, both misdemeanors. On appeal, they raise two issues: (1) whether
the district court abused its discretion by excluding cases and other
documents that Flitcraft claimed to have relied on in concluding that
he was not required to file an income tax return; and (2) whether the
district court committed plain error in instructing the jury that an
unreasonable but good-faith misunderstanding of the income tax law was
no defense to the charge. We find no error as to issue (1), but do
find plain error as to issue (2), and therefore reverse and remand for
a new trial.
I. FACTS AND PROCEDURAL HISTORY
The Flitcrafts’ present troubles began
when Rebecca Flitcraft served on a federal jury in a criminal case and
provided the lone acquittal vote that caused a mistrial. Federal
investigators looking into charges of juror tampering discovered that
the Flitcrafts had not filed income tax returns for 1981 and 1982, and
that they had filed withholding forms in 1982 claiming exemption from
tax. Indictments followed under 26 U.S.C. § 7203 (willful failure to
file returns) and § 7205 (willful filing of a false withholding
exemption certificate).
At trial, the Flitcrafts admitted that
their income was high enough to make them liable for tax and that they
had in fact signed the false withholding forms and failed to file
returns. They contested only the Government’s contention that these
acts were done willfully. Mrs. Flitcraft stated that she had trusted
her husband when he told her that he had researched the question and
that they owed no tax. Mr. Flitcraft testified that he had read cases
and articles that convinced him that his wages were not income, merely
an even exchange of money for time. The trial judge, a United States
magistrate, refused to allow Flitcraft to introduce the legal
materials on which he claimed to have relied, but did allow him to
testify about them orally. The Government also introduced evidence
that Mr. Flitcraft had belonged to a tax protest group.
The jury found the Flitcrafts guilty on
all counts. Robert Flitcraft was sentenced to four years in prison and
five years of probation; Rebecca was sentenced to one year’s
imprisonment and five years’ probation. Both were ordered to pay
restitution and file annual tax returns. The district court affirmed
the judgment. 18 U.S.C. § 3402.
II. EXCLUSION OF DOCUMENTS
The Flitcrafts first contend that the
trial court erred by excluding from evidence documents relied on by
the Flitcrafts in their belief that they were not subject to federal
income tax. Robert Flitcraft testified that he believed that filing a
federal income tax return was voluntary. He sought to introduce case
law and documents, which he claimed were the basis for his beliefs.
The Government’s objection to this evidence was sustained but Robert
Flitcraft was allowed to testify about the existence and contents of
the documents. The Flitcrafts now argue that the jury would have been
more likely to credit the sincerity of the Flitcrafts’ belief that
they were not subject to filing a return if it had seen the documents.
The Federal Rules of Evidence provide that
evidence, though relevant, “may be excluded if its probative value is
substantially outweighed by the danger of . . . confusion of the
issues, or misleading the jury, or by consideration of undue delay,
waste of time, or needless presentation of cumulative evidence.”
Fed.R.Evid. 403. A district court’s ruling under Rule 403 will not be
disturbed except for an abuse of discretion. United States v.
Burton, 737 F.2d 439, 443 (5th Cir. 1984).
In the present case the introduction of
the cases and documents relied on by Flitcraft would have been
cumulative because Flitcraft testified to the documents he relied on
and their contents. The introduction of the documents themselves would
have had little further probative value. In addition, the documents
presented a danger of confusing the jury by suggesting that the law is
unsettled and that it should resolve such doubtful questions of law.
See, e.g., Cooley v. United States, 501 F.2d 1249, 1253, (9th
Cir. 1974), cert. denied, 419 U.S. 1123, 95 S.Ct. 809, 42
L.Ed.2d 824 (1975).
III. JURY INSTRUCTIONS ON INTENT
The Flitcrafts were found guilty of
violations of sections 7203 and 7205. Both statutes define specific
intent offenses and require a showing of “willfulness” on the part of
the offender.
In a preliminary instruction to the jury,
the magistrate stated:
The defendants
are entitled to raise the defense that they were acting in good faith
and that their actions were proper, but their beliefs must be
objectively reasonable and if they act contrary to settled law, the
beliefs are not considered to be objectively reasonable.
Record Vol. 5 at 293. In his closing
charge to the jury the magistrate gave a customary definition of
“willfulness,” i.e., “means, ‘voluntarily, purposefully, deliberately,
and intentional,’” but then stated:
The belief that
wages are not income, even if earnestly held, does not constitute a
misunderstanding of the requirements of the law and is not a defense.
Rec.Vol. 5 at 447. The defense failed to
object to either of these instructions.
The Supreme Court has defined willfulness,
in the context of a criminal tax case, as the “intentional violation
of a known legal duty.” United States v. Pomponio, 429 U.S. 10,
12, 97 S.Ct. 22, 23, 50 L.Ed.2d 12 (1976), quoting United States v.
Bishop, 412 U.S. 346, 360, 93 S.Ct. 2008, 2017, 36 L.Ed.2d 941
(1973). Where the statute, as in the instant case, criminalizes only
“willful” violations, a bona fide misunderstanding is a valid defense.
United States v. Murdock, 290 U.S. 389, 396, 54 S.Ct. 223, 226,
78 L.Ed. 381 (1933). This Court has followed the Supreme Court in
allowing a good faith defense under these and related statutes.
United States v. Burton, 737 F.2d 439, 441-42 (5th Cir. 1984);
United States v. Reed, 670 F.2d 622, 624-25 (5th Cir.), cert.
denied, 457 U.S. 1125, 102 S.Ct. 2945, 73 L.Ed.2d 1341 (1982);
United States v. Pry, 625 F.2d 689, 691-92 (5th Cir. 1980),
cert. denied, 450 U.S. 925, 101 S.Ct. 1379, 67 L.Ed.2d 355 (1981);
Mann v. United States, 319 F.2d 404, 409-10 (5th Cir. 1963),
cert. denied, 375 U.S. 986, 84 S.Ct. 520, 11 L.Ed.2d 474 (1964).
All of the other circuits to consider the question have reached the
same conclusion. See, e.g., United States v. Aitken, 755
F.2d 188, 192-93 (1st Cir. 1985); United States v. Kraeger,
711 F.2d 6, 7 (2d Cir. 1983); Yarborough v. United States,
230 F.2d 56, 61 (4th Cir.), cert. denied, 351 U.S. 969, 76 S.Ct.
1034, 100 L.Ed. 1487 (1956); Battjes v. United States,
172 F.2d 1 (6th Cir. 1949); Cooley, 501 F.2d at 1254 (9th Cir.
1974); United States v. Phillips, 775 F.2d 262, 263-64 (10th
Cir. 1985). In sum, there is little doubt that the instructions given
in the instant case were erroneous.
However, since the Flitcrafts did not
object to these instructions in the trial court, we cannot reverse
unless we find that the instructions constituted plain error
“affecting substantial rights.” Fed.R.Crim.P. 52(b); United States
v. Atkinson, 297 U.S. 157, 160, 56 S.Ct. 391, 392, 80 L.Ed.
555 (1936); United States v. Gammage, 790 F.2d 431, 434 (5th
Cir. 1986). In Mann, this Court found, in a case presenting
similar facts, that an instruction holding out an objective rather
than a subjective standard did constitute plain error. 319 F.2d at
409-10. The Mann Court noted that intent was central to the
case, and declared that the defective instruction was not cured by the
trial court’s other, correct instructions. Id. at 410. The
First Circuit, in another tax case, found a jury instruction setting
an “objectively reasonable” standard to be plain error. Aitken,
755 F.2d at 194.
In the instant case, the Flitcrafts’
intent to disobey the law was the crucial issue. The magistrate’s
instruction that the defendants could not have acted in good faith if
they disobeyed “settled law” deprived the Flitcrafts of their only
defense and amounted to an impermissible directed verdict for the
Government. Burton, 737 F.2d at 441.
The Government contends that the
Flitcrafts waived this point of error by failing to raise it on appeal
to the district judge. The district court did not address this
particular point of error, but, since the record does not include the
briefs reviewed by the district judge, it cannot be determined whether
the error was raised in that forum. In any event, this Court on direct
review may notice plain error on its own motion. See Williams v.
United States, 208 F.2d 447, 450 (5th Cir.), cert. denied,
347 U.S. 928, 74 S.Ct. 531, 98 L.Ed. 1081 (1954); United States v.
Powe, 591 F.2d 833, 847 n. 49 (D.C.Cir. 1978).
IV. CONCLUSION
Because the trial court’s instructions
deprived the Flitcrafts of their good-faith mistake of law defense,
their conviction must be REVERSED and the case REMANDED for a new
trial.
REVERSED AND REMANDED.
