Thursday, January 19, 2012

Reasonableness and Good Faith (1/19/12)

In United States v. Aldridge, 2012 U.S. App. LEXIS 448 (6th Cir. 2010), per curiam unpublished, here, the Sixth Circuit addressed the relationship of reasonableness to the good faith defense as follows:
Reasonableness does play a role in determining whether the defendant acted in good faith. Good faith is a defense to the willfulness element that the government must prove. The court instructed the jury that if it found "that the defendant, subjectively in his own mind, believed that he was not required by the law to file the returns in question or pay the taxes, it will be your duty to find him not guilty." The jury could use the reasonableness of the defendant's explanation for his actions to assess whether the defendant's version was credible. The more unreasonable the jury perceives the defendant's reasons for not paying taxes to be, the more the jury would likely infer that the defendant's proffered reasons were pretextual. Similarly, the more reasonable the defendant's reasons were, the more likely it is that the jury would credit them as being truthful. If the jury believed the testimony of the defendant and that testimony reflected an honest mistake in law, then the jury could find that the defendant acted in good faith. Accordingly, the court properly instructed the jury that the reasonableness of the defendant's actions "is a factor [the jury] can consider in determining whether the defendant acted in good faith."

1 comment:

  1. Jack,

    in F1040, IRS should put "attache Schedule B if you have foreign financial accounts" instead of "attache Schedule B if applicable"

    Also, Schedule B should have required taxpayer's signature with perjury penalty clause.

    I am not sure others. To me Schedule B has been like a scratch paper to calculate interests earning.

    The Gov should make taxpayers to treat Schedule B (which leads to FBAR) seriously. Why so many people missed FBAR ? That is likely due to the fact FBAR is at the bottom of Schedule B -- most people fail to read thoroughly.


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