Next, Taylor contends that the district court erroneously instructed the jury regarding § 7206(1)'s requirement that a defendant act "[w]illfully." We agree with Taylor that the instruction in question is somewhat incomplete. The district court instructed the jury that "[t]he term willfully, as used in these instructions to describe the defendant's state of mind, means that he knowingly performed an act deliberately and intentionally as contrasted with accidentally, carelessly or unintentionally." Missing from its explication of the pertinent standard is the longstanding recognition that § 7206(1)'s willfulness requirement obligates the government to prove the defendant's "voluntary, intentional violation of a known legal duty." Cheek v. United States, 498 U.S. 192, 201 (1991); see United States v. Pomponio, 429 U.S. 10, 12 (1976).
Nevertheless, Taylor concedes that, because he made no objection at trial to the instruction in question, our review is only for plain error. See Knowles, 623 F.3d at 385. This requires a showing of (1) error (2) that is plain, (3) that affects substantial rights, and (4) that "seriously affects the fairness, integrity, or public reputation of judicial proceedings" such that we should exercise our discretion to correct it. United States v. Miller, 734 F.3d 530, 536-37 (6th Cir. 2013) (citation omitted). Even assuming that an error is "plain," a defendant's substantial rights ordinarily are affected only if the error was "prejudicial"; that is, if it "affected the outcome of the district court proceedings." United States v. Olano, 507 U.S. 725, 734 (1993). And unlike under a typical harmless error analysis, see O'Neal v. McAninch, 513 U.S. 432, 437-38 (1995), the party seeking relief on the basis of plain error bears "[t]he burden of persuasion [*8] . . . to make a specific showing of prejudice." United States v. Jones, 108 F.3d 668, 672 (6th Cir. 1997) (en banc).
Taylor has made no such showing. We have observed that a willfulness instruction is the inverse of an instruction on a good-faith defense, see United States v. Damra, 621 F.3d 474, 502 (6th Cir. 2010), and Taylor argues only that the district court's instruction improperly failed to require the jury to decide whether he acted in good faith in failing to report as income the funds that he obtained from his investors. But the remaining elements of § 7206(1), unlike those of many other criminal tax statutes, see, e.g., 26 U.S.C. §§ 7201, 7203; Cheek, 498 U.S. at 193-94, overlap in significant ways with the tax code's generally applicable willfulness requirement because they require a finding regarding the defendant's subjective beliefs. See United States v. Tarwater, 308 F.3d 494, 506 (6th Cir. 2002) (characterizing § 7206(1) as a "perjury statute"). Even under the district court's partially incomplete instruction, the jury was permitted to convict Taylor only after it found that he "deliberately and intentionally" filed tax documents that he did "not believe to be true and correct as to every material matter." 26 U.S.C. § 7206(1). In other words, even absent the willfulness requirement, the jury in convicting Taylor needed to find that he knew and believed that his income was reportable before it could find that he purposefully filed tax forms that he subjectively believed were materially false.
As a result, Taylor's argument rings hollow when he claims that the result of his trial would have been different if the jury had been more precisely instructed. After all, in finding him guilty even under the incomplete instruction, the jury necessarily rejected Taylor's assertion that he subjectively believed that he did not need to report the income in question to the IRS. The jury found that Taylor knew that he was providing materially false information to the IRS but did it anyway. Thus, for the proper jury instruction to have made a difference in Taylor's case, the jury would have had to accept his argument that he in good faith did not know that it was unlawful for him to deliberately lie to the IRS about a material tax matter.
Taylor points to nothing that supports his argument that the jury would have credited this assertion. That is not surprising. The tax code's heightened willfulness requirement is intended to ensure that the criminal law does not penalize "taxpayers who earnestly wish to follow the law" but make "innocent errors . . . despite the exercise of reasonable care," due to "the complexity of the Internal Revenue Code." Cheek, 498 U.S. at 205 (internal quotation marks and citations omitted). A defendant's erroneous beliefs about the law's requirements do not need to be objectively reasonable in order for them to negate willfulness, but "the more unreasonable the asserted beliefs or misunderstandings are, the more likely the jury will consider them to be nothing more than simple disagreement with known legal duties imposed by the tax laws." Id. at 203-04. Taylor has made no showing that a properly instructed jury would have found that he believed in good faith that it was legal for him to lie to the IRS about an important matter—that is, to file tax returns with the IRS that he subjectively believed were materially false. See United States v. Aaron, 590 F.3d 405, 409 (6th Cir. 2009) (noting that a district court is not required to define the concept of willfulness and declining to find plain error where the defendant did not show that the district court's failure to define willfulness affected his conviction under § 7206(1)). See also United States v. Griffin, 524 F.3d 71, 78 (1st Cir. 2008) (noting that there is very little daylight between a proposed instruction that the defendant "had to know that her statements [to the IRS] were false" and an instruction that the defendant intentionally violated a known legal duty under the [*11] tax code); United States v. Vartanian, 223 F. App'x 662, 664 (9th Cir. 2007) (declining to find plain error where a defendant was convicted of § 7206(1) despite a lack of a willfulness instruction because "it is extremely unlikely that a properly instructed jury would not have convicted" the defendant anyway (internal quotation marks omitted)).
If Taylor had raised the issue in the district court and lost, he would have a much stronger claim that he is due a reversal on this basis, given that our review would have been de novo and that the government, not Taylor, would have been required to shoulder the burden of demonstrating the error's effect. But Taylor failed to make any such objection in the district court and has likewise failed to seriously pursue it before ours. We conclude that Taylor has not surmounted the significant hurdle of demonstrating that his case presents the "exceptional circumstances" prompting us to grant him relief for plain error in order "to avoid a miscarriage of justice." Miller, 734 F.3d at 537. See also United States v. Monus, 128 F.3d 376, 387 (6th Cir. 1997) (holding that a defendant convicted under § 7206(1) had not demonstrated plain error when the district court told the jury only that it needed to find that he acted "willfully" where the defendant had not asked for "more detailed jury instructions").JAT Comments:
1. I am a bit surprised that the Government attorney did not present that standard instruction which, if presented, the court would have surely given. The CTM instructions, here, include the willfulness element and define willfulness as follows:
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 aI would have thought that this instruction or at least the formula would be presented to the judge in every case.
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.
2. The Court does suggest that, if the defendant had requested the instruction and been convicted, the conviction would be reversible error if the judge did not give it.
3. Notice how the Court deftly weaves in the perjury analysis to support its conclusion. The jury found that he knew he was lying and intended to do it, and the defendant made no showing that, given those findings, he could have not intended to violate the law. (There is logic there, so that in a plain error review, surely a proper Cheek instruction almost surely would not have affected the outcome.)