Ninth Circuit Clarifies Affirmative Act for Evasion of Assessment After Return Filed Can Restart Statute Of Limitations (1/27/22)

In United States v. Orrock , 23 F.4th 1203 (9th Cir. 1/26/22), CA9 here and GS here, the Court resolved potential confusion in the 9^th Circuit as to whether the evasion of assessment statute of limitations runs from (i) the first date that all elements of the crime existed (often in evasion of assessment cases when the taxpayer files the return) or (ii) a later date where the taxpayer committed an affirmative action of evasion (e.g., lie in an audit or, as in Orrock, file some false related return). The Court held that the latter date could, in effect, restart the statute of limitations. In other words, if the taxpayer had done no affirmative act after filing the return, the statute of limitations applies from the date of filing the return. If the taxpayer does an affirmative act after filing the return, the statute of limitations is in effect “refreshed.”

I am surprised that this could really be a continuing issue. I think that, in the 9^th Circuit cases that appeared to create uncertainty on the point, there was just confusion that has now been clarified.

I offer on this subject the following from Michael Saltzman and Leslie Book, IRS Practice and Procedure, ¶ 12.02[1][c][iv] Affirmative act of evasion (Thomsen Reuters 2015) (some footnotes omitted) (note: I am the principal author of Chapter 12,  titled Chapter 12: Criminal Penalties and the Investigation Function):

We discuss statutes of limitations below, but it is important to note here that the statute of limitations begins to run on the date of the last affirmative act of evasion. To illustrate, assume the taxpayer files a false return with intent to evade tax. That filing alone can be the affirmative act. If it is the only affirmative act, then the statute of limitations runs from the date of filing. There can be later affirmative acts with respect to a previously filed return. For example, if, incident to an audit of the return, a taxpayer makes a false statement to the agent in order to hide the original fraud on the return, then the statute of limitations on evasion will run from the date of the false statement.n104 Although the affirmative act element and the willfulness element of tax evasion are stated as separate elements, the elements are related in that the affirmative act element requires a willful intent to evade motivating the affirmative act. Stated otherwise, if the affirmative act element is satisfied, then wouldn't the willfulness element necessarily be satisfied? The cases discussing the issue are sparse, but the logic seems compelling.
   n104 United States v. Beacon Brass Co., 344 US 43 (1952) . The false statement is also a separate crime under 18 USC 1001. The Ninth Circuit, in an opinion many practitioners believe was wrongly decided, held that where the filing of a false return was an act of evasion of assessment, the crime was complete and started the statute of limitations, so that subsequent false statements in audit to avoid assessment were not separate acts of evasion starting a new statute of limitations. United States v. Galloway, 125 AFTR2d 2020-803 (9th Cir. 2020) (unpublished). The reasoning is not consistent with Beacon Brass where a taxpayer’s later false statements in the course of an audit effectively refreshed the statute of limitations.

 I will revise that footnote in the next cumulative supplement to the Saltzman treatise.

Court Holds that the Trust Fund Recovery Penalty is a Tax For Purposes of Tax Evasion, § 7201 (11/10/18)

In United States v. Prelogar, 2018 U.S. Dist. LEXIS 188305 (D. Mo. 2018), here), the Court rejected the defendant's argument to dismiss the following count of tax evasion, § 7201 that defendant:  "did willfully attempt to evade and defeat the payment of the Trust Fund Recovery Penalty ("TFRP") due and owing by him to the United States of America . . . and the payment of income tax due and owing by him to the United States of America."  The first thing to note is that two types of evasion are alleged -- one for the TFRP and the other for income tax.  I focus here on the allegation of tax evasion for the TFRP.

Defendant's argument was simple.  Tax evasion requires a tax to be evaded (or, in the language of the statute attempted to be evaded).  The TFRP, as stated in § 6672, is a "penalty" rather than a tax.  Therefore a person evading the TFRP is not evading tax and thus outside the scope of tax evasion.

The Court rejects the defendant's argument as follows:

Count I charges that Defendant "did willfully attempt to evade and defeat the payment of the Trust Fund Recovery Penalty ("TFRP") due and owing by him to the United States of America . . . and the payment of income tax due and owing by him to the United States of America" in violation of 26 U.S.C. § 7201. Defendant argues that § 7201 does not apply to him because the TFRP owed is a penalty and not a tax. In support of this argument, Defendant quotes Section 7201, which prohibits the willful evasion of "any tax imposed by this title or the payment thereof." Id. (emphasis added). Initially, the Court notes that Defendant's argument does not justify dismissal of Count I because Count I alleges that Defendant attempted to evade the payment of both taxes and penalties. At best, Defendant's argument would justify only limiting the scope of Count I. Regardless, the Court does not agree with Defendant that § 7201 applies only to evasion of the tax itself. Section 7201 makes it unlawful to attempt "to evade or defeat any tax", and § 6671(a) states that "any reference in this title to 'tax' imposed by this title shall be deemed also to refer to the penalties and liabilities provided by this subchapter." 26 U.S.C. § 6671(a). As explained in the Report, a "plain reading of Section 6671(a) leads to the inescapable conclusion that a reference to 'tax imposed' in a statute under the Internal Revenue Code [Title 26] must be deemed to include a 'penalty' provided in the subchapter [Subchapter B: Accessible Penalties]." Therefore, Defendant's arguments with respect to Count I are rejected. 

In Defendant's objections to the Report, he argues that the Fifth Circuit supports his claim that a penalty is not a tax for the purposes of § 7201. (Doc. 68, p. 3.)1 In United States v. Wright, 211 F.3d 233 (5th Cir. 2000), the Fifth Circuit addressed whether petitioners could be prosecuted for tax evasion if they owed only interest and penalties. Wright, 211 F.3d at 236-37. The Court based its analysis by relying on Sansone v. United States, 380 U.S. 343 (1965), where the Supreme Court observed that a conviction under § 7201 requires proof of a "tax deficiency." The Fifth Circuit then relied on the tax code's definition of "tax deficiency" - which does not include a tax penalty — to conclude that a conviction under § 7201 cannot be predicated on the willful evasion of a tax penalty. Id. at 236 & n. 3-4 (citing 26 U.S.C. §§ 6211, 6601(e)). The Court declines to follow Wright for several reasons. First, Wright does not discuss § 6671. Second, the phrase "tax deficiency" does not appear in § 7201, so the more limiting definition of "tax deficiency" (as opposed to the definition of "tax" found in § 6671) is inapplicable. Third, the issue in Sansone involved the circumstances under which a person charged with felony tax evasion is entitled to a lesser-included offense instruction for the misdemeanor of willful failure to pay a tax. Thus, it does not appear that when Sansone said the elements of § 7201 included a "tax deficiency," it meant to use the technical definition of the phrase as found elsewhere in the tax code. For these reasons, the Court denies Defendant's arguments with respect to Count I.

Indictment of Taxpayers for Evasion of Payment and Structuring Cash Withdrawals (8/14/17)

DOJ Tax announced here the indictment of two Virginia taxpayers -- husband and wife -- for evasion of payment, § 7201, and conspiracy to structure bank deposits to avoid the reporting requirements.

This is a pretty straight-forward, unexceptional indictment for Count One, evasion of payment.  They owed the tax, they reported the tax liabilities on their returns, the IRS assessed the tax as reported, and they took various actions affirmative acts to evade payment (transfer or assets to kin, signing and filing false Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, and withdrawing cash from bank accounts (the actions asserted in the structuring conspiracy charge as the overt acts of the conspiracy)).

The structuring conspiracy charge is also unexceptional except for how sparse it is.  The overt acts of the conspiracy are the many cash withdrawals of less than $10,000.  These overt acts are presented in a spreadsheet table.  Often the overt acts of a conspiracy go on ad nauseum to conjure up the defendants as evil actors.  Here, by contrast, these overt acts are simply the list of cash withdrawals during a six month period in 2015.  That is all that is required to have the indictment pass muster as presenting fair notice to the defendants.  If the case goes to trial, however, I would expect the Government to enter into evidence additional acts that could reasonably be described as overt acts of the conspiracy and am surprised that the Government did not lard up the indictment to paint a more sinister picture than presented by the list of withdrawals.

One technical quibble. The indictment refers to the tax liability as "self-assessed."  There is no such concept as a self-assessed tax.  The taxpayer reports -- self-reports, if you will -- tax liability on a return; the IRS assesses the tax liability accordingly.  Section 6201(a)(1) ("The Secretary shall assess all taxes determined by the taxpayer or by the Secretary as to which returns or lists are made under this title").  The act of assessment is  the recording by the IRS of the liability (whether self-reported or not) on the books of the IRS as an assessment.  As I note in my tax procedure book:

Our tax system is described as a “self-assessment” system.  This means that the taxpayer reports the amount of the tax obligation via a tax return.  The IRS must assess the tax reported on the return.  § 6201(a)(1). The taxes thus reported are often referred to colloquially as “self-assessed” which is probably a fair characterization since the statutory requirement that the IRS assess the amount reported is mandatory, making the IRS’s formal assessment a ministerial act.  

And then, elsewhere in the book later, I use the short-hand self-assessed or some variation.

Louisiana Attorney Pleads Guilty to Tax Evasion (11/9/16)

DOJ Tax and USAO ED LA issued press releases here and here announcing the guilty plea of a Louisiana attorney, Michael Thiel, to one count of tax evasion.  The key excerpts from the parallel press releases are:

Michael Thiel, 66, a resident of Baton Rouge, Louisiana, pleaded guilty to one count of evading the payment of federal income and employment taxes for 2003 through 2013.  According to documents filed with the court, Thiel operated a criminal defense law practice in Hammond, Louisiana.  Despite earning substantial income through his law practice, Thiel did not timely file income tax or employment tax returns, and did not timely pay tax due and owing to the United States.  Thiel agreed that as of April 30, he owed federal income tax, penalties and interest totaling $736,527, and employment tax, penalties and interest totaling $261,725. 

In January 2007, in an effort to conceal the ownership of his property and evade the payment of his tax liabilities, Thiel used nominees and the trusts he beneficially owned to purchase his principal residence for $435,000.  The nominees obtained a mortgage on the principal residence, and used a nominee bank account beneficially funded by Thiel to make the payments. Thiel entered into a lease agreement with the nominees to falsely characterize the monthly mortgage payments as rent.  In addition, between January 2007 and January 2014, Thiel deposited $416,283.56 into the nominee bank account with funds from the trusts and other accounts not held in his name. 

* * * * 

Pursuant to the plea agreement, Thiel faces a maximum sentence of 37 months in prison * * * *.

The key documents are:

• The Information, here.
• The Plea Agreement, here.
• The Fact Statement, here.
• The Minute Entry for the Plea Hearing, here.

JAT Comments:

1.  The plea is to one count of tax evasion under § 7201, here, which has a maximum sentence of five years.  However, the plea is a special plea pursuant to Rule 11(c)(1)(C), FRCrP, here, which permits the parties to "agree that a specific sentence or sentencing range is the appropriate disposition of the case, or that a particular provision of the Sentencing Guidelines, or policy statement, or sentencing factor does or does not apply (such a recommendation or request binds the court once the court accepts the plea agreement)."  In this case, the plea agreement specifies a maximum sentence at the top of the indicated guidelines range at the agreed offense level of 19 (reflecting a stipulated tax loss in the range $550,000 to $1,500,000 for purposes of Sentencing Guidelines 2T1.1 and 2T4.1 and a 3-level reduction for acceptance of responsibility reduction).  The tax evasion count to which Thiel pled is a five-year felony under § 7201, here.  At the plea hearing, the judge deferred approving the Rule 11(c)(1)(C) agreement until it has reviewed the sentencing report.

The Relationship Between Affirmative Act of Evasion and Willfulness (11/18/16)

In United States v. Boisseau, ___ F.3d ___, 2016 U.S. App. LEXIS 20535 (10th Cir. 2016), here, Boisseau was a lawyer who reported but did not pay a large amount of tax over a number of years.  He then set about to avoid having to pay the unpaid tax or at least delay having to pay the unpaid tax.  He was prosecuted for tax evasion.

The district court determined that Mr. Boisseau willfully evaded paying his taxes by (1) placing his law practice in the hands of a nominee owner to prevent the Internal Revenue Service (IRS) from seizing his assets; (2) causing his law firm to pay his personal expenses directly given an impending IRS levy, rather than receiving wages; and (3) telling a government revenue officer that he was receiving no compensation from his firm when in fact the firm was paying his personal expenses.

Boisseau's "affirmative acts" of tax evasion were:  (1) he had his son's father-in-law appear as the nominal owner of the LLC through which he practiced law (the opinion does not state whether the father-in-law was a lawyer, but does state that he "had no daily involvement with the firm, performed no work for it, and received no salary."); (2) he altered his compensation from the firm from a salary to paying his personal expenses, so that the IRS would be less able to levy; and (3) he represented -- misrepresented -- to the collection officer that his expenses were being paid by children and family members rather than by the firm (he sought to avoid the inference from this fact by arguing that his lawyer had corrected the representation and that he reported by payments as Schedule C income).  The Court of Appeals held that the evidence was sufficient to permit the trial judge to find that these were affirmative acts of evasion, one of the three element of tax evasion.

And, basically on the same fact pattern, the Court of Appeals held that the evidence was sufficient to permit the trial judge to find willfulness, one of the three elements of tax evasion.

The next part of the opinion is the most interesting.  I quote it in full:

Mr. Boisseau also argues that his conviction was the product of two legal errors. He argues that proof of an affirmative act of tax evasion cannot be established without evidence that the act was designed to conceal or mislead, and that proof satisfying the affirmative act element is not sufficient, in and of itself, to prove the willfulness element. 

Regarding his first challenge, Mr. Boisseau relies upon United States v. Meek, in which we stated, "An affirmative act requires more than the passive failure to file a tax return; rather, it requires a positive act of commission designed to mislead or conceal." 998 F.2d 776, 779 (10th Cir. 1993). In light of this precedent, Mr. Boisseau contends that the district court erred in stating that the government did not need to prove that he misled or concealed assets from the IRS. See Boisseau, 116 F. Supp. 3d at 1257. The government argues, inter alia, that the district court properly recognized the Supreme Court's recent decision in Kawashima v. Holder demonstrates that "the elements of tax evasion pursuant to § 7201 do not necessarily involve fraud or deceit" and that "it is possible to willfully evade or defeat payment of a tax under § 7201 without making any misrepresentation." 565 U.S. 478, 132 S. Ct. 1166, 1175, 182 L. Ed. 2d 1 (2012). Mr. Boisseau asserts that this language in Kawashima is dicta and does not overturn this court's decision in Meek requiring a positive act designed to mislead or conceal. 

We need not resolve this issue, however, because Mr. Boisseau lacks the factual predicate to make it given the district court's evaluation of the evidence. The district court addressed Mr. Boisseau's contention that the affirmative acts must mislead or conceal, and clearly stated that "[Mr.] Boisseau did mislead or conceal." Boisseau, 116 F. Supp. 3d at 1257. It found that Mr. Boisseau's conduct in using a nominee, altering his compensation, and misrepresenting his compensation to the IRS was not only intentional but also inherently misleading. Id. In light of its findings, there was simply no need to expressly state that Mr. Boisseau's conduct was "designed to conceal or mislead." 

As to Mr. Boisseau's second argument, he asserts that because the willfulness and affirmative act elements are distinct, the district court erred in relying on the Second Circuit's decision in United States v. Romano to conclude "if the affirmative act element is satisfied, there is no question that willfulness is also present." Boisseau, 116 F. Supp. 3d at 1256 (quoting Romano, 938 F.2d at 1572). The government responds that this argument was not preserved, and that the district court clearly stated that the elements were separate, defined willfulness in accordance with Supreme Court precedent to mean "the voluntary, intentional violation of a known legal duty," Cheek, 498 U.S. at 201, and found that each component of that definition was satisfied here. 

Regardless of whether the error was preserved, and having considered each of Mr. Boisseau's contentions, we conclude the government has the better argument. The district court's opinion, taken as a whole, demonstrates that the court treated the affirmative act element and the willfulness element as distinct. It defined the elements separately, and separately discussed which facts in the record proved each element beyond a reasonable doubt. Thus, the error, if any there be, was harmless because the district court simply did not conflate the affirmative act and willfulness elements of § 7201.

Interest and Penalties Issues At Sentencing (8/29/15)

I recently posted a blog entry including a discussion of whether interest and penalties should be included in the tax loss for the Sentencing Guidelines calculation at sentencing.  Seventh Circuit Reverses Sentence for Improper Calculation of Advisory Guidelines Range (Federal Tax Crimes Blog 8/21/15), here.  Briefly, as I understand the rules (S.G. §2T1.1. , Application Note 1), here.

1.  Evasion of Assessment.  If the evasion conduct (which may include relevant conduct to the count of conviction) is to evade assessment of the tax, then only the tax is included in the tax loss calculation. 

2.  Evasion of Payment.  If the evasion conduct (which may include relevant conduct to the count of conviction)  is to evade collection, then tax, penalties and penalties sought to be evaded are included.

In the linked blog entry, I said that the Seventh Circuit confused these rules for two reasons -- (i) where fraudulent checks were submitted to pay amounts that included tax, penalties and interest, the object of the offense included tax, penalties and interest and (ii) evasion of payment was relevant conduct to the crime of tax obstruction.

In United States v. John Cote (2d Cir. 2015) unpublished per curiam, here, Cote was convicted "after jury trial, of one count of conspiracy to commit tax evasion, in violation of 18 U.S.C. § 371, and four counts of tax evasion, in violation of 26 U.S.C. § 7201."  As articulated in the quote, the conspiracy was an offense conspiracy rather than a defraud / Klein conspiracy.  However, according to the DOJ Tax Press Release on the Conviction here, the conspiracy was a defraud / Klein conspiracy.  There are important differences between an offense conspiracy and a defraud / Klein conspiracy, although they are punishable under the same statute, but those differences are not important for this blog entry.  Focusing on the tax loss, the Court said

Cote raises a substantial question as to whether the district court erred in considering interest and penalties when calculating the "tax loss" amount resulting from his conviction for tax evasion conspiracy under 18 U.S.C. § 371, where the relevant commentary provides that "[t]he tax loss does not include interest or penalties, except in willful evasion of payment cases under 26 U.S.C. 7201 and willful failure to pay cases under 26 U.S.C. 7203." U.S.S.G. § 2T1.1, Application Note 1. However, because the district court unambiguously stated that it would have imposed the same sentence were Cote to prevail on his interpretation of the Guidelines, any error in calculating the Guidelines sentencing range was harmless. See United States v. Feldman, 647 F.3d 450, 459 (2d Cir. 2011).

Plea to Tax Obstruction in Evasion of Payment Case (1/31/13)

I cut and paste this IRS news release principally for the benefit of students just being introduced to federal tax crimes.  First, the press release illustrates that the criminal enforcement system seeks to undergird the federal tax system by publicizing compliance initiatives that will encourage other taxpayers to voluntarily comply.  The IRS thus issues press releases for criminal actions.  DOJ Tax and U.S. Attorneys Offices issue press releases as well.  I often refer to the DOJ Tax and USAO press releases and have links to the right of the blogs to DOJ Tax's press release sites.  Second, this particular plea illustrates a matter we covered last week in the Federal Tax Crimes class at UH Law School.  We were covering tax evasion.  Tax evasion under Section 7201, here, is usually evasion of assessment (principally by false return underreporting tax liability), but sometimes by evasion of payment.  The case described in the press release below seems to fit the pattern of an an evasion of payment case, although the charge was not tax evasion.  The pattern for evasion of payment that we discussed in class was for a taxpayer to have unpaid assessed tax liabilities (often reported by him or set up on audit) that he avoids paying and takes affirmative steps to avoid paying.  That appears to be what this defendant did.

We have also noted in class that a pattern of conduct can often fit within the elements of two or more crimes.  Here, the pattern of conduct could have been charged as evasion of payment but was charged as tax obstruction, Section 7212(a), here.  This was a plea deal and perhaps the "lesser" crime of tax obstruction is what the defendant required in order to plea.  Facially, it is a lesser crime than tax evasion.  Tax evasion is a five year maximum sentence, whereas tax obstruction is a three year maximum sentence.  Given the amount of the tax loss ($1.7 million), it is possible that the three year count of conviction could be less than at least the top of the sentencing guideline range.  I did a fairly clean calculation of the guidelines range (only factors were the tax loss and the 3-level reduction for acceptance) and determined an indicated guidelines range of 30-37 months, so the maximum period allowed by a Section 7212(a) plea will cap the sentence at 36 months.  And this is true not only as to the guidelines range, but also as to any possibility of an upward Booker variance.  Some of the foregoing will be unintelligible to students in the early part of the course, but will be easily understood once we complete the Guidelines chapter.

Evasion of Payment Statute of Limitations Runs from the Last Affirmative Act (12/22/12)

In United States v. Irby, 703 F.3d 280 (2d Cir. 12/18/12), here, the taxpayer was convicted for tax evasion under Section 7201, here, for the combination of (i) failing to file a return and (ii) subsequent affirmative acts thereafter to avoid payment of the tax due.  The latter affirmative acts, of course, transformed a failure to file case into a tax evasion case.  The statute of limitations for evasion is six-years, but from which date.  Section 6531(2), here.  In this type of case, involving failure to file which itself is a lesser misdemeanor crime, what makes it a felony is the affirmative act.  Hence, the Fifth Circuit sustained counting the period from the date of the last affirmative act after the due date of the return.  The Court said (most cases and quotation marks omitted):

The other circuits that have expressly considered the issue have concluded that the statute of limitations for section 7201 offenses runs from the later date of either: when the tax return was due or the defendant's last affirmative act of tax evasion. In Dandy, The Sixth Circuit addressed facts similar to those at issue here, where the defendant did not file tax returns for 1982 and 1983, but the last act of evasion did not occur until 1985. The Dandy court found that the statute of limitation runs from the last evasive act because it is these evasive acts  which form the basis of the crimes alleged in the indictment." In Ferris, the First Circuit supported the rule by pointedly stating, the defendant, however, by deceitful statements continued his tax evasion through date of last act of evasion. No circuit has rejected the last affirmative act of tax evasion rule. 

The rule, therefore, is well-supported in Supreme Court precedent and in the caselaw of other circuits. One element of the section 7201 offense is the commission of an affirmative act seeking to evade tax liability, which can be shown through the individual's willful failure to file a tax return, or through continued evasive acts intending to avoid the payment of taxes. The statute of limitations accrues from the later of the two. 

Irby last acted to evade the payment of his taxes in 2006, by using nominee trusts to conceal his assets. Because he was indicted in 2011, the district court did not err in concluding that Count I was not barred by the statute of limitations.

Hapless Mr. Williams Loses Again (12/5/12)

I have blogged on Joseph B. Williams III before.  He is the gentleman subject to the FBAR willful penalty that drew such a problematic opinion from the Fourth Circuit imposing the penalty.  See Fourth Circuit Reverses Williams on Willfulness (Federal Tax Crimes Blog 7/20/12; revised 7/24/12), here.  There was a related civil proceeding regarding his income taxes.  I  reported the Tax Court decision in that case earlier.  The Williams Offshore Account Saga Continues - You Win Some, You Lose Some (4/28/11), here.  The Fourth Circuit has now decided the appeal in the Tax Court case, Williams v. Commissioner (4th Cir. - No. No. 11-1804 12/3/12), here, an unpublished opinion, holding against Mr. Williams on the points he raised on appeal.

The Fourth Circuit unpublished decision plows no new ground (which is probably why it is unpublished).  Hence all it does is remind practitioners of settled propositions in the particular fact situation before the court.  The key propositions (with some fleshing out by me for context matters not addressed in the opinion) are:

1.  A guilty plea to income tax evasion for one or more years will be collateral estoppel in an ensuing civil case involving the same years.  Collateral estoppel after a guilty plea for income tax evasion will govern the unlimited statute of limitations in Section 6501(c)(1), here, and the civil fraud penalty in Section 6663, here.  Depending upon the plea and the allocution, It may not determine anything other than a minimum number for the tax liability itself.

2. Tax evasion under Section 7201, here, encompasses evasion of assessment or evasion of payment, or both (it is fair to say that evasion of assessment involves evasion of payment).

Evasion of Trust Fund Taxes and Charging Decisions (1/23/2012)

In United States v. Farr, 2012 U.S. LEXIS App. 1032 (10th Cir. 2012), here, in a nonprecedential Order and Judgment, the Tenth Circuit denied Farr's appeal of the district court's denial of bail pending appeal of her conviction for tax evasion of trust fund taxes.  The Court noted the standard as follows (emphasis supplied to highlight the conjunctive requirements for bail):

Under 18 U.S.C. § 3143(b)(1) [here], detention pending appeal is presumed unless a judicial officer finds (A) "by clear and convincing evidence that the person is not likely to flee or pose a danger to the safety of any other person or the community," and (B) "that the appeal is not for purpose of delay and raises a substantial question of law or fact likely to result in" reversal, a new trial, or a lesser sentence. The district court concluded that Ms. Farr had failed to show the required substantial question of law or fact.

The Court concluded, on appeal of the denial, it applies a de novo review to mixed questions of fact and law and a clearly erroneous review to the questions of fact.

Defendant raised several issues alleged to raise a substantial question of law or fact none of which had merit.  The one that interested me is as follows:

Proceeding under incorrect statute. Ms. Farr contends that she should have been charged under 26 U.S.C. § 7202 [here] rather than 26 U.S.C. § 7201 [here]. It appears, however, that § 7201 encompasses her conduct. See Farr I, 536 F.3d at 1186 [here] ("[T]he government has adduced ample evidence from which a jury could find Ms. Farr guilty of evading the trust fund recovery penalty."). "When a defendant's conduct violates more than one criminal statute, the government may prosecute under either (or both, for that matter, subject to limitations on conviction and punishment)." United States v. Bradshaw, 580 F.3d 1129, 1136 (10th Cir. 2009). "Absent certain allegations of impropriety, it is not the role of the jury (or the judge) to decide whether the government has charged the correct crime, but only to decide if the government has proved the crime it charged." Id. Accordingly, this issue does not present a substantial question for appeal.

Duplicity in Government Charging of Evasion of Assessment Counts

The Third Circuit issued an important opinion in United States v. Root, 585 F.3d 145 (3d Cir. 2009). The major issue in the opinion is the application of the criminal law concept of "duplicity." Duplicity is defined as "an indictment where the Government charges two or more distinct offenses in one count. In the latter situation, it cannot be determined if the jury's verdict was unanimous as to each distinct offense.)." 1A Charles Alan Wright et al., Federal Practice and Procedure § 142 (3d ed. 1999) (cited in fn. 7 of the concurring opinion in Root). The majority cites a longer list of concerns in duplicity:

The purposes of the prohibition against duplicity include: (1) avoiding the uncertainty of whether a general verdict of guilty conceals a finding of guilty as to one crime and a finding of not guilty as to another; (2) avoiding the risk that the jurors may not have been unanimous as to any one of the crimes charged; (3) assuring the defendant adequate notice; (4) providing the basis for appropriate sentencing; and (5) protecting against double jeopardy in a subsequent prosecution.

(Note that some of these concerns overlap the recent Rigas discussion here.