Sunday, February 17, 2008

Tax is "IN"

Wesley Snipes is not the only one dealing with tax issues these days.  It seems the former mayor's brother in Philadelphia, in response to charges against him, is arguing that the tax code is unconstitutional.  The Philadelphia Inquirer reports here on a trial that sounds like a scene from a Broadway play. But as bizarre as the testimony may be, tax cases can be very difficult for the government.

In Cheek v. United States, the accused was unsuccessful on his claim of no knowledge as the Court noted that one cannot argue a statute's unconstitutionality without having knowledge of the statute.  But Cheek was successful in obtaining a reversal as the trial court had not given an appropriate knowledge instruction.  After all, tax statutes are complicated.

Although tax cases can be difficult ones for the government, when there is a failure to file and a proper jury instruction is given, a claim of no knowledge can be difficult for the accused.  As noted by Justice Blackmum (Marshall joining) in his dissent in the Cheek case:

"it is incomprehensible to me how, in this day, more than 70 years after the institution of our present federal income tax system with the passage of the Revenue Act of 1913, 38 Stat. 166, any taxpayer of competent mentality can assert as his defense to charges of statutory willfulness the proposition that the wage he receives for his labor is not income, irrespective of a cult that says otherwise and advises the gullible to resist income tax collections."

Stay tuned to find out how the accused fares in this trial.

(esp) (w/ a hat tip to Peter Goldberger)

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Cheek entitles the defendant to an instruction requiring the jury to find more than just "knowledge of the statute." It requires that the defendant "know" (which for present purposes most importantly includes that s/he *believes*) that the statute imposes a legal duty that applies to him/her, requiring that s/he file/pay/whatever. This is not an affirmative defense of "good faith"; it is the mens rea -- so if the jury has so much as a reasonable doubt on this score, it would be obligated to acquit. In fact, however, juries rarely have much difficulty concluding, BARD, that the defendant's professed lack of "knowledge" of (i.e., belief in the applicability of) the obligation is being asserted in bad faith, not sincerely.

Posted by: Peter G | Feb 19, 2008 3:09:47 PM

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