concluding that the taxability of earnings from the sale of blood plasma “was completely novel and unsettled by any clearly relevant precedent”
How later courts described this case
- concluding that the taxability of earnings from the sale of blood plasma “was completely novel and unsettled by any clearly relevant precedent”
- in tax evasion case, district court erred, inter alia, by excluding expert testimony proffered by defense on novel question of whether certain payments defendant received in exchange for her rare blood plasma constituted taxable income: "In a case such as this where the element of willfulness is critical to the defense, the defendant is entitled to wide latitude in the introduction of evidence tending to show lack of intent. The defendant testified that she subjectively thought that proceeds from the sale of part of her body were not taxable. By disallowing [the expert’s] testimony that a recognized theory of tax law supports Garber’s feelings, the court deprived the defendant of evidence showing her state of mind to be reasonable.”
- “By disallowing [the expert’s testimony] that a recognized theory of tax law supports Garber’s feelings, the court deprived the defendant of evidence showing her state of mind to be reasonable.”
- reversing the exclusion of expert testimony to show that defendant reasonably believed no tax was due
Written by the judges who cited it.
Later courts went against this
Criticized in part by People v. Smith, 155 Cal. App. 3d 1103 (1984)
Garber has been criticized in United States v. Ingredient Technology Corp. (2d Cir. 1983) 698 F.2d 88, 97, insofar as it holds it is for the jury to decide whether the tax law is sufficiently uncertain to negate defendant’s intent in the absence of evidence that defendant actually relied on one view.
Declined to follow by United States v. James G. Mallas Robert v. Jones, Jr., (Two Cases), 762 F.2d 361 (1985)
607 F.2d 92 (5th Cir.1979) (en banc), we decline to follow that rule.
The opinion
JAMES C. HILL, Circuit Judge,
specially concurring:
Because I conclude that the transactions under investigation constituted services and the income derived therefrom taxable under 61(a)(1), I should have preferred that the court say so in positive terms. The question would thus cease to be a novel one for those considering it in the future.
It was a novel question when it arose here, however, and the defendant should have been permitted to demonstrate its novelty, not so that the jury could pass upon the tax consequences of the transactions, but so that the jurors could better determine the question of willfulness. The case should be sent back for retrial with the willfulness issue determined upon consideration of all the evidence.
I take it that, at some length, the majority winds up by doing just that. So, I concur.