Petition — Foster v. United States

MAR 2 1978

L_MicHagL RODAK, JR., CLERK

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1977

“er eve ee eeeee

RONALD L. FOSTER,

DELLA M. FOSTER,

Petitioners

vs.

UNITED STATES OF AMERICA,

Respondent

PETITION FOR A WRIT OF CERTIORARI

TO THE COURT OF APPEALS

FOR THE NINTH CIRCUIT

CLYDE R. MAXWELL

Attorney at Law

567 San Nicolas Drive, Suite 401

Newport Beach, California 92660

(714) 644-5232 (213)570-8123

TOPICAL INDEX

TABLE OF AUTHORITIES

OPINION BELOW

TIMELINESS OF PETITION

JURISDICTION

QUESTIONS PRESENTED

REASONS FOR GRANTING THIS WRIT

LEGAL ARGUMENT

CONCLUSION

APPENDIX A — Memorandum No. 76-3733

APPENDIX B — Order Staying Issuance of Mandate

APPENDIX C — Internal Revenue Code §§ 7203 & 7204

PROOF OF SEY VICE

18

19

TABLE OF AUTHORITIES

Cases ,

Blackledge v. Perry

(1974) 417 U.S. 21, 28

Bolling v. Sharpe

347 U.S. 497 (1954)

Garner v. United States

(1976) 424 U.S. 648

North Carolina v. Pearce

(1969) 396 U.S. 711

Porth v. Templar

72-1 USTC 9146 (10th Circ. 1971)

Two Guys From Harrison-Allentown, Inc. v. McGinley

(1961) 366 U.S. 682

United States v. Berrigan

482 F.2d 171 (3rd Cir. 1973)

United States v. Berrios

501 V.2d 1207 (2nd Cir. 1974)

United States v. Daly

481 V.2d 28 (8th Cir. 1973)

United States v. DeMarco

560 F.2d 1224 (9th Cir. 1977)

United States v. Falk

479 F.2d 616 (7th Cir. 1973, rehearing in banc)

United States v. Jordan

508 F.2d 250 (7th Cir. 1975)

United States v. Oaks

527 F.2d 937 (9th Cir. 1975)

#

-—.—————

United States v. Snider

502 F.2d 645 (4th Cir. 1974)

United States v. Steele

461 F.2d 1148 (9th Cir. 1972)

Washington v. United States

401 F.2d 915 (CA D.C. 1968)

Yick Wo v. Hopkins

118 U.S. 356 (1886)

Internal Revenue Code

Title 26 U.S.C.

Section 7203

Section 7205

Title 28, U.S.C.

Section 1254(1)

Supreme Court Rules

Rule 19

a

SUPREME COURT OF THE UNITED STATES

October Term, 1977

SA. < vind uae ee

RONALD L. FOSTER,

DELLA M. FOSTER,

Petitioners

vs.

UNITED STATES OF AMERICA,

Respondent

PETITION FOR A WRIT OF CERTIORARI

TO THE COURT OF APPEALS

FOR THE NINTH CIRCUIT

TO THE HONORABLE CHIEF JUSTICE AND

ASSOCIATE JUSTICES OF THE SUPREME COURT

OF THE UNITED STATES:

Petitioners, RONALD L. FOSTER and DELLA M.

FOSTER, pray that a Writ of Certiorari issue to review

the judgment of the Court of Appeals for the Ninth

Circuit entered in the above entitled case on December

30, 1977, affirming petitioners’ convictions of willful

failure to file income tax returns (Forms 1040) for the

years 1969 and 1972 in violation of Title 26 U.S.C.

§7203.

~ ee

el

OPINION BELOW ,

The opinion of the Court of Appeals for the Ninth

Circuit before Ely and Hufstedler, Circuit Judges, and

Lindberg, District Judge, attached as appendix A., was

filed December 30, 1977, No. 76-3733. It is a

memorandum decision and is not reported in the

published services. The decision affirms the petition-

ers’ convictions for failure to file income tax returns

(Forms 1040) for the years 1969 and 1972 in violation of

Title 26 U.S.C. §7203. It reverses the §7203 convictions

for 1970 and 1971 by reason of the trial court’s failure to

charge the jury on the Fifth Amendment self

incrimination issue required by Garner v. United

States, (1976) 424 U.S. 648. It reversed the petitioners’

convictions of filing with their respective employers

false withholding exemption certificates (Forms W-4E)

for the years 1972 and 1973 in violation of Title 26

U.S.C. §7205 by reason of the trial court’s denial of a

pretrial motion to grant an evidentiary hearing on the

discriminatory prosecution issue as to the §7205 counts.

It sustained the denial of a hearing on the

discriminatory prosecution issue as to the §7203 counts

under United States v. Oaks, 527 F.2d 937 (9th Cir.

1975) and remanded the cause to the District Court for

the evidentiary hearing solely as to the §7205 counts.

TIMELINESS OF PETITION

Pursuant to the order staying issuance of mandate

by the Court of Appeals filed February 17, 1978

(attached as appendix B) petition for this writ may be

filed with this Court by March 2, 1978.

JURISDICTION

Jurisdiction to review the aforestated judgment of

the Court of Appeals for the Ninth Circuit by Writ of

Certiorari is provided by Title 28 U.S.C. §1254(1).

This petition invokes Rule 19 of the Supreme Court

Rules authorizing the granting of this writ in that the

decision of the Court of Appeals is in conflict with its

own decision in United States v. Steele, 461 F.2d 1148

(9th Cir. 1972) and the decisions in United States v.

Oaks, both in the Ninth Circuit, 508 F.2d 1403 (1974)

and 527 F.2d 937 (1975), on the issue of prosecutorial

discrimination; a serious constitutional question

involving the First, Fourth and Fifth Amendments

which has not been but should be settled by this Court.

Over the years many convictions of tax protesters who

raised their constitutional rights, under identical

circumstances as these petitioners, have resulted in

discriminatory and impermissible prosecution of

persons exercising their right of protest under the First

Amendment in order to inhibit the exercise of that

right. There has been no review by this Court defining

the proper prosecutorial limits in this situation.

Furthermore, the Ninth Circuit’s decision appears

to be in conflict with the crite: ia set by this Court on the

discriminatory prosecution issue and with other

circuits.

QUESTIONS PRESENTED ;

1. Did the Circuit Court err in distinguishing

between violations of Title 26 U.S.C. §7203 and Title 26

U.S.C. §7205 in requiring an evidentiary hearing on the

discriminatory prosecution issue as to the latter but not

as to the former.

2. Did the Circuit Court err in holding that the

statistical information is a valid basis for requiring an

evidentiary hearing on the §7205 violations as opposed

to the §7203 violations.

3. Did the Circuit Court err in failing to apply the

criteria of the Supreme Court and other Circuits in

requiring a hearing on the discriminatory prosecution

issue.

REASONS FO” GRANTING THIS WRIT

Petitioners are members of a Tax Rebellion Group

who protest against the requirements of reporting the

information required on Forms 1040 by reasons of the

Government’s monetary and fiscal policies which they

believe are in violation of their constitutional rights.

Accordingly, petitioners and others of their persuasion

file federal tax returns showing their names, addresses

and social security numbers but refusing to submit

information as to income, exemptions, expenses and

tax as an invasion of their rights under the First, Fourth

and Fifth Amendments to the Constitution.

In reversing the convictions of failure to file proper

returns for 1970 and 1971 the Circuit Court recognized

the application of the Fifth Amendment under Garner,

supra to this form of return. By failure to charge the

jury in this respect the convictions were reversed.

The decision points up the importance of the

discriminatory prosecution issue in this category of the

violation, since the Tax Rebellion Group has national

scope with respect to filing Forms 1040 by claiming

violation of constitutional rights [(cf. Porth v. Templar,

72-1 USTC 9145 (10th Circ. 1971); United States v.

Daly, 481 F.2d 28 (8th Cir. 1973); United States v.

Jordan, 508 F.2d 250 (7th Cir. 1975); United States v.

Snider, 502 F.2d 645 (4th Cir. 1974)].

In Porth v. Templar, supra, the court found

invalid certain conditions of probation prohibiting the

taxpayer from circulating materials questioning the.

constitutionality of the income tax laws and requiring

him to abstain from speaking or writing activities which

encouraged others to violate such laws. This ruling is

vital to the instant petition since petitioners contend

that they were invidiously selected for prosecution by

reason of their vocal and public actions against the

constitutionality of the income tax laws.

The Circuit Court drew arithmetical distinctions on

the discriminatory prosecution issue between those

prosecuted for violations of §§ 7203 and 7205 of the

Internal Revenue Code based upon United States v.

Oaks, 527 F2d 937 (9th Cir. 1975).

The court distinguished Oaks by holding that the

instant record,

“shows that 24 investigations of suspected

violations of Section 7205 were made, all of which

involved tax protestors. Of those investigated, at least

18 were recommended for prosecution, including these

appellants. We cannot say on this record that the

appellants’ claim of discriminatory prosecution relating

solely to the Section 7205 counts should be rejected

without an evidentiary hearing.’’

However, the Oaks decision, supra, shows that

during this period 19/0 through 1973 (the same period

covering the §7205 violations), 160 investigations were

made by the Los Angeles District Internal Revenue

Service Intelligence Division of suspected §7203

violations. Of these, 48 (30%) involved people

identified with the Tax Rebellion Group. Of the 48

recommended for prosecution, 24 were presumably

identified with the Tax Rebellion Group and the

defendant was one of the 24.

The bifurcation of statistics on the numbers

investigated and recommended for prosecution does

not warrant distinguishing between the statutes on the

basis for granting an evidentiary hearing on the |

discriminatory prosecution issue. Having granted the

hearing on the §7205 violations, the court was required

to follow suit as to the §7203 violations.

The §7205 violations are in effect corollaries of the

§7203 violations since petitioners in their withholding

exemption certificates deny receipt of taxable income

for the previous year requiring withholding. Their

protest returns apply to the §7205 charges as well as tc

the §7203 charges where they place the protest

imprimator on the Forms 1040.

The government has a galaxy of charges to level

against tax violators but the issue of discriminatory

prosecution should not hinge on the statute allegedly

violated but on the individual who is selected for

prosecution by reason of exercising his constitutional

right.

To distinguish between §§ 7203 and 7205 on the

discriminatory prosecution issue in effect violates the

decision in United States v. DeMarco, 550 F.2d 1224

(9th Cir. 1977). The court dismissed the second

indictment by reason of prosecutorial vindictiveness

when defendant refused to waive his right to a change

in venue. The Ninth Circuit ruled the prosecutor had no

right ‘‘upping the ante’’ by bring a new indictment

charging an additional offense as a penalty for

defendant exercising his rights. ‘“The factual nucleus of

both indictments was the same.’’ The court cited

Biackledge v. Perry, (1974) 417 U.S. 21, 28; North

Carolina v. Pearce, (1969) 395 U.S. 711.

The analogy to the instant petition is clear. The

nucleus of the §7203 and §7205 charges are the same.

LEGAL ARGUMENT

In United States v. Oaks, 508 F.2d 1403 (9th Cir.

-

1974) the court ruled a tax protestor, a member of the

Tax Rebellion Group, was entitled to an evidentiary

hearing on the issue of discriminatory prosecution as

follows: |

‘In United States v. Steele, 461 F.2d 1148 (CA 9,

1972) we hb ld that a policy of selective prosecution

which pu:posefully discriminates against persons

choosing to exercise their first amendment rights is

impermissible.’’

The Fourteenth Amendment prohibits any state

from taking action which would deny to any person

within its jurisdiction the equal protection of the laws.

This admonition is applicable to the Federal

government through the Fifth Amendment. Bolling v.

Sharpe, 347 U.S. 497 (1954); Washington v. United

States, 401 F.2d 915 (CA D.C. 1968).

This Court ruled in Yick Wo. v. Hopkins, 118 U.S.

356 (1886) that the administration of laws ‘‘with an evil

eye and an unequal hand, so as practically to make

unjust and illegal discrimination between persons in

similar circumstances’’ constitutes a denial of equal

protection.

A defendant cannot be convicted if he proves

unconstitutional discrimination in the administration of

a penal statute. Two Guys From Harrison-Allentown,

Inc. v. McGinley, 366 U.S. 582 (1961).

The petitioners have complied with the rule in

United States v. Berrios, 501 F.2d 1207 (2nd Cir. 1974)

on the issue of discrimizatory prosecution since he has

prima facie established: ‘‘(1) that, while others

similarly situated have not generally been proceeded

against because of conduct of the type forming the

basis of the charge against him, he has been singled out

for prosecution; and (2) that the government’s

discriminatory selection of him for prosecution has

been invidious or in bad faith, i.e., based upon such

impermissible considerations as race, religion, or the

desire to prevent the exercise of constitutional rights.’’

United States v. Berrigan, 482 F.2d 171 (3rd Cir.

1973) holds on the discriminatory prosecution question:

‘These cases teach that although the government

is permitted ‘the conscious exercise of some selectivity’

in the enforcement of its criminal laws, Oyler v. Boles,

868 U.S. 448, 456, any ‘systematic discrimination’ in

enforcement, Robinson, supra, 311 F. Supp. at 1065,

‘or unjust and illegal discrimination between persons in

similar circumstances, Yick Wo, supra, 118 U.S. at 374,

violates the equal protection clause and renders the

prosecution invalid.’ ’’

In United States v. Falk, 479 F.2d 616 (7th Cir.

1973, rehearing in banc) the court reversed the

conviction of a vocal Vietnam war protester for failure

to possess a draft card and submit to induction. On the

defendant’s showing that over 25,000 individuals were

not prosecuted for similar charges, the court ordered an

evidentiiry hearing. The court held thai defendant

alleged ‘‘intertional purposeful discrimination and

presented facts sufficient to raise a reasonable doubt

about the prosecutor’s purpose....”’

Significantly, the court ruled: ‘‘The particular

circumstances of this case which we believe compelled

the government to accept the burden of proving

non-discriminatory enforcement of the law are

several.’’ The court pointed to defendant as a vocal

dissenter against the Vietnam War.

It is submitted that the Ninth Circuit’s decision as to

which certiorari is sought does not meet the criteria of

the Supreme Court and other circuits on the issue of

discriminatory prosecution, and therefore that the

decision violates due process of law as to these

defendants.

CONCLUSION

For the reasons stated, petitioners respectfully

submit that the Petition for Writ of Certiorari be

granted.

Respectfully submitted,

CLYDE R. MAXWELL

FRED G. CUNARD

BY: CLYDE R. MAXWELL

10

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 76-3733

MEMORANDUM

UNITED STATES OF AMERICA,

Plaintiff-Appellee

RONALD FOSTER and

DELLA FOSTER,

Defendants-Appellants

Appeal from the United States District Court

for the Central District of California

Before: ELY and HUFSTEDLER, Circuit Judges,

and LINDBERG, * District Judge.

Ronald and Della Foster, husband and wife, appeal

from their convictions on four counts each for willful

failure to file federal income tax returns for the years

* Honorable William J. Lindberg, Senior United States District

Judge, Western District of Washington, sitting by designation.

11

1969 through 1972, in violation of 26 U.S.C. § 7203, and

two counts each for willfully submitting false or

fraudulent withholding certificates in 1972 and 1973,

inviolation of 26 U.S.C. § 7205. Each appellant received

a suspended sentence of one year imprisonment for

each of the counts and a $10,500 fine, and was placed

on probation for a period of three years. The sentences

imposed under the two Section 7205 counts and the

Section 7203 counts for 1969 and 1972 were concurrent.

None of the issues raised on appeal has sufficient

merit to justify discussion, except the obliquely-raised

point that the court did not instruct the jury upon the

impace of Garner v. United States (1976) 424 U.S. 648,

and the claim that the appellants were entitled to an

evidentiary hearing on the discriminatory prosectuion

issue.

The appellants are members of the Tax Rebellion

Group. Ronald earned $9,169.63 in 1969, $9,267.17 in

1970, $11,353.74 in 1971, and $11,842.87 in 1972; Della

earned $7,100.62 in 1969, $7,573.46 in 1970, $7,037.82

in 1971, an@67,695.51 in 1972. For the years 1969 and

1972, they filed no federal income tax returns; for the

years 1970 (Footnote 1) and 1971, they filed unsigned

Forms 1040 with only their names, their addresses, and

an assertion that Form 1040 violated their Fifth

Footnote 1: The Government's brief erroneously stated the year to

be 1969. An examination of the exhibits reveals that the Fosters

used a printed 1969 form for 1970.

12

Amendment rights. These forms were returned by the

Internal Revenue Service with instructions on how to

make valid returns. No subsequent returns were made

by the appellants. In 1972 and 1973, Ronald and Della

filed Form W4-E tax withholding certificates with their

separate employers, certifving that they incurred no

federal income tax liabilities for the immediate

preceding year by virtue of certain provisions of the

United States Constitution.

Following a jury trial, the appellants were

convicted on all of the counts charged.

I

Contrary to appellant’s contention, Garner does

not prevent prosecution for violation of Section 7203

when taxpayers assert the Fifth Amendment to avoid

responding to questions on their tax returns. All Garner

does is to permit taxpayers to assert a defense to a

Section 7203 charge on the ground that they made a

good faith claim of Fifth Amendment privilege.

Garner is irrelevant to the appellants’ prosecution

for the years 1969 and 1972, because they tailed to file

any returns for those years. No Fifth Amendment claim

can be asserted in respect of returns that appellants did

not file. (United States v. Sullivan (1927) 274 U.S. 259;

see Garner v. United States, supra, at 651, n. ».)

Appellants did claim the Fifth Amendment

privilege on their 1970 and 1971 returns. The appellants

sought a jury instruction based upon the Garner case,

13

which the court rejected in favor of a proposed

instruction that the court drew from Devitt & Blackmar,

Federal Jury Practice and Instructions, Section 35.31,

at 158 (1977). (Our court approved that instruction in

Cooley v. United States (9th Cir. 1974) 501 F.2d 1249,

1253.) The problem is that the district court did not give

the instruction to the jury. As nearly as we can

ascertain from the record, no one noticed the omission

when the jury was instructed. The failure to instruct

upon the appellants’ defense based on Garner and

Cooley was plain error, which survives on appeal

despite the absence of an appropriate exception in the

district court. Accordingly, appellants’ convictions on

the Section 7203 counts for the years 1970 and 1971

must be reversed.

Il

The district court denied appellants’ pretrial

motions for an evidentiary hearing on the issue of

discriminatory prosecution, in reliance on United States

v. Oaks (9th Cir. 1975) 527 F.2d 937. Upon a

comparison of the materials presented in the Oaks case

and the internal memoranda of the Internal Revenue

Service lodged in camera with the district court, we are

convinced that Oaks adequately disposes of the Section

7203 counts. The statistics considered in Oaks are the

same as those presented in this case. However, the

record does not support denial of the claim of

14

discriminatory prosecution in respect of Section 7205

counts, without an evidentiary hearing. Here, unlike

Oaks, the record shows that 24 investigations of

suspected violations of Section 7205 were made, all of

which involved tax protestors. Of those investigated, at

least 18 were recommended for prosecution, including

these appellants. We cannot say on this record that the

appellants’ claim of discriminatory prosecution relating

solely to the Section 7205 counts should be rejected

without an evidentiary hearing.

The convictions on the Section 7203 counts for the

years 1970 and 1971 are reversed; the convictions on

the Section 7203 counts for the years 1969 and 1972 are

affirmed. Unless the United States dismisses the

Section 7202 counts for the years 1970 and 1971, the

appellants are entitled to a new trial on those counts.

The cause is remanded to the district court for an

evidentiary hearing on the appellants’ claims of

discriminatory prosecution solely in connection with the

counts based upon claimed violations of Section 7205.

Pending determination of the evidentiary hearing on

the Section 7205 counts, appellants’ convictions on the

Section 7205 counts are vacated.

15

ee eee ee eee

APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Filed

Feb 17 1978

U.S. Court of Appeals Clerk

No. 76-3733

DC#CR75-539 Stephens

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

vs.

RONALD L. FOSTER,

DELLA M. FOSTER,

Defendants-Appellants

ORDER STAYING ISSUANCE OF MANDATE

Upon application of CLYDE R. MAXWELL,

ESQUIRE, counsel for the Defendants-Appellants, and

good cause appearing, IT IS ORDERED that the

issuance, under Rule 41 (a) of the Federal Rules of

Appellate Procedure, of the certified copy of the

judgment of this Court in the above cause be and

hereby is stayed pending the filing, consideration and

disposition by the Supreme Court of the United States

16

of a petition for writ of certiorari to be made by the

Defendants-Appellants herein, provided such petition

is filed in the Clerk’s Office of the Supreme Court of the

United States on or before March 2, 1978.

In the event the petiition for writ of certiorari is

granted, then this stay is to continue pending the final

disposition of the case by the Supreme Court of the

United States.

SHIRLEY M. HUFSTEDLER

United States Circuit Judge

s/Denied .

Walter Ely

Shirley Hufstedler

DATED: Los Angeles

February 10, 1978

CLYDE R. MAXWELL

Suite 401

Newport Beach, CA 92660

(714) 644-5232 (213)570-8123 Form No. 14

17

APPENDIX C

INTERNAL REVENUE CODE

Section 7203 Wilful failure to file return, supply

information, or pay tax.

Any person required under this title to pay any

estimated tax or tax, or required by this title or by

regulations made under authority thereof to make a

return (other than a return required under authority of

section 6015 or section 6016), keep any records, or

supply any information, who willfully fails to pay such

estimated tax or tax, make such return, keep such

records, or supply such information, at the time or

times required by law or regulations, shall, in addition

to other penalties provided by law, be gnilty of a

misdemeanor and, upon conviction thereof, shall be

fined not more than $10,000, or imprisoned not more

than 1 year, or both, together with the costs of

prosecution.

Aug. 16, 1954, c. 736, 68A Stat. 851.

INTERNAL REVENUE CODE

Section 7205 Fraudulent withholding exemption

certificate or failure to supply information.

Any individual required to supply information to

his employer under section 3402 who willfully supplies

18

false or fraudulent information, or who willfully fails to

supply information thereunder which would require an

increase in the tax to be withheld under section 3402,

shall, in lieu of any other penalty provided by law

(except the penalty provided by section 6682), upon

conviction thereof, be fined not more than $500, or

imprisoned not more than 1 year, or both. Aug. 16,

1954, c. 736, 68A Stat. 852; Mar. 15, 1966 Pub.L.

89-368, Title I, Sec. 101(e)(5), 80 Stat. 62.

19

PROOF OF SERVICE

STATE OF CALIFORNIA )

ss

County of Riverside )

I am a citizen of the United States and a resident of

the Couty aforesaid; I am over the age of eighteen

years and not a party to the within entitled action; my

business address is 1509 N. Main, Santa Ana,

California.

On March 1, 1978, I served the within PETITION

FOR A WRIT OF CERTIORARI on the interested

parties in said action, by placing a true copy in each of

two sealed envelopes with postage thereon fully

prepaid, in the United States mail at Santa Ana,

California, addressed as follows:

Andrea S. Ordin Wade H. McCree, Jr.

United States Attorney U. S. Solicitor General

' 312N. Spring St., Room 1200 Department of Justice

Los Angeles, CA 90012 Washington, D.C. 20530

I CERTIFY under penalty of perjury that the foregoing

is true and correct.

EXECUTED on March 1, 1978, at Santa Ana,

California.

JACK GALLAGHER

21