Opposition — Stout v. United States

i Const, u.& .

NOV 45

No. 79-389 ty 979

2, 7

In the Supreme Court of the United States” ~~

OCTOBER TERM, 1979

PAUL STOUT, PETITIONER

we

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE SEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES

IN OPPOSITION

WaDE H. McCRrEE, JR.

Solicitor General

M. CARR FERGUSON

Assistant Attorney General

ROBERT E. LINDSAY

JAMES F. MILLER

Attorneys

Department of Justice

Washington, D.C. 20530

INDEX

Page

II sseniicintanacieiesaniniiemtaniaahisicnnimeinnilanimimisiiadiunens |

PEI RD IES 0 ei NO nich PaO ene a |

I SIS. siisntnniscntieleisbcinnininndentientnanaminnlabinnenas 2

UIE schinsseenivesinetinncbendianantilisiniehcaiasiinsdnsaitnbainnanitaeiindenaen 2

POE * cians susshiliennipaiiilansindasiaidbrevenistisaimndinieneaneipaniisen 3

DD -sisenssiansiiliensasapiinnnndidassuenibiaienaniasiianiabnieaiacatiaeaia LI

CITATIONS

Cases:

Garner v. United States, 424

ee NE ddan Karate nial bavakabeidemacdaetieccniaanas :

Griffin v. California, 380 U.S. 609 0.0.00... +

Hoffman v. United States, 341 U.S. 479 0.0.0.2... 4

Newhouse v. Misterly, 415 F. 2d 514,

CORR, GI, FF St UD vntenstrescccnsstescinasesee +

Reagan v. United States, 157 U.S. 301 ............. 10

Singer v. United States, 326 F. 2d 132 ............... 6

United States v. Benson, 592 F. 2d 257 ............. 5

United States v. Berrios, 501 F. 2d 1207 .......... 10

United States v. Bertolini,

See Fs e. BAe seismic Se libsamihakewians 6

United States v. Crovedi, 467 F. 2d 1032,

CONE. Ge, GED SI. TD acninccspesencnccncnnnconces 10

United States v. Falk, 479 F. 2d 616 ................ 10

United States v. Farris, 517 F. 2d 226

COME, OMIT, SD TI, IE wcneennccsttnccincicicnnressices y

Page

Cases—{ Continued):

United States v. Genser, 582 F. 2d 292

after remand, 595 F. 2d 146, affd after

remand, 602 F. 2d 69, cert. denied, No. |

I I II I i icc ciscincniesscscncwoies 7

United States v. Gomez- Rojas, 507 F. 2d

1213, cert. denied, 423 U:S. 826 ...................... 4

United States v. Hicks, 420 F. 2d 814 ..........00.... 6

United States, In re, 584 F. 2d 666 ..............0.... 7

United States v. Kahl, 583 F. 2d 1351 ............. 10

United States v. Kopel, 552 F. 2d 1265,

a Se oan 4

United States v. LaSalle National Bank,

I i alcss viata 8

United States v. Malinowski, 472 F. 2d

850, cert. denied, 411 U.S. 970 ...............0...... 10

United States v. McCabe, 416 F. 2d 957 ............ y

United States v. Miller, 425 U.S. 435. cecccccecccccocee 7

United States v. Miller, 529 F. 2d 1125,

UE, WI, Ie TI FI wivnsecvccccckcicccescccecsivavecs y

United States v. Scott, 521 F. 2d 1188,

oe OS eC. . ae cee 10-11

United States v. Swanson, 509 F. 2d 1205 ....... 10

United States v. Taylor, 569 F. 2d 448,

i I, Ee RE Fe aivcsiinbcedsccenscccccccincece 6

United States v. Young, 578 F. 2d 216 ........... 5-6

iil

Page

Constitution, statutes and rules:

Constitution, statutes and rules:

United States Constitution:

First AMONGMet .........ccccccccccccccccrsccccsesceeees 10

Fifth AmenmGmeint ....c..cccccccccccccsssscese ee

Sixth AAGCMAMCHA nics .cccsscccscscccccscsccccesccccsesens 5

Internal Revenue Code of 1954:

Be Rs FI Kreck ssncnctancscornsivnsascnsenccctnnncnetans 2

Se RE Bea FOR sida hacker ccanaiindanncnnssiesennssrececesss 2

Fed. R. Crim. P.:

PE BIBI ss csncsnscrererectecnsessscsevanssccscerevses 8

IO MIN ois scnoncustannmnessnbasbibuesiieshinnnanhons 4. 6

Fed. R. Evid.:

RE IIIED cs vecossnasvneneuBianankspecanesenepseretiacennites 2)

RUIN GEE sctscrensnparnsnesdaceuguansnstedsrbenasnnsinaseserenion 7

In the Supreme Court of the United States

OCTOBER TERM, 1979

No. 79-389

PAUL STOUT, PETITIONER

LL

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE SEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES

IN OPPOSITION

OPINIONS BELOW

The district court did not issue a written opinion. The

opinion of the court of appeals (Pet. App. 1-8) is reported

at 601 F. 2d 325.

JURISDICTION

The judgment of the court of appeals was entered on

July 3, 1979 (Pet. 2), and the court of appeals denied

rehearing on August 10, 1979 (Pet. App. 9-10). The

petition for a writ of certiorari was filed on September 7,

1979.

(1)

QUESTIONS PRESENTED

1. Whether the prosecution's introduction of Forms

1040 that petitioner filed for 1973, 1974 and 1975, violated

his Fifth Amendment privilege against compulsory self-

incrimination.

y Whether either the’ Internal Revenue Service's

investigation of petitioner's tax liability or petitioner's

trial violated petitioner's rights to due process.

3. Whether petitioner was subject to improper se-

lective prosecution.

STATEMENT

After a jury trial in the United States District Court for

the Northern District of Illinois, petitioner was convicted

of failing to file federal income tax returns for 1973, 1974

and 1975, in violation of 26 U.S.C. 7302, and of supplying

a false withholding allowance certificate to his employer

in 1974, in violation of 26 U.S.C. 7205. The district court

sentenced him to a one-year term of imprisonment, to be

followed by a five-year term of probation, and fined him

$6,500. The court of appeals affirmed (Pet. App. 1-8).

The evidence at trial showed that during the years 1973

through 1975 petitioner was employed by the Quaker

Oats Company, which issued him W-2 forms indicating

wages of $30,342.88 in 1973, $23,841.79 in 1974, and

$25,741.27 in 1975 (Pet. App. 2). Although petitioner was

married, had only three children, and his previous annual

deductions had averaged between $5,000 and $6,000, he

supplied his employer in each of these years with W-2

forms on which he claimed 34 withholding allowances. As

a result of these claimed allowances, no federal income

taxes were withheld from petitioner's wages (Pet. App. 2- |

3; Tr. 467).!

“Tr.” refers to the trial transcript. “I-R.” and “I1-R.” refers to

the original record on appeal.

The evidence also showed that petitioner did not timely

file his income tax returns for 1973-1975. Instead, on

February 17, 1977, petitioner filed Forms 1040 for those

years, upon which were set forth only the names of

petitioner and his wife, petitioner’s address, his filing

status, three claimed exemptions, the first name of one

dependent child, and two asterisks opposite each line.

According to one page of a 48-page attachment, the

asterisks signified that:

Specific objection is made to this question under the

Fifth Amendment, U.S. Constitution, as to Federal

Reserve Notes and rights under said Amendment;

and similar objection is made to the question under

the First, Fourth, Seventh, Eighth, Ninth, Tenth,

Thirteenth, Fourteenth, and Sixteenth Amendments.

The attachment also contained several other items, none

of which provided any information with regard to

petitioner's or his wife’s income or from which the

amount of such income could be determined (Pet. App. 3-

4).

ARGUMENT

|. Petitioner contends (Pet. 5-7) that the prosecution's

introduction of the Forms 1040 that petitioner submitted

in 1977 for the years 1973-1975 violated his Fifth

Amendment privilege against compulsory self-incrim-

ination. In support of this argument, petitioner

relies on Garner v. United States, 424 U.S. 648 (1976).

But petitioner did not object to the introduction of these

forms during the trial. To the contrary, petitioner's

counsel stated that there would be a “continuing

objection relative to documents other than relating to

1973, 1974 and 1975” (Tr. 178) (emphasis supplied). Since

petitioner did not object to the introduction of these

forms, he may not now challenge their admission unless

there was “plain error” which “affected the substantial

rights of the accused and if uncorrected would be an

affront to the integrity and reputation of judicial

proceedings.” United States v. Kopel, 552 F. 2d 1265,

1274 (7th Cir.), cert. denied, 434 U.S. 970 (1977); Rule

52(b), Fed. R. Crim. P. Here, the admission of the Forms

1040 into evidence was entirely proper.

The Fifth Amendment forbids the prosecution from

using against an accused the fact that he has invoked his

privilege against self-incrimination. Griffin v. California,

380 U.S. 609 (1965). Bui the privilege can only be validly

invoked where the individual claiming it has reasonable

cause to apprehend danger of incrimination from a direct

answer. Hoffman v. United States, 341 U.S. 479, 486

(1951). Thus, if the privilege has not been validly invoked,

no constitutional violation results if the jury is made

aware of an attempted invocation of the privilege. See

United States v. Gomez- Rojas, 507 F. 2d 1213, 1220 (Sth

Cir.), cert. denied, 423 U.S. 826 (1975); cf. Newhouse v.

Misterly, 415 F. 2d 514, 518 (9th Cir. 1969), cert. denied,

397 U.S. 966 (1970).

Here, the evidence established that petitioner had

invoked the privilege against self-incrimination on the

Forms 1040 he filed on February 17, 1977, not because he

feared incrimination as a result of supplying information

on those forms, but because he was generally opposed to

the taxing system.2 When Internal Revenue agents asked

petitioner on May 3, 1976, whether he was required to file

a tax return, petitioner did not assert that he could be

incriminated by supplying the information requested on a

Actually, it is not entirely clear that petitioner was even referring

to his privilege against compelled self-incrimination. The forms

contain objections on the ground of the “Fifth Amendment,” as well

as a veritable barrage of other constitutional amendments.

=a

Form 1040. Instead, he stated that he had no income

because Federal Reserve Notes are not money, and he was

_therefore not required to file tax returns (Tr. 302, 307-

309). Indeed, when questioned by his standby counsel

during his direct testimony, petitioner stated that he had

not filed the returns in question because he believed that

he “had not received the required minimum number of

dollars that would subject * * * _— to sending in a

return” (Tr. 381-382).

Since petitioner did not validly invoke the privilege on

the Forms 1040, the introduction of those forms in

evidence against him did not violate the Fifth Amend-

‘ment. Garner vy. United States. supra, upon which

petitioner relies, does not support his claim. It recognizes

that a person may exercise his Fifth Amendment privilege

against compulsory self-incrimination on a tax return

only insofar as the claim of privilege is valid (424 U.S. at

662-663).

2. Petitioner further argues (Pet. 7-13) that the trial

and the Internal Revenue Service's investigation of his tax

liability violated his “procedur! due process rights.”

a. At trial, petitioner moved for a continuance on the

ground that there was an irreconcilable difference in trial

strategy between himself and his appointed counsel. He

urges (Pet. 7-8) that the trial court’s denial of this motion

“resulted in there being no consistent defense theory.”

However, the record shows (Tr. 23, 39-40) that the trial

court permitted petitioner to represent himself with the

assistance of standby counsel and that this arrangement

satisfied petitioner. There were accordingly no difficulties

involving trial strategy.°

3Contrary to petitioner's claim (Pet. 8, note 7), there is no Sixth

Amendment right to be assisted by a nonlawyer. United States v.

Benson, 592 F. 2d 257, 258 (5th Cir. 1979); United States v. Young,

Petitioner suggests (Pet. 8) that because the trial court

had previous experience with a “tax protester case” and

“had a great deal of pre-trial contact with * * *

[petitioner] in which there had been arguments on a

multitude of legal issues,” it unfairly assisted the

prosecution. He also contends (Pet. 8) that the trial court

“acted as a government advocate in arguing law, sua

sponte.”

But petitioner never raised these points during the trial

and may not now urge them unless there was such “plain

error” so as to warrant reversal. United States v. Hicks,

420 F. 2d 814, 817 (Sth Cir. 1970); Rule 52(b), Fed. R.

Crim. P. The record does not show any pre-trial contact

between the trial court and petitioner which may have

prejudiced petitioner’s case. Moreover, the trial court's

experience with a previous “tax protester case” only served

to facilitate its understanding of the issues and did not

constitute prejudicial assistance to the prosecution (Tr.

213-214).4

Petitioner further states (Pet. 8) that because “(t}here

was no exclusion of witnesses and two IRS agents, who

would later testify, were permitted to attend the entire

578 F. 2d 216, 217 (8th Cir. 1978); United States v. Bertolini, 576 F.

2d 1133 (Sth Cir. 1978); United States v. Taylor, 569 F. 2d 448, 450-

451 (7th Cir.), cert. denied, 435 U.S. 952 (1978).

‘Petitioner further challenges (Pet. 8) the trial court's expressions

of “its ‘misunderstandings’ about his defense on a number of

occasions in front of, as well as outside the presence of, the jury.”

However, petitioner likewise never objected to these remarks at trial,

and cannot object to them now unless they constitute plain error.

Singer v. United States, 326 F. 2d 132, 134 (9th Cir. 1964); Rule

52(b), Fed. R. Crim. P. The alleged expressions of

“ ‘misunderstandings’ ™ by the trial court (Tr. 13, 65, 66, 68. 211) were

actually efforts at clarification to provide better understanding of

points made by defense counsel. These efforts aided rather than:

impeded the conduct of petitioner's case.

trial,” the effect on his case “must have been devastating.”

He does not identify the witnesses to whom he refers. In

any event, petitioner failed to request the trial court to

order the exclusion of any witnesses, as Fed. R. Evid. 615

requires. Moreover, petitioner has not shown that the IRS

agents did not qualify under the exception to the rule for

“an officer or employee of a party which is not a natural

person designated as its representative by its attorney.” /n

re United States, 584 F. 2d 666, 667 (Sth Cir. 1978).

Finally, petitioner has shown no prejudice resulting from

the presence of any witnesses during the trial.°

b. Petitioner further argues (Pet. 9) that evidence

concerning his income obtained by the Internal Revenue

Service through the use of an Internal Revenue summons

should have been suppressed because a grand jury

investigation was already in progress. But as the court of

appeals correctly noted (Pet. App. 6), “[t]he record does

not show if and when an IRS summons was used and, if

used, whether a grand jury investigation was then in

progress.” Moreover, even assuming that petitioner has

standing to seek suppression of evidence obtained from a

third party (see United States v. Miller, 425 U.S. 435

(1976); United States v. Genser, 582 F. 2d 292, 304-305

(3d Cir. 1978), after remand, 595 F. 2d 146, aff'd after

remand, 602 F. 2d 69, cert. denied, No. 79-249, Oct. 29,

1979), and further assuming that summonses were issued

while a grand jury investigation was in_ progress,

petitioner did not show that any summons was issued

after the Internal Revenue Service recommended to the

‘Petitioner also argues (Pet. 9) that he was “constantly maneuvered

and intimidated into providing his ‘defense’ in advance of his case in

chief” (emphasis in original). But in the two insiances cited by

petitioner (Tr. 55, 73-74), the trial court simply assisted petitioner,

who insisted on representing himself, in making his opening

statement.

Department of Justice that a criminal prosecution be

undertaken or that the Internal Revenue Service used the

summons authority solely for criminal purposes without

the existence of a valid civil tax determination or

collection purpose. See United States v. LaSalle National

Bank, 437 U.S. 298 (1978). © In these circumstances, the

trial court properly refused to suppress the evidence

obtained by the Internal Revenue Service.

c. Petitioner also asserts (Pet. 9-10) that he was

convicted of being a “bad” man, i.e., one who contributes

to defense funds of other tax protesters, a false

“Reverend”, and the creator of his own religion. But the

jury was not told that petitioner contributed funds to tax

protesters or that petitioner was a “false ‘Reverend’ “” or

the creator of his own religion (see Tr. 387 395-397). At

all events, in light of the overwhelming evidence of

petitioner's guilt, any error in the trial court's

characterizations was plainly harmless.

Petitioner further contends (Pet. 10) that the

prosecution’s production of material from his civil audit

file (Tr. 290-291) during the trial “should have resulted in

an immediate mistrial” because it should have been

produced prior to trial under Rule 16(a)(1)(C), Fed. R.

Crim. P. But petitioner did not object to the production

of this material during the trial. At all events, petitioner

‘Petitioner states (Pet. 9) that the “specter of the use of illegally

obtained wiretap evidence still beclouds this case [because] * * * [t]he

government never filed the affidavits they had promised to file stating

that there had been no wiretapping.” In its Response to Defendant's

Multiple PreTrial Motions, the government denied that there had

been any electronic surveillance of petitioner (I-R., Doc. 26, at 3).

The trial court apparently found this statement sufficient and

dispensed with the need for affidavits when it denied petitioner's

Motion to Dismiss (II-R., Doc. 1, at 2).

did receive the material and has not shown how he was

prejudiced by its arguably late production. See United

States v. Miller, 529 F. 2d 1125, 1128 (9th Cir.), cert.

denied, 426 U.S. 924 (1976).7

d. Petitioner also argues (Pet. 10-11) that the trial court

improperly allowed introduction of evidence of his prior

and subsequent conduct with respect to the filing of

returns. This evidence supported a finding that petitioner

knew that he was required to file returns and that,

therefore, when he failed to file them, he did so willfully.

It is well settled that the use of such evidence is entirely

proper. Uniied Siaies v. Farris, 517 F. 2d 226, 229 (7th

Cir.), cert. denied, 423 U.S. 892 (1975); United States v.

McCabe, 416 F. 2d 957, 958 (7th Cir. 1969); Rule 404(b),

Fed. R. Evid.

e. Petitioner contends (Pet. 11-12) that the court erred

in giving the following instruction (Tr. 491):

A defendant who wishes to testify is a competent

witness and his testimony should not be disbelieved

merely because he is a defendant. However, in

weighing his testimony, the jury should consider the

fact that the defendant has a vital interest in the

___ outcome of his trial.

It is well settled that such an instruction concerning the

credibility of a defendant's testimony is correct. See

7Petitioner also alleges (Pet. 10) that “{iJn his argument, the

prosecutor inflamed the jury into believing that the entire ‘voluntary’

tax system would collapse if Stout were not found. guilty.” The

record, however, does not contain such a statement by the

prosecution: (See Tr. 459-469, 482-485.)

10

Reagan v. United States, 157 U.S. 301, 305 (1895);

United States v. Crovedi, 467 F. 2d 1032, 1035-1036 (7th

Cir. 1972), cert. denied, 410 U.S. 990 (1973).*

3. Finally, petitoner contends (Pet. 13-19) that he was

the victim of improper selective prosecution by the

Internal Revenue Service. In order to establish a claim of

selective prosecution, the defendant must show that others

similarly situated generally have not been prosecuted, and

that the government's prosecution of him is impermissibly

selective, invidious, in bad faith or based on impermissible

considerations such as race, religion, or his exercise of

constitutional rights. United States v. Kahl, 583 KF. 2d

1351 (Sth Cir. 1978).

Here, unlike United States v. Falk, 479 F. 2d 616 (7th

Cir. 1973), .upon which petitioner relies (Pet. 15, 18),

petitioner did not prove that the government failed to

prosecute persons it knew had violated the filing laws. All

that he showed was that his activity may have attracted

attention to the fact that he was likely to be violating the

tax_laws, which violations the government prosecutes to

the extent that it has knowledge of them and to the

extent of its physical capabilities to prosecute the volume

of cases presented. The same showings in similar cases

have uniformly resulted in rejections of claims of selective

prosecution. See, e.g., United States v. Berrios, 501 F. 2d

1207, 1211 (2d Cir. 1974); United States v. Swanson, 509

F. 2d 1205, 1208-1209 (8th Cir. 1975); United States v.

Scott, 521 F. 2d 1188, 1195 (9th Cir. 1975), cert. denied,

‘Petitioner also urges (Pet. 13) that “his dramatic increase in

withholding ‘allowances’ was surely a political protest protected by

the First Amendment from criminal prosecution, as a matter of law.”

However, such violations of the law are not protected by the First

Amendment. United States v. Malinowski, 472 F. 2d 850 (3d Cir.),

cert. denied, 411 U.S. 970 (1973).

424 U.S. 955 (1976). The court of appeals therefore

correctly held (Pet. App. 4-5) that petitioner was not the

victim of improper selective prosecution.

CONCLUSION

It is therefore respectfully submitted that the petition

for a writ of certiorari should be denied. -

WADE H. MCcCCREE, JR.

Solicitor General

M. CARR FERGUSON

Assistant Attorney General

ROBERT E. LINDSAY

JAMES F. MILLER

Altorneys

NOVEMBER 1979

DOJ-1979-11