# Appendix — Bunch v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385010_0417%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1983 - **Citation:** 460 U.S. 1040 ## Text rh Re ri Pee CP UA Pe ee ee ee La rens vr : Tey a - 18 APPENDIX A * ‘ No. 82-3118 95 UNITED STATES COURT OF APPEALS FILED FOR THE SIXTH CIRCUIT D&C 20 JOHN F. HEHMAN, Clerll © UNITED STATES OF AMERICA, Plaintiff-Appellee v. ORDER WILLIAM DON BUNCH, Defendant-Appellant J Before: KENNEDY, MARTIN, and WELLFORD, Circuit Judges. | William D. Bunch appeals hie conviction for tax asien. 26 U.S.C. § 7201 (1954). We affirm. Relying on the “net worth plus nondeductible personal | de expenditures" theory of proof, the government proved to the jury's ih satisfaction that Bunch evaded paying income tax in 1973, 1974, „a2 1975. Upon conviction, he was given the following sentence: Count I - one year and one day in prison plus a $5,000 fine; Count II - four years probation to run consecutively with the prison sentence imposed for Count I end conditioned upon payment of the fine imposed for Count I; Count III - the same sentence 2 Count I, concurrent with Count II. Bunch 1% free on a $25,000 No. 62-3118 - 2 - Bunch raises several issues here. The first and second deal with the sufficiency of the evidence. Bunch argues that there was insufficient evidence to support the jury's finding that, as to Count II, he attempted to evade paying income tax “on or about April 15, 1975." We disagree. Like the court below, we find sufficient evidence to support the conviction, regardless of whether the sale of the West Lane Avenue property was or should have been included in the govern- ment's calculations. Bunch also makes che general assertion that the evidence as a whole does not support the verdict, Again, we disagree. When viewed in the light most favorable to the government, the evidence is not deficient, In so holding, we are mindful of the Supreme Court's direction that “the cogency ot. Uthe government's)...proof depends upon ite effective negation of reasonable explanations by the taxpayer inconsistent with guilt." United States v. Holland, 348 U.S. 121, 135, quoted in United States v. Giacalone, 574 F.2d 328, 332 (6th Cir. 1978). Bunch's third argument that the district: court erred in refusing to order the government to produce the Internal Revenue Service's Special Agent Report is equally without merit. . The dietrict court stated mee May 12, 1981 Order denying Bunch's Motion for Production/ Fed. R. Crim. P. 16(a)(2) “Limite @iscovery otherwise allowed by providing that the government need not disclose ‘reports, memoranda, or other internal government 18 * 5 No, 62-3118 — 5 - documente made by... government agents in connection with the investigation or prosecution of the case. Rula 16(a) (2) = disposes of this issue. N We have no difficulty in disposing, in a like fashion, of Bunch's argument that the admission, pursuant to the business records exception to the hearsay rule,of certain financial records, including personal checks, loan applications, and other bank records, denied him his sixth amendment right to confront and cross-examine his accusers. As the Supreme Court stated in Dutton v. Evang, 400 U. 8. 74, 89 (1970), quoting California v. Green, 399 U.S. 149, 161 (1970), the “mission of the Confrontation Clause is to advance a practical concern for the n © y the truth-determining process in criminal triale by assuring / the trier of fact (has) a satisfactory basis for evaluating the truth of the prior statement. Business records are an exception to the hearsay rule precisely because of their inherent reliability. Where business records are appropriately introduced, as they were here, the voncerns of the Confrontation Clause are adequately met. In his fifth argument, Bunch claims that the government failed to establish with reasonable certainty his opening net worth as of January, 1973. Specifically, he argues that it failed to accurately ascertain the amount of cash-on-hand in the base year; it failed to accurately account for the effect of his purchase and sale of certain real estate on net worth calcula- tions; and it failed to include among his assets furni cure allegedly in hie possession with a value of $15,000. No. 82-3118 1 „ * 4 7 In Holland, a tax evasion case in which the govern- ment relied upon the net worth theory, the Supreme Court held: essential condition in cases of this fe the establishment, with . Inty, of an n this sum of all assets on hand at the out- 348 U.S. at 132 (emphasis added). See, Giacalone, 574 F.2d at 331. Moreover, ment does not track down relevant leads re ee taxpayer—lesds res- - sonably susceptible of bein,, checked, which, if true, would establish the tax- payer's innocence. When the Govern- ment fails to show an investigation into a the validity of such leads, the trial judge pony, eee to | Id, at 135-136. Examining Bunch's claims in light of these commands, we are persuaded that the government has carried its burden of establishing with reasonable certainty the amount of 21 ——_— — — — — K rere — —ũ— —äĩ4 :: ñ ñ ̃ — No. 62-3116 985 cash-on-hand as of January, 1973. Moreover, we find no fault with the treatment of the purchase and sale of the Charing Road ~ apartments. We have sowe difficulty, however, with the manner in which the government treated the question of furniture. In evidence as a government exhibit was a November 3, 1971 financial report submitted by Bunch to City National Bank. Under “assets,” the report listed $15,000 worth of home and office furnishings. In calculating Bunch's net worth for late 1972, however, the government did not include the value of these furnishings. On cross-examination, the government's witness was asked to explain the exclusion. "(Bjecause 1 have not seen any evidence to the point that they were still in Mr. Bunch's hands at the end of 1972," he replied. It is for the government, if it proceeds on a net worth theory, to negate the validity of any “relevant leads... reasonably susceptible of being checked.” Until and unless it does so, the burden of proof does not shift to the taxpayer. The government witness’ statement implies a misunderstanding of this fact. In this case, the November 3, 1971 financial report was indisputably a relevant lead to an asset which was, we think, reasonably susceptible of being checked. It is unclear from the record whether it was checked. In this case, however, the effect of an error on the government's part was harmless. Once the $15,000 is credited to ET . SIRI RN ennai 5m 4 1 b 4 . - 6 - me: Bunch as a component of net worth in January, 1973, its . l f effect is merely to increase the absolute net worth valuations . i then and in subsequent years. It will not change the relative fluctuation in net worth between those years nor, therefore, will it change the calculations of tax deficiency. The judgment of the district court is affirmed. ENTERED BY ORDER OF THE COURT " i‘ e A * er hg A TRUE copy ' Attest: ISSUED AS MANDATE: December 28, 1982 COSTS: x None | . 4 * This order was prepared by Judge Hart in. No. 62-3118, United States v. Bunch N KENNEDY, Circuit Judge, concurring in part and dissenting n part. . I concur in all of the Court's order except that portion which holds that the listing of $15,000 worth of home and office furniture on a financial report submitted by Bunch to City National Bank on November 3, 1971 constitutes a “relevant lead" which the government was required to check. When the Court in Holland v. United States, 348 U.S. 121 (1954), discusses relevant leads, it does so in terms of suggestions from the defendant. li ut | z | { li i Hl : i 289 U.S. 89, 91-92. At 19/-38. While under investigation for tax evasion, Bunch did not submit the existence of the furniture as an explanation which might tend to establish his innocence. Had Bunch mentioned that he possessed the furniture, then I would agree that such suggertion would constitute a lead to be pursued. The information here did not constitute a “relevant lead.* "ae . anne om on at N a Dub 5 . y : 4 * * 7 0 1 * re eee W Pe et thn SAYS » eee — 15 United States District Court a” ; „ Gouthern Dietrine of Ohie/Eastera Division oarenoant > BURCH, Willian e ** 1 4 „fn 0 a er Sete b j uve’ append in pawn on Coons, | tJ WITHOUT Counse. —— 2 — — —ꝓä᷑ —— ——— —-—t 2 — the defendant . — ——— of — 1 , «Seek Meter an SI OUILTY, and the cones being wlified hat _JNOLOCONTENDERE, ee there by 0 foetus! Bawls for tne plea, 0 f (J NOT GUILTY, Defendant ts discharged 4 There being e et of eunty. — . 2 a A pe ef gy * * tn the of the attorney for the ; r ſ ne the 4. >| * ae is A cl l f 7 2 ö 0 i i | Hs 5 i i i i i i L i f b i 5 1 i 5 ö if i i | it i 1 ips i it 15 : i oe v APPENDIX ¢ ' WN Ates ja 15 2 un IN THE UNITED STATES DISTRICT COURT Satine aN no FOR THE SOUTHERN DISTRICT OF on:0 EASTERN DIVISION UNITED STATES OF AMERICA, ' Plaintiff, ‘ va, + Case CR-2-60-62 WILLIAM DON BUNCH, ' Defendant. ' MEMORANDUM ANO ORDER In @ jury trial commencing August 10, 1981, William Don Bunch was tried on three counts of attempting to evade income tex due and owing by wim to the United States of Americe. Count I of the indictment charges the defendant with willfully and knowingly attempting to evade income tax due and owing by him to the United States of Americe for the calender year 1973, Count II chacges the defendant with willfully and knowingly attempting on or bout the 15th day of April, 1975 to evede income taxes due ond owing by him to the United Status of America for the calendar year 1974. Count III charges the defendant with willfully and knowingly attempting to evade income taxes due and owing by him to the United States of America for the calender year 1975, On September 16, 1961, the jury found the defendant gvilcy of Count 1, Count 11 and Count 111. The defendant hes filed a motion for judgment of acquittel pursuant to red. R. Crim. Y, 29(e). Previous motions by this de tendeat for judgment of ecquittel were made et the close of the Government's case and at the close of all the evidunce, pursuant to Fed. . Crim, . 29(0), ond were denied by the Court. The seme at ended ie to be applied in ruling on s wotion for judgment of acquittal regardless of at what stage of the proceedings the motion is made, United States v. Austin, 585 F. 2 127) (Sth Cir, 1978); United States vy. Felice, 461 F. Supp. 79, 87 (n. b. Ohio 1978), aff'd 609 F.2d 276 (6th Circ. 1979); Weight, Federel Practice and Procedure: Criminal $467 (1969); GA Moore's Federal Practice 429.06 (1961). Pursuent to Rule 29(«), „ court “shell order the entry of judgment of acquittel...if the evidence fe insufficient to sustein d conviction.” This cule was thus interpreted by the Sisth Circuit in United States v. Mey, 430 F.24 715, 717, 716 (6th Cir. 1970), The test for determining the suse tetenes of the evidence to sustain a motion for 3 of acquittal is well settled and is 1177711. set forth in United States v. Conti, 339 77d 10, 13 (6th Cir, 1860). In cesting the — 1 of the evidence to withstand « motion for judgment of scquitcel the trial judge does not pase upon the credibility of the witnesses or the weight of che evidence. On the contrary, he must view the ovidonse and the inferences: that may justifiably be dravn therefrom in the Light most favorable to the ecnment, [The many citations omitted). If, under such view of the evidence he concludes that # reasonable mind might fairly conclude guile beyond «a reasonable 4, che motion should 11 and the isse left to the a t is ony re under such view of evidence concludes there ust be such « doubt in a coasonable wind, should the unin to granted, (The many citations omitted, re fact that the evidence is 12127“ idence, . inconsequential. Circumstantial evid trong to convince a jury of « defendant 0 guile be @ reasonable doubt, te set fte tent te eke e case to the 1 204 sustein « verdict. (Citations omitted, Accord, United Stetes v. Lewis, No. 60-5183, slip op. ot 3 (6th Cie. June 19, 1961); United States vy. Gaines, 353 F.2d 276, 278 (6th Cir, 1965); United Stetes v, Berkley, 268 5. 24 733, 716 (6th ct.), cert, denied, 368 U.S. 822 (1961), + 493 . Supp. 1092, 1094-3 (M.D. Tenn, 1979), aft'd, 617 7. 20 604 (6th Cir.), SA denied, 101 8. Ce. 119 (1980); United States . Gibson, 486 F. Supp. 1230, 1233 (3.0, Ohio 1980). + @aT¢ Applying these standards to the evidence adduced ae to each count, the Court concludes thet the motion for Judgment of ecquittel should be dented. The Court hes corefully considered the evidence presented at (ciel, and, viewing the evidence and the inferences justifiably drawn therefrom In the light most favorable to the Government, concludes that @ reasonable juroc could find beyond e reasonable doubt each of the essential elements of the crines of which the defendant wes convicted, and thus could fairly conclude guilt beyond e reasonable doubt on each count of the indicteent. The defendant's motion basically calses two issues. Firet, the defendant argues that the Government failed to eetablish with reasonable certainty the beginning net worth of the defendant. Additionally, che defendant argues chat the guilty verdict was improper since the defendant did not have any duty to ceport the gain from the sale of his Lane Avenue residence until October 15, 1975. 11. FALLURE TO ESTABLISH OPENING NET WORTH The defendant's argument that the Government failed to establish the defendant's opening net worth fe two pronged. First che defendant argues that I. A. 8. Revenue Agent Barbace Kast] failed to adhere to the Special Agente Handbook's guidelines which desl with establishing e fire opening net worth for the defendent.! Therefore, the defendent argues the verdict should be set aside because the I. k. 8. is bound to follow its own cules and regulations. Additionally, the defendont argues that equipment and furniture owned by the defendant were ignored by the Government in determining the defendant's opening net worth, A. A zerdl Doctrine The defendant attempts to base ite Fed. K. Crim, The Court notes that the Specie) ens never offered into evidence, A few passages from rhe Handbook were read into the record during the trial. The Court 2 ie exceedingly 14 90 to tely sanhyes Spe idelines in question without © access to . guidelines . 29(c) motion in part on the peinciple that an agency is bound to follow its own cules and regulations. That principle wes enunciated in United States ex rel. Accacdi v, Shaughnessy, 347 U.S. 260 (1954). . 10 Accerdi, an alien brought « habeas corpus action attacking the validity of the denial of his application for suspension of deportation. We claimed thet his application to the Board of lesigtet ton Appeals hed been prejudged beceuse, prior to the Board's decision, the Attorney General hed included the alien on e confidential List of “unsavory characters” whom the Attorney Generel wished to deport. 347 U.S. at 262. The Supreme Court was feced with the fesue of whether the alleged conduct of the Attorney General deprived the alien of any rights quo t eat oed him by etetute or by regulation. The Supreme Court reviewed the operative tegulations applicable to appeals from deportation decisions. Those teguletions expressly required the Board of lomigration Appeals to exercise the same discretion and power thet hod been conferred upon the Attorney Generel by law. The Supreme Court concluded thet "as long as the regulations remain operative, the Attorney General denies himself the right to sidestep the Board or dictate ite decision in any manner.” 1d. at 267, The Supreme Court therefore held that if the petitioner could prove his allegations thet the Board hed failed to exercise its discretion under the regulations, he would be entitled to e new hearing before the Boerd without the burden of the previous proscription by the Attorney General's list. The Accardi doctrine hes subsequently been ppl by the Supreme Court to invelidete discharges of federal po when safeguards required by agency regulations were aot provided. See Viterelli v. Seaton, 359 U.S. 535 (1959); Seevice v. Dulles, 354 U.S. 363 (1957). The Accerdi doctrine hes also been applied in the context of criminal prosecutions. See Heffner, 420 F.2d 809 (4th Cir. 1969); Jones, 366 F.2d 795 (1966). Im Heffner, the Fourth Circuit reversed the defendant's conviction. The court noted: — It is of no ei 5 Hog the procedures ot fostructions «hich the as established ere more generous than the I requires. Io Service v. Dulles, the Supreme t victeted the discharge of « Torsten service officec because pak the State Department's Esilure to follow ite n The Court 3 that it no difference thet the stete De t hed no atetutory ot constitutional obi nid — to eotebliah the procedure in question: While it fe of course true that... the Secretery was not obligated to upon hinself these more t 2 — * «ve tive and procedural 822 * 21 done so could not, 60 long os fons 898 unchanged, proceed Kess 2 to then 354 U.S. at 368, 77 8. Ct. at 1165. See also Vitarelli v. Seaton, supra, Hor does it matter that these IRS instructions to special agents were not promulgeted in some- thing 11 y labelled « A io fon” ot edopted with etcict regard to the Administrative Procedure Act; the doctrine has s broader sweep. The Supreme Court in Viterelli v. Seaton, 22572. applied it to a Department of the Interior .* Second Circuit * 4 82 it to tee andl a "Weekly Bulletin 05 » (ct. 20 7). solch “. Resor, 406 F 33 ial, 143-144 72 12 146 had court found had been established by the FCC's “usual practice” of N= the Avy in ite orders. Sangamon . Television ats v United States, 106 BB 3: c. 2. 2 4 5. 2d 221, 224-225 b nn. 8 & 9 "tts 9). fe ahlenmaier, 226 F.2d 35, 43 (0. + cies 2. 1993) Rien holding). The same court applied the * ety 10. rec 1 33. Broedcasti 241 U.S. A, 9. C. 343, 179 1.123,73. 3275 iad) Finally, ia United Stetes ex rel. Brooks v. Clifford, 69 2.23 at 706, this ce ppl ied the doctrine to @ Department of Defense “Directive.” 420 F.2d at 612. The defendant in United States v. Jones, 368 F.2d 793 (2nd Cir. 1966), hed been convicted under 18 U.S.C. 61407 for failing to register ee 6 narcotics veer upon entering the United States. The Secretary of the Tressuty hed promulgated « regulation under thie statute requiring custome officers to furnish registration foras to narcotics users, aod no euch form bed been furnished to Jones, The Court of Appeals reversed the conviction, holding: -30~ 4 n Our decision rests the os leas le that because the Government has failes to follow its own regulation, promulgated in the proper exercise of the Secretary of the Treasury's discretion, its ection cen heave to effect. In other words having felled to pportunity to regist LDA rt unity reg listet or in uletion, hie errest and ee ons fovelid. There te mo novelty in holdirg thet where an official ie given discretionary power by statute, promulgetes tegulations es to liow the ie to exercised then fells to follow his own regulations, the action is of no effect. 368 F.24 et 799 (citations omitted). This Court does not question the validity and continuing vitelity of this rule of lew. See Uni ¥. Hixson, 416 U.S. 683 (1974). However, thie Court notes that exceptions have developed to the Accardi doctrine. Government agencies have been perwitted to depart from their reguletions when those regulations wero designed to govern internel agency procedures rathor than to protect an interest of some other party. See, : . American Farm Linea v. Block Ball Freight Service, 397 U.S. 532 (1970). These cases have noted thet the agency rules in question “were not intended primarily to confer important procedural benefite upon individuals in the fece of otherwise unfettered d@lecretion,,,[citation omitted); wor lere these cases) in which an agency required by rule to exercise independent — discretion bes failed to do so." American Farm Lines, fupta, at 538-39. Cases involving regulations designed to govern internal agency proceduces are exempted from the Accardi doctrine because: [T)here is no ceason to exempt (these cases) from the 1 principle that “Tile ie elways within the discretion of a court or an edministrative ency to relex oi modify its procedural rules ed for the orderly transaction of business before it when in a given case the ends of justice require it, The action of either in such « case — — 3 passes. ween 4 nee ; ing of end- tent el pre ce to ain ety. cone 305 Pera 16 „ 764, Ig. at 339. Thus e number of cases have concluded thet che „ Accardi doctrine applies only (1) when the agency's regulations ace designed to protect the perty deeling with the agency and (2) when the egency’s departure from those regulations tesulte in prejudice to thet party. See, 8: · City Council! of Baltimore v, Nethews, 362 F.2d 914 (Ath Circ. 1977), cect. denied, 439 U.S. 862, véceted on other grounds, $71 F.2d 1273 (Ath Cic, 1978); E. of Baltimore County, 462 F. Supp. $35 (D. Hd. 1978). In United States v. Ceceres, 440 U.S. 741 (1979), the Supreme Court further explained and refined the scope of the Accerdi doctrine. In Ceceres the Supreme Court refused to apply the Accevdi doctrine to exclude evidence ebteined in violation of Internal Revenue Service regulations. The Court eppesred to apply e two pronged analysio in deciding whether the courts hed « duty to enforce an agency tetulet ton. First, the Court looked to see if “compliance with the tegulation is mandated by the Constitution or federel lew.” Id. at 749, it compliance is mandated, then the courts obviously have a duty to enforce the regulation. In the next step of ite enslye ie the Court looked to see whether the violation of agency reguletions raised any consticutionel questions, While e tule may not heave been adopted to make certain that individuals’ constitutional rights are not infcinged, the violation of that rule efter it le adopted may give rise to constitutions] cle tees. This second prong of the Caceres analysis appeere to reflect the rationsle of those cases which hold chat the Accerdi doctrine only applies when the agency's regulations are designed to protect the party dealing with the agency end when the agency's departure from those regulations results in prejudice to that party. See, , Meyor end City Council of Baltimore ¥. Nethewe, supe, In the present cease it is clear that compliance with the Internal Revenue Service's guidelines on establishing a firm opening net worth ie not mandeted by the Constitution or etetute. The guidelines are not cules informing L. N. 8. date on how to safeguard express constitutions] rights, This Court slee believes thet eny deviation from -32- the guidelines in question would not ralse any constitutional questions, In the present case it does not eee that these guidelines on establishing an opening net worth were designed to protect the pacty dealing with the 1.8.5. los tee, these guidelines appear to be on aid to 1. K. 8. epeciel agente in deteraining whet questions should be ested while conduct ing an investigation, Thie Court also notes thet defendant Bunch could not cle te e due process violet ten if chte Court should find thet Barbera Kestl did not follow the guidelines. Defendant Bunch cannot cleim that he relied upon these guidelines or thet 6 deviation from the guidelines effected his conduct since hie filing of the tex returns in question occurred long before the alleged breech. See United Stetes v, Cormier, 639 . % 1177, 1100 (Sth cit. 1961). The defendant 81e cannot claim thet @ devietion from the guidelines would per ge reovlt in failure to adequately prove the defendant's opening net worth. Finally, testimony from the Government's expert witness Mr. Peter Hugenderg, Supervisory Revenue Agent for the Internal Revenue Service, indicates that revenue agente euch as Becbere Kast) ere not required to read ot adhere to the IRS special agent's manual. Revenue agents eppacently heve o separate set of guidelines to ald thele investigations. Im light of this evidence, the Court fells to see how the defendent could claim he wee prejudiced by Berbera kost! not following guidelines she was not cequired to utilize. B. Failure to Include Assess in Opening Wet Worth The defendant also argues that the opening net worth in this cose wae not established with reasonable certainty becouse the Government felled to take into cone der et lo furniture owned by the defendant. The record indicates no evidence of substantial transactions by the defendant involving furnituce. It does not appear that the defendant furnished the I. K. 8. with reasonable leads of furnituce sales which would change his financial position. Thus, this Court feele the Government was justified in treating the defendant's furnituce essets 60 @ constant during the tex years in 33 yaa Oe eee WA sy Aa in c 1 question. To the extent thet the defendent attempted to argue ot ciel thet significent sales of furniture occurred, the jury was faced with e question of fect. There was out tte tent evidence for the jury to reject the defendant's position and find the defendant guilty beyond e reasonable WUE RESTDERC! anl. 9 4 1. Ane The defendant argues thet bie conviction on Count I1 of the indictment was improper because the Government Sought to include in the net worth computetion for the 1974 tex year evidence of gein realized on the sele of the defendant's principal residence, Ae this Court noted earlier, thie Court must view the evidence in this case in the light most favorable to the Government to determine whether there is sufficient substential proof, direct and civrcumatentiel, together with inferences reasonably drawn therefrom, oo which the defendant wight be found guilty beyond « reasonshle doubt. The Government presented evidence in this cose which tended to show that the defendent hed unreported taxable income of approximately $14,600)for the 1974 tex year. This figure included aii of the getn reelized by the defendant on the sale of the defendant's West Lene residence since the Government felt the defendant was only entitled to the exclusion provided for in 26 U.S.C. 1202, However, if the defendant is correct end if pur sunt to 26 U.S.C. $1034 the defendant did not have e duty on April 15, 1975, to ceport c gain on the sale of the West Lane property, approximately 510, 2000 would have to be 2 1 amounts used in thie section of the opinion dave rounded to the neerest hundred dollere. Bec the Government is not required to prove en exect figure of taxes due, rounding will not affect the present the 4 Mc. Hugenberg used $14,651 es the smount of texeb ct wi? give the 2 the benefic this to $14,600 ’ Gein realized by the defendent efter sale of the West ty wae said to be $20,464 at one point in the trial, „ Of cross examination Mr. -34- aa A 14 * N LA * * Genn. deducted from the unreported taxable income figuce which the Government cle lee as correct, Ignoring the gain veel tted from the sale of the West Lane property end viewing the remaining evidence in the light most favorable te the: Government, there wes proof tending to show: he defendant hed failed to report D © taxable income. The defendant in bie 1974 . ro reported taxable incose p of $8,785. 10. Thue, the Government's proof, excluding che gein fros 15 sole of the West Lene property, indicates thet taxes would be due on — — tenable loco. Besed upon thie texable income ute the defendant would heve failed to pey 6 evbstantiel ont of income taxes. Thus, thie Court finds thet there is sufficient proof from which @ jury could find beyond e reasonable doubt thet the defendent willfully ettempted to evade substantial taxes due and owing when he filed his 1974 tex return on or about Apt 1 15, 1975. The defendant relies upon e number of cases dealing with attempts by the Government to amend indictments, The present case does not involve an attempt by the Govern- met to end the indictment. The present case was tried and subeitted to the jury on the theory thet defendant Bunch willfully ettempted on of about the 15th day of e, 1975 to evade income texes due end owing by bis for the calender year 1974, The Government did not attempt to amend the indictment to also cherte that the defendant ettempted to evede tees on October . 1973. Thus, thie Court faces „ different question then the question addressed by the Sixth Ciccuit Court of Appeals in 524 F. 2d 644 (6th Cie. 1975), where the Government did attempt such en effort, The defendent's reliance on Pendilidie and other cases dealing with emendments to indictments is, therefore, misplaced. 4% isse . the 26 U. 8.6, this 27525255 te equa 0 0 s discussion Sn n 7 $20,400 to 7 in from the sale of the 88e 38 = 1 SS the additions] emount which would heve — . l. 2 © The defendent elso cites to s number of cases construing the scope of the phrase “on or bout“ in a criminal indictment. See Ledbetter vy. United Stetes, 170 U.S. 606 (1898), United States v. Lene, 514 F.2d 22 (9th Cie. 1975); United States z. Goldstein, 502 v. 2 526 (34 Cie. 1974); United States v. Goodrich, 493 F.24 390 (9th Cie. 1974); United States v. Heard, 443 F.24 856 (6th tr.), cert. denied, 404 U.S. 850 (1971); Yew v. United States, 226 F.2d 362 (9th Cir, 1955); United States v. Tramagline, 197 F.24 928 (24 Cle. ), cert, denied, 344 U.S. 864 (1952). Thies Court agrees with the defendant's contention thet October 15, 1975, could not reasonably be conotrued to be “on ot ebout the 15th day of April, 1975." Thue, it the defendant's duty to report the gein from the sele of the West Lene property could only have et sen on October 15, 1975, the defendant could not heve willfully ettempted to evede the tax due on thet gein when he filed his 1974 tex teturn on ot about Apcil 15, 1975. Ae the First Cicevit bas noted in s case involving # prosecution for feilure to file a tax return: “just #8 subsequent conduct cannot relieve a texpeyer from criminal Liebility for feilure to file tex returns on or before their due date, leitet tons omitted), [thie Court does] not think thet subsequent events can trensform en act of omission, innocent when it occurred, into o criminel ect.” United States v. Bourque, 541 F.2d 290, 294 (let Circ. 1976). However, this Court notes that the jury aay heve found that the sale of the West Lane property did not fall within the scope of the provisions of 26 U.S.C. §1034 because the defendant never intended to reinvest the gein realized from that sale in a new residence, If the defendent never intended to reinvest hie gein in a new residence, then the gain from the sale of the West Lane property should have been recognized and reported on the 1974 tex return filed on or ebout April 15, 1975. g., United , S11 F.2d 514 (loth cit.), cert. denied, 423 U.S. 825 (1975) (holding that losns obtained in bed faith and without on intent to repay constitute income). Se ft In the present cose the evidence is undisputed that the defendant failed to reinvest hie gain from the sale of the West Lane property in « new cesidence within the eighteen (18) month period provided fore in 26 U.S.C. $1034. The evidence is also undisputed that the defendant never amended hie 1974 tex return to reflect any tete from the sale of the West Lene property. Where e defendant hes en opportunity to correct his return, end is on notice thet euch correction fe necessary, bie failure to file an ewended return aay be considered by the jury in determining the defendant's intent. See United States v. DeNiro, 392 . 2 753, 758 a. 8 (6th Str.), cert. denied, 393 U.S. 626 (1966); Hill v. United Stetes, 363 F.2d 176, 160 (Sth cite. 1966). Thus, im the inetant case the jury could have found thet the defendant never intended to reinvest bis gain from the sale of the West Lane property; that 26 U.S.C. §1034 did not, therefore, apply to this transection; and thet the defendant was willfully attempting to evade che texes due on this property when he filed his 1974 tex return. Whether the jury drew such reasonable inferences from the evidence in this case, however, is not determinative, since, os this Court noted earlier, there is sufficient evidence, even excluding the gein from the sale of the West Lene property, for the jury to have found the defendant guilty. The Court finds thet the defendant's arguments ere not well taken. The defendant's Fed. K. Crim. P. (e) motion is, therefore, DENIED. IT 18 SO ORDERED. ° schuh, ted States District Court =37- * aes “4 a 7 „ * * * e „ 2 N ‘a 9 APPENDIX o ' ; At ewer 75 8 ee een a a1 7 . * 2 nym nen , f come ge ö 7 DISTRI ay EASTERN DIVISION Neude UNITED STATES OF AMERICA, ~ Plaintift, 1 a + Case CR-2-80-62 WILLIAM DON BUNCH, : Defendant. > ORDER This case ie now before the Court upon the aotion of defendant Bunch for an order directing the United States to produce the Internal Revenue Service's Special Agent Report (SAR). The defendant is charged with three counts of income tex evasion in violation of 26 U.S.C. §7201. The government represents thet by pote the “net worth plus expenditures” method of proof, l it will prove thet defendant Sunch earned income substantially in exces. of the amounts he reported to the Internal Revenue Service in 1973, 1974 and 1975. The SAR is „ compilation of memorands, tax schedules, reports and other documents prepared by « Special Agent of the Internal Revenue Service in the course of en investigation of e texpayer.v United States v. Clevelend, $07 F.2d 731, 736 m. 9 (7th Cir. 1974). On April 3, 19861, the Court heard oral argument on defendant's motion. bur ug defendant's argument to the Court, defendant's counsel stated that he was seeking the 1 worth method of f “compares the velve of by — ‘e eesets end raises at the sported un tag * ond of a tex r fo order to show unr income.” + 486 5. 1235 (8. 0. nir Peston ys Cibeen A ee 24 310, 111 ben . 7 SAR io order to challenge the spec el Agent s test imony regard tag the “opening net worth” ettcibuted to defendant for each of the tax years in question. (Tr. 33, 34). Defendant's counsel further stated that to deny defendant eccess to the SAR would, with respect to the Special Agent, deprive defendant of effective cross-examidation and con- frontetion, In support of his motion, defendent relies vponiinited Stetes v. Clevelend, supts, „ Jencks Act decision. The government opposes defendant's ot Ion end maintains that the SAR is not subject to pretrial discovery. Furthermore, the government's trial ettorney represents that the Special Agent who investigated defendant in connection with thie cese may not be called to testify et defendant's trial. Even assuming thet the IRS Speciel Agent wiil testify at defendant's trial, it is cleat thet defendant ie not entitled to discover the SAR. Rule 16 (0 (% of the Federal Rules of Criminal Proceduce limits discovery other- wise allowed under the rules by providing thet the govern- ment need not disclose “reports, memoranda, or other intecnal government documents made by...government agents in connection with the investigation ot prosecution of the case.” Rule 16(#)(2), Fed, . Crim. Proc. Moreover, defendant's relience e United States v. Cleveland, supra, is misplaced. Clevelend is # Jencks Act decision. 18 U.S.C. $3500 (1970). The Jencks Act prohibits the pretrial discovery of statements and reports made by prospective government witnesses unless the witness testifies on direct examination at triel, in which case the Act requires the government to produce any previously-made statement of the witness in ite enen * i insofer es it relates to the witness’ testimony at triel. „ United States v. Nickel, 552 ¥.24 684, 688 (6th Cir. 1977). 2 The Jencks Act, 18 0. 8. c. $3500, provides in pertinent pert: : : (a) In criminal prosecution brought the United Sates, no statement ot report in I I { of the United Stetes which wes made a Covern- went witness or 9 witness 8 fendent) shall be the subject @ subpoena, discovery, of inspection until BLT) Te NM PEM IAN ae 40 . ‘ ay? ' ; = = = ~ = 2 2 — 2. € 7 5 “Im Cleveland the Seventh Circuit Court of Ape, ; held thet the ertire SAR In ao crininel tax evasion case is „ staterent under the Jencks ace? $07 F. at 737. not- withstending th» fort that the Specie! Agent may not testify et defendant's tet end hes, delentant’s argucent in favor of „ Jencks disclosure is peenituce, the Clevelenc court's position has not been followed by the Sixth Circuit. in /United Stetes v Derk, 597 . % % (oth Cir. 1979), eaid witness hes testified on dicect exeminetion in the triel of the case. (b) After e witness called by the United States hes test te on direct exemination, the court shall, on motion of che defendant, order the United States to produce ony statenent (as hereinafter 821 of the witness in the session of the United States which relates to subject matter as to which the witness hes testified. if the entice contents of eny such statement relete to the subject matter of the test of the witness, the court shall order ic to be delivered directly to the defendant for his exenination and use. 18 U.S.C. $3500(b) (1970). N It should be noted that with respect to disclosure of lor relevant statements of witnesses, the Jencks t has been supplemented by new Rule 46.2 of the Federal Rules of Criminal Procedure which is designed to plece disclosure of prior celevant etetements of defense Witnesses on the same legal footing of is the dieclosuce of prior relevant statements of prosecution witnesses under the Jencks Act. ight, rt t „ Supplement to Vols. T-3, $435 ; 3 The Jencks Act defines “statement” as follows: (e) The term “statement”, as used in subsections (b), (e), and (4) of this section in relation to 5 Ne any witness called by the United Scetes, means a (1) @ written statement mode by said witness ¥ and signed or otherwise adopted or approved by bin; (2) a@ stenographic, mechanical, electrical, or other recording, or @ transcription thereof, which is a substantially verbetio recite of an oral statement made by said vitness and recorded contemporaneously with the making o such oral statement; of („ @ statement, however taten ot recorded, ot @ transcription thereof, if any, made by seid witmess to „ grand jury. — — —— — -40- Dil? enn e Ng Sg in aii er a an eae en, N pa te for example, the Siath Ciccuit held that the contents of an IRS Special Agent's case tepoct in @ cciminal tax prosecution did not constitute s stetement under the Jencks Act. 18 U.S.C. §3500(e). Furthermore, in e factually similer case fovolving FBI case reports, the Sixth Circuit cejected the ergument Chet the agent's case reports constituted stetements under the Jencks Act. (4) We do not find such broad requirements in the Jencks Act ot in I of 2 1 cited to Rel wea te" caste tas"e” oe th SE tight to file 2 tig ag = „: he in 12555 1577 77 $. Ce. 425 U8. 94, 04, ; ‘ 1 9 8. 353 98. $ . Ct. 7 . 4 1287 (1954) (Footnote omitted). 7 Ue tee v. Nickell, Defendant Bunch's motion presents a cequest for pretrial discovery of government files, oc in the alternative, @ premature request for disclosure of Jencks material. itn view of Rule 16(a)(2) of the Federal Rules of Criminal Procedure and the decisions set forth in Dark, supce, end Ainited States v. Nickell, supra, neither request by defendant is meritorious. Inasmuch as defendant will have the opportunity to cross-examine the Speciel Agent at triel should the government elect to call her ae a witness, the defendant's cleim chat he will suffer e denial of crose-examination and confrontation if he ie not provided eccess to the SAR is unmeritorious. Accordingly, defendant's ot on for production of the SAR is DENIED. IT is SO ORDERED. * sc ited States District Court -4l- CERTIFICATE OF SERVICE I hereby certify that on this at day of February, 1983, three copies of the re-printed Petition for A Writ of Certiorari were mailed to James Ratan, Assistant United States Attorney, at 85 Marconi Boulevard, Columbus, Ohio 43215, Counsel for Respondent\™..I further certify that all parties éQuired to pe served have been serves SHEWARD & WEINER 743 South Front Street Columbus, Chio 43206 Telephone: 614/443-6581 Counsel for Petitioner --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385010_0417%3A2. Public record. Not legal advice.