Petition for Writ of Certiorari — Dorris v. United States

: | Suprerne Court, US. |

i 1; FILED

No. | . ANIOL, JR.

aa...

In The Eases

Supreme Court of the United States

October Term, 1990

UNITED STATES OF AMERICA,

Respondent,

VS.

JAMES K. DORRIS,

Petitioner.

PETITION FOR WRIT OF CERTIORARI FROM THE

UNITED STATES COURT OF APPEALS FOR THE THIRD

CIRCUIT

EDWARD J. SCHWABENLAND

Attorney for Petitioner

25 East Second Street

P.O. Box 955

Media, Pennsylvania 19063

(215) 565-2930

10959

*NJ (201) 257-6850 (800) 3 APPEAL *NY (212) 840-4640°MA (617) 542-1114

tz

_ en DC (202) 783-7288*PA (215) 925-6500*USA (800) 5 APPEAL

QUESTIONS PRESENTED

I. Whether the verdict in favor of the Petitioner as to the

original tax returns of 1982 and 1983 and against the Petitioner

as to the amended tax returns for 1981, 1982 and 1983 was

inconsistent and against the weight of the evidence.

Il. Whether the Trial Court erred in allowing the Government

to argue that the Petitioner’s Universal Life Church Congregation

was a sham organization.

Ill. Whether the Trial Court erred in denying, without an

evidentiary hearing, the Petitioner’s Motion to Dismiss the

Indictment on the basis of selective prosecution.

IV. Whether the Trial Court erred in failing to dismiss Count

Three of the Superseding Indictment (1981 Amended Tax Return).

V. Whether the tax sections which the Government claims

to be applicable to the prosecution are unconstitutionally vague

to support a criminal conviction.

VI. Whether the Government’s solicitation of testimony from

the IRS agent that the Petitioner failed te contract Agent Bell

or to produce records following Agent Bell’s interview of Petitioner

on July 5, 1984 constituted reversible error.

VII. Whether the Trial Court erred in charging the Jury that

the statements made in the amended returns in Counts 3, 4, and

5 were material as a matter of law.

PARTIES TO THE PROCEEDINGS

The Caption of the case contains the names of the parties

to the proceeding in this Court. The Petitioner’s wife, Patricia

Dorris, was co-defendant at trial and was acquitted.

ul

TABLE OF CONTENTS

Questions Presented ............

Parties to the Proceedings....

Table of Contents.................. (exe

Bee Ge Gg gv ccc ccccccsccccecsces

Statement of Jurisdiction................

Constitutional Provisions Involved ........

Bm GE Wi GOD on oc cece ccccccccces

I te ee

Argument:

1. The verdict in favor of the Petitioner as to the original

tax returns of 1982 and 1983 and against the Petitioner

as to the amended tax returns for 1981, 1982 and 1983

was inconsistent and against the weight of the

a a aN a Nee oA A ers rs ff

Il. The Trial Court erred in allowing the Government to

argue that the Petitioner’s Universal Life Church

Congregation was a sham organization. .........

Il. The Trial Court erred in denying, without an

evidentiary hearing, the Petitioner’s motion to dismiss

the indictment on the basis of selective prosecution.

ill

iv

tv

tv

ty

las

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a

Contents

Page

IV. The Trial Court erred in failing to dismiss count three

of the superseding indictment (1981 amended tax

SURG ccs cons hvacen dane eeeeneneeeseaeokrkes? 19

V. The tax sections which the Government claims to be

applicable to the prosecution are unconstitutionally

vague and cannot support a criminal conviction.

pea chends ua ees babbabeeeeeuhbeel ees 20

VI. The Government’s solicitation of testimony from the

IRS agent that the Petitioner failed to contact Agent

Bell or to produce records following Agent Bell’s

interview of Mr. Dorris on July 5, 1984 constituted

pean WW. ao b'e'o bak ous ha ee aes 21

VII. The Trial Court erred in charging the jury that the

statements made in the amended returns in count 3,

4, and 5 were material as a matter of law........ 22

CED oo on xs andthe eked ek eA enh an weap see 23

TABLE OF CITATIONS

Cases Cited:

Doyle v. Ohio, 426 U.S. 610 (1976) ................... 22

ULC, Inc. v. United States, 372 F. Supp. 770 (E.D. Cal. 1974)

Pe eT ere Te re ere pee ee ee ee 14

y

Contents

Page

United States v. Dixon, 658 F.2d 181 (3d Cir. 1981)... .. 8

United States v. Doan, 710 F.2d 124 (3d Cir. 1983) .....

$bbvescencoeeds ated dadeussaunensad maniac 8,9

United States v. Edwards, 576 F.2d 1152 (Sth Cir. 1978)

United States v. Greenberg, 735 F.2d 29 (2d Cir. 1984)

sékuaveesn TIITITT re iki ee

United States v. Myerson, 368 F.2d 393, cert. denied, 386

U.S For, $7 S. Ce. 1906, 06 EL. Bb. BB FS cccccccs 20

United States v. Pomponio, 429 U.S. 10 (1976), rehearing

denied, 429 U.S. 987, on remand, 563 F.2d 659, cettiorari

Gi, Ge Was UE 8 ccev cus ikucéedanonens 4 i oe 12

United States v. Powell, 469 U.S. 57 (1984) ............ 10

United States v. Steele, 461 F.2d 1148 (9th Cir. 1972)

United States v. Sternstein, 596 F.2d 528 (2nd Cir. 1979)

Contents

Page

United States v. Torquato, 602 F.2d $64 (3d Cir. 1979), cert.

denied, 444 U.S. 941, 100 S. Cr. 295, 62 L. Ed. 2d 307

ee bb Sede en $0s0e6ebebbebeshe 0 6USSSs SUSSNSEEE 17

United States v. Velasquez, _. F.2d —. (3d Cir., No.

BB-DEER,, GIASEDD nnn vvccvcecs vssecsedsectecueses 8

United States v. Zudick, 523 F.2d 848 (3d Cir. 1975) 20

Wayte v. United States, 470 U.S. 598, 105 S. Cr. 1524, 84

Se FE fT... Ree 17

Yates v. United States, 354 U.S. 298 (1957) ...... 2.6... is

Yick Wo v. Hopkins, 118 U.S. 356, 6S. Ct. 1064, 30 L. Ed.

r Pe 7 eee peecesesecseces 16

Statutes Cited:

26 U.S.C. Section SOM(CK3MT9B2) ©... 6. ene . 6

26 U.S.C. Sesriem GERI oo. cccccccsccccecsscccccnssees 20

26 U.S.C. Section 66S3a) . ... ees i8

26 U.S.C. Section 7206(1) . ... 6. ccc cnn neues 2, 9, 1S, 20

26 U.S.C. Section 720G(a) . ... 6 wee eens 19

2B U.S.C. Sectiom U2SOA).. ww cen ccceceeneescncnnes a

---- - —~-—-

vi

Contents

Page

United States Constitution Cited:

First Amendment 2, 14, 15, 17

Fifth Amendment 2, 22

Sixth Amendment 2

APPENDIX

Appendix A — Sur Petition for Rehearing From the Third

Circut Dated May 7, 1990 _.. ; la

Appendix B — Judgment Order From the Third Circuit Dated

April 3, 1990 _... ie 4 eae 3a

Appendix C — Judgment Order Dated October 19, 1989

No.

In The

Supreme Court of the United States

>

October Term, 1990

UNITED STATES OF AMERICA,

Respondent,

vs.

JAMES K. DORRIS,

Petitioner.

PETITION FOR WRIT OF CERTIORARI FROM THE

UNITED STATES COURT OF APPEALS FOR THE THIRD

CIRCUIT

A copy of the judgment and commitment Order of the United

States District Court for the Eastern District of Pennsylvania

(criminal no. 89-00092-01) dated October 19, 1989 is attached to

the appendix. The Orders from the United States Court of Appeals

from the Third Circuit dated April 10, 1990 affirming the judgment

of the Lower Court and dated May 7, 1990 denying the Petition

for Rehearing In Banc are also attached to the appendix.

STATEMENT OF JURISDICTION

The Judgment of the United States Court of Appeals for

the Third Circuit sought to be reviewed was entered on April 10,

1990. A Petition for Rehearing In Banc was denied by Order dated

May 7, 1990. The jurisdiction of this Court is invoked under 28

U.S.C. Section 1254(1).

CONSTITUTIONAL PROVISIONS INVOLVED

Arguments include the rights afforded by the First, Fifth and

Sixth Amendments.

STATEMENT OF THE CASE'

This is a Petition for Certiorari arising from the following

facts. In or about March, 1989, the Petitioner and his wife, Patricia

A. Dorris, were charged in a five count indictment for alleged

tax violations [26 U.S.C. Section 7206 (1)]. On or about August

22, 1989, the Government returned a superseding indictment which

essentially charged the same five violations. Said Counts charged

that the Petitioner and his wife claimed deductions for certain

charitable contributions as follows:

COUNT DATE TAX RETURN AMOUNT

I 4/17/83 1982 $11,400.00

I] 4/15/84 1983 $11,050.00

Ill 1/08/85 1981 (Amended) $14,034.00

IV 2/27/85 1982 (Amended) $11,400.00

V 1/03/85 1983 (Amended) $11,050.00

1. ‘*Tr’’ will refer to the trial transcripts.

ENON Ee =

On September 5, 1989, a jury trial commenced and evidence

was concluded on Friday, September 8, 1989. Following closing

arguments and the Court’s charge on September 13, 1989, the

jury returned a verdict of not guilty as to all counts for Patricia

Dorris and a verdict of guilty as to Counts III, IV and V and

not guilty as to Count I and II as to James K. Dorris.

On October 19, 1989, Mr. Dorris was sentenced as to Count

III for a period of imprisonment of 90 days, as to Count IV to

pay a fine of $9,000.00 and as to Count V to a three year period

of probation with a three hundred hour community service

requirement. The commencement of sentencing was stayed pending

this appeal (6a).

On April 10, 1990 a Judgment Order was issued by the United

States Court of Appeals for the Third Circuit wherein the judgment

of the Lower Court was affirmed (3a). The Petitioner presented

a Petition for Rehearing In Banc to the United States Court of

Appeals for the Third Circuit which was denied on May 7, 1990

(3a).

STATEMENT OF FACTS

James K. Dorris and his wife, Patricia, have been married

for over thirty years and have four children (9/8/89 Tr. 45). From

approximately 1969 to 1989, Mr. Dorris worked for the FAA as

an air traffic controller. Because of that position he was required

to relocate to various states periodically (9/8/89 Tr. 49-51).

Mr. Dorris is from a Protestant background and his wife

is from a Catholic background. Their different religious

backgrounds was a matter of some conflict between the Dorrises

at various times during their married life. Furthermore, Mr. Dorris

was searching to become involved in some type of ministry (9/8/89

Tr. 52, 154-159).

In approximately 1979, Mr. Dorris was transferred to

Bethany, Oklahoma. While in Bethany, Mr. Dorris spoke with

a Mormon minister, George Harris, concerning his ministry and

Mr. Dorris’ desire to become involved in a ministry (9/8/89 Tr.

13-16, 55). Thereafter, in speaking with another FAA employee,

Terry Rhodes, Mr. Dorris learned of the Universal Life Church

(ULC). Mr. Rhodes was a minister in the ULC. After doing some

research and making certain inquiries, Mr. Dorris decided that

he wished to join the ULC and to become a minister.’

When Mrs. Dorris and the children moved to Oklahoma some

time thereafter, Mr. Dorris reviewed with his wife what he knew

of the ULC and his desire to become a minister in the Church.

Mrs. Dorris’ own research of the ULC consisted of contacting

the Internal Revenue Service (IRS) to ascertain the IRS’s position

with regard to the ULC. Mrs. Dorris was advised by the IRS

representative that the ULC was a recognized tax exempt religious

organization, that a minister could set up a church in his home,

and that in order to qualify as a church the IRS required three

Board Members (9/8/89 Tr. 57, 159-163).

Mrs. Dorris agreed to support her husband in this ministry

and Mr. Dorris subsequently became a licensed ordained minister

of the ULC in July, 1979. James K. Dorris’ ministry was an

Outreach ministry to individuals who were disillusioned with their

own religious commitment or lack thereof. Mr. Dorris was not

interested in bringing in new members to his congregation; rather,

the focus of Mr. Dorris’ ministry was to get individuals to go

back to their own church or faith in Christ (9/8/89 Tr. 65-67).

2. Since Mr. Dorris was in the process of pursuing a graduate degree for

advancement in the FAA, it was impossible to plan to attend any Seminary.

The ULC permitted Mr. Dorris to establish an immediate ministry (9/8/89 Tr.

54).

Mr. Dorris, pursuant to the instructions given him by the

ULC headquarters in Modesto, California, established his

chartered congregational church (Charter Number 29427) in his

home and his periodic services would consist of prayer, bible

reading, songs and tape playing (9/8/89 Tr. 67).

From an organizational standpoint, Mr. Dorris and his wife

constituted two of the three individuals on the Board of Directors.

Other Board Members, at various times, included Terry Rhodes,

George Crotts and Ken Morris. Resolutions were approved by

the Board and the Church provided the Dorris family with a

parsonage allowance pursuant to section 107 of the Internal

Revenue Code. The Church had its own separate checking account.

In addition to the parsonage allowance, the Church would also

reimburse James K. Dorris for operating expenses relating to

church activities which had been previously approved by the Board.

Mr. Dorris relied upon the guidance of Terry Rhodes and upon

the organizational instructions provided by the ULC headquarters

in California as to the administration and record keeping process

for the chartered congregation (9/8/89 Tr. 58-62).

Any contribution made by Mr. and Mrs. Dorris to their

chartered congregation of the ULC was made by personal check

and deposited into the Church account. The Church would also,

on occasion, provide Mr. and Mrs. Dorris pursuant to approved

resolutions with a parsonage allowance and reimbursement for

payment of certain operating expenses. Any check received from

the Church was deposited into the personal account of Mr. Dorris

(9/6/89 Tr. 145-151, 9/7/89 Tr. 6-65). The maintaining of separate

checking accounts was not only recommended by the mother

Church of the ULC in Modesto, California but was also in keeping

with sound accounting principles (9/8/89 Tr. 30-33).

Any monies paid by James K. Dorris to the ULC were

declared by him as charitable deductions. The only limitation

imposed upon Mr. Dorris according to the instruction manual

from the ULC was that a minister, such as Mr. Dorris, could

not be the only one to contribute to his own congregation since

that would constitute self dealing. Mr. Dorris was advised that

it was permissible for different congregations to support each other

(9/8/89 Tr. 63-64, 108-110). On his initial tax returns, Mr. Dorris

provided the IRS with copies of his personal checks made payable

to his chartered church (See Government’s trial Exhibits A and

B). The charitable deductions taken by the defendant always

specified on the return what amount of money constituted payment

to the ULC.

In May, 1981, Mr. Dorris had to relocate to West Virginia.

His wife and children again remained behind in Oklahoma. While

in West Virginia, the air traffic controllers’ strike occurred and

Mr. Dorris was transferred in August, 1981, to JFK International

Airport in New York. In November, 1981 the family later moved

to New York City after selling the house in Oklahoma. In

September, 1982 Mr. Dorris was transferred to Philadelphia

International Airport. However, because he could not qualify in

the allotted short time period, he went back to JFK in January,

1983. His family meanwhile had moved to the King of Prussia

area where they stayed. During this time period Mr. Dorris

continued, as best he could, his outreach ministry and periodic

prayer meetings or services (9/8/89 Tr. 61-81).

In approximately 1983, Mr. Dorris read an article which had

been published by the ULC wherein its founder indicated that

in his opinion, Christ was a liar. Clearly disagreeing with this

philosophy, Mr. Dorris resigned his position effective as of August

1, 1983. After leaving the ULC, Mr. Dorris had several meetings

with Tom Avringer, a Baptist minister in New York, concerning

the possibility of establishing a ministry in that area (9/8/89 Tr.

80-88).

During the time period that Mr. Dorris had been a member

of the ULC, the Universal Life Church, whose base is located

in Modesto, California had tax exempt status from approximately

1974 to 1984. Mr. Dorris’ resignation was effective as of 8/1/83

and thereafter he had no further contact with the ULC. In 1984,

the ULC’s tax exempt status was revoked and the revocation was

made retroactive (9/6/89 Tr. 108-110). Sylvia Pratt, an IRS

employee, testified that between 1974 and 1984 over several

thousand people had applied, as did Mr. Dorris, to the ULC for

membership (9/6/89 Tr. 122).

In 1979 (Government Exhibit A) and 1980 (Government

Exhibit B) Mr. Dorris listed the contributions to the ULC and

attached copies of his check payable to the ULC (Congregational!

Charter 29427). The 1981, 1982 and 1983 tax returns (Government

Exhibits 1, 3 and 6 respectively) list those contributions specifically

made to the ULC.’

Special Agent Jack Bell of the Internal Revenue Service began

his investigation of Mr. Dorris in the Spring of 1984. On July

5, 1984, Agent Bell and another, made an unannounced visit to

the residence of James K. Dorris and asked to speak with Mr.

Dorris about an investigation. The nature of the interview consisted

in Agent Bell asking questions and Mr. Dorris responding (Mr.

Dorris answered all questions posed to him including, his

background, employment with the FAA, moving to different

locations, becoming a minister in the ULC, the establishment of

Church checking accounts in Oklahoma, New York and

Philadelphia as he would move, and his reasons for leaving the

ULC [9/7/89 Tr. 90-96]). At one point, Mr. Dorris inquired of

Agent Bell directly what Agent Bell felt Mr. Dorris had done

wrong. No response was given (9/8/89 Tr. 95-96).

3. Copies of the 1981, 1982 and 1983 amended tax returns are attached

to the Defendant’s Post Trial Motions. The appellant will provide copies of

any trial exhibits should this Court require.

While the investigation was pending and while Mr. Dorris

was waiting to hear from the IRS concerning its investigation,

Mr. Dorris filed amended returns. The amendments did not change

in any way the claimed charitable deductions in thé original tax

returns. These amended returns for the years 1981 (Government’s

Trial Exhibit 2a and 2b), 1982 (Government’s Trial Exhibit 5)

and 1983 (Government’s Trial Exhibit 7) specifically dealt with

changes concerning FICA, per diem and earned interest income

figures.

ARGUMENT

I.

THE VERDICT IN FAVOR OF THE PETITIONER AS

TO THE ORIGINAL TAX RETURNS OF 1982 AND 1983 AND

AGAINST THE PETITIONER AS TO THE AMENDED TAX

RETURNS FOR 1981, 1982 AND 1983 WAS INCONSISTENT

AND AGAINST THE WEIGHT OF THE EVIDENCE.

The test is whether there was substantial evidence for a

rational jury to find that the government proved all the elements

beyond a reasonable doubt. United States v. Doan, 710 F.2d 124,

127 (3d Cir. 1983); United States v. Dixon, 658 F.2d 181, 188

(3d Cir. 1981); United States v. Velasquez, _. F.2d ___ (3d

Cir., No. 88-3652, 9/1/89).

During the course of the trial, the Court intimated that this

was not a difficult case in the sense that the jury would conclude

either that Mr. Dorris’ congregation was a ‘‘sham’’ organization

from the beginning or, on the contrary, that Mr. Dorris had

established his ULC congregation for religious reasons and that

he subsequently declared those charitable deductions to which he

truly believed he was entitled. If the former occurred, he would

be convicted as to all counts; if the latter then he would be

acquitted.

eV

The crime of tax perjury is defined in 26 U.S.C. Section

7206(1) as follows: ‘‘any person who . . . willfully makes and

subscribes any return . . . which contains or it is verified by a

written declaration that it is made under the penalties of perjury,

and which he does not believe to be true and correct as to every

material matter,’’ shall be guilty of a felony. Clearly the main

issue in the case was one of intent, that is whether the Petitioner

willfully made and subscribed to a return he did not believe to

be true. See United States v. Doan, 710 F.2d 124, 126 (3d Cir.

1983).

However, the jury, after deliberating for approximately three

hours concluded that the Petitioner was not 2uilty as to the original

tax returns for 1982 and 1983 (Counts | and 2) but that he was

guilty for the amended tax returns which were filed in 1985 for

the tax years of 1981, 1982 and 1983 (Counts 3, 4, and 5).

The jury, by its finding of not guilty as to Counts | and II

concluded that Mr. Dorris truly believed at the time he filed his

1040 tax returns for the years 1982 and 1983 that he was entitled

to the claimed charitable deductions and that he did not knowingly

or willfully make any material misrepresentations on those returns.

In short, Mr. Dorris believed that what he was doing was correct.

Additionally, the government, over the objection of the Petitioner

had introduced evidence that the Respondent had claimed as

deductions his contributions which he had made to the ULC for

the years 1979, 1980 and 1981. Yet the jury still concluded that

there was no criminal intent on Mr. Dorris’ part, during the time

period that he was a member of the ULC or, to say it another

way, that he truly believed he was entitled to the claimed charitable

deduction for the tax years of 1982 and 1983.

In 1983, Mr. Dorris voluntarily ended his association with

the ULC because of his own religious convictions. As of August

1, 1983, no more contributions were made by him to the ULC.

10

Almost a year later, on July 5, 1984, Special Agent Jack Bell

appeared unannounced at the Dorris residence. Agent Bell stated

that he was conducting a criminal investigation and proceeded

to ask him numerous questions concerning his association with

the ULC. At no time did Agent Bell advise Mr. Dorris what the

IRS felt he had done improperly.

Subsequent to the interview and while the investigation was

pending, Mr. Dorris filed amended tax returns for the tax years

1981, 1982 and 1983 (Government Exhibits 2a & b, 5 and 7). These

amended returns were necessary in order to make the appropriate

changes concerning FICA, per diem and earned interest income

figures. Mr. Dorris paid additional income tax because of the

changed items. The amended tax returns did not change in any

way the claimed charitable deductions in the original tax returns.

The same figures pertaining to the deductions were merely copied

on the amended returns (9/6/89 Tr. 58-71). Mr. ‘‘Dorris literally

could do nothing about his claimed charitable deductions while

the investigation (which took five years) was pending especially

in light of Mr. Dorris’ belief that the claimed charitable deductions

had been appropriate and permissible.

The Petitioner is mindful that as a general rule a jury may

reach inconsistent verdicts with respect to a single defendant in

a criminal case. United States v. Powell, 469 U.S. 57, 60-69 (1984).

However, this Court in Powell left open the possibility that a

certain case may warrant a dismissal in light of its inconsistent

verdict and its lack of sufficient credible evidence. In the present

case, where the actions of the jury are clearly explainable and

the evidence was insufficient to support a finding of guilt as to

Counts 3, 4 and 5, justice would warrant that the verdict be set

aside and that a judgment of acquittal be granted.

During closing arguments, the prosecutor for the first time,

on rebuttal, called the jury’s attention to the fact that amended

income tax returns had been filed by Mr. Dorris following the

July 5, 1984 interview by Agent Bell (9/13/89 Tr. 89). Nothing

was mentioned by the prosecutor as to the substance of the

amended tax returns. Since this was rebuttal, the defense was

precluded from calling to the jury’s attention the fact that the

amended returns did not change or modify the charitable

deductions which had previously been taken on the original returns.

Since arguments were occurring five days after the closing of

evidence, it is obvious that the jury never considered the substance

of the amended returns.

Clearly the Petitioner who believed that the charitable

deductions which he claimed in the original returns were true and

correct, cannot be faulted, let alone found guilty beyond a

reasonable doubt, for filing amended tax returns to clear up

matters other than the charitable deductions while the criminal

investigation was continuing. The critical element of tax fraud

is the mental state of the defendant. United States v. Sternstein,

$96 F.2d $28 (2nd Cir. 1979).

The Petitioner believed in the trueness and correctness of

his tax returns for 1979 through 1983 and that belief did not change

for the amended returns. Having been found not guilty as to

Counts | and 2, the only logical result should have been not guilty

as to Counts 3, 4 and §.

As is apparent by the jury’s verdict as to Counts | and 2,

the Petitioner believed the claimed deductions were true and correct

originally. There was no reason to change those figures on the

amended tax returns. The only thing that Mr. Dorris was aware

of was that the IRS was investigating the ULC. No deductions

had been denied by the IRS; nor had the IRS suggested to Mr.

Dorris any reason which would warrant the denial by the IRS

of any deductions.

12

Certainly there was no duty placed upon Mr. Dorris to amend

the tax returns with respect to the previously claimed charitable

deductions just because he was aware of a pending IRS

investigation. In United Siates v. Pomponio, 429 U.S. 10 (1976),

rehearing denied 429 U.S. 987, on remand 563 F.2d 659, certiorari

denied 435 U.S. 942, *willfulness’* was defined as simply meaning

a voluntary intentional violation of a known legal duty. In the

present case, Mr. Dorris not only believed in the deduction he

had previously taken but he also had no other alternative but

to await the outcome of the IRS investigation. Were he to make

any changes, we submit that the Government would then claim

that constituted an admission of guilt. However, he had to file

amended tax returns in order to make the appropriate changes

with regard to other items.

The evidence fails to demonstrate that Mr. Dorris willfully

and knowingly made material misrepresentations in the amended

tax returns.

THE TRIAL COURT ERRED IN ALLOWING THE

GOVERNMENT TO ARGUE THAT THE PETITIONER'S

UNIVERSAL LIFE CHURCH CONGREGATION WAS A

SHAM ORGANIZATION.

During the course of the trial, the government suggested that

Mr. Dorris violated tax laws in possibly three ways. The first is

that while the ULC in Modesto, California had a tax exempt status,

the Petitioner's congregation did not. This was at best a technical

violation of which he was not aware since he had been told both

ee eg

13

by the ULC and the IRS that the defendant's congregation could

use the tax exempt status of the ULC.*

The second is that the contributions of Mr. Dorris inured

to his benefit because it was his congregation. The Petitioner

testified he was not aware of this limitation. He was aware that

he could not be the only contributor to his congregation since

he was advised of this by the ULC in California. The experts

for both sides differed as to this opinion. Again this was at best

a technical violation. Furthermore the specific part of section 170

of the Code is vague since the section states that no part of the

net earning may inure to the benefit of an individual. Since the

Petitioner received a parsonage allowance and was reimbursed

for certain operating expenses, these sums do not constitute net

earning. Rather they constitute expenses which are deducted from

the gross to ascertain the net earnings.

The third and most important suggestion by the Government

is that the Petitioner's congregation was not a viable religious

Organization despite the fact that the ULC had been granted tax

exempt status. Both experts agreed that the Code never defined

or limited the idea of a religious organization. Furthermore, Mr.

Dorris described his ministry as an outreach ministry and stated

that he had periodic services in the nature of prayer, bible reading,

singing and listening to tapes. The Government failed to produce

any evidence which demonstrated that Mr. Dorris’ congregation

was anything but a religious organization.

4. Mr. Dorris even attached to his 1981 amended tax return a letter from

the IRS to the Universal Life Church in Modesto, California dated April |},

1976 wherein the ULC was advised of its tax exempt status. No limitation was

mentioned by the IRS. Mr. Dorris was advised by the ULC that his congregation

was tak exempt since it was part of the ULC.

14

The Courts have concluded that most precious of all

constitutional rights is that afforded under the First Amendment

— the right of religious expression and association. See Unired

States v. Fatk, 479 F.24 616 (7th Cir. 1973) (en bane): Unired

Srares v. Sreele, 461 F.2d 1148 (9th Cir. 1972). Essentially the

term ‘“‘réligion’’ is mot defined in the law. The Courts have

interpreted ‘‘religion’’ broadly and recognize that serious

constitutional difficulties would result if the term were interpreted

to exclude even those beliefs that do not encompass a supreme

being in the conventional sense.

The defense attempted to seek an affirmation by the Court

that the Petitioner's congregation was a religious organization

by requesting supplemental points for charge in accordance with

ULC, Ine. v. United Srarés, 372 F. Supp. 770 (E.D. Cal. 1974).

These requests were denied.

Additionally despite evidence to the contrary, the Government

was permitted to argue and/or suggest that the ULC congregation

of the Respondent was a ‘‘sham’’ organization. Over the objection

of the defense (App. i42a-i44a; 9/6/89 Tr. 14-16), the

Government was permitted to refer to the method by which Mr.

Dorris became a minister, namely by written application and a

fee. Such references and comments had no bearing on the tex

sth ULC, Me. v. US., 372 F. Supp. 770 (E.D. Cal. 1974, the Cour

reasoned that the ordination of ministers and the chartering of churches were

fully accepted activities of @ religious organization. The fact that the ULC

distributed minsters’ credentials may be compared to a mass conversion at a

typical revival or religious crusade. Neither the Federal Courts, nor any branch

of the Government may properly consider the merits or fallacies of a religion.

Nor will the Court compare the belief, dogmas and practices of a newly organized

religion with those of older more traditional or established religions. Nor wil!

the Court praise or condemn 4 religion, however excellent or unusual it may

seem, Were this to be done, it would violate the guarantee of the First

Amendment Freedom of Religion.

15

case, but rather Was ai attempt to suggest that Mr. Dorris’ ULC

congregation Was not a religious organization. This violated the

defendant's First Amendment right, and was contrary to the weight

of the evidence.

Since the Government was permitted to argue against the

religious organization of the ULC congregation of the Respondent,

the verdict mist be set aside. See ores v. United Srares, 354 U.S.

298, 312 (1957) (‘A Verdict [imust) Be set aside in cases Where

the verdict is supportable of Oe ground, but Not on another,

and it is impossible to tell Which ground the jury selected’’).

THE TRIAL COURT ERRED IN DENYING, WITHOUT

AN EVIDENTIARY HEARING, THE PETITIONER'S

MOTION TO DISMISS THE INDICTMENT ON THE BASIS

OF SELECTIVE PROSECUTION.

The standard for review is whether the Trial Court erred in

denying, without an evidentiary hearing, the Petitioner’s motion

to disitiss the indictment on the basis of selective prosecution.

We respectfully submit that the evidence demonstrates a systematic

discrimination on the part of the Government in its enforcement

as well as ant unjust discrimination between Mr. Dorris and others

in similar circumstances.

The gist of the Government's case against Mr. Dorris was

that he declared certain charitable contributions which were made

to the Universal Life Church as deductions. The United States

challenged the legitimacy of these charitable contributions and

charged the defendant with knowingly and intentionally violating

26 U.S.C. Section 7206(1).

16

The Internal Revenue Service of the United States of America

has had a long history of dealing with the Universal Life Church.

The Internal Revenue Service, on or about April 13, 1976,

recognized the tax exempt status of the Universal Life Church

organization under Section 501(c)}(3) of the Internal Revenue Code

of 1954, 26 U.S.C. Section 501(c)(3)(1982). On or about August

28, 1984, the Internal Revenue Service issued a letter ruling

revoking its prior ruling of April 13, 1976. It is believed that this

matter is presently on appeal.

The Internal Revenue Service has taken the position that the

Universal Life Church is a tax protester. Furthermore, the Internal

Revenue Service has lumped together any member or former

member of the Universal Life Church into the category of a ‘‘tax

protester’’. Mr. Dorris and his wife were included in this category.

In or about 1983, the Petitioner, James K. Dorris,

disassociated himself, for religious reasons, with the Universal

Life Church. On or about July 5, 1984, federal agents associated

with the Criminal Division of the Internal Revenue Service

questioned Mr. Dorris concerning his association with the ULC.

The investigation had begun in the spring of 1984.

From 1976 to 1984, over two thousand people, including the

Dorris Family, had established a ministry through the ULC (See

Trial testimony of Sylvia Pratt, tax law specialist on exempt

corporations [9/6/89 Tr. 122]).

The Government is not entirely unconstrained in its choice

of those whom it will prosecute. As long ago as Yick Wo v.

Hopkins, 118 U.S. 356, 6S. Ct. 1064, 30 L. Ed. 220 (1886), Justice

Matthews wrote for the Supreme Court that

‘*if [a law] is applied and administered by public

authority with an evil eye and an unequal hand,

a

17

sO as practically to make unjust and illegal

discriminations between persons in similar

circumstances material to their rights, the denial

of equal justice is still within the prohibition of

the constitution.”’ [118 U.S. at 373, 6 S.Ct. at 1073]

‘*Nothing can corrode respect for a rule of law more than

the knowledge that the government looks beyond the law itself

to arbitrary considerations, such as race, religion, or control over

the defendant’s exercise of his constitutional rights, as the basis

for determining its applicability.’’ United States v. Berrios, 501

F.2d 1207, 1209 (2d Cir. 1974). See also, United States v.

Torquato, 602 F. 2d 564, 568 (3d Cir. 1979), cert. denied, 444

U.S. 941, 100 S. Ct. 295, 62 L. Ed. 2d 307.

Recently the Supreme Court reasoned that selectivity in

enforcement of criminal laws is subject to constitutional restraints.

A decision to prosecute may not be deliberately based upon

unjustifiable standards such as race, religion or other arbitrary

classification, including the exercise of protected statutory and

constitutional rights. Wayte v. United States, 470 U.S. 598, 105

S. Ct. 1524, 84 L. Ed. 2d 547 (1985).

Most precious of all constitutional rights is that afforded

under the First Amendment— the right to religious expression

and association, and the mere exercise of that right cannot be

punished by means of selective prosecution. See United States

v. Falk, 479 F.2d 616 (7th Cir. 1973) (en banc); United Siates

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

The Third Circuit in United States v. Torquato ruled that:

‘‘although the government is permitted the

conscious exercise of some selectivity in the

enforcement of its criminal laws, Oy/er v. Boles,

18

368 U.S. 448, 456, 82 S. Ct. 501, 506, 7 L. Ed.

2d 446 (1962), any systematic discrimination in

enforcement, [United States v. Robinson, 311 F.

Supp. 1063, 1065 (W.D. Mo. 1969)], or unjust and

illegal discrimination between persons in similar

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

6S. Ct. at 1073, violates the equal protection clause

and renders the prosecution invalid.’’ [602 F.2d

at 568]

In the present case, the Internal Revenue Service has

systematically lumped the Universal Life Church and its members,

whether past or present, into the category of a ‘‘tax protester’’.

Furthermore, the United States’ charges of tax violation for the

years 1981, 1982 and 1983 against the Petitioner, after the Internal

Revenue Service had revoked the tax exempt status of the Universal

Life Church in August, 1984, constitutes, in essence, a form of

retroactive prosecution.

Additionally, a review of various cases clearly demonstrates

that others who were similarly situated as the Dorris family have

not been nor are they generally prosecuted for the same conduct.

Numerous tax payers have been assessed civil tax liabilities based

upon their alleged contributions to the Universal Life Church.

Said tax payers have received ‘‘statutory notices of deficiency’’

from the IRS, asserting additional taxes due upon disallowance

of contributions to the ULC. While the IRS has assessed civil

‘*negligence’’ penalties in most cases, pursuant to Internal Revenue

Code Title 26 U.S.C. Section 6653(a), none of these individuals

have faced criminal prosecution (Examples of over sixty cases

are listed in the Supplemental Memorandum in support of the

Pre-trial Motion).

The only member or former member of the ULC to have

been called by the Government at trial as a witness was Ken Morris.

—

19

Mr. Morris admitted that he filed amended tax returns. Neither

civil penalties nor criminal charges were ever brought against Mr.

Morris.

It is impossible to establish the total number of cases which

have already been tried civilly or which are presently pending in

the civil arena absent meaningful discovery. Clearly however, the

Respondent has been singled out for his religious affiliation with

the ULC. Furthermore Mr. Dorris was criminally prosecuted while

others, many others, similarly situated have not been prosecuted.

IV.

THE TRIAL COURT ERRED IN FAILING TO DISMISS

COUNT THREE OF THE SUPERSEDING INDICTMENT

(1981 AMENDED TAX RETURN).

In or about March, 1989, a Federal Grand Jury returned

a five count indictment against James K. Dorris and his wife

alleging violations of 26 U.S.C. Section 7206(a). Count 3 refers

to the 1981 amended tax return which was filed in January, 1985.

The Government did not mention the original 1981 individual

tax return which had been filed on or about March 10, 1982.

Count 3 charges that the Respondent improperly deducted

charitable contributions in the amount of $14,034.00. Those exact

figures had been mentioned in the original 1981 income tax return.

The amended ‘tax return for 1981 did nothing to change the

figures either for the deductions or the charitable contributions.

The 1981 amended income tax return seeks a reimbursement for

FICA payments.

There are no allegations raised by the Government in the

indictment nor was any evidence presented at trial which would

20

suggest that the request for reimbursement of the FICA payments

was in and of itself a violation of Title 26 U.S.C. Section 7206(1).

The claim by the Government is that the charitable

contributions taken by Mr. Dorris constituted a violation of that

section of the United States Code. That charitable contribution

was listed in the original 1981 tax return which is well beyond

the six year statute of limitations. See 26 U.S.C. Section 6531.

It is clear that the six year statute of limitation begins to run on

the date that said return becomes due. United States v. Zudick,

523 F.2d 848 (3d Cir. 1975); United States v. Myerson, 368 F.2d

393, cert. denied, 386 U.S. 991, 87 S. Ct. 1305, 18 L. Ed. 2d

335. The 1981 tax return became due on April 15, 1982. This

was more than six years from the date of the indictment.

The Government has attempted to pursue the 1981 income

tax return by alleging a violation of 26 U.S.C. Section 7206(1)

in the amended 1981 return which was filed. However the only

change on the amended income tax return was with regard to

FICA payments. There was no overt affirmative act taken by Mr.

Doris which could arguably be said by the Government to be

sufficient to keep the action alive.

¥.

THE TAX SECTIONS WHICH THE GOVERNMENT

CLAIMS TO BE APPLICABLE TO THE PROSECUTION ARE

UNCONSTITUTIONALLY VAGUE AND CANNOT

SUPPORT A CRIMINAL CONVICTION.

Section 170 of the Internal Revenue Code allows an individual

to take deductions for contributions made to an organization

organized and operated exclusively for religious purposes with

the specification that no part of the net earnings is to inure to

the benefit of an individual. Section 501 of the Internal Revenue

Code has similar language.

21

At the conclusion of testimony Petitioner raised various

objections including the fact that the tax sections were vague and

therefore unenforceable in a criminal setting (9/8/89 Tr. 200-202).

In addition to the Code never defining or limiting the term

‘religious purposes’’, it also never defined what was meant by

the term “‘net earnings.’’ Even the Government’s expert admitted

to the lack of definition. Applying accounting procedures, net

earnings constitute the amount remaining once the operating

expenses are deducted from the gross receipts.

Since the Petitioner received a parsonage allowance and was

reimbursed for certain operating expenses, these sums do not

constitute net earning. Rather they constitute expenses which are

deducted from the gross to ascertain the net earnings.

While the Government claims that the defendant wilfully

violated section 170, a criminal charge cannot stand in light of

the vagueness of the terms.

VI.

THE GOVERNMENT’S SOLICITATION OF

TESTIMONY FROM THE IRS AGENT THAT THE

PETITIONER FAILED TO CONTACT AGENT BELL OR TO

PRODUCE RECORDS FOLLOWING AGENT BELL’S

INTERVIEW OF MR. DORRIS ON JULY 5, 1984

CONSTITUTED REVERSIBLE ERROR.

On direct examination, the prosecutor inquired of Agent Bell

if, following his interview of Mr. Dorris on July 5, 1984, Mr.

Dorris had ever made an attempt to contact Agent Bell or to

provide Church records. Despite an attempt to object to this

inquiry, Agent Bell stated that Mr. Dorris never attempted to

contact him or to provide Church records.

>?

-

At side bar counsel requested a mistrial. the trial court denied

the request and further instructed the jury that they were to

disregard the testimony. We submit that such testimony was highly

prejudicial and constituted reversible error (9/6/89 Tr. 152-158).

The jury, by its verdict, obviously focused on Mr. Dorris’

actions following the July 5, 1984 interview with Agent Bell. The

prosecutor by her question suggested to the jury that Mr. Dorris

by subsequently remaining silent and not producing any records

had something tto hide. This comment was in violation of

Petitioner’s Fifth Amendment Right and required a reversal of

the conviction. See Doyle v. Ohio, 426 U.S. 610 (1976). The

prosecutor essentially urged the jury to draw an adverse inference

from the Petitioner’s exercise of his right. Such action constituted

prejudicial error. United States v. Henderson, 565 F.2d 900 (Sth

Cir. 1978); United States v. Edwards, 576 F.2d 1152 (Sth Cir.

\e~ 1978).

VII.

THE TRIAL COURT ERRED IN CHARGING THE JURY

THAT THE STATEMENTS MADE IN THE AMENDED

RETURNS IN COUNTS 3, 4, AND 5 WERE MATERIAL AS

A MATTER OF LAW.

The appellant recognizes that the Court, in some instances,

may charge that as a matter of law, that certain statements were

material. See United States v. Greenberg, 735 F.2d 29 (2d Cir.

1984). However in the present case there was a serious question

of materiality concerning the amended tax returns. The amended

tax returns, as indicated above, did not change or modify the

previously claimed charitable deductions. The amended tax returns

were filed for reasons other than the charitable deductions. The

defendant had a right to have the jury consider the materiality

of the statements made in the amended tax returns. The Court’s

23

instruction to the jury essentially constituted a directed verdict

for the United States.

CONCLUSION

For the reasons advanced in this Petition, it is respectfully

submitted that a Writ of Certiorari should be issued to review

the decision of the Court of Appeals below.

Respectfully submitted,

EDWARD J. SCHWABENLAND

Attorney for the Petitioner

la

APPENDIX A — SUR PETITION FOR REHEARING FROM

THE THIRD CIRCUIT DATED MAY 7, 1990

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 89-1914

UNITED STATES OF AMERICA

Vv.

JAMES K. DORRIS,

Appellant

(D.C. Crim. No. 89-00092-01)

SUR PETITION FOR REHEARING

Present: HIGGINBOTHAM, Chief Judge, SLOVITER,

BECKER, STAPLETON, MANSMANN, GREENBERG,

HUTCHINSON, SCIRICA, COWEN, NYGAARD, and SEITZ’,

Circuit Judges

The petition for rehearing filed by appellant in the above-

entitled case having been submitted to the judges who participated

in the decision of this Court and to all the other available circuit

judges of the circuit in regular active service, and no judge who

concurred in the decision having asked for rehearing, and a

majority of the circuit judges of the circuit in regular service not

having voted for rehearing, the petition for rehearing by the panel

and the Court in banc, is denied.

* As to panel rehearing only.

2a

Appendix A M

BY THE COURT,

s/ [illegible] Seitz

Circuit Judge

Dated: May 7, 1990

ta

APPENDIX B — JUDGMENT ORDER FROM THE THIRD

CIRCUIT DATED APRIL 3, 1990

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 89-1914

UNITED STATES OF AMERICA

v.

JAMES K. DORRIS,

Appellant

Appeal from the United States District Court for the Eastern

District of Pennsylvania D.C. Criminal No. 89-00092-01

(Honorable Norma L. Shapiro)

Submitted April 3, 1990

Before: MANSMANN, SCIRICA and SEITZ, Circuit Judges

JUDGMENT ORDER

After considering the contentions raised by appellant, to wit,

that:

1. The court erred in denying, without an evidentiary hearing,

appellant's motion to dismiss the indictment on the basis of

selective prosecution;

2. The court erred in denying, without an evidentiary hearing,

appellant’s motion to dismiss the indictment on the basis of

prosecutorial conduct;

———————————————————————————————eeee—V—VvVvVnX_—

4a

Appendix B

3. The court erred in failing to dismiss Count II! of the

superseding indictment (198! Amended Tax Return);

4. The court erred in refusing, without an evidentiary hearing,

to suppress appellant's statement of July 5, 1984;

5. The verdict as to the appellant was inconsistent and against

the weight of the evidence;

6. The evidence was insufficient to demonstrate a finding

of guilt beyond a reasonable doubt as to the amended tax returns;

7. The court erred in allowing the government to argue that

appellant’s Universal Life Church congregation was a sham

organization;

8. The tax sections which the government claims to be

applicable to the prosecution are unconstitutionally vague and

cannot support a criminal conviction;

9. The government’s solicitation of testimony from the IRS

agent that appellant failed to contact Agent Bell or to produce

records following Agent Bell’s interview of the appellant on July

5, 1984, constituted reversible error; and

10. The court erred in charging the jury that the statements

made in the amended returns in counts II], 1V and V were material

as a matter of law, it is

ADJUDGED AND ORDERED that the judgement of the

district court be and is hereby AFFIRMED.

Sa

Appendix B

BY THE COURT,

s/ [illegible] Seitz

Circuit Judge

Attest:

s/ Sally Mrvos

Sally Mvros, Clerk

April 10, 1990

6a

APPENDIX C — JUDGMENT ORDER DATED OCTOBER \

19, 1989

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF PENNSYLVANIA

Case Number: 89-92-1

UNITED STATES OF AMERICA

V.

JAMES K. DORRIS

730 Thomas Jefferson Road

Wayne, Pa.

JUDGMENT IN A CRIMINAL CASE

Edward Schwabenland

Attorney for Defendant

THERE WAS A:

— verdict of quilty as to counts: 3, 4 & §

— verdict of not guilty as to counts: 1 & 2

THE DEFENDANT IS CONVICTED OF THE OFFENSE OF:

False statements on a tax return. 26:7206(1).

IT IS THE JUDGMENT OF THIS COURT THAT: On count

3 the defendant is hereby committed to the custody of the Attorney

General or his authorized representative for imprisonment for a

term of 90 days. On count 4 the defendant is to pay a fine to

the United States in the sum of $9,000.00. On count 5 the

7a

Appendix C

defendant is placed on probation for a period of 3 years upon

the following terms and conditions:

1. That he pay taxes deemed to be due.

2. That he perform community service for 300 hours over

the period of probation as is approved by the probation office

and the court.

Sentence is stayed pending appeal.

October 25, 1989

In addition to any conditions of probation imposed above, IT

IS ORDERED that the conditions of probation set out on the

reverse of this judgment are imposed.

CONDITIONS OF PROBATION

Where probation has been ordered the defendant shall:

(1) refrain from violation of any law (federal, state, and local)

and get in touch immediately with your probation officer if arrested

or questioned by a law-enforcement officer;

(2) associate only with law-abiding persons and maintain

reasonable hours;

(3) work regularly at a lawful occupation and support your legal

dependants, if any, to the best of your ability. (When out of work

notify your probation officer at once, and consult him prior to

job changes);

8a

Appendix C

(4) not leave the judicial district without permission of the

probation officer;

(5) notify your probation officer immediately of any changes in

your place of residence;

(6) follow the probation officer’s instructions and report as

directed.

The court may change the conditions of probation, reduce or

extend the period of probation, and at any time during the

probation period or within the maximum probation period of 5

years permitted by law, may issue a warrant and revoke probation

for a violation occuring during the probation period.

IT IS FURTHER ORDERED that the defendant shall pay a total

special assessment of $150.00 pursuant to Title 18, U.S.C. Section

3013 for counts 3, 4 & 5 as follows.

iT IS FURTHER ORDERED that the defendant shall pay to the

United States attorney for this district any amount imposed as

a fine, restitution or special assessment. The defendant shall pay

to the clerk of the court an amount imposed as a cost of

prosecution. Until all fines, restitution, special assessments and

costs are fully paid, the defendant shall immediately notify the

United States attorney for this district of any change in name

and address.

IT IS FURTHER ORDERED that the clerk of the court deliver

a certified copy of this judgment to the United States marshal

of this district.

_

9a

Appendix C

— The Court orders commitment to the custody of the Attorney

General and recommends:

No objection to community correction facility on work release.

Date of imposition of Sentence: 10/19/89

s/ Norma L. Shapiro

Signature of Judicial Officer

Norma L. Shapiro, J.

Name and Title of Judicial Officer