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United States v. Latham

February 4, 1985


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 82 CR 890 -- Thomas R. McMillen, Judge.

Author: Coffey

Before CUMMINGS, Chief Judge, COFFEY, Circuit Judge, and CAMPBELL, Senior District Judge.*fn*

COFFEY, Circuit Judge. The defendant, Ronald E. Latham, appeals his conviction for willful failure to file income tax returns and for filing false W-4 statements in violation of 26 U.S.C. §§ 7203 and 7205, respectively. We affirm.


On December 13, 1982, the defendant was charged in a six-count indictment with failure to file income tax returns for the calendar years 1980 and 1981, in violation of 26 U.S.C. § 7203, and with filing false W-4 statements on four separate occasions during the years 1980, 1981, and 1982, in violation of 26 U.S.C. § 7205. The defendant was convicted by a jury on all counts and sentenced by the district court to two concurrent one-year terms to be followed by a five-year probationary period; however, the sentence was stayed pending this appeal.

On appeal, Latham challenges his conviction on five grounds. He claims that (1) the district court lacked jurisdiction over his prosecution under 18 U.S.C. § 3231 since jurisdiction under the statute is limited to offenses defined in Title 18 only; (2) the special grand jury that indicted him exceeded its authority since it was empowered to investigate organized crime activities only; (3) the district court erred when it improperly instructed the jury and abused its discretion when it refused the theory of law he proffered as a defense instruction; (4) the district court abused its discretion in excluding certain evidence offered by the defendant; and (5) his rights under the Speedy Trial Act were violated, 18 U.S.C. § 3161 et seq.


A. Issues controlled by Koliboski.

The first three issues raised by the defendant relating to jurisdiction, grand jury powers, and the jury instructions, are controlled by our recent decision in United States v. Koliboski, 732 F.2d 1328 (7th Cir. 1984). The defendant in Koliboski was indicted on similar charges by the same grand jury that indicted this defendant. As in this case, Koliboski argued that the district court was without subject matter jurisdiction under 18 U.S.C. § 3231. We rejected Koliboski's claim as "silly," holding that Title 26 violations are offenses against the laws of the United States and thus are clearly within federal district court jurisdiction under § 3231.*fn1 Id. at 1329. Thus, the defendant's claim of lack of jurisdiction is similarly dismissed as meritless.

Koliboski further resolves Latham's claim that a special grand jury can investigate only organized crime activities. In Koliboski we held that special grand juries are not restricted in their scope to investigating organized crime only. Id. at 1330 ("Special grand juries have broad investigative powers. Section 3332(a) directs these grand juries to 'inquire into offenses against the criminal laws of the United States alleged to have been committed within that district.' . . . The legislative history confirms the breadth of the general mandate bestowed by this section. These grand juries are not restricted to investigating only organized crime activities."). Thus, based upon our holding in Koliboski the special grand jury which indicted Latham did not exceed its authority.

The Koliboski decision also disposes of two of Latham's other claims with regard to improper jury instructions. Latham contends that the district court improperly refused his instruction defining "income" as distinct from "gross income." This instruction was intended to enforce his claim that he in good faith believed that wages are not income for taxation purposes. As we stated in Koliboski, a claim of this nature is without merit. Id. at 1329 n.1. Latham's wages were and are income; thus, his proposed jury instruction was a misstatement of the law and the district court properly refused to adopt the same in the instructions.

Latham argues also that the district court erred in refusing to instruct the jury that in order for a violation of the tax laws to be "willful" the violation must be the product of a "bad purpose." The district court's instruction correctly paraphrased the "voluntary, intentional violation of a known legal obligation" jury instruction that we approved in Koliboski and United States v. Moore, 627 F.2d 830 (7th Cir. 1980). The Supreme Court in United States v. Pomponio, 429 U.S. 10, 50 L. Ed. 2d 12, 97 S. Ct. 22 (1976), held this instruction to be the proper definition of willfulness in a prosecution for violations of the Tax Code. No further "bad purpose" instruction is required. See Koliboski, 732 F.2d at 1331 n.2.

The other jury instructions proffered by the defendant are equally inane. Thus we hold that the district court did not err in refusing the other instruction offered by Latham implying that 26 U.S.C. § 7343 defining "person" does not include natural persons.*fn2 Similarly, Latham's instruction which indicated that under 26 U.S.C. § 3401(c) the category of "employee" does not include privately employed wage earners is a preposterous reading of the statute. It is obvious that within the context of both statutes the word "includes" is a term of enlargement not of limitation, and the reference to certain entities or categories is not intended to exclude all others.

Latham also contends that the court erred in refusing to instruct the jury that an assessment under 26 U.S.C. § 6201 is a legal necessity before an individual can have an income tax liability. Latham's theory is that if there was no assessment, there can be no income tax liability and thus he cannot be found to have filed false W-4 forms since there was no tax liability in the preceding year. But an assessment under § 6201 is an administrative determination that a certain amount is currently due and owing as a tax with consequences somewhat similar to the reduction of a claim to judgment. Cohen v. Gross, 316 F.2d 521, 522-23 (3d Cir. 1963). The exempt status requirement of a tax liability in the preceding year does not support Latham's novel and ridiculous theory that there must have been an IRS ...

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