THE SHELLOW COLLECTION
 Jury Instructions By James M. Shellow of Wisconsin
Go to Shellow Collection Table of Contents

False Statements On Income Tax Return (26 USC 7206(1)) And Filing False Tax Return (26 USC 7207)

    1.    Filing False Tax Return: Elements
    2.    False Statements In Tax Return: Elements
    3.    Conspiracy To Commit Tax Fraud: Elements
    4.    Purpose Of Tax Fraud Conspiracy Must Be Tax-Related
    5.    False Tax Return/Tax Evasion: Burden Of Proof  
    6.    Tax Crimes: "Willfully" Defined
    7.    Willfulness In Criminal Tax Offenses Requires Showing Of Bad Faith Or Evil Intent
    8.    Willfulness Must Be Proven By Independent Evidence; Mere Understatement 
           Of Income Insufficient
    9.    Knowledge Of Contents Of Tax Return Cannot Be Attributed To Taxpayer 
           Based On Signature Alone
    10.  Income Tax Evasion: Knowledge Element
    11.  Tax Evasion: Jury May Consider Whether Taxpayer Had Previously Made 
           Honest Mistakes On Returns
    12.  Government Must Use Same Accounting Method As Taxpayer Employed 
           In Preparation Returns When Attempting To Reconstruct Return
    13.  Understatement Of Income Alone Insufficient To Sustain Conviction Of Tax Perjury
    14.  Requirement That Government Investigate Explanations And Leads 
           Supplied By Taxpayer
    15.  Taxpayer Not Required To Substantiate Leads Furnished To Government
    16.  IRS Assumes Burden Of Proving That the Items Contained In Newly 
           Constructed Return Are True
    17.  Jury Decides If Government Was Unreasonable In Failure To Investigate Leads
    18.  Government Must Demonstrate That Income Which Was Earned In The 
           Indictment Year Was Not Reported In That Year
    19.  Tax Evasion: Venue
    20.  Cash Expenditures Method Of Proving Unreported Income
    21.  Accrual Method Of Proving Unreported Income
    22.  Good Faith Belief That Certain Property Is Not Reportable Income As Defense
    23.  Gifts Need Not Be Reported On Income Tax Returns
    24.  "Income" Defined; Gifts Need Not Be Reported
    25.  Materiality Refers To Impact That Statement May Reasonably Have On Ability 
           Of IRS to Perform Functions Assigned To It By Law
    26.  Purpose Of Transactions In Which Defendant Allegedly Engaged Must Impede 
           And Defeat Investigations Of Internal Revenue Service
    27.  Jury May Consider Whether Evidence Exists That IRS Considered Money 
           As Compensation
    28.  Bonus To Employee In The Form Of Construction Of Personal Property 
           Constitutes Compensation
    29.  Unreported Amount: Definition Of "Substantial"
    30.  Jury May Consider Relationship Of Amount Unreported To Total Income 
           Declared To Decide Whether Unreported Income Is "Substantial"
    31.  Lack Of Adequate Documentation Does Not Incur Criminal Liability
    32.  Taxable Income: Rebuttable Presumption
    33.  All Of One’s Earnings Need Not Be Deposited In Bank Account
    34.  Jury May Consider Threats By Agents of the Internal Revenue Service
    35.  Defense Theory: Proceeds From Cashed Business Checks Used To Purchase Goods
    36.  "Cash Hoard": Burden Of Proof
    37.  Mere Receipt Of Money Does Not Establish That It Is Income
    38.  Defendant Permitted To subtract Ordinary And Necessary Business Expenses 
           From Income
    39.  Investigator-Witness Bias In Tax Case
    40.  Jury May Consider Defendant's Attitude And Conduct Toward Investigating 
           Agents In Case
    41.  Jury May Consider Indicia Of Fraud And Whether Those Factors Were Present In Case
    42.  Attorneys Not Required To Have Any Greater Record Keeping Requirements Than 
           Any Other Taxpayer
    43.  Government’s Burden To Prove Money Received Was Reportable Income
    44.  Unreported Gross Receipts: Burden Of Proof
    45.  Receipts Of Goods Can Also Be Income
    46.  26 USC 7206: Statutory Language
    47.  Income Tax Prosecutions: Taxpayer Not Obligated To Cooperate With IRS
    48.  Conspiracy To Violate Federal Tax Law

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

1.    Filing False Tax Return: Elements

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    Title 26, United States Code, Section 7207, makes it a federal crime or offense for anyone to willfully file a federal income tax return knowing it to be false in some material way.

    The defendant can be found guilty of that offense only if all of the following facts are proved beyond a reasonable doubt.

    First: That the defendant filed an income tax return which was false in a material way as charged in the indictment; and

    Second: That the defendant did so knowingly and willfully, as charged.

    It is not necessary that the government be deprived of any tax by reason of the filing of the return, or that it even be shown that additional tax is due to the government, only that the defendant willfully filed a false return.

    A declaration is "false" if it was untrue when made and was then known to be untrue by the person making it. A declaration contained within a document is "false" if it was untrue when the document was used and was then known to be untrue by the person using it.

    The "materiality" of the alleged false statements is not a matter for you to determine, but is a question for the Court to decide. You are instructed that the false statements charged in the indictment, if they were made, were "material" statements.

AUTHORITIES:

Pattern Jury Instructions Eleventh Circuit OI 96 (West Publishing Co. 1985).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

2.    False Statements In Tax Return: Elements

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    To sustain the charge of making a false statement on a tax return, the government must prove the following propositions:

    First, the defendant made, signed, and filed the tax return described in the indictment;

    Second, the tax return contained a written declaration that it was made under the penalties of perjury;

    Third, the tax return was false as to a material matter; and,

    Fourth, when the defendant made and subscribed the tax return (he/she) did so willfully and did not believe that the tax return was true and correct as to every material matter.

    If you find from your consideration of all the evidence that each of these propositions has been proved beyond a reasonable doubt, then you should find the defendant guilty.

    If, on the other hand, you find from your consideration of all the evidence that any of these propositions has not been proved beyond a reasonable doubt, then you must find the defendant not guilty.

AUTHORITIES:

7th Circuit Federal Criminal Jury Instructions 21; United States v. Londe, 449 F. Supp. 590, 593 (E.D. Mo.), aff'd, 587 F.2d 18 (8th Cir. 1978), cert. denied, 439 U.S. 1130 (1979).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

3.    Conspiracy To Commit Tax Fraud: Elements

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    The defendants are accused in Count ___of conspiring to defraud the United States by submitting false tax returns. It is against federal law to agree with someone to commit the crime of intentionally submitting false tax returns.

    For you to find any of the defendants guilty of this conspiracy, you must be convinced that the government has proved each of the following three elements beyond a reasonable doubt:

    First, that between __________ (date) and __________ (date), an agreement existed between the defendants to submit false tax returns. This does not have to be a formal agreement or plan in which everyone who was involved sat down together and worked out all the details. It is enough that the government prove beyond a reasonable doubt that there was a common understanding among those who were involved to commit the crime of submitting false tax returns. So the first thing that must be shown is the existence of such an agreement.

    Second, the government must prove beyond a reasonable doubt that each defendant intentionally joined in this agreement. Again, it is not necessary to find that (he/she) agreed specifically to all details of the crime. You must consider each defendant separately. So the second thing that must be shown is that each defendant was a part of the conspiracy.

    Third, the government must show that one of the persons involved in the conspiracy did something for the purpose of carrying out the conspiracy. This something is referred to as an overt act. The government must show that one of the persons involved in the conspiracy did one or more of the overt acts described in the indictment in order to carry out the conspiracy. You will receive a copy of the indictment, which describes the charged overt acts at pages ____ through ____.

    In summary, for any defendant to be convicted of the crime of conspiracy, the government must prove each of three things beyond a reasonable doubt: first, that between __________ (date) and __________ (date), there was an agreement among the defendants to commit the crime of submitting false tax returns; second, that the defendants intentionally joined in that agreement; and third, that one of the persons involved in the conspiracy did one or more of the overt acts charged.

AUTHORITY:

Pattern Criminal Jury Instructions No. 62 (Federal Judicial Center 1988), modified.

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

See also THE SHELLOW COLLECTION: Conspiracy.

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC Chapter 83: Conspiracy.

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

4.    Purpose Of Tax Fraud Conspiracy Must Be Tax-Related

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    In order for the government to prove the conspiracy charged in the indictment, it is necessary for the government to establish beyond a reasonable doubt that a purpose of the conspiracy charged in that count was to defraud the United States by impeding, impairing, obstructing and defeating the functions of the Internal Revenue Service in the computation, assessment and collection of the defendant's federal income taxes.

    If the sole purpose of the conspiracy was to conceal ________ (activity e.g., unlawful drug transactions) and to impede, obstruct, and defeat federal investigations into these transactions, then the defendant must be acquitted of that count.

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

See also THE SHELLOW COLLECTION: Conspiracy.

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC Chapter 83: Conspiracy.

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

5.    False Tax Return/Tax Evasion: Burden Of Proof

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION # 1:

    In a criminal prosecution for making and subscribing to a false tax return, the taxpayer has no burden of proving anything and (he/she) not need to document anything in order to be acquitted. The burden in a criminal prosecution is on the government and remains on the government throughout the trial. The government must prove its case; the taxpayer need prove nothing.

AUTHORITY:

United States v. Hestnes, 492 F. Supp. 999 (W.D. Wis. 1977).

SAMPLE INSTRUCTION # 2:

    In a criminal prosecution for tax evasion, the taxpayer has no burden of proving anything and (he/she) does not need to document anything in order to be acquitted. The burden in a criminal prosecution is on the Government and remains on the Government throughout the trial. The Government must prove its case; the taxpayer need prove nothing.

AUTHORITY:

United States v. Hestnes, 492 F. Supp. 999 (W.D. Wis. 1977).

SAMPLE INSTRUCTION # 3:

    You are instructed that in a civil audit and civil tax proceedings the taxpayer has the burden of proving that the Government's assessment is wrong and must usually support this proof with documentary evidence. In the absence of documentary evidence in support of a taxpayer's assertions, the Internal Revenue Service is empowered to make an assessment and to take such legal steps as may be necessary to collect the alleged unpaid tax.

    A criminal prosecution is entirely different. The taxpayer has no burden of proving anything and (he/she) does not need to document anything in order to be acquitted. The burden in a criminal prosecution starts on the Government and remains on the Government throughout the trial. The Government must prove its case; the taxpayer need prove nothing.

    Accordingly, the absence of the taxpayer's books and records is not evidence against the taxpayer, particularly when the evidence reflects that they were made available to the Government on prior occasions.

    Merely because a defendant in a criminal case chooses to introduce evidence or to cross-examine witnesses, does not impose upon (him/her) any affirmative burden of disproving the Government's case.

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

6.    Tax Crimes: "Willfully" Defined

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION # 1:

    The word willfully means voluntary and intentionally, with the specific intent to make a statement that the defendant knew was false, when it was the legal duty of the defendant to answer truthfully and the defendant knew it was (his/her) legal duty to answer truthfully.

AUTHORITIES:

Seventh Circuit Federal Criminal Jury Instructions, 4.09 Committee Comment: See United States v. Sawyer, 607 F.2d 1190, 1192 (7th Cir. 1979), cert. denied, 445 U.S. 943 (1980); United States v. Ponponio, 429 U.S. 10, 11 (1976); United States v. McCorkle, 511 F.2d 477, 484 n.2 (7th Cir.), cert. denied, 423 U.S. 826 (1975); United States v. Bishop, 412 U.S. 346, 356 (1973).

SAMPLE INSTRUCTION # 2:

    The defendants are charged with willfully signing tax returns verified by a written declaration made under the penalty of perjury, which the defendants did not believe to be true and correct as to every material matter at the time they were signed. The term "willful" means a voluntary, intentional violation of a known legal duty. In other words, the government must prove beyond a reasonable doubt that the defendants voluntarily and intentionally failed to report what they believed to be income, and knew they had a duty to report.

AUTHORITY:

United States v. Pomponio, 429 U.S. 10, 12 (1976).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 252.10.2.1 [Good Faith Defense: General Willfulness And "Intent To Defraud" Instructions Inadequate For Good Faith Defense].

See NCJIC 252.10.2.2 [Defenses: Good Faith Reliance Upon Attorney Or Other Professional Advice].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

7.    Willfulness In Criminal Tax Offenses Requires Showing Of Bad Faith Or Evil Intent

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    Willfulness in criminal tax offenses requires a showing of bad faith or evil intent.

AUTHORITY:

United States v. Lisowski, 504 F.2d 1268, 1270 (7th Cir. 1974).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

8.    Willfulness Must Be Proven By Independent Evidence; Mere Understatement Of Income Insufficient

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    Before a finding of guilt can be made in any tax prosecution, willfulness must be proven by independent evidence; willfulness cannot be inferred from mere understatement of income.

AUTHORITY:

United States v. Tolbert, 406 F.2d 81, 83 (7th Cir. 1969).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

9.    Knowledge Of Contents Of Tax Return Cannot Be Attributed To Taxpayer Based On Signature Alone

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION # 1:

    Knowledge of the contents of a tax return cannot be attributed to a taxpayer on the basis of (his/her) signature alone.

AUTHORITIES:

United States v. Harper, 458 F.2d 891, 894 (7th Cir. 1971), cert. denied, 406 U.S. 930 (1972); United States v. Bass, 425 F.2d 161, 163 (7th Cir. 1970).

SAMPLE INSTRUCTION # 2:

    Proof of signature alone on a tax return is insufficient by itself to make knowledge of the contents of that return attributable to the signer.

AUTHORITY:

United States v. Harper, 458 F.2d 891 (7th Cir. 1971), cert. denied, 406 U.S. 930.

SAMPLE INSTRUCTION # 3:

    If you find that the defendant signed (his/her) individual income tax return under a declaration that (he/she) had examined the returns, and to the best of (his/her) knowledge and belief they were true, correct and complete, you may consider that as a circumstance in determining whether (he/she) had knowledge of the content of those returns.

    Knowledge of the contents of a tax return cannot be attributed to a taxpayer on the basis of (his/her) signature alone. Whether the defendant had knowledge of the contents of the tax return for _____(year) must be determined upon the basis of all the evidence in the case.

AUTHORITY:

United States v. Hestnes, 492 F. Supp. 999 (W.D. Wis. 1977).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

10.    Income Tax Evasion: Knowledge Element

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    Although the defendant has not asserted that (he.she) was unaware of the contents of (his/her) ______ (year) tax return, nonetheless one of the elements of every income tax evasion prosecution is knowledge and that knowledge must be found before any defendant is found guilty regardless of (his/her) other assertions.

    In determining whether the defendant has the knowledge I have spoken of, you may consider whether (he/she) has agreed that (he/she) signed the return; whether there is evidence that it was explained to (him/her) by the preparer and whether there is evidence that (he/she) either saw or didn't see the return before (he/she) signed it.

    In weighing whether the Government has proven this knowledge, you must remember that while you may consider the signature on the return as some proof of knowledge, it does not raise an irrebuttable presumption that the defendant knew the contents of the return.

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

11.    Tax Evasion: Jury May Consider Whether Taxpayer Had Previously Made Honest Mistakes On Returns

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    The crime of tax evasion cannot be proven by merely showing that the taxpayer made a mistake in declaring taxable income.

    If you find an error in the declaration of the taxpayer's income for ______ (year), then you must consider whether this was a mistake or was a deliberate and intentional attempt to evade (his/her) income taxes. In making this determination, you may consider if you wish, whether on other occasions agents of the Internal Revenue Service considered that the taxpayer made honest mistakes in the preparation of (his/her) returns.

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

12.    Government Must Use Same Accounting Method As Taxpayer Employed In Preparation Returns When Attempting To Reconstruct Return

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION # 1:

    When the government claims that a defendant filed a tax return containing false statements and attempts to reconstruct the return from (his/her) receipts and expenditures, it is required to use the same accounting method as the taxpayer employed in the preparation of (his/her) returns.

    In this case the taxpayer prepared (his/her) returns on a cash basis. This is reflected on the returns which are in evidence. Accordingly, the government must use a cash basis in attempting to reconstruct the returns.

    The difference between a cash basis and an accrual basis, as far as this case is concerned, is that expenditures for a cash basis taxpayer should be included in the year in which the money was expended. In contrast to this, an accrual basis taxpayer shows the expenditures in the year in which the money was owed.

    Accordingly, if the evidence has only shown that the defendant incurred a liability, but not that the funds were expended, the amount of the liability cannot be considered by the jury in calculating the defendant's expenditures in that year.

SAMPLE INSTRUCTION # 2:

    The government is bound to follow the defendant's accounting method in making its calculations.

AUTHORITY:

Fowler v. United States, 352 F.2d 100, 103 (8th Cir. 1965).

SAMPLE INSTRUCTION # 3:

    The jury may not assume without evidentiary support that checks were income in the year in which they were negotiated. If you find from the evidence that the taxpayer was on an accrual basis in ______ (year), then the Government would be bound to follow an accrual method in making its calculations. This means that defendant's income would have been required to be reported in the year in which it is earned. Before any gross receipts could be considered as income in ______ (year), the Government would be required to prove to your satisfaction that the gross receipts were in payment for merchandise shipped and invoiced in ______ (year).

AUTHORITY:

United States v. Hestnes, 492 F. Supp. 999 (W.D. Wis. 1977).

SAMPLE INSTRUCTION # 4:

    During ______ (year), the taxpayer filed (his/her) income tax returns on an accrual basis and therefore any consideration of an alleged tax liability for that year must be made on the same basis. An accrual-basis taxpayer in the business of the defendant earns income in the year in which the invoice of the income is sent to declare (his/her) income on (his/her) income tax return in the year it was earned, not the year in which it was received.

    In order for the Government to prove a case against a taxpayer, it is not only necessary to demonstrate the substantial understatement of taxable income, but it must also prove that this income should have been declared in the indictment year. In this case the Government must prove that the income was earned in ______ (year).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

13.    Understatement Of Income Alone Insufficient To Sustain Conviction Of Tax Perjury

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    The understatement of income, standing alone, is insufficient to sustain a conviction of tax perjury; in addition, there must be evidence that defendant willfully made and subscribed to a return which (he/she) did not believe to be true.

AUTHORITY:

United States v. Doan, 710 F.2d 124 (D.C. PA 1983).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

14.    Requirement That Government Investigate Explanations And Leads Supplied By Taxpayer

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION # 1:

    The requirement that the government investigate explanations and leads supplied by the taxpayer which would establish (his/her) innocence in a prosecution for making a false statement on an individual federal tax return extends only to those explanations and leads which are specific and ostensibly reliable and does not accrue when the taxpayer fails to provide any information.

AUTHORITY:

United States v. Gibson, 486 F. Supp. 1230 (D.C. Ohio 1980).

SAMPLE INSTRUCTION # 2:

    In this case the [total assets, including cash on hand] [total deposits figure], served as the starting point in the government's analysis. The government must do everything that is reasonable and fair under the circumstances to identify any non-income transactions and deduct them from the [total expenditures] [ total deposits]. However, the government's investigators are not obliged to track down every conceivable lead offered by the taxpayer to justify the non-income designation of a particular item.

AUTHORITY:

United States v. Esser, 520 F.2d 213, 217 (7th Cir. 1975).

SAMPLE INSTRUCTION # 3:

    In undertaking a prosecution such as this, the government is required to investigate all reasonable leads supplied by the taxpayer or (his/her) representative, provided that these leads were supplied to the government in time for them to have been tracked down.

    If you find that the taxpayer or (his/her) representatives supplied leads to the Internal Revenue Service and that such leads, if substantiated, would have disproven the government's case, then you must consider whether the government used reasonable diligence in tracking down such leads. If you find that reasonable efforts were not made to track down such leads, you may consider this factor in determining whether the government has met its burden.

    The taxpayer is not required to substantiate leads which (he /she) has previously furnished to the government. There is no burden on the taxpayer to prove (his/her) correct [gross income] [taxable income] [for _______ (year).

AUTHORITY:

United States v. Hestnes, 492 F. Supp. 999 (W.D. Wis. 1977).

SAMPLE INSTRUCTION # 4:

    When the Government rests its case solely on approximations and circumstantial inferences, the cogency of its proof depends upon its effective negation of reasonable explanations by the taxpayer inconsistent with guilt. Such refutation might fail when the Government does not track down relevant leads furnished by the taxpayer -- leads reasonably susceptible of being checked, which, if true, would establish the taxpayer's innocence.

AUTHORITIES:

Holland v. United States, 348 U.S. 121, 135-136 (1955), modified.

SAMPLE INSTRUCTION # 5 [Earnings from drug sales]:

    In ______(month/year), the defendant placed the government on notice that (he/she) would defend this prosecution by showing that (he/she) had substantial earnings from the sale of marijuana in the years prior to ________(date). The government was required to use all reasonable means to investigate this claim.

    In weighing whether the government followed all reasonable leads, you may consider whether the government had other evidence which showed the defendant's drug-related activities in those years; and whether attempts were made to contact persons who were identified by government agents as the defendant's associates and conspirators to learn from them the extent of the defendant's earnings and expenditures in the years prior to ________ (date).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

15.    Taxpayer Not Required To Substantiate Leads Furnished To Government

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    The taxpayer is not required to substantiate leads which (he/she) previously furnished to the Government. There is no burden on the taxpayer to prove (his/her) correct taxable income for _____ (year).

AUTHORITIES:

Merritt v. United States, 327 F.2d 820, 823 (5th Cir. 1964) (modified).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

16.    IRS Assumes Burden Of Proving That the Items Contained In Newly Constructed Return Are True

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    When the Internal Revenue Service sets a taxpayer's return aside and constructs a new return for (him/her), it assumes a burden of proving, beyond a reasonable doubt, that the items contained therein are true. In proving the new return, the Internal Revenue Service must investigate leads reasonably susceptible of being checked.

AUTHORITY:

United States v. Keller, 523 F.2d 1009, 1011 (9th Cir. 1975).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

17.    Jury Decides If Government Was Unreasonable In Failure To Investigate Leads

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    The government enjoys some discretion in the area of investigation of leads. It is not, however, the final arbiter in determining which leads are "relevant" or "reasonably susceptible of being checked." The evidence here involves a factual determination by the jury whether the government was unreasonable in its failure to investigate the taxpayers alleged [cash hoard] [case expenses].

AUTHORITY:

United States v. Ramsdell, 450 F.2d 130, 133 (10th Cir. 1971), modified.

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

18.    Government Must Demonstrate That Income Which Was Earned In The Indictment Year Was Not Reported In That Year

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    A taxpayer must report on his income tax return all of the income which he receives in the year covered by the tax return. An accrual basis taxpayer earns income in the year in which he ships the goods or delivers the services from which his income is derived. Thus, an accrual basis taxpayer must report as income the amounts which represent the merchandise which he delivers in that year; for such a taxpayer, the actual receiving of the money from his customer has nothing whatsoever to do with the year in which the money was earned. In order for the government to prevail in any tax prosecution, it must demonstrate that income which was earned in the indictment year was not reported in that year. If all that the government has proven is that the defendant had unreported income, but is unable to allocate this income to the indictment year, then the defendant must be acquitted.

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

19.    Tax Evasion: Venue

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION # 1:

    Although I cannot require that you follow any particular approach or method of analysis in considering the evidence in this case, you might consider approaching the case in the following manner:

    There are two aspects to any criminal case. One is the amount of the government's proof on the elements of the offense. This is referred to by lawyers as the evidence of the government on the merits. The other pertains to matters which must be proven by the government, but which are not elements of the crime. One of these matters is called venue. Venue is simply the place at which the alleged offense was committed. If the government has not proven by a preponderance of the evidence that the tax returns were made or subscribed to in __________ (venue, e.g., the Northern District of Illinois), regardless of any other evidence on the merits which may have been offered by the government, the crime was not proven to have been committed in this district, and the defendant must be acquitted.

    Thus, you might consider whether the government has proven venue before you consider the evidence it has offered on the merits.

AUTHORITY:

United States v. Hestnes, 492 F. Supp. 999 (W.D. Wis. 1977).

SAMPLE INSTRUCTION # 2:

    One of the matters which must be considered by the jury in any tax prosecution is whether the government has proven to the jury's satisfaction that, if a crime was committed, it was committed in the federal district in which it was prosecuted. This requirement that the government prove the place at which a crime is committed is known as "proof of venue." In this case a crime is committed by the making or subscribing of a false tax return and, accordingly, the government, in order to prove its case, must introduce evidence that the return was either made or subscribed to in __________ (venue, e.g., the Northern District of Illinois). In the absence of evidence establishing that the return was either made or subscribed to in this district, then, regardless of any other evidence, the defendant must be acquitted.

SAMPLE INSTRUCTION # 3:

    As counsel have indicated to you in the course of their argument, I will give you an instruction and I will now give you this instruction. There are two aspects to any criminal case. One is the Government's proof on the elements of the offense. This is referred to by lawyers as the evidence of the Government on the merits. The other pertains to matters which must be proven by the Government but which are not elements of the crime. one of these matters is called venue. Venue is simply the place at which the alleged offense was committed. The question is whether the return for ______ (year) was signed and mailed in ______ (venue one) or signed and mailed in ______ (venue two) . If the Government has not proven by a preponderance of the evidence that that return, Exhibit ____, was signed and mailed in ______ (venue two), then the crime was not proven to have been committed in this District and the defendant must be acquitted.

AUTHORITY:

United States v. Hestnes, 492 F. Supp. 999 (W.D. Wis. 1977).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

20.    Cash Expenditures Method Of Proving Unreported Income

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    In this case the government relies upon the so-called "cash expenditures method" of proving unreported income. The theory of this method of proof is that if a taxpayer's expenditures and disbursements for a particular taxable year, together with any increase in net worth, exceed the total of his reported income together with non-taxable receipts and available cash at the beginning of the year, then the taxpayer has understated (his/her) income.

    The "cash expenditures method" necessarily involves not only the examination of the defendant's expenditures and disbursements during the taxable year, but also an examination of (his/her) "net worth" at the beginning and at the end of that year.

AUTHORITY:

Pattern Jury Instructions Eleventh Circuit OI 93.4 (West Publishing Co. 1985).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

21.    Accrual Method Of Proving Unreported Income

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    The jury may not assume without evidentiary support that checks were income in the year in which they were negotiated. If you find from the evidence that the taxpayer was on an accrual basis in any of the years ______ (year) through ______ (year) , then the government would be bound to follow an accrual method in making its calculations. This means that defendant's income would have been required to be reported in the year in which it is earned. Before any gross receipts could be considered as income, the government would be required to prove to your satisfaction that the gross receipts were in payment for merchandise shipped or services provided and invoiced in the years ______ (year) through ______ (year).

AUTHORITY:

United States v. Hestnes, 492 F. Supp. 999 (W.D. Wis. 1977).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

22.    Good Faith Belief That Certain Property Is Not Reportable Income As Defense

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION # 1:

    A good faith belief that certain property is not reportable income is a complete defense to the charges that the defendants failed to report income on their income tax returns. In other words, the government must prove beyond a reasonable doubt that the defendants actually believed that the property at issue here was required to be reported on their income tax returns.

    If, based on all the evidence, you believe there is a reasonable possibility that a particular defendant thought in good faith that the property at issue was not required to be reported on (his/her) tax returns, you must find that defendant not guilty.

AUTHORITIES:

United States v. Kouba, 822 F.2d 768, 771 (8th Cir. 1987); United States v. Pomponio, 429 U.S. 10, 13 (1976).

SAMPLE INSTRUCTION # 2:

    Regardless of whether the amounts omitted from a defendant's income tax return were large enough to be material, the defendant may still have had a good faith belief that those amounts need not have been reported. The issues of materiality and the defendant's belief are separate elements of the offense, and you are not to use materiality of the amount of money or property at issue to determine the defendant's good faith.

AUTHORITY:

United States v. Taylor, 574 F.2d 232, 235-37 (5th Cir.), cert. denied, 439 U.S. 893 (1978).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 252.10.2.1 [Good Faith Defense: General Willfulness And "Intent To Defraud" Instructions Inadequate For Good Faith Defense].

See NCJIC 252.10.2.2 [Defenses: Good Faith Reliance Upon Attorney Or Other Professional Advice].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

23.    Gifts Need Not Be Reported On Income Tax Returns

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION # 1:

    The defendants are charged with willful failure to report certain items of property on their income tax returns. Gifts need not be reported on income tax returns. Therefore, you are instructed that you must find a defendant not guilty if you believe, based on all the evidence, that the particular property in issue under a given count was a gift to that defendant.

AUTHORITIES:

United States v. Kouba, 822 F.2d 768, 771 (8th Cir. 1987); 26 U.S.C. §102(a); see also United States v. Londe, 587 F.2d 18, 20 (8th Cir. 1978), cert. denied, 439 U.S. 1130 (1979).

SAMPLE INSTRUCTION # 2:

    The defendants are charged with conspiring to defraud the United States by failing to report certain items of property on their income tax returns. The defendants contend that those items of property were gifts, and I am instructing you that gifts need not have been reported, as a matter of law. Accordingly, if you conclude that the property items at issue were gifts to a particular defendant, then there was no conspiracy to defraud the United States, and you must find that defendant not guilty on both the conspiracy count and the false statement on income tax return charges.

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

See also THE SHELLOW COLLECTION: Conspiracy.

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Chapter 83: Conspiracy.

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

24.    "Income" Defined; Gifts Need Not Be Reported

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    The government contends that __________ (name of defendant) [and __________ (name of defendant)] received certain property, and that such property was "income" that __________ (name of defendant) [and __________ (name of defendant)] then willfully failed to report on (his/her/their) income tax returns. Income is compensation for services, including fees, commission, and similar items. Where an individual by virtue of (his/her) trade or profession has earned the right to income or has otherwise exercised control over its disposition, (he/she) is to that extent required to report it on (his/her) income tax return. However, income does not include gifts.

AUTHORITIES:

United States v. Kouba, 822 F.2d 768, 771 (8th Cir. 1987); United States v. Allen, 551 F.2d 208, 211-12 (8th Cir. 1977).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

25.    Materiality Refers To Impact That Statement May Reasonably Have On Ability Of IRS to Perform Functions Assigned To It By Law

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    For purposes of the charges against defendant(s) __________ (name of defendant) [and __________ (name of defendant)] concerning false tax returns, materiality refers to the impact that the statement may reasonably have on the ability of the IRS to perform the functions assigned to it by law. The question is not what effect the statement actually had. The question is rather whether the statement had the potential for an obstructive or inhibiting effect.

AUTHORITY:

United States v. Holecek, 739 F.2d 331, 337 (8th Cir.), cert. denied, 469 U.S. 1218 (1984), quoting United States v. Greenberg, 735 F.2d 29, 31 (2d Cir. 1984).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

26.    Purpose Of Transactions In Which Defendant Allegedly Engaged Must Impede And Defeat Investigations Of Internal Revenue Service

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    In order for the government to prove the conspiracy charged in count ____, it is necessary for the government to establish that the purpose of the transactions in which the defendant allegedly engaged was to impede and defeat investigations of the Internal Revenue Service. Thus, if the purpose of these activities was to conceal income which had been earned in prior years and which the defendant had accumulated as of __________ (date), then the government has not proven the conspiracy charged in this indictment and the defendant must be acquitted.

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

See also THE SHELLOW COLLECTION: Conspiracy.

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Chapter 83: Conspiracy.

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

27.    Jury May Consider Whether Evidence Exists That IRS Considered Money As Compensation

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    In considering whether the was some form of compensation to , you may consider, if you wish, whether there is any evidence in this record that the Internal Revenue Service considered this as compensation and required that he pay tax upon it. The failure to require that (he/she) pay taxes upon the amount which the government alleges was paid by the for his is evidence that the Internal Revenue Service did not consider that amount to be a bonus or other form of compensation to (him/her) by (his/her) employer.

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

28.    Bonus To Employee In The Form Of Construction Of Personal Property Constitutes Compensation

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    You are instructed that if an employer gives a bonus to an employee in the form of construction of personal property, such as , the amount expended by the employer constitutes compensation to the employee and would be taxable to (him/her) as such.

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

29.    Unreported Amount: Definition Of "Substantial"

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    "Substantial" under the tax laws means an amount greater than some small amount, but relative to the circumstances of the case. "Substantial" does not necessarily mean large figures, though that may be a factor. "Substantial" under the statute involved in this case means that the amount omitted is not explainable because of error, oversight or a reasonable conclusion by the taxpayer that the amount omitted was inconsequential.

AUTHORITIES:

United States v. Mullins, No. H CR 85-21 (N.D. Ind. 1985); United States v. Hedman, 630 F.2d 1184 (7th Cir. 1980).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

30.    Jury May Consider Relationship Of Amount Unreported To Total Income Declared To Decide Whether Unreported Income Is "Substantial"

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION # 1:

    In making the determination whether the alleged unreported income which the government undertakes to prove is substantial, you may look to the amount itself and to the relationship of that amount to the total income declared by the taxpayer in ________ (year).

AUTHORITY:

United States v. Hestnes, 492 F. Supp. 999 (W.D. Wis. 1977).

SAMPLE INSTRUCTION # 2:

    I have expressed the law that the Government is never required to prove the exact amount stated in the indictment. If, however, the Government attempts to prove an amount less than that stated in the indictment, you must first consider whether the amount which it undertakes to prove is "substantial." In making the determination whether the alleged unreported income which the Government undertakes to prove is "substantial," you may look to the amount itself and to the relationship of that amount to the total income declared by the taxpayer in ________ (year).

    If you find that the Government has not undertaken to prove a substantial amount of understatement, then you need not examine the evidence further and must acquit the defendant.

SAMPLE INSTRUCTION # 3:

    It is not necessary that the government prove beyond a reasonable doubt the exact amount by which defendant's gross receipts were understated.

    However, in order for you to find that any understatement is a material matter, you must find that the government has proved beyond a reasonable doubt that the gross receipts were understated by a substantial amount.

AUTHORITIES:

United States v. Mullins, No. H CR 85-21 (N.D. Ind. 1985).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

31.    Lack Of Adequate Documentation Does Not Incur Criminal Liability

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    While the Internal Revenue Code requires adequate documentation, lack of such documentation will incur civil liability but not criminal liability.

AUTHORITY:

United States v. Hestnes, 492 F. Supp. 999 (W.D. Wis. 1977).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

32.    Taxable Income: Rebuttable Presumption

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    While it may be presumed that the income which was declared as taxable on the defendant's _______ (year) through _______ (year) income tax returns was in fact taxable income, this presumption may be rebutted by evidence. This evidence could be in the form of testimony or exhibits which permit the inference that some of this income that (he/she) declared on (his/her) return was not in fact taxable income.

    If you should find that some of the declared income on the tax returns was not taxable, or if you have a reasonable doubt whether some of that declared income was taxable, then you must subtract the amount of this non-taxable or doubtful-taxable income from the alleged deficiency which the government claims.

AUTHORITY:

United States v. Hestnes, 492 F. Supp. 999 (W.D. Wis. 1977).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

33.    All Of One’s Earnings Need Not Be Deposited In Bank Account

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION # 1:

    The income tax law does not require that all of one's receipts be deposited into a bank account. If the undeposited and unreported receipts are offset by unreported cash business expenses, tax evasion has not been committed.

AUTHORITY:

United States v. Hestnes, 492 F. Supp. 999 (W.D. Wis. 1977).

SAMPLE INSTRUCTION # 2:

    The income tax law does not require that all of one's receipts be deposited into a bank account. It only requires that the correct taxable income be reported on the tax return. If the unreported receipts are offset by unreported cash expenses, tax evasion has not been committed.

AUTHORITIES:

United States v. Lehman, 468 F.2d 93 (7th Cir. 1972).

SAMPLE INSTRUCTION # 3:

    The Government has the burden of refuting reasonable explanations for the undeposited receipts provided these explanations were advanced during the investigatory state of this tax prosecution.

AUTHORITIES:

United States v. Beasley, 519 F.2d 233, 244 (5th Cir. 1975) (modified).

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

34.    Jury May Consider Threats By Agents of the Internal Revenue Service

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION:

    In considering the testimony of __________ (name of defendant) that none of the funds deposited to the bank account in (his/her) name were (his/her) funds, you may consider, if you wish, (his/her) belief that (he/she) had been threatened by agents of the Internal Revenue Service.

RELATED SHELLOW MATERIALS:

See also THE SHELLOW COLLECTION: Impeding Internal Revenue Service (26 USC 7212(a)).

RELATED NCJIC MATERIALS:

See generally NCJIC 98.3 [Tax Evasion].

See NCJIC 305.20.2 [Tax Evasion].

See NCJIC Federal Model Instructions by Offense: 26 USC 7201: Income Tax Evasion.

See NCJIC Federal Model Instructions by Offense: 26 USC 7203: Failure To File A Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(1): False Statements On Income Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7206(2): Aiding Or Assisting In Preparation Of False Documents Under Internal Revenue Laws.

See NCJIC Federal Model Instructions by Offense: 26 USC 7207: Filing False Tax Return.

See NCJIC Federal Model Instructions by Offense: 26 USC 7212: Corruptly Endeavoring To Obstruct Or Impede Due Administration Of Laws--Elements.

THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin

35.    Defense Theory: Proceeds From Cashed Business Checks Used To Purchase Goods

ALERT: Carefully review the Caveats and Disclaimers before using these materials.

SAMPLE INSTRUCTION # 1:

    You learned in argument that the Court would instruct you concerning the defendant's theory of the case; and I am now about to undertake to state the defendant's theory of the case, or at least part of the defendant's theory of the case, and then to give you some instructions that relate to the defendant's theory of the case.

    In part, it is the defendant's theory of this case that (he/she) received checks from (his/her) customers in______ (year) and that (he/she) cashed these checks instead of depositing them and that (he /she)then took the proceeds of these cashed checks and purchased _________ (goods, e.g., cattle) with this money; and that the persons from whom (he/she) purchased the _________ (goods, e.g., cattle) preferred to be paid in cash and that (he/she)could buy _________ (goods, e.g., cattle) cheaper if (he/she)paid cash.

    You are instructed that if the defendant made such purchases, they were lawful business deductions and the defendant did not evade (his/her) income taxes.

    Accordingly, the government must prove beyond a reasonable doubt that the defendant did not purchase _________ (goods, e.g., cattle) for cash with a substantial portion of the proceeds of these cashed checks.

SAMPLE INSTRUCTION # 2:

    In part it is the defendant's theory of this case that (he/she) received checks from (his/her) customers in _____ (year) and that (he/she) cashed these checks instead of depositing them and that (he/she) then took the proceeds of these cashed checks and purchased _________ (goods, e.g., cattle) with this money; that the persons from whom (he/she) purchased the _________ (goods, e.g., cattle) preferred to be paid in cash and that (he/she) could buy _________ (goods, e.g., cattle) cheaper if he paid cash.

    At the outset you must realize that this is a criminal tax prosecution and not a civil tax dispute and that for this reason the Government must prove beyond a reasonable doubt that the defendant did not purchase _________ (goods, e.g., cattle) for cash. That is, the defendant does not need to prove to your satisfaction that (he/she) purchased _________ (go