United States v. Tamny Westbrooks
2017 U.S. App. LEXIS 9073
| 5th Cir. | 2017Background
- Westbrooks ran two tax-preparation businesses (JATS in Charlotte, CF&W in Houston) and managed JATS’s bank account and returns.
- A 2009 IRS search and grand-jury subpoena prompted limited and nonresponsive document production; she was convicted of criminal contempt in North Carolina for failing to comply with the subpoena.
- A Houston grand jury later indicted Westbrooks on: (1) one count under 26 U.S.C. § 7212(a) (corruptly endeavoring to obstruct administration of the tax laws, covering 2004–2009) and (2) three counts of filing false tax returns (2007–2009). A jury convicted on all counts.
- The obstruction count alleged inflated wage/subcontractor expenses on returns, cash payments, failure to file wage reporting forms, and false testimony at the contempt hearing; venue was laid in the Southern District of Texas based on related conduct there.
- The district court sentenced Westbrooks to 40 months and ordered $273,460 restitution to the IRS, with payment terms that began during incarceration and continued into supervised release.
Issues
| Issue | Westbrooks’s Argument | Government’s Argument | Held |
|---|---|---|---|
| Whether § 7212(a) requires knowledge of a pending IRS investigation or proceeding | § 7212(a) requires awareness of an ongoing IRS action; indictment insufficient otherwise | The omnibus clause is broader and does not require a pending investigation | Court held § 7212(a) does not require knowledge of a pending IRS action; indictment adequate |
| Whether § 7212(a) is unconstitutionally vague absent the pending-action requirement | Omnibus reading is vague and overbroad; people lack notice | Reeves’s narrowing of “corruptly” gives fair notice; defendant’s conduct was plainly proscribed | Vagueness challenge rejected; statute sufficiently clear as applied to Westbrooks |
| Double jeopardy/collateral estoppel based on prior contempt conviction | Prior contempt conviction bars prosecution for the obstruction charge | Offenses have different elements and cover different conduct | Rejected; convictions are for distinct offenses and acts |
| Venue for obstruction count | Venue should be Charlotte (JATS location) | Offense was continuing and some obstructive acts occurred in Southern District of Texas (returns prepared/listing CF&W Houston) | Venue in Southern District of Texas upheld |
| Statutory authority to order restitution | District court used wrong statute; restitution for Title 26 offenses limited and, per Stout, only via plea agreement | Restitution may be imposed as condition of supervised release under 18 U.S.C. §§ 3583(d), 3563(b), 3556, and § 3663; can be imposed after trial | Court held restitution may be ordered as condition of supervised release after trial but modified judgment to delay payments until supervised release begins (payments during imprisonment struck) |
| Amount of restitution / tax-loss calculation | Restitution should be limited to tax years underlying the false-return counts (2007–2009) and IRS calculations lack support for earlier years | Obstruction conviction covers 2004–2006 losses; IRS relied on bank records, witness statements and presentence report—permissible estimates | Amount affirmed ($273,460) including losses back to 2004; calculations not clearly erroneous |
Key Cases Cited
- United States v. Reeves, 752 F.2d 995 (5th Cir. 1985) (defines “corruptly” and narrows statutory reach to preserve notice)
- United States v. Kassouf, 144 F.3d 952 (6th Cir. 1998) (held § 7212(a) requires connection to a pending action — treated as outlier)
- United States v. Floyd, 740 F.3d 22 (1st Cir. 2014) (§ 7212(a) conviction may be sustained without proof of an ongoing audit)
- United States v. Marinello, 839 F.3d 209 (2d Cir. 2016) (omnibus clause covers corrupt interference with tax administration, not only known investigations)
- United States v. Massey, 419 F.3d 1008 (9th Cir. 2005) (no requirement that defendant know of an ongoing investigation for § 7212(a))
- United States v. Sorensen, 801 F.3d 1217 (10th Cir. 2015) (same: § 7212(a) not limited to pending proceedings)
- United States v. Popkin, 943 F.2d 1535 (11th Cir. 1991) (omnibus provision necessary to prevent varied corrupt methods of evading tax collection)
- United States v. Nolen, 523 F.3d 331 (5th Cir. 2008) (restitution for tax offenses may be imposed as a condition of supervised release under the statutory chain permitting such relief)
- United States v. Dahlstrom, 180 F.3d 677 (5th Cir. 1999) (presentence report information can support restitution/loss calculations)
- United States v. Zuniga, 720 F.3d 587 (5th Cir. 2013) (defendant bears burden to rebut presentence report information used for loss/restitution)