*1 рrediction uncertain guess stead of a or America, court”). STATES of UNITED
a federal Plaintiff-Appellee, 1867(c)(3) Second, applies because we the dismissal of the claims have affirmed original court had over which the district HOSKINS, Defendant-Appellant. Jodi jurisdiction; these claims had been indeed finally dismissed before the court No. 10-4131. claim. Brooks v. decided the state-law Appeals, United States Court of Gaenzle, 1213, 1229 Cir. Tenth Circuit.
2010) (this “generally circuit has held that trial, if federal claims are dismissed before Aug. law, only issues of state the federal leaving juris- court should decline the exercise of dismissing
diction the case without (brackets
prejudice” quotation and internal omitted)).
marks recognize require
We that dismissal will parties to rebrief the state-law issues court, duplication prior
in state ef- if necessary
forts. But it were for this claim, to retain the state-law
might certify well find it one advisable questions to the more New Mexico Su- Court,
preme require which would also briefing by
further parties.
event, in comity leaving the interest —
the states to decide questions novel clearly predominates here. We
state-law— judg-
therefore reverse the district-court
ment on the state-law claim and remand
with instructions to dismiss the claim with-
out prejudice.
III. CONCLUSION judg-
We AFFIRM the district court’s due-process
ment on Merrifield’s and First
Amendment claims. We REVERSE the judgment
district court’s remaining on the seeking hearing
claim review of the offi- decision,
cer’s and REMAND to the dis-
trict court with instructions to dismiss it prejudice.
without
scheme. Jodi Hoskins was convicted of tax evasion after she and her husband1 pay failed to taxes for income earned Companions, City a Salt Lake escort *3 service. The contended the Hoskinses failed to account for more than one million dollars in income the escorts generated in payments cash and credit receipts. sentencing, card At ment’s tax loss was relevant potential jail time and restitution under United (USSG) Sentencing States Guidelines § 2T1.1.
To minimize the tax loss pur- for these poses, the Hoskinses offered to the court (it hypothetical tax returns was too late to IRS) submit amended returns to the accounted for the unreported income and attempted they to take deductions been entitled to but for the tax reject- evasion. The district court ed the tax accepted gov- returns and ernment’s tax-loss estimate. As we ex- below, plain the district court did not err in rejecting the hypothetical return. We McCullough, W. Andrew McCullough & also dismiss Jodi challenges Hoskins’s Associates, LLC, Midvale, UT, Appel- for the sufficiency of the evidence supporting lant. conviction, her and the reasonableness of (John DiCicco, Alexander P. Robbins A. her sentence. General, Acting Attorney Assistant Frank Having jurisdiction under 28 U.S.C. Davis, P. Gregory Cihlar and Victor Attor- 1291 and 18 U.S.C. we therefore neys, Christensen, and Carlie Acting Unit- AFFIRM. Counsel, Attorney, ed States Of with him brief) Division, on the Tax Department of Background I. Justice, D.C., Washington, for Appellee. (Hos- Beginning in Jodi Hoskins kins) managed and operated Companions, BRISCOE, Before Judge, Chief City Salt Lake escort service founded TYMKOVICH, GORSUCH, Circuit then-boyfriend and owned her and fu- Judges. husband, Hoskins, ture Roy who mar- she TYMKOVICH, Judge. Circuit in April ried 2003. managed requires office, This case us to Companions’ consider a sen- supervised employees, tencing judge’s in establishing reservations, discretion coordinated escort main- tax loss resulting from a tax evasion tained receipt credit card Hoskins, pleaded guilty Cir.2010) 1. separately No. 10-4092 appeals his sentence. See United States v. tax return filed the Hoskinses failed to Compan- name was on Hoskins’s books. husband, account, report approximately her million and with bank ions’ Ac- in tax to the company’s receipts, finances. which resulted oversaw the $485,000. employee, Hos- of more than to a cording everything rejected and ran the alterna- “controlled district court kins R., II at 377. the tax on a accounting Vol. tive loss based business.” tax return that a tax hypothetical indicated marry Although they until $160,202. joint U.S. Individual Hoskinses filed Return, USSG, Tax Form subject Income Under the Hoskins was business, a Schedule C year As level of and a criminal to base offense *4 return; did not file its own Companions history of III. The category district rather, accounted the for Com- prostitution Hoskinses activities of pointed to the personal returns. income on their panions’ applied and a two- escorts Thus, joint by return filed the the 2002 because it found Hos- level enhancement Hoskinses, prepared by an ac- which was report correctly kins identi- “failed countant, reported Companions’ $10,000 income income fy exceeding the source of Roy Although Hoskins expenses. and any year activity.” in from criminal USSG provided 2Tl.l(b)(l). and most of Companions Accordingly, owned presen- the (PSR) the 2002 re- supporting the information report’s tenoe recommended sen- turn, signed the return as Jodi Hoskins tencing range was 51 to 63 months. The well. lower tax-loss estimate offered Hoskins guideline range the would have moved reported in The 2002 return The used 33 41 months. district court receipts Companions. After an from higher range applied a downward the but government discovered investigation, the variance and sentenced Hoskins to 36 at least Companions received imprisonment. months’ in $1,053,552 payments in alone credit-card Further, because es- district factual Contesting the court’s company explained that received findings, analysis, sentencing corts and calcula- cash, gov- its payments tion, her and appeals 50-70% conviction Hoskins projected the cash intake for 2002 ernment sentence. equal receipts. to the credit-card
was
II. Discussion
government
estimated that Com-
$2,107,-
gross receipts
2002
panions’
ap-
three
challenges
Hoskins raises
million
excess
104—more
(1)
peal:
the evidence was insufficient
income claimed
Hoskinses.
(2)
conviction,
district
support her
government also contended that some
government’s
court’s
calculation
engaged
prostitu-
the escorts were
(3)
erroneous,
clearly
and
tion,
knew
about
applying
a sentenc-
district court erred
activity.
criminal
report or
ing
failing
enhancement for
identify
sources of income derived
2008,
jury charged
a
grand
federal
activity.
each
turn.
criminal
We discuss
willfully attempting to
Hoskins with
Jodi
or defeat
federal
evade
Sufficiency
the Evidence
A.
taxes,
in violation of 26 U.S.C.
evi-
first contends insufficient
a
§ 7201. Hoskins was convicted after
argues
supports
dence
her conviction. She
three-day
sentencing,
trial. At
bench
failed to establish that she
court credited
2002,
false tax re-
willfully intended to submit
joint
estimates
found
202,
turns,
signed
requirement.”
she claims she
ness
Id. at
because
S.Ct.
knowing
knowledge
2002 return without
or under-
604. Actual
require-
is a strict
legal
“[C]arrying
need for
ment.
standing
requires
conse-
this burden
quences
reporting
negat[e]
[the
understated income.
to]
defendant’s
claim of ignorance of the law or a claim
sufficiency
We review
evidence de
of a misunderstanding
because
of the
Parker,
novo.
States v.
United
law,
good-faith
he had a
belief that he was
Cir.2009).
1309,
(10th
Under due
not violating
provisions
of the
process principles, evidence is sufficient to
604;
tax laws.”
Id.
111 S.Ct.
see
if,
support
viewing
conviction
evi-
Chisum,
also
States v.
inferenсes
dence and all reasonable
there-
Cir.2007).
Hoskins ar-
light
from the
most favorable to the
gues
good
had
faith
she was
belief
government, a rational
of fact
trier
could
breaking the
laws when she signed
Id.;
find
guilt beyond reasonable doubt.
and submitted the false
return.
Virginia,
see
also Jackson
U.S.
(1979).
99 S.Ct.
Hoskins was convicted under 26 U.S.C. Roy 2002 Hoskins 7201, Companions, owned § felony which makes it a for “[a]ny Jodi actively Hoskins managed compa person willfully attempt[ any ] man- [to] ny’s affairs and held out herself as a co- ner to evade or defeat tax.” To prove According owner. to a 7201, em § evasion under “the ployee, (1) Jodi Hoskins (2) manager “was must liability, show substantial tax owner, and (3) basically willfulness, person charge and an affirmative aсt con- R., company.” I at Vol. 139. The stituting or attempted evasion evasion.” district court heard that in evidence con Thompson, 832, United v. States (10th Cir.2008) role, nection managerial with her omitted). Hoskins (quotation 850 supervised employees, first, enforced Hoskins office argues, that there was insuf- rules, maintained the company’s credit- ficient evidence her willful intent book, receipt card dealt IRS in evasion, second, commit tax sign- and that returns, connection with 2003 tax and had ing the 2002 tax return not constitute signatory authority Companions’ over an act affirmative of evasion. We are not Indeed, bank account. the accountant re persuaded by argument. either tained the Hoskinses believed Jodi and 1. Willfulness equally knowledgeable about the business’s finances. 7201, Under “willfulness” “voluntary, means the intentional violation short, established legal of a duty.” (1) known Cheek v. United Hoskins was familiar with States, 192, 201, (2) 498 finances, U.S. 111 S.Ct. obligation knew of the to re- (1991) L.Ed.2d (quotation port omit all company’s business income on the ted). (3) return, the Government proves past, “[I]f actual in the had reminded Com- knowledge pertinent lеgal duty, panions’ escorts of them obligation to re- prosecution, more, port without has tip satisfied income on their personal re- turns, (4) the knowledge component willful- and told an Special Agent IRS attempted of the tax” evasion of her obli- evasion been informed that had added)); v. United (emphasis Sansone the escorts’ Form 1099s for gation to file States, 343, 351-52, 85 S.Ct. 380 U.S. together shows This evidence income. (1965) (“[I]t undisputed L.Ed.2d 882 to file an duty her legal knew of Hoskins and filed a tax return that petitioner that return, an infer- negates and accurate a false tax return petitioner’s filing of good signing acted faith that she ence a sufficient affirmative commis- constituted return. filing and satisfy requirement sion ample evi- court had the district Gonzales, 7201.”); v. knew of her dence to conclude (10th Cir.1995) (explaining F.3d and tax returns legal duty to file accurate ... a false” docu- “signing filing and finances. of Companions’ the state knew the IRS a classic affirmative ment with knowledge, despite plain And it is evasion); Wainwright act tax return voluntarily signed a (10th Cir.1971) States, million more than underreported (“[Wjhenever beyond appear the facts gross receipts. evidence in reasonable doubt from the will the dis- Accordingly, we not disturb signed that the his tax ha[s] case accused willfulness, finding of trict court’s return, inference jury draw the rec- supported was reasonable knowledge that the had find accused ord. return.”). By knowingly contents of return, the 2002 tax Hoskins took signing Act 2. Affirmative contents, inaccurate responsibility its a defen liable under To be escape thus she cannot now criminal fail to passively more than dant must do *6 liability. return; “requires also file a tax statute the court’s supported Sufficient evidence designed to positive act of commission affirmatively acted finding Hoskins 518 F.3d Thompson, or conceal.” mislead mislead and conceal. omitted). Importantly, (quotation at 852 however, only government need[s] “[t]he B. Tax-Loss Calculation evasion for affirmative act of show one Next, two proposes Hoskins reasons (emphasis tax Id. each count of evasion.” calculating why the district court erred added). government, the tax loss suffered trial that she Hoskins admitted at applicable in turn sen- affected This alone signed First, false 2002 return. range. says the court tencing she affirmative an adjust sufficient establish refused improperly was 7201, given § more so unclaimed tax act under even tax loss based on ment’s Second, knew the she conclusion she she as- factfinder’s offered. erroneously Boulware included com- were inaccurate. See serts the court contents 2, States, part as tips kept by 424 n. escorts missions v. United U.S. (2008) (re gross receipts.2 Nei- of L.Ed.2d 34 S.Ct. constituting point persuasive. an affirmative act ther quiring “an here, argument given that once the argues dress this that because she also Hoskins obligation § Companions, had no own she court established the factors signing says, by Hoskins, pay question its taxes. she of tax and convicted return, a tax tax she caused the inaccurate government how lost loss addresses much $5,439.50 only tax break she re- of loss —the of tax return. as a result the inaccurate Hoskins, filing jointly with ceived return, signed tax the 2002 When individually. not ad- We need rather Wise, reviewing a district court’s 1148 n. 6 Cir. “[W]hen 2010) (“Commentary sen- Guidelines, interpreting the Sentencing of application tenсing guidelines binding on the federal legal questions we review de novo and we courts unless violates the or Constitution error, findings review factual for clear statute, a federal or is with inconsistent giving due to the deference district court’s guideline interprets.”) (quotation guidelines to the facts.” application omitted). Chavez-Diaz, 444 United States v. (10th Cir.2006) “tax for the USSG defines loss” (quotation omit purpose sentencing defendants convict- ted). §
ed under 7201: If the offense or involved evasion I. Unclaimed Deductions statement, return, fraudulent or false Jodi Hoskins’s 51-to-63 month sen document, other loss is the total tencing guideline range tied to the amount object that was the government court’s calculation (i.e., offense the loss that $485,000. suffered tax loss more than had resulted the offense been successful- disputes figure and contends ly completed). improperly the court account failed to 2Tl.l(c)(l). USSG The notes to 2T1.1 estimating unclaimed deductions when instruct courts that tax loss “shall be treat- government’s argues tax loss. She ed as equal unreported gross 28% of the actual loss was less than ..., unless a more аccurate deter- $200,000.3 mination the tax loss can he made. ” (A) 2Tl.l(c)(l), Id. (emphasis Note add- mayWe overturn the district court’s ed). “[Ajlthough bears the tax-loss if clearly calculation it was burden sentencing proving erroneous. v. Spencer, See United States flowing amount from the defen- (10th Cir.1999). Un- acts, dant’s illegal neither the standard, der this deferential “for us to obligation nor the has an to calculate disturb the district court’s factual certainty the tax or precision.” erroneous, clearly we would have to *7 Sullivan, 1256, United States v. conclude the lacks support factual (10th Cir.2001) omitted). 1263 (quotation record, or, reviewing after all the words, In other the Guidelines establish evidence, we would need the definite and simple-to-calculate presumptive tax loss firm conviction that a mistake has been rate; gross linked to income and set tax Martinez, made.” United States v. 512 presumptive this will applied amount be 1268, (10th Cir.2008) (quotations F.3d 1276 unless a more accurate can determination omitted). be We made court. interpretations defer of Sentencing the Guidelines Commis- question The remains: what evidence important sion as an instructions from au- can be marshaled to a “more demonstrate thoritative source. United States v. accurate determination the tax loss”?4 months, responsibility assuming took for its history category contents. More- a criminal over, III) $80,000 charged we note that Hoskins was if the between and was $200,000, (33 attempting months) to evade Hoskins's taxes—an 18 to 41 if it was $200,000 $400,000, allegation that takes into account the fact that between and 20 if it $400,000 (41 did $1 own further was between and million —and months). 2T4.1(F)-(H). separate, §
that Hoskins did not file a individual 51 USSG year for tax return 2002. 4. We address issue because the case, 3. argues In criminal tax a defendant's base ment the district court erred in consid- (27 ering offense level 16 under USSG is to 33 Con- Hoskins's unclaimed deductions.
1093
(A). Here,
The dis-
2Tl.l(c)(l),
given to
escorts.
payments
28%
Note
USSG
considered, but
appropriately
trict court
un-
million of
more
Hoskins’s
rejected,
claim that
ultimately
Hoskins’s
was
gross
approximately
reported
adjusted
down-
gross income should
her
more
$336,000,
parties proposed
but both
ward.
tax loss.
of the
determinations
accurate
appeal,
cоurt and on
Before
district
introduced
evidence
un-
objects to the use of
tax evasion result-
showing that Hoskins’s
tax-
purposes
for
of the
claimed deductions
$485,443.5 It
in an actual tax loss
ed
from
points
calculation.
It
to dicta
by estimating that
at this number
arrived
Spencer,
v.
decision in United States
our
equal
credit-card
receipts were
cash
1368,
F.3d at
where we discussed
178
accounting only and then
receipts,
case,
2T1.1.
scope USSG
return
on
2002
included
(A)’s
2T1.1 Note
“more accu-
stated
This
was
by the Hoskinses.
estimate
filed
not al-
provision
rate determination”
does
by testimony
Companions’
from
supported
taxpayers
opportunity
“a second
low
agents.
employees
governmental
having
after
been convict-
claim deductions
explained that in
of tax
Id. We
ed
fraud.”
evidence,
pre-
To counter this
calculating
purpose
tax loss for the
of sen-
unclaimed
including
a tax return
pared
tencing,
computing
“we are not
an individ-
on the
could
deductions she
liability
as is done
a traditional
ual’s
return,
return,
not. This
2002
but
rjather
audit[,
assessing
merely
but
we are
which indicated
mannеr in
resulting
the tax loss
complete
chose to
his
$160,202,6
on
esti- which the defendant
premised
logic,
this
income tax returns.” Id. Under
than 60% of
mation
more
upside
defendant is stuck with all the
including
from unre-
receipts,
those
income,
none
the down-
but can claim
cash,
deductible commission
ported
however,
adjustments.7 Ultimately,
side
1158,
Clarke, 562
versely,
United. States v.
F.3d
contends
court erred
(11th
rejecting
proffered
Cir.2009);
additional
Delfino,
her
evidence of
v.
parties
Cir.2007);
some
(4th
deductions.
both
contest
States v.
F.3d
aspect
judgment
court's
Cir.2007);
(5th
Phelps,
judicial
proper
It is
within our
score.
well
Chavin, 316
United States v.
F.3d
judgment as
role to vindicate a district court’s
Sherman,
(7th Cir.2002);
United States v.
written.
(8th Cir.2010);
Fed.Appx.
676-77
see
Blevins,
also United States
The difference between
Cir.2008)
(declining to decide
$485,443 figures
consequential, because if
*8
may ever
“whether an
tax benefit
unclaimed
figure,
the lower
Hos-
the district court used
tax
but
the district court
offset
loss”
been 18.
kins’s base offense level would have
properly
reduce
based on
declined to
tax loss
government's evi-
Since the court credited the
(emphasis
taxpayers’ unclaimеd deductions
dence, however, her base
level was
offense
Gordon,
added)).
States
291
But see United
v.
20.
Cir.2002)
(2d
("[tlhe district
F.3d
187
briefs
forth this amount in her
6. Hoskins sets
any
erred
it refused
consider
court
when
proposed
us.
a
different
before
She
potential unclaimed deductions in its sentenc-
$179,466—in
objections
her written
amount —
Comment,
ing analysis.”);
Tax Loss Calcula-
and
do not
the PSR. The record
briefs
Sentencing Guide-
tion Under United States
discrepancy. But it is
reveal the source of the
Should Courts Account
lines Section 2T1.1:
any
ultimately
consequence, given
of
that
no
Legitimate
Deductions
But Unclaimed
for
$200,000 has
and
tax loss between
Sentence?, 34
Calculating a
When
Defendant’s
under the USSG.
the same effect
(2005) (discussing merits of
U.L.Rev.
Sw.
legitimate
un-
allowing
consideration
adopted by a num-
Spencer’s logic has been
7.
deductions).
See,
e.g.,
States v.
ber of other circuits.
Cir.2010);
(9th
Yip,
592 F.3d
that
persuaded
we
the defendant
rather than the actual loss to the
ment”);
Delfino,
establish an entitlement to
v.
failed to
United States
F.3d
Cir.2007)
the unclaimed deductions.8 We therefore
“tax
(holding
loss”
that
squarely
did not hold
unclaimed de-
refers to the
lоss to
Govern-
“intended
ment”).
by
can
logic
ductions
never
considered
These circuits take
a
this
court.
step
concept
further and conclude that the
tax
categorically
intended
loss
does not
here. Al-
We likewise refuse
do so
allow for consideration of
deduc-
unclaimed
a
though
bright-line
forbidding
rule
after-
disagree.
tions. We
of unclaimed
the-fact consideration
deduc-
easily administrable,
appealing
accept
tions
and
Even if we
that
2T1.1 is
direct-
§of
plain language
loss,
2T1.1 does not
ed at
tax
intended rather
actual
categorically prevent a court from
in proposing
consid-
does not follow that
a more
determination,
ering unclaimed deductions
its sentenc-
may
accurate
defendant
Instead,
ing analysis.
§ 2T1.1 directs
never benefit
deductions
he
courts to calculate the
loss that was the
could have claimed on the false tax re-
“object
We,
course,
the offense”—“the loss
agree
Spencer
turns.
would have resulted had the offense
been
other circuits that where a defendant
successfully
Thus,
completеd.”
“object
estimate,
support
offers weak
tax-loss
by
the offense” refers to the “amount
nothing
requires
the Guidelines
a sen-
underreported
tencing
defendant]
engage
[a
the “nebulous
fraudulently
liability
his tax
potentially
stated
his
complex
spec-
exercise
Chavin,
return.” United
ulating
States
about unclaimed
deductions.”
(7th Cir.2002).
Interpreting
v. Yip,
(9th Cir.2010).
language,
some other circuits have
But where defendant of-
held
2Tl.l’s language requires
convincing
courts to
fers
proof
the court’s
—where
calculate
the tax loss the
complex—
defendant
exercise is neither nebulous nor
when
intended
he or she filed the fraudu-
nothing
prohibits
in the Guidelines
a sen-
lent return —and not the actual
tencing
considering
court from
evidence of
See,
by the government.
e.g.,
suffered
id.
unclaimed
analyzing
deductions
defen-
(explaining
“object
of the
offense” dant’s estimate of the
suffered
Indeed,
(as
means “the attempted
government.9
or intended
a defendant
though
Spencer
Even
we discussed
deductions unrelated to
at issue.
offense
case,
whether district courts
account for un-
example,
For
in this
thе district court
loss,
calculating
claimed deductions when
permitted
would have been
to consider Hos-
ultimately rejected
the defendant’s tax-loss
payments
kins’s evidence of commission
estimate because
supported
escorts,
but
Guidelines would not allow
competent
"scintilla of
evidence.”
her to account for unclaimed deductions for
explained
"post
at 1369. We
the defendant’s
peripheral
expenditures
unrelated
Com-
self-serving
hoc
pur-
of the
characterization”
("[D]e-
panions.
Yip,
As an initial we find the (“[T]ips employee received an in the court did err district when it included of his employment course shall be consid- Compan escorts’ commission payments ered employ- remuneration such statute, By ions’ income. gross “gross in ment.”); 3121(12) (tips see also id. come” “all income from includes whatever part employee’s considered of an wages 61(a). source derived.” See 26 U.S.C. income). company’s and not a According- this, Recognizing explained we have ly, tips income, any because are not por- “the ‘sweeping scope’ [gross of this in Companions’ unreported tion of receipts ... repeatedly section has been come] em tips derived from should not have been Court,” phasized by the Supreme “any included in company’s gross total in- gain gross constitutes income unless the come. taxpayer demonstrates that falls within a however, problem, is that Hoskins specific exemption.” Brabson v. United did not raise argument this before the States, (10th Cir.1996) court, and thus there is a minimal omitted). (quotations expansive Given this factual elucidating record the amount of definition, we have no reason doubt the tips by Companions’ received escorts. We district court’s conclusion that commission tipping know escorts was common- payments part to escorts Compan place, but we know little else. For exam- gross regardless ions’ of the ar income— ple, size, average tip we do not know the rangement the company had with its es paying how often customers with credit course, corts. Of Hoskins could have tips cards included the in their credit-card claimed deductions for cash commission payments instead of tipping in cash. escorts, payments to but as explained others, knowing Without these facts and above, the district court did not err in much, any, cannot how if estimate refusing to proposed account for her un unreported-income million figure in calculating gov tips. was derived from Moreover, We can envision ernment’s tax loss. it is telling scenarios where little or none of authority Hoskins cites no the unre- stating that ported tip-based. commissions that are income was kept by collected and For exam- ple, nearly agents business’s if all do constitute credit-card customers cash, tipped income the business. See doubling then the total Baum, Cir. receipts yield credit-card a reason- note, however, required We pay payroll and was taxes on its required employee 3121(a) to withhold tip §§ income and escorts' income. 26 U.S.C. Security tip reported, Social and 6053. prostitution. We review specifically, cash gross income from able estimate Chavez-Diaz, Further, error. for clear transactions. wheth- notes, does not indicate the record F.3d at 1225. sufficiently por- large tips er constituted assertion, Contrary to Hoskins’s *13 income unclaimed Companions’
tion of ample finding factual was based on court’s pushed tax would be that the such Indeed, in record. the court evidence $400,000 figure threshold under below —a testimony that escorts heard do not know. simply We the Guidelines. in sex acts as a matter of common engaged gov- because the And of that —and because regard, In a witness stated practice. this impetus develop ernment hаd no referred to escorts as that the district point record on this before in sex engage “liberal” who were known say court cannot the district court —we id.; R., acts clients see also Vol. [See with accepting in plainly erred 683.], II, and that Hoskins would have at calculation. ment’s tax-loss “naive” not to know the escorts en- been Moreover, dem even if she could R., I at gaged prostitution. in Vol. can plain, onstrate error that appropriately district court found The plain “Under the prejudice. not establish facts others these established standard, we when ... error reverse preponderance of evidence more that, but probability is a reasonable there $10,000 in- unreported than of Hoskins’s claimed, of the the result for the error activity. come derived from criminal This have been different.” proceeding would clearly was not erroneous. finding Mendoza, Cir.2008). Hoskins’s sentenc III. Conclusion was 51 to ing range under Guidelines above, we For reasons discussed Even if the court had calculat 63 months. AFFIRM conviction and sen- Hoskins’s $200,000, than to be less ed her conclusion, rеaching In we find tence. this however, sentencing range Hoskins’s 2T1.1, § sentencing under USSG 41 months. Be would have been analyzing court suffered of 36 months cause the court’s sentence consider evidence of range, lower we find no was within this a defendant’s unclaimed deductions. prejudice. sum, has In not satisfied BRISCOE, in concurring Judge, Chief prongs plain error review. dissenting part part. majority’s opin- join portions I of the Sentencing C. conviction, affirming the dis- ion challenges the Finally, Hoskins finding regarding trict court’s ultimate enhancement for sentencing district court’s loss, and the district amount report, of income derived failing to sources application U.S.S.G. court’s activity. from Under USSG criminal 2Tl.l(b)(l) I respectfully § enhancement. 2Tl.l(b)(l), the defendant failed to “[i]f portion opinion from the dissent correctly identify report or to the source of unnecessary majority which the takes $10,000 any from exceeding year step announcing permitting a rule de- activity, offense level in [the is] criminal in future cases to offer deductions fendants by 2 levels.” The district crease[d] actually in order did not claim that more than made a factual “a more accurate determination unreported income establish of Hoskins’s 2Tl.l(a). (less 1%) illegal activity— of tax loss” under U.S.S.G. arose upon We not called case the time the fraudulent tax return was and, reach a consequence, this issue I filed. Further, required
would
reach it.
if
majority
our
views
discussion
it,
prior
I
side with our
reach
own
Spencer,
reject
where we
a defendant’s
precedent
majority
and the vast
our
entitlement to retroactive deductions when
sister circuits who
addressed the is-
2Tl.l(a)
computing
loss,
as dictum.
sue.
I do not think
in Spencer
the discussion
readily
can
ignored.
Spencer,
be so
majority’s
I
agree
conclusion
recently
noted
the Second Circuit had
not err
court did
when it
held that
“employ ‘legiti-
*14
defendants could
accepted
evidence re-
mate
but unclaimed deductions’
calculat-
loss,
tax
garding
that this determina-
ing
loss,”
questioned]
but “[w]e
this
tion
to uphold
is sufficient
the calculation
conclusion.” Id. at
(quoting
1368
United
of Hoskins’s
level.1 The
base offense
ma-
Martinez-Rios,
v.
States
143 F.3d
jority
hypothetical
then discusses the
case
(2d Cir.1998)).
specifically reject-
We then
a
in which defendant somehow offers “con-
ed the interpretation
phrase
“a
vincing proof’ of the tax return she would
more accurate determination of
have filed had she known that she would
adopted
loss” which
now
by
majori-
is
caught
later be
and prosecuted for tax
ty:
atOp.
evasion.
1094-95. Because the
sentencing guidelines
The
simply au-
question
answer to the more abstract
pre-
thorize a court
presumptive
to avoid the
sented “makes no
difference to
out-
tax rates
aif
“more accurate determi-
come of the case
...
before us
we need not
nation of the tax loss can be made.”
Valley
[should] not decide it.”
Forge
We
do
not
interpret
[U.S.S.G.
Partners,
Ins. Co. v.
Mgmt.
Health Care
2Tl.l(c)
(A)]
Note
as giving taxpay-
Ltd,.,
(10th
Cir.2010).
616 F.3d
ers
opportunity
second
claim de-
to
restraint,
all,
“Judicial
after
usually means
ductions after having been
convicted
must,
answering
questions
we
tax fraud.
It must be remembered
those
can.”
However,
we
Id. at 1094.
that, in tax loss calculations under the
majority
it,
because the
chooses to discuss
sentencing guidelinеs, we are not com-
my
I write
express
disagreement
with a
puting an individual’s tax liability
as
will,
view,
my
rule that
greatly and
Rather,
done
a traditional audit.
improperly complicate sentencing in tax
merely assessing
the tax loss result-
cases.
I would
our prior
adhere to
state-
ing from the
manner
which
de-
ments in
v. Spencer,
complete
fendant chose to
his income
(10th Cir.1999),
F.3d 1365
and reiterate
tax returns.
that a
defendant
not attempt
adjust
(citation
omitted).
amount of the tax
by
proposing
Id.
Although this state
deductions that
actually
she did not
claim ment was an
upon
alternative basis
which
majority
circumstances,
1. The
addresses the issue because
under some
for a
de-
criminal
government argues
district court
advantage
hypothetical,
fendant to take
un-
n
considering
erred in
Hoskins's unclaimed de-
sentencing,
claimed deductions at
the Op.
ductions. See
at 1092-93 n. 4. The fact
this case did not err—much less
party
argument
that a
raises an alternative
clearly err—when it evaluated the evidence
does not mean we are
bound
address it. In
and found
that Hoskins's
loss was more
case,
government argued
both that a
$400,000.”
15;
Aple.
Br. at
see also
point
defendant cannot
to unclaimed deduc-
Aple. Br. at 20-23.
tions
legally possible,
"even if it were
Surely if
2T1.1 tax loss cannot be re-
ruling because
the district court’s
to affirm
support
by
pay-
the de
subsequent
no evidence
duced
the defendant’s
there was
deductions,
at
id.
taxes, §
proposed
fendant’s
2T1.1 tax loss cannot be
ment
rejection
statement
clear
proffered
unclaimed deductions
reduced
majority
advances.2 “Alter
rule the
now
after
in an unfiled return
conviction.
this, providing
as
rationales such
native
Five other circuits have also concluded
for the Court’s
grounds
further
do
cannot
defendant
reduce
ordinarily cannot be written off
disposition,
§ 2T1.1 tax loss with unclaimed
U.S.S.G.
Corp.,
v. Sure Foot
as dicta.”
LC
Surefoot
Yip,
See United States v.
deductions.
(10th Cir.2008).
1236, 1243
Cir.2010)
(9th
(“We
hold
F.3d
calculation is to
goal of a
2T1.1 does
entitle
defendant
from the
“resulting
the tax loss
assess
him
charged
the tax loss
to reduce
defendant chose
manner
legitimate,
potentially
amount of
but
complete
Spencer,
his tax returns.”
unclaimed,
if
deductiоns even those deduc-
of a defendant’s
scope
1368. The
at
offense.”);
tions are related to
at
point
tax evasion is determined
Phelps,
States
*15
filed,
is
not after the
which the return
curiam)
Cir.2007)
(holding that
(per
charged
convicted. The
defendant
could
reduce the tax loss
defendant
not
majority’s statement that “the
security
a
taking
tax deduction that
social
gains
a
supposed
reap
windfall
as
is not
return);
he did not claim on the false
evasion,”
1095,
atOp.
tax
has no
result of
468,
Delfino,
v.
510
United States
F.3d
473
issue,
are
on
instant
where we
bearing
(“The
(4th Cir.2007)
simply
law
does not
on the
to determine tax
based
asked
require
engage
the district court
actually
defendant
filed.
tax return the
[speculation as to what deductions would
in the fraudulent
The tax
embodied
allowed], nor
have
does
entitle the
been
necessarily
is not
amount that
return
they
Delfinos to
benefit of
lost
government actually
in revenue
might
they
have claimed now
stand
could ulti-
the amount that
defendant
evasion.”);
of tax
convicted
pay,
be ordered to
because
mately
“[t]he
(7th Cir.2002)
Chavin,
666,
678
v.
by any payment
is not
of
reduced
(holding
of tax loss “ex-
that the definition
subsequent
the tax
commission
2Tl.l(c)(5).
deduc-
cludes consideration
unclaimed
offense.” U.S.S.G.
position.
government's
majority
government’s
states the
The
2. The
relies on
argument
repeatedly
Spencer
cites
ment in its brief
concession at oral
argu-
rejection
very
(discussing
of the
tax-loss
Op. at
n. 8
treats our
case. See
1094
dictum,
making,
language
not as
government’s
that the
ment Hoskins
now
concession
First,
dicta).
holding
Aple. Br. at
par-
I
but as
of the case. See
Spencer was
note
a
a
8,
("In
rulings
Spencer,
interpretation
prior
16
United States v.
this Court
ty’s
of our
is not
argument
expressly rejected
Nat’l
v.
Hoskins now
U.S.
Bank Or.
determinative. Cf.
Inc.,
("Hoskins
Am.,
makes.”),
attempts
escape
Agents
Indep. Ins.
508 U.S.
(1993)
(“Spencer
Spencer's holding____”),
17-18
113 S.Ct.
124 L.Ed.2d
(''[T]he
'the
that was the
Appeals
holds that
total amount
Court of
acted without
object
based
accept what
ef-
of the offense' must be calculated
impropriety
refusing to
did,
law.’’);
actually
question
on
the defendant
...
not
stipulation
a
a
what
fect was
Charles,
might they
what
could have done or
United States v.
F.3d
done.”),
("[Tjhis
("[T]he
Sрenc-
Cir.2009)
holding in
Court's
conces-
party's posi-
to its
that there
dispositive
a
er
not limited
statement
is not
because
sion
'competent
in the record
was no
evidence'
in a case ... does not dictate
mean-
tion
(internal quotation
'more
determina-
ing
that would allow a
accurate
a federal
law.”
”).
Second,
omitted)).
majority
I
tion of the tax loss to made.’
think the
mis-
Clarke,
tions”);
escape
a
allow defendant to
the full conse-
see also United States
(hold-
(11th Cir.2009)
return
quences
the defendant chose
not
ing that the defendant was
entitled
to file.
calculated
on a
have the tax loss
based
majority’s
The
in part
decision is based
actually-
than the one he
filing status other
that,
on the idea
at the
time
false
and that
district court did
“[t]he
used
filed,
legally
return was
the defendant
the tax
computing
err in
loss based on
a
in-
owed
certain amount
taxes which
filed,
actually
return Clarke
fraudulent
cluded unclaimed deductions. This is a
not on
tax return Clarke could
fiction; deductions do not reduce
one’s
not”).
have filed but did
liability
actually
unless
claimed.
of these cases from our
reasoning
The
Equally
troubling,
majority’s
rule
majority’s
sister circuits is sound. The
turn a sentencing
invites defendants to
essentially
ruling
allows the
defendant
hearing
a tax
into
audit and the district
defendant,
by permitting
“do over”
court into a tax court tasked with deter-
conviction, to
prepare
hypothetical,
after
mining
proposed
whether the deductions
return which
de-
substitute
minimizes the
at sentencing would have been
when
viable
hypothetical
liability.
fendant’s
actually
the defendant’s return was
filed.
might
fact that the defendant
have done
Martinez-Rios,
(criti-
with the affirming When Hos- ing that evolution not comport does kins’s conviction for tax evasion violation majority’s. previous the The version of § of 26 U.S.C. majority the con- guideline tax the defined loss as “the that signature cludes on the (A) greater of: the tax total amount of that false return the was affirmative act of tax taxpayer the evaded to attempted for escape evasion which “she cannot now evade; (B) the ‘tax loss’ defined However, liability.” Op. criminal at 1091. turn, § § 2T1.3.” In 2T1.3 defined tax when reviewing the sentence for imposed by as percent “28 of the amount which act, this criminal the majority shifts gears greater gross income permits over,” an and taxable after-the-fact “do understated, plus concluding percent was we should for consider sentenc- ing of the purposes hypothetical tax that total amount of return false credits did not serve against as basis for her criminal tax.” The income- cоnviction. majority’s The new rule would based calculation was an alternative meth- Further, majority’s approach per- 3. hypothetical would fered tax returns in this case mit a defendant to claim deductions to which because "it was too late to submit amended longer she is no entitled Op. because the time returns to IRS.” at 1088. It was too period amending for ex- her tax return has late because the Hoskinses not choose to pired. majority timely The that of- states file amended or truthful returns. tax offenses.” application increased deterrence calculating loss. The od of C, U.S.S.G.App. 2T1.1 Amendment previous to this version *17 tax that the minimum amount of than the deductions, inevitably must at- could owed at the possibly defendant actual tempt to calculate the total language, “[t]he time. The old Why at stop loss. unclaimed de- revenue taxpayer tax that the evaded amount of relating specific to the offense? ductions evade,” ac- sounds more like attempted honest, to determine what an goal If the loss than “the tual revenue have done tаx-minimizing taxpayer would object loss was the amount of legally what owed determine Chavin, offense.” (which the court goal becomes when plausible application (finding deductions), I would unclaimed entertains the new tax-loss note was deleted “because compelled that courts would be think specifically excludes consider- definition exemptions, deduc- possible all consider on its face ation of unclaimed deductions and tax credits. tions object by defining ‘the reasons, join I cannot For ”). Further, these I in the note offense.’ per- the-majority’s opinion portion also 1993 amendments Commission unclaimed de- proffer provide “to mits defendants adopted a revised tax table Further, be. willfully filing a and some deductions offense 4. if the offense is return, how un- I fail see some tax return. false tax relate All the deductions to the would be related claimed deductions under in order to reduce duetions § 2T1.1.
U.S.S.G. America,
UNITED STATES
Plaintiff-Appellee, Craig COOPER,
Michael Defendant-
Appellant.
No. 10-3105. of Appeals, States Court
Tenth Circuit.
Aug. 10. The Notes 2T1.1 make reasonable added). require (emphasis support. They loss” Id. further "tax available facts." Moreover, “determining applicable the tax attrib- be the same rules "determined offense, sentencing should use as determining any factor.” utable to court other (c) 2T1.1, many methods in subsection Application 1. Accord- set forth USSG Note given necessary commentary as are ingly, the "amount of in circumstances where uncertain,” particular Id. may case.” "sim- circumstances of tax loss
Notes
notes to interpretation against to 2T1.3 cuts guideline majority’s “The refers stated: minimum standard for tax greater an alternative deterrence offenses provide goal loss, on per- which based it reduce the sentenc- greatly for the will because amounts of certain centage of the dollar range who could have ing for defendants filed in returns made misstatements if they had filed truthful taken deductions may This standard taxpayer. alternative tax returns. determine, make and should be easier nine Finally, puzzled by footnote I am taxpay- of whether irrelevant issue opinion, “empha- majority’s adjustments offsetting er was entitled permit ... 2T1.1 does not sized failed to claim.” that he benefit from deductions unre- defendant to Sentencing Commission atOp. offense at issue.” lated loss to “the changed the definition why I fail to see should matter n. 9. loss that was the total amount of tax loss is are the unclaimed deductions re- whether (i.e., the object of the offense fact, or not.4 In lated the offense had the offense been have resulted permit more unrelat- might make sense The Commis- successfully completed).” precisely because ed deductions application note dis- also deleted sion and, thus, part not to the offense unrelated The note was deleted be- cussed above. to be evasion scheme addressed relevant, longer cause it no States, sentencing. Clark United Cf. fore- explicitly rule the] order to “delete[ (“Some (8th Cir.1954) of unclaimed offset- consideration closing deductions in a the failure claim times atOp. Yip, 1096. See ting adjustments,” taxpayer’s part well return at 1041. I would conclude up unreported income to cover his scheme change language supports deter- creating suspicion a matter of tax loss that was mination return.”). of his Once a district the face “object something of the offense” other hypothetical begins entertaining un-