*1 571 before the administrative agency. 28 (1984). C.F.R. 542.15 Martinez failed exhaust the ad ministrative made remedies available Bureau of Prisons the time of the filing petition of this for corpus. habeas court, therefore, correctly district dis missed this claim. Tatum v. See Christen sen, 964; 786 F.2d at Green v. Christian- sen, 1397, (9th Cir.1984); 732 F.2d 1400 Smith, Ruviwat v. F.2d at 701 845. Because the makes record clear that Martinez failed to exhaust his administra- Dublin, Cal., Phillip peti- for remedies, evidentiary tive hearing tioner-appellant. necessary. issue was or is See Chua States, Han Mow v. United 730 F.2d at Stergis, Atty., Barbara C. Asst. U.S. Los 1314. Cal., Angeles, respondent-appellee. Finally, there is no reversible error manner in which district assigned magistrate the matter hearing. to a Affirmed. BROWNING, Judge, Chief FARRIS, GOODWIN and
PER CURIAM: prisoner
A federal the dismissal petition his of corpus. for a writ habeas affirm.
We prisoners America,
Federal required are UNITED STATES Plaintiff-Appellant, exhaust their federal administrative reme prior petition to bringing dies for a writ v. corpus habeas in federal court. Tatum RUSSELL, Schooff, James Earhl C. R. Christensen, 959, (9th F.2d 786 964 Cir. Richey, M. and Lawrence 1986); Fendler v. United States Parole Defendants-Appellees. 975, Commission, 774 F.2d 979 Cir. 86-3013, 1985); Miller, Nos. 86-3014 and Anderson v. 86-3015. — (7th Cir.1985), denied, cert. U.S. Appeals, States Court -, (1986); S.Ct. Ninth Circuit. States, Han Chua Mow v. United (9th Cir.1984), Argued Sept. and Submitted 1986. Decided Nov. (1985); Smith, Ruviwat The Bureau of Prisons has established remedy an administrative
by which an prison inmate in a federal may any aspect imprisonment.
seek review of C.F.R. 542.10 Difficulties prisoner experience may in meet-
ing requirements the time for an adminis- appeal
trative properly brought are *2 FLETCHER, FERGUSON, and
REINHARDT, Circuit FLETCHER, Judge: United States dis- Plaintiff trict dismissal of of a court’s counts indictment. The district court 28-count held that the defendants lacked fair notice tax avoidance they developed promoted, schemes and and accordingly they could not will- have fully the statute. We and violated reverse trial. remand for
BACKGROUND developed Frank Forrester tax shelter designed programs to reduce in- taxpayers’ pri- come tax liabilities. Under Forrester’s mary program, “personal con- services tract,” taxpayers would “sell” life their services to Professional and Ser- Technical him, (PTS), entity an by vices created year. per one dollar When taxpayers paychecks from their employers, received endorse the send would checks and PTS, them transferred the checks Dynamics, (IDI), an- International Inc. organization. other turn Forrester IDI in the funds to IDI transferred Credit Union (IDICU), taxpayers which would send the equal percent checks to 90 to 92 original taxpayers’ paychecks. Some purported foreign of these entities to be corporations. trusts or Forrester’s other tax scheme at issue here the “9:1 tax shelter” under which taxpayers purchased “consulting services” Taxpayers IDI. an allegedly Searles, Roger Donald Atty., W. M. Ol- consulting IDI, IDI deductible fee to sen, Paup, Michael L. Lindsay, Robert E. sent immediately taxpayers Dawson, Justice, Dept, Deborah W. tax-free reimbursement check less ten a Washington, D.C., plaintiff-appellant. percent consulting fee. No were Bothwell, Lorello, Thomas & Bothwell performed. ever Christopher Tait, Yakima, Wash., Joseph S. Russell, Defendants James Earhl Jr., Butler, Nappi, Spokane, Brian T. Schooff, Richey and Lawrence were Wash., for defendants-appellees. promotion volved in the and sale of these three, along schemes. These with Forres- ter, deceased, charged now who is variety indictment 28-count with fraud, fraud, judgment” mail and tax evasion viola- under 28 U.S.C. 1291. Unit- ed States v. tions. general Despite the appli- defendants, motion the district On finality requirement, cation of 1291’s dismissed counts of the indict- twelve “[sjection can, does, make it law- ment, finding reasoning that under ful for the ap- take certain Dahlstrom, 713 though peals judg- there no final *3 (9th Cir.1983), According ment.” Id. at 1308n. 10. to the (1984), 80 L.Ed.2d the Eleventh “right Circuit in this to illegali- of the defendants lacked fair notice appeal take an interlocutory ex- [must be] July ty of the tax schemes until 1982 pressly provided in section 3731.” Id. held, Eighth the in a when civil provides Title 18 U.S.C. 3731 in rele- § proceeding, “personal that a services con- part: vant “In appeal by a criminal case an tract”, involved in similar to those this the United States shall lie to a court of case, illegal was an tax avoidance scheme. decision, appeals judgment, from a or order Landsberger, 692 States v. F.2d United of dismissing a district court an indictment (8th Cir.1982).1 any ... as to more one or counts.” Be- government appealed the dismissal cause the district court dismissed 12 of the of the twelve counts. The district court counts, government the is authorized to counts, remaining continued trial on the appeal under satisfying thus the § ruling accruing during that the time the prong. first prong, As to second the the would pendency appeal the be deemed district court order not a judgment is final except as to delay Speedy the Schooff because it excludable under Trial does not dispose remaining of the 16 counts.2 How- Act. ever, quoted we have interpreted por- the tion of expressly providing 3731 as the § DISCUSSION right interlocutory to take appeal in this Appealability 1. situation. See United Marubeni The district court dismissed 12 of (9th Corp., America indictment, 28 counts in the the contin Cir.1980) (court that supplied held § remaining trial pending ued on the counts appellate jurisdiction where district court appeal. prosecute appeal, its To the portion had dismissed one count and had government that “must show it has the suspended pre-trial proceedings on remain- right appeal appealed to order and that the ing pending appeal; counts no discussion of statutory comes within the terms of a 1291’s finality requirement). Following § Marubeni, grant jurisdiction.” juris- we conclude that we have Dior, interlocutory appeal diction to hear the in Cir. case at 1982). bar.3 satisfy prong, To government bring to must be authorized 2. Standard Review appeal under 18 U.S.C. 3731. To satisfy the prong, being second decision The district court “assumed the truth of appealed generally must constitute a “final material each fact set forth the indict- Landsberger "personal only interlocutory appeal 1. involved ser- Schooff. The issue arises contract,” only Richey. vices and did involve the "9:1 as to defendants Russell and in the case shelter.” district court at bar apparently pr^-Landsberger, Order, concluded that At the end of its the district court lacked of the fair notice any stated: "To the that this Court extent has well, the “9:1 tax shelter” as because the district authority government’s entertain motion involving dismissed at count least one interlocutory appeal, for leave to take an only the "9:1 tax shelter.” same is This GRANTED." statement has no provision effect. There is no for district court charged interlocutory 2. We note that defendant Schooff certification of criminal I, 1292(b) analogous regarding in count which was dismissed. The to 28 U.S.C. terlocutory appeals. district court’s order is final as to civil therefore and, applying
ment ruled that 1428. The court accordingly reversed the evidence, Id. at 1429. regardless judgments.
would be unable to sustain its burden with
4. Frank
Forrester’s
Tax
Shelter
respect
to those counts which were dis-
Schemes
missed.” The district court thus ruled as a
law,
holding
matter of
and we review this
The heart of the primary Forrester
de novo.
personal
scheme was the
taxpayers
contract under which
sold their
3. Dahlstrom
PTS,
life services
one of the entities
Forrester,
created
for one
per
dollar
The tax avoidance scheme at
issue in
year.
taxpayers
were allegedly there-
at 713 F.2d
described
1425-
by obligated
paychecks
to transfer
all
Commissioner,
Zmuda v.
and also
According
indictment,
PTS.
to the
the de-
Zmuda
fendants
participants
assured the
appeal
was an
judgment
from a Tax Court
*4
longer
income was no
taxable to them as
disallowing
assessing
deductions and
civil
individuals because PTS owned their pay-
penalties for use of a tax
virtually
scheme
checks.
to the one at issue in the Dahlst-
identical
rom criminal
prosecution.
As this
recognized,
At
court has
guid-
the heart of
“[t]he
ing principle
assignment
the
foreign
scheme were three
trusts to be
income cases
is that
income is
individually by
person
established
taxed to the
taxpayer
each
or
entity, which in
participant.
fact controls
Property
earning
or income
the
was trans-
States,
Johnson v.
United
income.”
among
trusts,
ferred to and
these
698
and
372,
374
eventually
Supreme
taxpay-
transferred
back to the
Court first announced
“gift.”
er
this rule in
transactions,
as a
1930 in
Some of the
Earl,
Lucas v.
Ill,
114-15,
281 U.S.
including
the
50
taxpayer,
to the
241,
Ct.
(1930),
These Commis- allegations in the indictment indi- sioner, participants cate that in the scheme contin- alleged taxpayer The indictment par- that
ued to “earn” their own salaries. The
ticipants
pur-
contracted with IDI for the
illegal
scheme is therefore
under Lucas.
services,”
“consulting
paid
chase of
a fee
Calling the
assignment
scheme an
of life
services,
for the
immediately received a
services rather than
assignment
of in-
equal
percent
from IDI
to 90
of the
change
come does not
the nature of the
paid,
fee
and never
any consulting
received
underlying
acts
in the indictment.
They
services.
told
that
the “fee”
The fact
that
this scheme in
“consulting
for the
services” was tax
purported foreign
volved the use of
trust
substance,
deductible. This scheme lacks
organizations,
particular
and that
and the defendants had fair notice of its
scheme
illegal
had not been ruled
until the
illegality.
Landsberger litigation,
change
does not
assuming
We conclude that
the truth of
Regardless
basic conclusion.
of the enti
allegations
indictment,
in the
defend-
through
taxpayers’
ties
monies were
engaged
promoting
ants were
in
tax
funneled,
personal
the basic
con
schemes,
of which
had
assignment
tract remains an
of income that
fair notice. The district court
in
erred
is
purposes.
ineffective for tax
If it is
granting
pre-trial
the defendants
motions
beyond any
clear
doubt that a scheme is
for dismissal of 12 counts.
illegal
principles
under established
of tax
law,
participants
then
have fair notice of its
REVERSED and REMANDED.
7206(2),
Judge, concurring:
FERGUSON, Circuit
I.R.C.
and the return prepared
Dahlstrom,
filed. See
never
Durst was
Judge
opinion.
I
I
in
Fletcher’s
concur
clarify
in
our
separately
an effort
write
holds,
Dahlstrom
Dahlstrom,
as noted in
its Conclu-
in
decision
sion,
for
advocacy of a
“[p]rosecution
that
Cir.1983),
cluding except Durst, all of the defendants protection granted by Dahlstrom. *6 advocated no did shelters — They more than prepared talk. or false I.R.S.;
fraudulent documents for the
most, they may have counseled such a
preparation. then, opinion, The bulk of the group
dealt with a
people
acts
whose
possibly
“advocacy
could
... direct-
POOLE,
In the Matter of
&.
McGONIGLE
inciting
ed to
producing
or
law-
imminent
DICK, INC., dba Northwest Steel Fabri-
likely
less action ...
or produce
to incite
cators,
Oregon corporation,
an
Debtor.
such action.”