*1 Rather, Id. at 882. The Corat answered the trial evidence is di- senteeism. ruling employer negative, “[t]he Teahan was rectly to whether addressed (De- knowledge not abuse at times could have been motivated engaging in substance 8, February not it cannot claim that it did have and now cember 1988) eoncededly had employee fired for nondiscrimi- April when Further, hardly reason,” doing natory although so. it would stopped id. at the em- justice to rule that be- ployer might the ends be entitled to diminition serve some transparently false testimo- remedy employee, Teahan’s of the afforded the id. at cause hearing concerning ny at the March 1988 885-87. prompted Smith to be log book incident In this Metro-North did skeptical anything Teahan
justifiably about psychiatric testimony offer its an claimed, link including between the asserted alternative, “legitimate” motive for dismiss Teahan’s historic ab- substance abuse and ing It offered this evidence Teahan. senteeism, Metro-North is therefore liable prove had that its decision dismiss Teahan Act. for a violation of the “Sec- to Teahаn they under all as the facts reasonable basis employer’s] simply [an insures tion 504 of the As we existed at the time dismissal. handicapped treatment of even-handed I, stated Teahan issue “whether standards [employee] who meets reasonable qualified’ employee ‘otherwise as of is she be discriminated that he or will not so forward-looking and date of termination handicap.” solely of the against because employer to how the enables the consider Doe, 775. employee perform compаred to non- will accordingly reject claim that Teahan’s We handicapped F.2d at 521 individuals.” 951 completely had dismissed the Metro-North 776). Doe, (citing F.2d at any link Teahan’s his- possibility of between necessarily pre expert testimony at trial was abuse, and his substance toric absenteeism Accordingly, the rule announced dictive. could not the result that Metro-North application McKennon has no here. concerning have made “reasoned decision” of a recurrence of absenteeism likelihood Conclusiоn resulting from abuse. substance af- judgment of the district court is firmed. Expert Testimony. B. The noted, previously
As the district court expert testimony regarding the
entertained of substance abuse
likelihood of a recurrence findings adverse to
by Teahan and made testimony. premised upon that
Teahan so, doing contends that in
Teahan
Supreme Court’s re
contravened the
court
America, Appellee,
UNITED STATES
teaching in
v. Nashville
McKennon
cent
—Co.,
Publishing
Banner
dis-
grounds. *2 Division, Justice, Department
Tax Wash- counsel), DC, ington, Appellee. GRAAFEILAND, Before: MINER VAN *3 CABRANES, Judges. Circuit MINER, Judge: Circuit ap- Defendant-appellant Julius Klausner peals judgment from in the United a entered for Dis- States District Court the Southern (Brieant, J.), following a trict of York New trial, convicting him of four counts of evasion, in attempted of 26 tax violation four counts of willful failure to U.S.C. returns, file tax violation of 26 U.S.C. assisting of and 19 counts preparation tax of false violation 7206(2). court of U.S.C. The district a of sentenced Klausner to 33-month term imprisonment, three-year super- a term of release, special of a vised a fine appeal, assessment of On Klausner $1250. its contends that the court erred assisting charge on as to attempted counts of and that tax evasion was insufficient. For the reasons follow, judgment we affirm district court.
BACKGROUND Klausner, 1980s, early Beginning in the (“CPA”), engaged public certified accountant preparing tax re- business of corporate turns for both individual and for the clients. total tаxable income His $640,- years through 1989 was almost over a total owed of giving rise to $190,000. However, failed to time- Klausner ly file tax return for of those an income timely years. April In he filed request of time to file his for extension return; form, falsely request in that (Brian Devita, City D. R. New York James not owe tax for 1986. stated that he did Linder, Hugel, dayman & Paul S. Rosen- only payments Klausner made estimated tax counsel), berg, City, York for Defen- New 1986,1987, years of the tax for each $3000 dant-Appellant. pay- no He made estimated and 1988. Division, Wehner, Attorney, Tax Karen year. ments for the 1989tax Justice, Washington, Department of DC White, Attorney Revenue (Mary On October Internal Jo (“IRS”) York, special agents came of New Loretta Service the Southern District General, him place business to Attorney Rob- Klausner’s Argrett, Assistant C. investigation their of his Lindsay, Heehtkopf, Attorneys, in connection with E. Alan ert pay Spe- tax returns. Klausner’s clients were addi- to file income IRS failure Agent Frederick Stranahan informed cial tional taxes. subject of a crimi- Klausner that he was indicted On October him his investigation nal and read Miranda attempted on four counts tax evasion and rights. During questioning, four of willful failure to file a tax counts had not filed his own tax stated that he govern- return. December On through 1989 returns for the tax superseding ment filed indictment regard procrastination. due to his counts, charging as- added Klausner with scope practice, Klausner told Strana- sisting preparation of the false tax prepared approximately han that he 250 to of 19 of returns his clients. year per 300 individual income tax returns *4 Klausner’s trial commenced in December fact, years during In the for his clients. agents of 1994. and several of Klaus- IRS prepared through Klausner had during four-day the tri- ner’s clients testified 471, 616, individual income tax re- and 758 - addition, government In al. both the and turns, ques- respectively. Stranahan also experts testify Klausner called medical expected regarding tioned Klausner his regarding mental Klausner’s condition liability. Klausner stated based on the time of the At the of the offenses. close already payments estimated tax had made trial, jury the district court instructed the on salary, withholding on his wife’s
.and
assisting
prеparation
the 19 counts of
in the
expect
any
did not
to have
additional
you
of false tax returns as follows: “If
find
However,
liability.
Klausner owed taxes to-
any
that the itemized deductions claimed on
$190,000
years
for
talling more than
through
of the tax returns listed in Counts 9
through
Klausner also stated that he
1989.1
false,
you
27 are
then
will find that such
adjusted gross income
and his wife had total
returns are false as to a material matter.”
$100,000
fact,
year.
of about
In
their ad-
justed
significantly higher
jury
On December
gross
was
convicted
on
years.
all 27 counts and he was sen-
the 1987to 1989tax
July
tenced
the district court on
Stranahan,
with
Klaus-
After his interview
appeal
This
followed.
began
for
ner
to file his income tax returns
years
through
the tax
1989. On Febru-
DISCUSSION
return,
ary
filed his tax
year.
along
payment,
with a
for the 1986 tax
appeal,
On
Klausner contends that
con-
weeks,
During the next several
he filed his
assisting
prepa-
viction on 19 counts of
returns, along
payments,
income tax
with
for
ration of false tax returns should be over-
1987,1988,
years
the tax
and 1989.
argues
turned. He
that
the district court
charging
erred in
if
that
it found
spring
began
In
IRS
that the itemized deductions on the tax re-
audit the income tax returns of Klausner’s
false,
turns were
then the returns were false
that these returns
clients.
IRS found
as to a material matter. Klausner also
included itemized deductions for charitable
claims that there was insufficient evidence to
expenses
and business
contributions
support his conviction on four counts of at-
or
were
either nonexistent
overstated.
tempted
reject
tax evasion. We
these con-
who testified at trial indicated that
Clients
tentions.
very
spent
little time discuss-
Klausner had
ing
with them and had not
their returns
Jury Charge
Materiality
I.
on
Under
specific
regard
asked them for
information
7206(2)
Instead,
to the itemized deductions.
Klaus-
ner had included the false itemized deduc-
Klausner was
convicted under
7206(2)
tions in
clients’ tax returns on his own
assisting
preparation
audits,
clients,
initiative. As a result of the
the IRS
false income tax returns for 19 of his
deductions,
many
disallowed
of the
and
due to his inclusion of false itemized deduc-
$87,160
year, respec-
1. The amount he owed for the
for each
$16,022, $23,-
through
approximately
tively.
1989 was
provides,
tions
their returns. Section
Housing Development and Urban documents, loan in violation of 18 U.S.C. (2) in, [w]illfully ... or aids assists or § 1001.3 The trial court had instructed counsels, procures, advises the prepara- or government required under, presentation tion or connec- alleged false were statements under, arising tion with matter material to the activities and decisions of laws, internal revenue return ... HUD, “[t]he and that issue is or is false as which fraudulent you your is not submitted to decision but material matter ... rather is a matter for the decision at-, court.” guilty felony.... shall be of a (alteration original at 2313 quotation 7206(2), §of In order to establish a violation omitted). “(1) prove: parties agreed in Gaudin that materi- aided, assisted, pro- [the defendant] ality necessary is a element of a cured, counseled, prep- advised or caused the *5 parties agreed violation. Id. The also the on return, (2) presentation of aration and a that “materiality” in definition of this context— the return was or false as to a frаudulent tendency “the statement must have ‘a natural (3) matter, the material and that act of the influence, capable influencing, to or [be] of was willful.” United States v. [defendant] decisionmaking body the of the to (2d Cir.1977). decision Perez, F.2d 1233-34 565 ” (alteration which it was addressed.’ Id. in ease, present in- In the the district court omitted). original quotation and jury materiality of structed the on the issue “If the you follows: find that itemized that, Supreme Court held because the any of the tax deductions claimed on returns Fifth and Sixth Amendments to the United false, through in 27 listed Counts 9 are then “require States Constitution criminal convic- you will find returns are to that such false as jury upon tions to that rest determination According a material matter.” to this guilty every the of defendant is element of charge, materiality ques- the issue of beyond charged, the crime with which he is of that the court had tion law decided. See doubt,” at-, reasonable Id. 115 S.Ct. at Greenberg, v. 735 F.2d 31 Louisiana, (citing 2313 Sullivan Cir.1984) (holding the determination 275, 276-79, 2078, 2080-81, 124 113 S.Ct. 7206(1)2 materiality under 26 U.S.C. is a of (1993)), L.Ed.2d the trial 182 court’s refusal court). of law question for the materiality jury to allow to the determine the allegеd infringed of the the false statements that, under of Klausner concedes the law Fifth and Sixth Amendment defendant’s trial, at the time of his it was this Circuit rights. The reasoned that the decision Court question the correct for the court to decide of were whether the statements material However, materiality. argues the requires in the determination of at least two court’s was erroneous instruction Supreme subsequent subsidiary questions purely of historical light of the Court’s de- Gaudin, (a) made?”; and fact: “what statement was cision in United States v. U.S. Whoever, any jurisdiction provides, matter within the 2. Section relevant any agency department or the United Any person who— falsifies, (1) willfully any knowingly cov- [w]illfully and conceals or ... makes and subscribes document, return, statement, scheme, trick, up by which any or other or a material ers fact, device by false, or is a written declaration contains verified fraudulent or makes fictitious or penalties perjury, that it is made under the representations, uses or makes or statements or any believe to be true and and which does not writing knowing the same falsе or document every as to material matter ... correct false, fictitious or fraudulent state- to contain entry, or ment or shall be fined under this title guilty felony.... be of a shall imprisoned years, five both. more than provides: 3. Section (b) judge” “exception has been agency trying to and that the “what decision was the (e) cases, question: The ultimate have held
make?”.
section 1001
which we
was material
the statement
“whether
must
that it is an element of the crime that
decision,” requires applying
legal
(alteration
jury”
determined
be
abоve)
materiality (quoted
standard
omitted)).
original
quotation
historical facts.
these
at-,
According
at 2314.
In order to establish a violation
Court,
court’s failure to allow
the trial
7206(2),
that a
must
jury
of materi-
to determine
tax return is false as to a material matter.
ality deprived
of his “historical
the defendant
the itemized deductions
...
constitutionally guaranteed right
of Klausner’s
on the income tax returns
jury
guilt
decide
or inno-
demand that
they
if
clients constituted material matters
issue,
every
applica-
includes
cence on
which
computation were essential to the accurate
at-,
law to the facts.” Id.
tion of the
the clients’ taxes.4 See United States
Court, however, recog-
S.Ct. at 2315. The
(“The
Warden,
civil,
that,
cases, as in
“[i]n
nized
criminal
respect
a false
test of
judge
permitted
must be
to instruct the
particular
return case is whether a
item must
on the law and to insist
reported
taxpayer
be
order that the
esti
follow his instructions.”
Id. at
correctly.”
compute
(quota
mate and
his tax
States,
(citing Sparf v.
S.Ct. at 2315
Null,
omitted));
tion
United States v.
294-95,
51, 105-06,
Cir.1969) (same).
Un
(1895)).
L.Ed.
governing
der the statutes
the сalculation of
light
Klausner contends
tax,
the itemized deductions on the
holding in
Supreme Court’s
dis-
income tax returns of Klausner’s clients were
failing
trict court erred
to submit the
computation
essential to the
of their taxes.
*6
materiality
question of the
of the false item-
1,§
According
imposed
to 26 U.S.C.
a tax is
jury.
disagree.
We
ized deductions
on the taxable income of individuals. Under
analysis
Supreme
of the materi-
The
Court’s
§
an individual’s
in
U.S.C.
taxable
HUD,
ality
in
of false statements made to
gross in
come is defined as the individual’s
apply
§
in the
violation of
dоes
deductions, including
come minus allowable
present
Supreme
case. While the
Court’s
itemized deductions. Itemized deductions in
materiality required the
determination of
expenses,
clude deductions for business
un
by
jury
“subsidiary ques-
of
resolution
§
der 26
for char
U.S.C.
and deductions
fact,”
purely
of
historical
the determi-
tions
contributions,
§
itable
under 26
U.S.C.
materiality
present
in-
nation of
ease
recognized
Circuit in
Seventh
Warden
purely
question
of law and was
volved
statutory
of
the effect
this
scheme:
by the
court.
suitable for resolution
district
gross
from
Sinсe deductions are subtracted
Taylor,
States v.
66 F.3d
See United
Cir.1995)
adjusted gross
income or
income to reduce
(stating that “the issue of ma-
liability, they
the ultimate tax
teriality
perjury
and false
are material
[criminal
most
statutes is a
of law for
to the contents of the return. Stated oth-
statement]
(2d Cir.1994)
materiality
(holding
4. This definition of
in connection
that defendant's failure to
with false itemized deductions on income tax
partner's
partner
disclose another
interest in a
returns is consistent with determinations of ma-
teriality
ship tax return was materiаl
had the
because it
previously
that we
have made in other
potential
hindering
verify
for
IRS’s efforts
instance,
contexts under
7206. For
Green-
liability),
partner’s
and monitor the other
berg, we held that
the defendant's fraudulent
-
denied,
-,
cert.
corporate
expenses
of
business
classification
case,
present
any
L.Ed.2d 640
In the
corporate
payments
income tax return
loan
in a
inaccuracies in the income tax returns of Klaus-
underreporting
and his
of his own income in his
disrupt
ner’s clients also would
the IRS’s efforts
personal income tax return were material mis-
ascertain their tax
liabilities.
statements,
potential
they
because
"had the
verify
hindering
efforts to monitor and
the IRS’s
income is defined as "all income from
5. Gross
liability
corporation]
[de-
the tax
and the
[the
§ 61.
whatever source derived.” 26 U.S.C.
32;
wife].”
Mittelstaedt,
fendant and his
735 F.2d at
see also
United States v.
31 F.3d
(second
-,
at 2313-14
al-
erwise,
invariably
will
the deduction
affect
omitted);
original
quotation
teration
liability.
[the
when
taxpayer’s
jury
Taylor,
(stating
F.3d at 255
see also
judge] instructed the
materiality requires a
matters as thаt
the element of
were material
“when
deductions
indictment,
finding,
he did no
it does in section 1001
in the
factual
as
term is used
that de-
element must be submit-
prosecutions,
the obvious fact
more than state
omitted)).
computation
jury” (quotation
of tax lia-
affect the
ted to the
ductions
contrast,
bility.
questions
no such factual
needed to
by
present
resolved
in the
case.
be
added).
(emphasis
F.2d at 37
neces-
Because the false itemized deductions
present
because the itemized
sarily
resulted in inaccurate amounts
taxes
dirеctly affected the calculation
deductions
reported on the clients’ income tax
in the tax returns of Klaus-
taxable income
inevitably
the deductions
made the returns
clients,
necessarily
any false deductions
ner’s
false as to material matter.
Gaudin
computations of their
in inaccurate
resulted
recognized
criminal
“[i]n
Court itself
the false itemized
income. Whether
taxable
cases,
judge
permitted
must
be
minor effects
had substantial or
deductions
on the law.”
U.S. at
instruct
reported,
of taxable income
on the amount
the deter-
to the
addition,
elements of
tively.
found the essential
In
had stated
could have
Klausner
beyond
expect
reasonable doubt.”
tax
the crime
a
he did not
to have
additional
Roldan-Zapata,
F.2d
v.
916
liability, although,
United States
time of his state-
Cir.1990)
omitted),
(quotations
ment,
his taxes owed for the
1397, 113
denied,
940, 111
$190,000. Finally,
499 U.S.
cert.
through 1989totalled over
(1991).
“The
is entitled
L.Ed.2d 453
claimed
his wife had
Klausner
that he and
upon
circum-
inferences from
base its verdict
adjusted gross
approxi-
combined
income of
evidence,
need not
and such evidence
$100,000
while,
fact,
stantial
mately
year,
such
a
every
hypothesis of
possible
have excluded
significantly higher
income was
the 1987
and citation
(quotations
Id.
innocence.”
years.6
pre-
1989 tax
Based on the evidence
omitted).
sented,
found
reasonably
could have
that Klausner
his income tax liabil-
misstated
gov
argues that the
first
made
ity
request
on the 1986 extension
insufficient
ernment offered
intent to
false statements to
IRS with the
constituting at
acts
committed affirmative
evade taxes.
An affirmative
tempted income
invasion.
conduct,
likely
“any
effect of
act includes
Klausner, nonetheless,
this
contends that
or to conceal.”
be mislead
which would
Romano,
case is similar
States v.
United
States,
492, 499, 63
Spies v. United
317 U.S.
(2d Cir.1991),
held
other appears to be. Hence- first as it at
drastic
forth, submitting the issue of have to trial courts will jury, our term, easily accom- task not
define many are that probabilities
plished. assign- of this difficult carrying out
cases the judicial closely resemble
ment will so materiality that the Su-
determination outlawed as to accom- now has
preme Court substantially result. the same
plish York, by of New
PEOPLE of the State VACCO, Attorney General of
Dennis C. York, Plaintiff-Appel of New State
lee, NATIONAL; RESCUE
OPERATION Tucci; Terry; Youth for
Randall Keith Pre-Born;
America; Missionaries Does; Foreman;
Joseph and Jane John B.O.R.N., Mahoney; Defen
Patrick
dants,
Raymond Mylott, Respondent, Brusstar; Weslin; Norman John
Daniel Biltz; Mary Gannon;
Dunkle; E.J. L. Henry; Hagen; M. Michael J.
Carol Hinke; Hudson; Ethel Colin
Clarence Sauley; Yellico;
Norton; Lola Edward Yonan, Respondents-Appellants,
James America,
Creditor-Appellee, Broderick, Esquire, Appellant. J.
John. 94-7947, 94-9039. Dockets
Nos. Appeals, States Court
Second Circuit.
Argued Oct. 29, 1996.
Decided March