United States v. William Waller ( 2020 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS NOV 12 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 19-10367
Plaintiff-Appellee, D.C. No.
2:18-cr-00112-JCM-VCF-1
v.
WILLIAM WALLER, MEMORANDUM*
Defendant-Appellant.
Appeal from the United States District Court
for the District of Nevada
James C. Mahan, District Judge, Presiding
Submitted October 14, 2020**
San Francisco, California
Before: FERNANDEZ, WARDLAW, and COLLINS, Circuit Judges.
William Waller appeals the district court’s denial of his motion for acquittal
on two counts of willful failure to file a tax return under 26 U.S.C. § 7203 and one
count of attempt to evade or defeat tax under 26 U.S.C. § 7201. We have
jurisdiction under 28 U.S.C. § 1291, and we affirm.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Panel
1. The district court correctly concluded that venue was proper in
Nevada for the failure to file charges. “Failure to file a tax return is an offense
either at the defendant’s place of residence, or at the collection point where the
return should have been filed.” United States v. Hicks, 947 F.2d 1356, 1361 (9th
Cir. 1991) (citation omitted). This is true even if the defendant is required to file
his return in a state in which he does not reside. Id. The Nevada venue was proper
because Waller resided in Nevada.
2. The district court properly concluded that sufficient evidence
supported the attempted tax evasion conviction, even though Waller did not
receive a notice of tax deficiency for the relevant years. “The elements of
attempted income tax evasion under 26 U.S.C. § 7201 are: (1) willfulness; (2) the
existence of a tax deficiency; and (3) an affirmative act constituting an evasion or
attempted evasion of the tax.” United States v. Kayser, 488 F.3d 1070, 1073 (9th
Cir. 2007) (citation omitted). To prove willfulness, the government must show that
the “law imposed a duty on the defendant, that the defendant knew of this duty,
and that he voluntarily and intentionally violated that duty.” Cheek v. United
States, 498 U.S. 192, 201 (1991). “A tax deficiency exists from the date a return is
due to be filed” and is not dependent on a final assessment by or notice of
deficiency from the IRS. United States v. Voorhies, 658 F.2d 710, 714 (9th Cir.
1981); see also 26 U.S.C. § 6151(a). There was sufficient evidence for the jury to
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conclude that Waller knew of his deficiency and intentionally violated his duty to
pay tax: Waller’s real estate brokerage provided him with 1099 Forms; he had paid
income tax previously; and he had been penalized for filing a “zero” return in the
past.
3. The district court did not abuse its discretion by not admitting into
evidence two video clips of former IRS agents discussing tax law because the
probative value of the videos was outweighed by the risk of unfair prejudice. The
video evidence was “repetitive, only marginally relevant,” and “pose[d] an undue
risk of . . . confusion of the issues.” Holmes v. South Carolina, 547 U.S. 319, 326–
27 (2006) (cleaned up). Because Waller was able to “present the substance” of his
defense by testifying to the contents of the videos and how they affected his
subjective state of mind, the district court’s evidentiary ruling achieved the proper
balance under Federal Rule of Evidence 403 and did not violate Waller’s
constitutional rights. United States v. Waters, 627 F.3d 345, 353–54 (9th Cir.
2010); see also United States v. Bergman, 813 F.2d 1027, 1029–30 (9th Cir. 1987);
United States v. Malquist, 791 F.2d 1399, 1402 (9th Cir. 1986).
4. The district court properly rejected Waller’s requested entrapment by
estoppel instruction because there was no “foundation in the evidence” for the
instruction. United States v. Whittemore, 776 F.3d 1074, 1078 (9th Cir. 2015)
(citation omitted). To succeed under an entrapment by estoppel theory, the
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defendant “must show that (1) an authorized government official, empowered to
render the claimed erroneous advice, (2) who has been made aware of all the
relevant historical facts, (3) affirmatively told [the defendant] the proscribed
conduct was permissible, (4) that [the defendant] relied on the false information,
and (5) that [the] reliance was reasonable.” United States v. Schafer, 625 F.3d 629,
637 (9th Cir. 2010) (quoting United States v. Batterjee, 361 F.3d 1210, 1216 (9th
Cir. 2004)). Waller claimed to have relied on internal IRS records, obtained
through a Freedom of Information Act request, which included a computerized
code that read “Mail File Requirement: 01= Return not required to be mailed or
filed. (1040 not required).” The district court correctly found that single line was
too vague to qualify as the affirmative statement required to establish entrapment
by estoppel. See United States v. Ramirez-Valencia, 202 F.3d 1106, 1109 (9th Cir.
2000) (“To succeed under [the entrapment by estoppel] theory, defendant must do
more than show that the government made vague or even contradictory
statements.”) (cleaned up).
AFFIRMED.
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