United States v. Araujo

43 F. App'x 21

Opinions

MEMORANDUM

Footnotes

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Maria Lilia Araujo (“Araujo”) appeals her jury conviction and sentence on five counts of federal tax evasion under 26 U.S.C. § 7201. The district court had jurisdiction pursuant to 18 U.S.C. § 3231, and we have jurisdiction over Araujo’s timely appeal under 28 U.S.C. § 1291. We affirm. Because the parties are familiar with the factual and procedural history of this case, we do not recount it here.

The essential elements of federal tax evasion under 26 U.S.C. § 7201 are: “(1) the existence of a tax deficiency; (2) willfulness; and (3) an affirmative act constituting an evasion or attempted evasion of the tax.” United States v. Marashi 913 F.2d 724, 735 (9th Cir.1990) (internal quotation marks and citation omitted). On appeal, Araujo presents two arguments, challenging the sufficiency of the government’s evidence of her willfulness and the existence of a tax deficiency.¹ Sufficient evidence exists to support a conviction if, “viewing the evidence in the light most favorable to the government, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” United States v. Wright, 215 F.3d 1020, 1025 (9th Cir.), cert. denied, 531 U.S. 969, 121 S.Ct. 406, 148 L.Ed.2d 313 (2000). We find that the government’s evidence was sufficient to sustain her conviction on the five counts.

Citing Edwards v. United States, 375 F.2d 862 (9th Cir.1967), Araujo first argues that the government’s evidence was inadequate to show that she intended permanently to evade, rather than merely to postpone, payment of the federal taxes of her clients, Jess and Oralia Ortega (“the Ortegas”). In Edwards, we held that the willfulness requirement of 26 U.S.C. calls for “a specific intent to evade or defeat the tax or its payment,” which “contemplate^] an escape from tax and not merely a postponement of disclosure or payment.” Edwards, 375 F.2d at 867. We concluded that the Edwards defendant, a tax attorney, did not intend the permanent evasion of his clients’ taxes, but only “to take advantage of the time lag in Government investigation of delinquent returns to tide him over during a period of personal financial hardship.” Id. Accordingly, we reversed the defendant’s conviction under 26 U.S.C. § 7201 for insufficient proof of willfulness. See id.

Araujo’s argument fails because the government’s evidence was enough for a rational trier of fact to find that Araujo intended permanently to evade, rather than merely to postpone, payment of the Ortegas’ federal taxes. The government’s evidence shows that Araujo took for herself payments from the Ortegas that they intended for the tax authorities. The record is devoid of any evidence indicating that Araujo planned ultimately to send the Ortegas’ payments to the Internal Revenue Service (“IRS”). In contrast with Edwards, there is no evidence that Araujo obtained extensions for the Ortegas’ federal tax payments and thereby disclosed to the government that a return for the Ortegas was due. See id.

Moreover, Araujo’s own evidence does not support her contention that she intended only to delay payment of the Ortegas’ federal taxes. At trial, Araujo stated that the Ortegas gave her the checks at issue in the five appealed counts as loans, not as payments of their federal taxes. Araujo declared that whenever she repaid the loans, the Ortegas, rather than she, would be responsible for making their tax payments. Thus, Araujo’s own trial testimony fails to substantiate her theory on appeal that she sought merely to postpone payment of the Ortegas’ taxes.

Finally, evidence of Araujo’s dire financial situation suggests that she could not reasonably have believed that she would see herself through her difficult times by filing tardy tax returns for the Ortegas. In Edwards, we cautioned: “One pursuing a path such as that of [the defendant] might eventually fall so far behind that no reasonable man could believe that he would ever catch up.” Id. We found, however, that the Edwards defendant’s “straits had [not] become that serious.” Id. The record in this case indicates that the same was not true for Araujo. Araujo filed for bankruptcy after paying the Ortegas a mere fraction of the total loss that they incurred as a result of Araujo’s tax evasion scheme. Given this evidence of Araujo’s difficult financial predicament, it is reasonable to infer that Araujo intended permanently to evade, rather than merely to postpone, payment of the Ortegas’ federal taxes. Thus, we reject Araujo’s argument that the government’s evidence was insufficient under Edwards.

Araujo next argues that the government’s evidence on the five counts that she challenges was insufficient to show the existence of a tax deficiency. To prove a violation of 26 U.S.C. § 7201, the government must show the existence of a tax deficiency on the date that the taxpayer should have filed a return. United States v. Voorhies, 658 F.2d 710, 714 (9th Cir.1981). However, the willful and affirmative conduct constituting the tax evasion may occur prior to the failure to file a return when taxes are due. See United States v. Mal, 942 F.2d 682, 685 (9th Cir.1991) (the defendant’s filing of a false and fraudulent tax withholding certificate constituted a sufficient willful and affirmative act for purposes of 26 U.S.C. § 7201). The government’s indictment set forth the five counts at issue in a table that contains columns indicating the count, the taxpayer (the Ortegas), the year for which the tax was due, the amount of tax due, the Ortegas’ check date, and the date on which Araujo either cashed the Ortegas’ check or deposited it into her personal bank account. Pointing to the last column, which indicates when she cashed or deposited the Ortegas’ checks, and omitting any reference to the column that shows the tax years, Araujo argues that the government charged her with committing tax evasion at a time when the taxes were not yet due, and so no tax deficiencies then existed. Araujo contends that, accordingly, the government’s evidence, showing that the Ortegas still owed federal taxes for the years of 1995 and 1996 after the April 15, 1996 and April 15, 1997 dates when the Ortegas should have filed their returns, was insufficient to prove the crimes charged because, Araujo asserts, the indictment charged crimes occurring at an earlier date.

We reject Araujo’s argument because it misconstrues the indictment. The final column that Araujo cites does not allege the dates on which the tax deficiencies arose. Rather, this column shows the dates on which she performed the willful and affirmative acts constituting tax evasion by cashing or depositing into her personal bank account monies that the Ortegas intended for the IRS. As already noted, the required willful and affirmative conduct may occur prior to the existence of the tax deficiency. See id. The indictment indicates the April 15 date on which each tax deficiency arose by reference to the year for which the taxes were due and owing. The indictment charged her with evading the tax “due and owing by the individuals named below to the United States of America, for the tax years listed below .... ” Because the case law defines the date of the tax deficiency as the date on which the tax became due and owing for the particular tax year, see Voorhies, 658 F.2d at 714, the indictment’s specification of the 1995 and 1996 tax years alleged tax deficiencies on April 15, 1996 and April 15, 1997, respectively. Consequently, the government’s evidence of tax deficiencies after April 15, 1996 and April 15, 1997 was adequate to prove the tax deficiencies that the government charged in its indictment.

Further, it is acceptable that Araujo was convicted of multiple counts of evasion for each of the tax years in question. See Cohen v. United States, 297 F.2d 760, 769-71 (9th Cir.1962) (affirming a conviction for tax evasion for tax years 1945 through 1950 when the defendant had previously been convicted of tax evasion for three of those years based on different acts); Norwitt v. United States, 195 F.2d 127, 133 (9th Cir.1952) (disagreeing with the defendant’s argument that “several such separate [tax evasion] offenses may not be committed for the same year”). In this case, each of the three counts relating to the 1995 tax year and the two counts relating to the 1996 tax year is based on a different affirmative act of evasion. These distinctions differentiate the counts.

Because we reject Araujo’s challenges to the sufficiency of the government’s evidence on the five counts of tax evasion, we find no error in the district court’s sentencing determination.

AFFIRMED.

This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as may be provided by Ninth Circuit Rule 36-3.

1

. Because Araujo does not raise the separate legal question discussed by the dissent, namely whether a tax preparer's theft of client monies intended for the Internal Revenue Service properly constitutes tax evasion under 26 U.S.C. § 7201, we do not address the issue. See Paracor Finance, Inc. v. General Elec. Capital Corp., 96 F.3d 1151, 1168 (9th Cir.1996) ("It is well established in this Circuit that claims which are not addressed in the appellant's brief are deemed abandoned.”) (quoting Collins v. City of San Diego, 841 F.2d 337, 339 (9th Cir.1988)).