Today, the 9th Circuit Court of Appeal in San Francisco will hear arguments in connection with the 2005 convictions of Irwin Schiff, Cindy Neun, and Larry Cohen.  An objective review of the trial transcript, and of the defendants' appeal brief, shows that the convictions should be overturned for a variety of reasons.  Here are just two examples;

1. The government failed to meet its burden and prove willfulness.  In Cheek v. U.S. (498 U.S. 192, the Supreme Court held 

"Willfulness, as construed by our previous decisions in criminal tax cases, requires the government to prove that the law imposed a duty on the defendant, that the defendant knew of that duty, and that he voluntarily and intentionally violated that duty." (Emphasis added)

At one point in the trial, the defense asked if the government intended to prove that the law imposed a duty on the defendant.  The government replied "We do not intend to prove it, since the Court will instruct the jury on the law."


2. In Jury Instruction # 44, the court made the erroneous claim that rents, dividends, compensation for service, etc. were all forms of income.  However, in Eisner v. Macomber, as well as other Supreme Court cases, the court correctly defined 'income' as a corporate profit.

If the Appeals Court were to rule that the government did meet its burden, or worse, say that the government did not have to meet its burdern, such a ruling would have significant repucussions in all kinds if criminal trials, not just tax trials.  

Lastly, if the Appeals Court ignores the numerous Supreme Court decisions defining 'income' as a corporate profit, it will also be ignoring the legislative intent of Congress.

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