United States v. Donovan
250 F. Supp. 463 (1966)
Donavan prepared tax returns for clients, after getting the money from them, he told the clients that he would transmit the money and the returns to the Internal Revenue Service. However, he failed to file the returns and make the payments of the money. Instead, he transferred the money to his own uses and told his clients that he had filed the returns and paid the taxes. Donavan is sued for failing to file tax return and pay tax under Internal Revenue Code Section 7201.
Disposition of Lower Courts:
The District Court held that Donavan’s behavior were sufficient to raise to grade of felony alleged offense of file returns and pay tax under Internal Revenue Code Section 7201.
Is the defendant necessary to do any positive affirmative act to show the “willfully attempt” to defeat or evade the tax or the omission?
Disposition of Court:
Judgments for the defendant—Donovan’s activities constitute willful affirmative action to raise the offense to that of the grade of felony under Internal Revenue Code Section 7201.
The Court stated that that jury must conclude that the defendant willfully attempted to evade or defeat the tax as long as the jury finds that the defendant willfully failed to file a return and to pay the tax due unless the facts show the different way. in Spies v. U.S., 317 U.S. 492 (1942). The court also said that “attempt” means “ try to do or accomplish, but that it is not necessary that there be affirmative steps taken, and that attempt may be found on the basis of inactivity or on refraining to act as well”. In addition, in Sansone v. United States, 380 U.S. 343 (1965), the Supreme Court restated that the elements of section 7201 are “willful, the existence of a tax deficiency, and an affirmative act constituting an evasion or attempted evasion of the tax”.
Chief Judge Spears, in his opinion, thought that based on the fact that the defendant...