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Sixth Circuit Affirms Conviction for Failure to File

U.S. v. MAGA




No. 10-4008.

United States Court of Appeals, Sixth Circuit.

Filed April 4, 2012.

Before: COOK, WHITE, and DONALD, Circuit Judges

Defendant-appellant Dominic Joseph Maga appeals a jury verdict finding him guilty of failing to file income tax returns. He contends that the trial proceedings violated his Sixth Amendment right to confrontation, that the district court erroneously denied his motion for acquittal, and that the district court abused its discretion in denying his motion for a new trial. For the reasons that follow, we affirm.

I. Background

Several years ago, Maga obtained copies of his "individual master file" transcript (also known as an "IMF transcript" or a "specific transcript"), a technical record that the IRS uses to keep a running account of all of a person's tax events—e.g., penalties assessed, refunds owed, refunds issued, and interest. He noticed that the code "MFR-01" appeared on each of his IMF transcripts. Unsure of the meaning of this code, he wrote to the IRS about it. An IRS disclosure officer replied via letter that the code meant "1040 not required." Based on this letter and his reading of IRS manuals on the Internet, Maga claims he interpreted the code to mean that he was "not required" to file any returns.

The IRS's records revealed that Maga stopped filing tax returns in 1996, years before he received the letter from the disclosure officer. When the IRS sent a levy notice, Maga requested a collection due-process hearing, purporting that he did not need to file tax returns.

A grand jury indicted Maga for failure to file a federal income tax returns between 2002 and 2006—five counts in all. It also indicted Maga for four counts of tax evasion.

Central to Maga's arguments on appeal is the government's preparation of his official tax transcripts for use at trial. These transcripts, also known as Form 4340s, document in lay terms the same information contained in an IMF transcript.

At trial, the prosecution called IRS employee John DePowell to explain how he generated and certified Maga's official tax transcripts. DePowell testified that he became involved in Maga's case when a special agent from the IRS Criminal Investigative Division asked him to obtain Maga's Form 4340s. According to DePowell, he first cross-referenced the social security number that the agent gave to him with the Social Security Administration to confirm that it belonged to Maga, then generated the Form 4340s by accessing the IRS master file remotely and printing them out at his desk. After verifying the accuracy of the Form 4340s against the data on the computer, he presented his findings to Resident Agent-in-Charge Martha Williams for further verification. Williams signed the certification at the end of each of the transcripts and DePowell affixed the seal. On the witness stand, DePowell identified the Form 4340s he generated and their accompanying "certificates of official record," observing that the Form 4340s revealed no record of Maga filing a tax return for the years 2002, 2003, 2004, 2005, and 2006.

After the prosecution rested, Maga objected to the admission of the Form 4340s and their certificates and moved for acquittal. The trial court denied the motion without comment. In his closing argument, Maga maintained that he did not willfully fail to file the tax returns because he could not have known from publicly available information that the IRS letter's explanation, "1040 not required," referred to the IRS's obligation to mail tax return forms, rather than his obligation to file tax returns. See 26 U.S.C. § 7203 (requiring proof of willfulness as element of "failure to file tax return" offense).

The jury returned a guilty verdict for the five counts of failure to file a tax return and acquitted Maga of the four counts of tax evasion.

V. Conclusion

In short, Maga drew from public sources to create an interpretation that no one shares—or in the prosecution's words, a "secret" interpretation. The mere fact that Maga used public sources in this interpretive process does not shield the resulting misinterpretation from skepticism. The district court did not plainly err in refusing to grant a new trial on this ground.

Read more at: Tax Times blog

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