Cheek v. United States

Cheek v. United States, 498 U.S. 192 (1991), was a United States Supreme Court case in which the Court reversed the conviction of John L. Cheek, a tax protester , for willful failure to file tax returns and tax evasion, who was convicted again during retrial. The Court held that an actual good-faith belief that one is not violating the tax law, based on a misunderstanding caused by the complexity of the tax law, negates willfulness, even if that belief is irrational or unreasonable. The Court also ruled that an actual belief that the tax law is invalid or unconstitutional is not a good faith belief based on a misunderstanding caused by the complexity of the tax law, and is not a defense.

Contents

• 1 Background

  • 1.1 Trial court

    • 1.1.1 Ignorance of law

    • 1.1.2 Erroneous jury instructions

  • 1.2 Appeals

• 2 Opinion of the Court

• 3 Dissent

• 4 Cheek defense

• 5 Later developments

• 6 See also

• 7 Notes

• 8 External links

Background

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The defendant , John L. Cheek, became a pilot for American Airlines in 1973. Through the tax year 1979, Cheek filed Federal income tax returns. Beginning with the 1980 tax year, Cheek stopped filing Federal income tax returns. He began claiming up to sixty allowances on his Form W-4 withholding statement submitted to his employer.

From 1982 to 1987, Cheek was also involved in at least four civil cases challenging the Federal income tax. Among the arguments raised in those cases were: (1) the argument that he was not a taxpayer within the meaning of the law; (2) the argument that wages are not income; (3) the argument that the Sixteenth Amendment does not authorize an income tax on individuals; and (4) the argument that the Sixteenth Amendment is unenforceable. In all four cases, the courts stated that these arguments were erroneous. Cheek also attended two criminal trials of individuals charged with tax crimes.

John Cheek himself was eventually charged with six counts of willfully failing to file Federal income tax returns under 26 U.S.C.  § 7203 for 1980, 1981, 1983, 1984, 1985 and 1986. He was also charged with tax evasion under 26 U.S.C.  § 7201 for years 1980, 1981, and 1983.

Trial court

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At his own criminal trial, Cheek represented himself.

He also testified that around 1978 he had begun attending seminars conducted by a group that believed that the Federal income tax system was unconstitutional. Cheek stated that based on the seminars and his own study, he sincerely believed that the tax laws were being unconstitutionally enforced, and that his actions were lawful. Cheek specifically testified about his own interpretations of the U.S. Constitution, court opinions, common law and other materials. He testified that he had relied on those materials in concluding that he was not required to file tax returns, that he was not required to pay income taxes, and that he could claim refunds of the money withheld from his pay. Cheek also contended that his wages from a private employer (American Airlines) did not constitute income under the internal revenue laws. Cheek argued that he therefore had acted without the "willfulness" that was required for a criminal tax conviction.

Ignorance of law

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Under U.S. criminal law, the general rule is that ignorance of the law or a mistake of law is not a valid defense to criminal prosecution

(see also Ignorantia juris non excusat ). However, there are exceptions to that rule. Some U.S. criminal statutes provide for what are known as "specific intent" crimes, where ignorance of the law may be a valid defense. The federal criminal tax statutes are examples of statutes for specific intent crimes, where actual ignorance of the law is a valid defense.

Erroneous jury instructions

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Cheek was convicted, but during the jury deliberations, the jury asked the trial judge for a clarification on the law. The judge instructed the jury that an "honest but unreasonable belief is not a defense, and does not negate willfulness." The trial court also instructed the jury that "[a]dvice or research resulting in the conclusion that wages of a privately employed person are not income or that the tax laws are unconstitutional is not objectively reasonable, and cannot serve as the basis for a good faith misunderstanding of the law defense."

Appeals

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Cheek appealed his conviction to the United States Court of Appeals for the Seventh Circuit , which upheld the conviction. The United States Supreme Court issued a writ of certiorari to review the case. At the Court, Cheek contended that the trial court had erred by instructing the jury that a misunderstanding of the law had to be objectively reasonable to negate willfulness.

Opinion of the Court

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Justice Souter took no part in the case, as it was argued the week before he joined the Court.

In its judgment, the Court produced two essential holdings:

1. A genuine, good faith belief that one is not violating the Federal tax law based on a misunderstanding caused by the complexity of the tax law (e.g., the complexity of the statute itself) is a defense to a charge of "willfulness", even though that belief is irrational or unreasonable.

2. A belief that the Federal income tax is invalid or unconstitutional is not a misunderstanding caused by the complexity of the tax law, and is not a defense to a charge of "willfulness", even if that belief is genuine and is held in good faith.

The Supreme Court reiterated that a finding of willfulness in a federal criminal tax case requires proof (1) that the law imposed a duty on the defendant, (2) that the defendant knew of this duty, and (3) that the defendant voluntarily and intentionally violated that duty. In explaining how the willfulness element must be proven, the Court distinguished arguments about constitutionality of the tax law from statutory arguments about the tax law.

In an opinion by Justice Byron White , the Court ruled that the defendant's belief that the tax laws were unconstitutional was not a defense, no matter how honestly that belief might have been held. To the contrary, Cheek's acknowledgement that his failure to file tax returns was based on a belief about constitutionality was viewed by the Supreme Court as possible evidence (1) of Cheek's awareness of the tax law itself (the Court stating that constitutional arguments reveal the taxpayer's "full knowledge of the provisions at issue and a studied conclusion, however wrong, that those provisions are invalid and unenforceable"), and (2) of the voluntary, intentional violation of a known legal duty imposed by the tax law.

However, Cheek's statutory argument—his asserted belief that his wages were not income under the statute (the Internal Revenue Code itself)—was ruled by the Supreme Court to be a possible ground for a valid defense even though that belief was not objectively reasonable, provided that the belief was actually held in good faith. The Supreme Court ruled that by instructing the jury that the defendant's statutory argument had to be based on a belief that was "objectively reasonable," the trial judge had erroneously transformed what should have been treated

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