(Last update: September 1, 1999)

Those who are interested in the federal income tax issue and act upon their beliefs occasionally get into trouble, typically by being indicted for some tax crime. Of course when they are required to put forward a defense, they must not only have the ability to testify but they also need to be prepared to offer documentary evidence which supports their beliefs. However too often when I enter the picture, I find that many people simply have not documented everything upon which they relied. Frequently, these people have not kept the most important documents they studied and relied upon, which thus requires work in locating those particular items. This short memo explains how important it is to keep the books, documents, cases and other "reliance" materials you have studied, especially if that material constitutes an admission made by the government.

I have represented numerous parties who believed that compliance with the federal income tax laws is voluntary. Why do these people have such beliefs? The basis for those beliefs is not the rantings of some lunatic but the government itself. There are a few cases which make statements that compliance is voluntary, and there are published documents from the Internal Revenue Service which declare the same thing. However, I am surprised by the utter lack of concern by those who might and eventually do fall within the crosshairs of some government prosecutor. I always interview my client to learn what his particular beliefs are and sometimes my client claims the "voluntary" belief. Do you know how saddening it is to have my client then show to me a single page document which he obtained at some patriot pep rally that contains a couple of quotes from other sources that assert that compliance with the tax laws is voluntary? Do you really think that a typical American jury will give much credence to such a document? From experience, I know that any document which you want to rely upon must have the appearance of being a copy of an actual government document. Quotes contained in some newsletter or book from government publications are simply no substitute for the actual government publications themselves. Why don't you do yourself a favor and obtain the actual government documents which contain the statements of importance to you? The legal reason for doing so is explained in the following portion of a trial brief that I use:

A criminal defendant may offer evidence during trial regarding certain statements and representations made by government if those statements relate to his intent and understanding of the law, and many of such statements may qualify as admissions made by the government; see United States v. Van Griffin, 874 F.2d 634, 638 (9th Cir. 1989)(government manuals admissible as party admissions under Fed.R.Evid. 801(d)(2)(D)); and United States v. GAF Corp., 928 F.2d 1253 (2nd Cir. 1991). In Arizona Grocery Co. v. Atchison, T. & S.F. Ry. Co., 284 U.S. 370, 52 S.Ct. 183 (1932), it was held that a party could rely upon the representations made by a government agency, and in Moser v. United States, 341 U.S. 41, 71 S.Ct. 553 (1951), the Court held that such reliance could constitute a defense to actions taken by the government. These decisions are buttressed by others such as Raley v. Ohio, 360 U.S. 423, 79 S.Ct. 1257 (1959), Cox v. Louisiana, 379 U.S. 559, 85 S.Ct. 476 (1965), United States v. Laub, 385 U.S. 475, 487, 87 S.Ct. 574 (1967), and United States v. Penn. Industrial Chemical Corp., 411 U.S. 655, 674, 93 S.Ct. 1804, 1816 (1973). In Penn. Industrial, supra, a company being criminally prosecuted for water pollution sought to assert a defense of reliance upon certain applicable agency regulations, but the trial court precluded the admission of that evidence. In reversing, the Supreme Court held that this reliance did constitute a defense and that the agency representations, the subject regulations, should be given as jury instructions.

The federal appellate courts do recognize the "reliance" defense. One of the earliest cases granting verdict for a defendant on this ground was United States v. Mancuso, 139 F.2d 90, 92 (3rd Cir. 1943). Here, the defendant filed suit to enjoin being drafted and the district court erroneously granted an injunction. Mancuso later used the injunction order as justification for refusing induction. His conviction for refusing enlistment was vacated because of his reliance upon the erroneous order. See also United States v. Albertini, 830 F.2d 985 (9th Cir. 1987).

Other courts have addressed this issue. In United States v. Tallmadge, 829 F.2d 767, 775 (9th Cir. 1987), the defendant was being prosecuted for possessing firearms after conviction for a felony. In defense, Tallmadge demonstrated that a licensed arms dealer, held to be a government agent, represented to him that it was lawful for him to acquire firearms. Because Tallmadge relied upon the word of this government agent, that court held that it would violate due process to convict him:

The prosecution and conviction of Tallmadge for the receipt and possession of firearms, after he was misled by the government agent who sold him the weapons into believing that his conduct would not be contrary to federal law, violated due process.

In United States v. Clegg, 846 F.2d 1221 (9th Cir. 1988), the defendant was charged with arms smuggling in Pakistan and sought to defend himself with the factual defense that high government officials approved his activities; that court held such to be a valid defense. In United States v. Heller, 830 F.2d 150, 154 (11th Cir. 1987), the defendant, a lawyer, was convicted of tax crimes and sought to defend on the basis that his accounting methods conformed with the dictates of a tax court decision. In reversing the convictions, that court held that a jury instruction covering the substance of the tax court decision upon which Heller had relied should have been given. In United States v. Hedges, 912 F.2d 1397 (11th Cir. 1990), the defendant had acted upon the advice given to him by a Standards of Conduct officer regarding a conflict of interest matter. Hedges was prosecuted for conflicts violations, defended himself with the factual argument that he had relied upon the advice of the Standards officer, and tendered a corresponding requested jury instruction which was not given. On appeal, the court acknowledged the validity of this defense and held it was error to refuse the giving of a jury instruction on this point. In United States v. Brady, 710 F.Supp. 290 (D.Colo. 1989), a defendant charged with illegal possession of firearms ("coyote getters") was acquitted when he showed that he directly relied upon the word of a state judge. The most recent case on this issue, United States v. Levin, 973 F.2d 463 (6th Cir. 1992), was one where the trial court dismissed an indictment because of reliance upon a government representation.

Several state courts also acknowledge this defense. In Schiff v. People, 111 Colo. 333, 141 P.2d 892 (1943), the defendant had received stolen property and informed the police about such, who instructed him to simply retain possession; his conviction for possessing stolen property was reversed. In People v. Markowitz, 18 N.Y.2d 953, 223 N.E.2d 572 (1966), a defendant who was told by certain public officials that he did not need a license to sell merchandise at Yankee Stadium had his conviction vacated through use of this defense. In State v. Ragland, 4 Conn. Cir. 424, 233 A.2d 698 (1967), a defendant's conviction for driving without a license was vacated based upon the fact that he drove the car on the occasion in question at the order of police officers. In Connelly v. State, 181 Ga.App. 261, 351 S.E.2d 702 (1987), a defendant who had relied upon a misleading driver's license form had his conviction for driving offenses reversed. In State v. Chiles, 569 So.2d 45 (La.App. 4 Cir. 1990), a pawn shop owner who relied upon the practices of the local sheriff's office had her conviction for failure to abide by record keeping laws reversed. See also Commonwealth v. Twitchell, 617 N.E.2d 609, 616-620 (Mass. 1993), and State v. McKown, 475 N.W.2d 63, 68 (Minn. 1991). The refined essence of these cases is that a criminal defendant does have available to him the defense of reliance upon representations made to him by government officials, whether judges or executive department officers and agents.

Please keep whatever materials you have relied upon. If you have relied upon cases quoted from some book, go get copies of those cases at the law library so that you can assert the defense of reliance upon the word of judges. If you have relied upon a quote of something else which is allegedly derived from a government publication, get that document.

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