TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, November 15, 2007

7th Circuit Affirms Tax Protestor's Tax Evasion Conviction, Orders Attorney to Show Cause Why He Should Not be Fined for Frivolous Arguments

The Seventh Circuit yesterday affirmed a taxpayer's conviction for tax evasion and ordered his attorney (Jerold W. Barringer) to show cause why he should not be fined for his frivolous arguments. United States v. Patridge; Nos. 06-3635, 06-3785 (7th Cir. 11/14/07):

Patridge's brief in the criminal appeal presents 19 issues, all frivolous. Many are in the style of tax-protest arguments that we might expect from a layman representing himself but do not expect to see in a brief filed by a member of the bar.

For example, although counsel concedes that a person who earns income cannot avoid taxes by appointing it to a third party -- here, by remitting the income to Trust #1 -- he insists that the maneuver may be penalized only if the taxpayer knows that § 7201 is the section of the Internal Revenue Code that makes the dodge unlawful. Cheek v. United States, 498 U.S. 192 (1991), holds that a person may be convicted of tax offenses only if he knows that the Code requires him to pay. The jury was so instructed, and its verdict shows that it found, beyond a reasonable doubt, that Patridge knew that he had to pay taxes on what he made from his business. It is scarcely possible to imagine otherwise: the system of offshore trusts, and the fictive "loans," show that Patridge was trying to hide income that he knew to be taxable. Why else all this folderol? Yet Patridge, in common with many other people who know what the law requires, could not say just which provisions of the Code make income taxable and prevent evasion. For that matter, many tax lawyers (and most judges) could not rattle off the citations without glancing at a book. This shortcoming of memory (perhaps, for Patridge, a deliberate avoidance of knowledge) prevents criminal punishment, counsel insists.

But why would this be so? No statute says it; no opinion holds it. Cheek derived its knowledge-of-law requirement from the fact that § 7201 makes only "willful" tax evasion criminal. An act is willful for the purpose of tax law, the Court concluded, when the taxpayer knows what the Code requires yet sets out to foil the system. Knowledge of the law's demands does not depend on knowing the citation any more than ability to watch a program on TV depends on knowing the frequency on which the signal is broadcast. ...

Jerold W. Barringer represented Patridge at trial, in the Tax Court, and during the three appeals to this court. He has performed below the standard of a pro se litigant; we have serious doubt about his fitness to practice law. The problem is not simply his inability to distinguish between plausible and preposterous arguments. It is his disdain for the norms of legal practice (19 issues indeed!) and the rules of procedure.

Take, for example, Fed. R. App. P. 28(a)(7), which requires every appellant's brief to contain "a statement of facts relevant to the issues submitted for review with appropriate references to the record". Circuit Rule 28(c) adds: "The statement of facts required by Fed. R. App. P. 28(a)(7) shall be a fair summary without argument or comment. No fact shall be stated in this part of the brief unless it is supported by a reference to the page or pages of the record or the appendix where that fact appears." So what did Barringer write as a "fair summary without argument or comment"? Here is the complete text of his "STATEMENT OF THE FACTS":

This case is about due process and the Fifth and Sixth. The indictment was defective and revolved around a theory of law section 7201 cannot support. The term "willful" cannot support. There was no evidence of willfulness regarding knowledge of the facts and there is no evidence of willfulness regarding knowledge of the law required to be alleged in the indictment and proved beyond a reasonable doubt at trial. The Paperwork Reduction Act of 1995 forbid the indictment from being returned. There was no fraud in any wire and there was no laundering of any money from an illegal source. The jury was clearly confused by the Court's usage of evade and avoid interchangeably. The District Court relied upon the wrong Sentencing Guidelines and found facts to give Appellant 60 months in prison when the sentence should have been probation.

This contains not a single fact and verges on illiteracy. One might think that Barringer had confused the "Statement of Facts" section with the "Summary of Argument" required by Rule 28(a)(8), except that this passage does not contain any argument (it is argument free, though full of assertion) and is immediately followed by a six-page-long "SUMMARY OF APPELLANT'S ARGUMENTS".

Noncompliance with Rule 28(a)(7) is not an isolated problem. To avoid tedious length, we'll limit ourselves to one more example. Circuit Rule 30(a) provides: "The appellant shall submit, bound with the main brief, an appendix containing the judgment or order under review and any opinion, memorandum of decision, findings of fact and conclusions of law, or oral statement of reasons delivered by the trial court or administrative agency upon the rendering of that judgment, decree, or order." Circuit Rule 30(b)(1) adds that the appendix also must contain "[c]opies of any other opinions, orders, or oral rulings in the case that address the issues sought to be raised. If the appellant's brief challenges any oral ruling, the portion of the transcript containing the judge's rationale for that ruling must be included in the appendix." To make sure that counsel are aware of these requirements, we require every appellate lawyer to certify in writing that the brief complies with these rules. Circuit Rule 30(d). Lack of a statement under Rule 30(d) tells the clerk's office that counsel is unaware of the rule, and the brief will be rejected; but a brief with the required statement will be accepted, because our staff is not able to look behind the certificate to determine whether all of the essential materials have been included -- and they really are "essential," because without knowing why the district court did what it did, we can't assess claims that the court erred.

Barringer's brief contains this statement: "I, Jerold Barringer, certify by my signature above I have included Nos. 06-3635 & 06-3785 9 all of the materials required by parts (a) and (b) of Circuit Rule 30 in the appendix for the Appellant." The brief was accepted. But the representation is false -- whether deliberately so, or as a result of Barringer's inability to comprehend Rule 30, we cannot know. The only document "bound with the main brief " is the judgment of conviction. None of the district court's opinions and other explanations is attached to the brief. We eventually tracked down three that should have been included. Two concern Barringer's motions to dismiss the indictment; one denies a motion for a judgment of acquittal. The district judge's oral statement of reasons for the 60-month sentence should have been transcribed and included but was not. These omissions complicated our task of review.

This court regularly fines lawyers who violate Circuit Rule 30 yet falsely certify compliance under Circuit Rule 30(d). E.g., United States v. White, 472 F.3d 458, 465-66 (7th Cir. 2006); United States v. Evans, 131 F.3d 1192 (7th Cir. 1997); In re Galvan, 92 F.3d 582 (7th Cir. 1996). We also regularly penalize unrepresented litigants who advance frivolous tax-protest-style arguments. E.g., Szopa v. United States, 453 F.3d 455, after reconsideration, 460 F.3d 884 (7th Cir. 2006) (setting $4,000 as the presumptive sanction for frivolous tax appeals, doubled for repeat offenders). Members of the bar must be held to standards at least as high as those of unrepresented litigants. Barringer is a recidivist; he ignored our 2006 decision reminding him that taxpayers cannot use a request for a collection hearing to contest their substantive liability. We therefore give Barringer 14 days to show cause why he should not be fined $10,000 for his frivolous arguments and noncompliance with the Rules, and why he should not be suspended from practice until he demonstrates an ability to litigate an appeal competently and responsibly. See Fed. R. App. P. 38, 46(b), (c).

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Attorney Jerold W. Barringer probably won't list Federal Appeals Judge Easterbrook as a reference on his next resume. Mr. Barringer... [Read More]

Tracked on Nov 15, 2007 5:31:39 AM

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TaxProf Blog quotes the Seventh Circuit once again whaling on a hapless lawyer: Jerold W. Barringer represented Patridge at trial, in the Tax Court, and during the three appeals to this court. He has performed below the standard of a pro se litigant; ... [Read More]

Tracked on Nov 15, 2007 3:47:54 PM


I used to work for an attorney who did criminal tax evasion defense work, and the willfulness argument is really the best way to win those cases, but it sounds like this lawyer didn't do a good job of presenting it.

We defended uneducated people who had attended a seminar where a smart-looking guy in a suit told them that wages are not income, that the 16th Amendment was not validly passed, that taxation is voluntary, etc. (all absurd arguments that have been rejected by courts again and again), and they genuinely believed that they could legally get away with not paying taxes. They thought they were beating the system, yes, but they thought they were doing it within the law. You can definitely raise a reasonable doubt about willfulness on those facts.

If Partridge genuinely believed that the things he was doing were legitimate, legal ways to shelter income from taxes, then his behavior was not willful and therefore not criminal tax evasion (he still has to pay the taxes, interest and penalties, of course, but he doesn't go to jail). And you don't have to prove he genuinely believed it; you just have to raise a reasonable doubt as to whether he genuinely believed it. It looks like the lawyer just did a lousy job of making a good argument.

Posted by: Lisa | Nov 16, 2007 6:49:29 AM