United States v. McLain, No. 09-3292 (8th Cir. 2011)
Annotate this CaseDefendant was convicted of failing to account for and pay employment taxes under 26 U.S.C. 7202, sentenced to 48 months imprisonment and fined $75,000. Defendant appealed his conviction, the calculation of loss to the government, and his fine. The court held that the district court did not err under Federal Rule of Evidence 404(b) in admitting evidence relating to defendant's compliance with Minnesota tax law. The court held however, that the district court made insufficient findings to conclude that defendant had violated section 7206(2). Accordingly, the court vacated the calculation of loss and remanded for resentencing on the existing record. Because the court remanded for resentencing, it did not reach defendant's remaining arguments.
Court Description: Criminal case - criminal law and sentencing. Evidence of defendant's compliance with Minnesota state tax law was relevant in his prosecution for failing to account for and pay employment taxes under 26 U.S.C. Sec. 7202 as it went to willfulness and because defendant's beliefs regarding the status of his employees was a central issue at trial; jury instructions concerning the elements of a Section 7202 offense were not erroneous; evidence was sufficient to support defendant's conviction; with respect to defendant's sentencing, he could have violated Section 7206(2) by counseling others to file false tax returns even if they never filed a return; however, the section cannot be violated if a false return is never prepared, and the district court made no findings as to whether the other persons prepared returns that were false or fraudulent as to a material matter; as a result, the matter must be remanded for recalculation, based on the existing record, of the amount of loss.
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