Taxpayer Anctics: Taxpayer Convictions

Taxpayers often make mistakes. It happens. But there are some times when you just have to ask “what was the taxpayer thinking?”

Take the recent United States v. Baucom (and combined United States v. Davis) case. Taxpayers Martin Louis Baucom and Patrick Grant Davis were convicted of conspiracy to defraud the United States and willful failure to file tax returns.

After being indicted the taxpayers were given the opportunity to hire a competent tax attorney. The taxpayers sent “questionnaires” to potential tax attorneys in an effort to hire tax counsel. The court informed the taxpayers that this was not an appropriate means for obtaining a tax attorney and it gave the taxpayers additional time to obtain tax counsel.

The taxpayers then asked the court to allow their non-attorney friend to represent them in their criminal tax matter. The taxpayers’ request – which was sent to the judge, who was also an attorney – stated:

Defendant . . . has little confidence in the legal profession . . . . Defendant is aware of a few attorneys he trusts, but their multi-thousand dollar fees are out of the question . . . . He does NOT trust just any attorney out of a grab-bag whom the government is willing to furnish; neither would this defendant be satisfied with such an “attorney’s” concept of the Constitution of the United States after the average attorney, full of law-school brainwashing, thinks that the Constitution is what the judges say it is, rather than what the Constitution itself, says it is.

The court admonished the taxpayers for “continuing to send questionnaires to potential attorneys after having been advised that this was not an effective means of obtaining counsel” and the court gave the taxpayers additional time to find a tax attorney.

The taxpayers responded by filing:

a document entitled “AFFIDAVIT & DECLARATION OF CONTINUED EFFORTS TO SEEK COMPETENT COUNSEL.” The document contained numerous citations of Washington State cases and procedural rules. Among other things, Davis asserted that “[t]his court has NO authority to appoint me counsel over my objections”; “I can and will sue any Attorney for ineffective assistance of counsel who is appointed to my case over my objections”; and that “I can and will sue the person who picked my attorney and appointed him to me over my objections if said attorney loses my case.”

Fifteen months after the indictments, the court finally said that the taxpayers had had sufficient time to obtain a tax attorney, they refused to do so, and, therefore, the criminal trial would proceed with the taxpayers representing themselves. The trial commenced and the taxpayers were convicted. The court sentenced Baucom to fifteen months imprisonment. The court considered Davis’ charitable works in imposing a light four years probation (conditioned on the service of 12 months of house arrest). The taxpayers appealed the convictions and they lost.

Notwithstanding the antics of the taxpayers, here is the interesting part of the case. The lower court judge refused to include the amount of the state taxes that the taxpayers failed to pay in determining the taxpayers federal sentence. The lower court judge said:

I don’t think I have the . . . jurisdiction to sentence this man for [a] violation of North Carolina law. I mean, it’s inconceivable to me that a federal judge would be sitting up here and saying you violated North Carolina law and I’m putting you in jail for it. It’s just–what happened to the whole notion of federalism? I don’t think I have the power to do that. And if I do, if I have discretion, I decline to exercise the discretion to do that. It’s not fair and I ain’t gonna. Y’all can all go to Richmond and they can tell some other judge what to do.

On appeal, the IRS attorneys argued that the judge did have this power and he should have exercised the power. The Fourth Circuit Court of Appeals agreed with the IRS.

The Fourth Circuit Court stated:

We also think that the sentences imposed by the district court fail to reflect the seriousness of the offense and do not provide just punishment… Appellants failed to file taxes of any sort for twelve years before they were apprehended. Moreover, as the Government notes, neither Appellant began paying taxes until 2004, after his conviction. Finally, we note with respect to Davis’ sentence that we are troubled by the heavy reliance of the district court on Davis’ charitable works.

The appeals court affirmed the convictions, vacated the sentences, and remanded the cases to the lower courts to impose higher sentences.