USA v. Michele Kellar, et al

Filing 920100910

Opinion

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IN THE UNITED STATES COURT OF APPEALS United States Court of Appeals FOR THE FIFTH CIRCUIT Fifth Circuit FILED
September 9, 2010 N o . 09-41287 Lyle W. Cayce Clerk

U N IT E D STATES OF AMERICA, Plaintiff­Appellee v. M I C H E L E G. KELLAR; PHILIP G. KELLAR, D e fe n d a n t s ­ A p p e lla n t s

A p p e a l from the United States District Court for the Eastern District of Texas U S D C No. 4:08-cr-00145-RAS-DDB-2

B e fo r e STEWART, PRADO, and ELROD, Circuit Judges. P E R CURIAM:* P h ilip and Michele Kellar (collectively, the "Kellars") appeal their c o n v ic t io n s and sentences for violations of the Internal Revenue Code ("IRC"). A jury found both Michele and Philip guilty of one count of failure to pay income t a x e s , in violation of 26 U.S.C. § 7201; and Philip guilty of four counts of failure t o file income tax returns, in violation of 26 U.S.C. § 7203. The district court s e n te n c e d the Kellars each to forty-one months' imprisonment, the high end of t h e recommended Guidelines range.
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
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No. 09-41287 O n appeal, the Kellars make several common arguments, and several u n iq u e to one or the other. Both argue that the Government did not introduce s u ffic ie n t evidence as to whether they willfully violated the IRC, and that the d is t r ic t court erred when it calculated the tax loss for purposes of sentencing. Philip argues that the district court abused its discretion when it prohibited him fr o m offering into evidence opinion letters that Philip alleges created his good fa it h belief that he owed no income tax. Michele argues that the district court a b u s e d its discretion by not allowing her to testify as to the circumstances of her a r r e s t , and by denying her request for a minor role reduction or downward d e p a r t u r e at sentencing. Because the district court allowed Philip to testify as to the contents of the o p in io n letters without admitting them into evidence, it did not abuse its d is c r e t io n . Likewise, it did not abuse its discretion by refusing to allow Michele t o testify as to the circumstances of their arrest, as those circumstances have no r e le v a n c e as to whether Michele willfully failed to comply with the IRC. Furthermore, the Government introduced sufficient evidence for a rational jury t o conclude that the Kellars willfully violated the IRC, and to conclude that M ic h e le actively and willingly participated. Similarly, the Government did not a b u s e its discretion when it found that Michele was not entitled to a minor role r e d u c t io n or downward departure at sentencing. Finally, the district court did n o t clearly err by adopting the Government's proffered tax loss calculation for t h e years that the Kellars failed to file income tax returns. For these reasons, w e affirm the Kellars' convictions and sentences. I. FACTUAL AND PROCEDURAL BACKGROUND A. F a c t u a l Background P r io r to 1995, Philip paid his income taxes consistently. That year, h o w e v e r , Philip met Dr. Sweet, author of Good News for Form 1040 Filers, Bad N e w s for the IRS, and subsequently failed to "voluntarily" file any tax returns 2

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No. 09-41287 o r pay any income taxes from 1996 to 2007. Four months after his first failure t o file a tax return, Philip purchased "opinion letters,"1 and began to conduct his o w n research as to whether the federal income tax was mandatory. Philip a lle g e s that he did not believe that his commission income was taxable, and fo r m e d his beliefs after researching "Supreme Court cases, books, the Internal R e v e n u e Code, seminars, and professional advice from CPA[s], enrolled agents, t a x attorneys," and anyone else who had "a real professional knowledge of the t a x code." In 1996, Philip married Michele, who testified that she would write, mail, n o ta r iz e , or sign things for Philip because "he was her husband and she trusted h im . " Michele admitted that she failed to pay income taxes while married to P h ilip , and chose not to because Philip told her that the IRS could not tax their w a g e s . She also stated that she and Philip "had a lengthy and communicative r e la t io n s h ip " with the IRS, and that they responded to all IRS correspondence w it h the same request: "show me where it says my income/wages are taxable." The Kellars allege that they never received a response to those requests. Michele admitted that she also believed that she did not have to pay income t a x e s , and that those beliefs were not based solely on those of Philip. The Government reports that the Kellars earned approximately $177,757 in 2000, $242,068 in 2001, $246,156 in 2002, $206,426 in 2003, $218,000 in 2004, $ 2 8 9 ,4 4 5 in 2005, $305,046 in 2006, and $163,661 in 2007. In 2005, after the I R S provided notice that it had initiated a criminal investigation into the K e lla r s ' deficiencies, the Kellars filed untimely tax returns for 2001, 2002, 2003, a n d 2004, but failed to pay any amounts owed. Despite filing extensions in 2005, 2 0 0 6 , and 2007, the Kellars filed no tax returns at all for those years.

The parties do not define "opinion letters," but it seems clear that they were not issued by the IRS and do not constitute any official Government position or policy.

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No. 09-41287 D u r in g the years in question, Philip repeatedly filed forms with and sent le t t e r s to his employers claiming "99 withholding allowances," or that "no federal w it h h o ld in g is authorized," and signed each document "U.T.C.D.," which stands fo r "under threat, coercion, and duress." Michele acted similarly, filing W-4 fo r m s which falsely claimed various withholding allowances with her employers. These actions prevented the Kellars' employers from withholding any of their in c o m e for federal taxes. Additionally, the Kellars sent the IRS correspondence, including c h a lle n g e s to jurisdiction, threats to file criminal complaints, objections to bills, " a d m in is t r a t iv e notices," and "administrative interrogatories." Michele

t h r e a te n e d third parties with lawsuits if the third parties complied with IRS s u m m o n s e s or levies. Additionally, Philip attempted to hide his income by h a v in g his paychecks disbursed to an entity called the "Order of Gershom," and t h e n having the payments routed back to him. The Kellars also held other bank a c c o u n t s under "nominee names," such as "PMK Trust, Unlimited," and "MGK T r u s t , Unlimited." In 2004, the IRS instituted a tax lien to offset its deficiency. In response t o the IRS's correspondence with the Kellars, the Government states that the K e lla r s attempted to further conceal their income and obstruct IRS collection e ffo r t s . As an example, the Government describes how Philip opened a bank a c c o u n t , depositing only $25 and withdrawing that sum seven days later. Philip t h e n submitted checks to the IRS totaling more than $500,000 as "Tender of p a y m e n t in Adjustment and Set-Off." After the bank returned the checks for in s u ffic ie n t funds, Philip sent letters to the IRS stating that his checks "were not `b a n k a b le items'" and insisting that the IRS cancel his debt. Around this time, M ic h e le attempted a similar maneuver, sending checks totaling over $20,000 to t h e IRS on an account opened with a $10 deposit and closed nine days after o p e n in g . 4

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No. 09-41287 I n July 2008, law enforcement officials, including an IRS agent, rang the d o o r b e ll at the Kellars' residence, and then kicked in the door to execute arrest w a r r a n ts for the Kellars on tax evasion charges. Michele alleges that the officers d r a g g e d her, Philip, and their teenage daughter out of bed and handcuffed them fo r officer safety. Although Michele requested to use the restroom, officers would o n ly permit her to do so if they accompanied her. Without elaboration, Michele a ls o alleges that the officers touched her in a "sexually inappropriate manner." Pursuant to an order from the court, a psychologist evaluated Michele, and c o n c lu d e d that Michele exhibited signs of Post Traumatic Stress Disorder (" P T S D " ), Major Depressive Disorder ("MDD"), and "had no trust in the federal s y s t e m ." B. P r o c e d u r a l Background A grand jury issued a superseding indictment charging both Michele and P h ilip with one count of willful evasion of the payment of taxes, in violation of 2 6 U.S.C. § 7201, and Philip with four additional counts of willful failure to file in c o m e tax returns, in violation of 26 U.S.C. § 7203. At trial, the Kellars argued t h a t they did not act "willfully." Philip attempted to introduce into evidence the o p in io n letters that he alleged caused him to believe in good faith that the G o v e r n m e n t could not tax his income. The district court, however, only

p e r m it t e d Philip to testify as to their contents, read a few excerpts, electronically p r o je c t excerpts from the opinion letters to the jury, and offer biographical in fo r m a t io n and professional qualifications of the authors. The district court a ls o provided a limiting instruction to the jury, ordering that they only consider t h e letters to the extent that they may have affected Philip's willfulness. Philip t e s t ifie d that the proffered information influenced his understanding of the fe d e r a l income tax, such as his beliefs that only activities requiring a license fr o m the Government are taxable and that where the IRC referred to "persons," it meant only artificial persons such as corporations. 5

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No. 09-41287 I n addition to Philip's proffer, Michele attempted to testify about the c ir c u m s t a n c e s of their arrest. The Government objected on relevance grounds, a n d Michele responded that the circumstances would help the jury understand h e r perspective that "you cannot trust the government, the IRS does not want y o u to know that your wages are not taxable; they will come after you if you try t o fight them," and that "[t]he Government's actions that morning only solidified h e r beliefs that she and her husband were right and the IRS was trying to scare t h e m into being quiet." The district court sustained the Government's objection. At the close of the Government's case, the district court denied the Kellars' m o t io n for acquittal under Federal Rule of Criminal Procedure 29, the jury c o n v ic t e d the Kellars of all counts for which they had been charged, and the K e lla r s proceeded to sentencing. Both the Kellars and the Government made o b je c t io n s to the pre-sentence report ("PSR") and filed sentencing memoranda. Michele requested a minor role adjustment, which the district court denied. T h e Kellars' base offense level turned largely on the amount of tax loss a s s o c ia t e d with their criminal conduct. Although they failed to pay any

d e fic ie n c y , the Kellars filed untimely tax returns for tax years 2001 through 2 0 0 4 , but failed to make any filings for tax years 2005 through 2007. For tax y e a r s 2001 through 2004, the district court calculated the tax loss based on the K e lla r s ' filed tax returns, which included itemized deductions. For tax years 2 0 0 5 through 2007, however, the district court accepted the Government's loss e s t im a t io n -- w h ic h used standard deductions--despite the fact that the Kellars' a c c o u n t a n t provided a tax loss estimate using itemized deductions. The district c o u r t justified using the Government's proffered loss estimate because most of t h e information the Kellars' accountant used in making his estimate had been p r o v id e d either by the Kellars themselves or by an unverified H&R Block tax r e t u r n . The district court concluded that it could not rely on the underlying

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No. 09-41287 in fo r m a t io n provided by the Kellars because tax evasion is a crime involving d is h o n e s ty . T h e total tax loss calculated by the district court, including interest and p e n a lt ie s , amounted to $444,832.53 and resulted in a base offense level of twenty a n d a Guidelines range of thirty-three to forty-one months' imprisonment for b o th Philip and Michele. Had the district court adopted the tax loss calculated by the Kellars' accountant-- $ 3 6 6 , 8 1 1 . 2 9 , including interest and

p en a lties-- P h ilip and Michele's base offense level would have been eighteen with a Guidelines range of twenty-seven to thirty-three months' imprisonment. The d is t r ic t court sentenced both Kellars to forty-one months' imprisonment, and the K e lla r s timely appealed. II. ANALYSIS A. E v id e n t i a r y Issues 1. S t a n d a r d of Review

W e review evidentiary rulings in criminal cases "on a heightened abuse of d is c r e t io n basis." United States v. Franklin, 561 F.3d 398, 404 (5th Cir. 2009) (c it in g United States v. Nguyen, 504 F.3d 561, 571 (5th Cir. 2007)). Even if we fin d that the district court abused its discretion, the Kellars' evidentiary c h a lle n g e s are subject to harmless error review. Id. This Court has defined h a r m le s s error "as `any error, defect, irregularity or variance that does not affect s u b s t a n t ia l rights.'" Nguyen, 504 F.3d at 571 (quoting United States v. Treft, 447 F .3 d 421, 425 (5th Cir. 2006)). "`The government bears the burden of proving b e y o n d a reasonable doubt that the error was harmless.'" Id. (quoting Treft, 447 F .3 d at 425). 2. T h e District Court Did Not Abuse Its Discretion by Limiting t h e Introduction of the Proffered Opinion Letters

O n appeal, Philip argues that the district court abused its discretion by r e fu s in g to admit into evidence his proffered opinion letters because (1) the

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No. 09-41287 o p i n i o n letters seemed very persuasive, (2) the authors were "in a position to o ffe r advice upon which a lay person could reasonably rely," and (3) the opinion le t t e r s were narrowly focused on his case's main issues and written with a high d e g r e e of detail. Thus, Philip argues that the district court erred by not

p e r m it t in g the jury to view the documents themselves in order to gauge how t h e y may have influenced his beliefs. Philip also argues that (1) the district c o u r t could have offered a limiting instruction that would have negated any c o n fu s io n by permitting the jury to read the full contents of the proffered opinion le t t e r s , (2) the district court should have considered each document individually b e fo r e excluding every one of them, and (3) "the court's limiting

in s t r u c t io n -- t h a t the law upon which [he] relied was incorrect--may have fu r t h e r prejudiced [him] as it could have misled the jury into thinking that the d o c u m e n t s were so poorly written as to be obvious shams on their faces." Federal Rule of Evidence 403 states that "[a]lthough relevant, evidence m a y be excluded if its probative value is substantially outweighed by the danger o f unfair prejudice, confusion of the issues, or misleading the jury . . . ." In cases a d d r e s s in g the willfulness prong of failure to pay taxes or file returns, we have c o n s is t e n t ly upheld allowing a defendant to testify about the documents giving r is e to his or her beliefs, but excluding the documents themselves.2 Because "the in t r o d u c tio n of the documents themselves would have . . . little further probative v a lu e " once a defendant testifies as to their contents, but would present "a d a n g e r of confusing the jury by suggesting that the law is unsettled and that it s h o u ld resolve such doubtful questions of law," Flitcraft, 803 F.2d at 186, we h a v e held that a district court satisfies the "delicate balance required by Rule 4 0 3 " by "excluding the documents themselves but allowing the defendant to

See United States v. Simkanin, 420 F.3d 397, 412­13 (5th Cir. 2005); United States v. Stafford, 983 F.2d 25, 27­28 (5th Cir. 1993); United States v. Barnett, 945 F.2d 1296, 1301 (5th Cir. 1991); United States v. Flitcraft, 803 F.2d 184, 186 (5th Cir. 1986).

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No. 09-41287 t e s t ify as to their contents, and the effect in forming his beliefs." Barnett, 945 F .2 d at 1301 (citing Flitcraft, 803 at 185­86).3 I n this case, the district court adopted the approach approved by our c a s e la w . Philip has not attempted to distinguish these cases in any meaningful w a y , arguing only that the Government favors a "blanket rule" which would a lw a y s prevent a district court from introducing evidence of this sort in tax e v a s io n cases."4 We thus find that the district court did not abuse its discretion b y excluding the opinion letters.5 3. T h e District Court Did Not Abuse Its Discretion by E x c lu d i n g Testimony Relating to the Kellars' Arrest

A t trial, the Kellars testified that they believed the Government would go t o great lengths to keep the public from learning the truth about the IRC. Michele's attorney questioned her during direct examination about the c ir c u m s t a n c e s of her arrest, which Michele claims helped solidify her distrust of t h e Government, and the district court sustained an immediate Government o b je c t io n on the basis of relevance. On appeal, Michele argues that the district

See also Simkanin, 420 F.3d at 404 ("The defendant in a criminal tax trial . . . must be permitted to present evidence to show what he purportedly believed the law to be at the time of his allegedly criminal conduct. At the same time, however, the district court must be permitted to prevent the defendant's alleged view of the law from confusing the jury as to the actual state of the law, especially when the defendant has constructed an elaborate, but incorrect, view of the law based on a misinterpretation of numerous IRC provisions taken out of proper context."). Although Philip cites United States v. Gaumer, a Sixth Circuit case reversing a defendant's conviction because the trial court refused to admit a book, three legal opinions, and a excerpt from a Congressional Quarterly article, 972 F.2d 723, 724­25 (6th Cir. 1992), he neglects to cite the portion from Gaumer that states "[t]his does not mean that the trial court was required to permit the physical introduction of exhibits comprising hundreds of pages. At a minimum, [the] defendant should have been allowed to read the relevant excerpts to the jury." Id. at 725. Philip's argument that the district court violated the "best evidence rule" of Federal Rule of Evidence 1002, by not admitting the letters themselves is unavailing. Rule 1002 applies when a party wishes to "prove the content of a writing," and in this case, Philip wishes to introduce the writing to demonstrate its effect on his subjective state of mind.
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No. 09-41287 c o u r t abused its discretion by doing so because the facts surrounding her arrest in fo r m e d her state of mind and beliefs regarding the IRS, including the payment o f income taxes and whether she willfully failed to do so. "`Relevant evidence' means evidence having any tendency to make the e x is t e n c e of any fact that is of consequence to the determination of the action m o r e probable or less probable than it would be without the evidence." FED. R. E VID. 401. Although, as a general rule, "[a]ll relevant evidence is

a d m is s ib le , . . . [e]vidence which is not relevant is not admissible." FED. R. EVID. 402. In this case, Michele has not demonstrated how the circumstances of her a r r e s t have any bearing on whether she willfully failed to pay her income taxes. Michele's distrust of the Government does not mean that she did not willfully v io la t e the IRC. Additionally, the Kellars' arrest occurred after the issuance of t h e indictment accusing her of willful failure to pay her income taxes from 2001 t h r o u g h 2008. Her subsequent arrest obviously could not have affected her state o f mind or served as a basis for her justification for alleged violations occurring b e fo r e her arrest. We thus hold that the district court did not abuse its

d is c r e t io n by excluding this testimony. B. S u f f i c i e n c y of the Evidence Issues 1. S t a n d a r d of Review

B e c a u s e the Kellars filed a motion for judgment of acquittal under Federal R u l e of Criminal Procedure 29, we review "the district court's denial of that m o t io n by examining the evidence and all reasonable inferences drawn t h e r e f r o m in the light most favorable to the verdict, and asking whether a r a t io n a l trier of fact could have found guilt beyond a reasonable doubt." United S ta te s v. Montes, 602 F.3d 381, 388 (5th Cir. 2010) (citing United States v. V a ld e z , 453 F.3d 252, 256 (5th Cir. 2006)). "`[I]t is not necessary that the e v id e n c e exclude every reasonable hypothesis of innocence or be wholly 10

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No. 09-41287 in c o n s is t e n t with every conclusion except that of guilt, provided a reasonable t r i e r of fact could find that the evidence establishes guilt beyond a reasonable d o u b t .'" Id. (quoting United States v. Bell, 678 F.2d 547, 549 (5th Cir. Unit B 1 9 8 2 ) (en banc)) (alteration in original). 2. T h e Government Introduced Sufficient Evidence to Sustain t h e Jury's Verdict as to Phillip

O n appeal, Philip offers several arguments as to why the Government's e v id e n c e did not suffice to prove that he willfully failed to pay his income taxes o r file tax returns. First, Philip argues that the Government never proved that t h e Kellars had any duty to pay income taxes, instead describing the G o v e r n m e n t 's proof as "the assumption that most Americans have that if you w o r k and make money, you have to pay income taxes." Next, Philip challenges t h e strength of a letter introduced by the Government sent from Philip to an IRS a g e n t in 2006 that caused the IRS agent to "speculate" that Philip's "beliefs r e g a r d in g his liability to pay taxes had changed." Philip argues that the IRS a g e n t knew that Philip was under "tremendous pressure" and "extreme duress" w h e n he wrote the letter, and that in any event, the letter could not suffice to d e m o n s t r a t e that any steps he took to avoid paying his income taxes or filing his r e t u r n s before 2006 were not done with the good faith belief that he need not pay in c o m e taxes. Finally, Philip directs us to his "stubborn refusal to recant his s t a t e d beliefs . . . and his refusal to cooperate with Government efforts to force [h im ] to file tax returns or pay taxes except under extreme duress" as " o v e r w h e lm in g " evidence that his failure to file returns or pay taxes was not w illfu l. To establish liability for tax evasion, the Government must prove, beyond a reasonable doubt, "(1) existence of a tax deficiency; (2) an affirmative act c o n s t it u t in g an evasion or an attempted evasion of the tax; and (3) willfulness." United States v. Miller, 588 F.3d 897, 907 (5th Cir. 2009) (citing United States

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No. 09-41287 v . Nolen, 472 F.3d 362, 377 (5th Cir. 2006)). For the Kellars' convictions, the o n ly disputed element is whether the Kellars willfully failed to pay their income t a x e s and whether Philip willfully failed to file his tax returns. In tax evasion c a s e s , "[e]vidence of willfulness is ordinarily circumstantial," and may consist of, among other things, a failure to report a substantial a m o u n t of income, a consistent pattern of underreporting large a m o u n t s of income, the spending of large amounts of cash that c a n n o t be reconciled with the amount of reported income, or any c o n d u c t , the likely effect of which would be to mislead or to conceal. U n ite d States v. Chesson, 933 F.2d 298, 304 (5th Cir. 1991) (emphasis, citations, a n d internal quotation marks omitted). T h e Supreme Court has held that "[w]illfulness . . . requires the G o v e r n m e n t to prove that the law imposed a duty on the defendant, that the d e fe n d a n t knew of this duty, and that he voluntarily and intentionally violated t h a t duty." Cheek v. United States, 498 U.S. 192, 201 (1991). "[C]arrying this b u r d e n requires negating a defendant's claim of ignorance of the law or a claim t h a t because of a misunderstanding of the law, he had a good faith belief that he w a s not violating any of the provisions of the tax laws."6 Id. at 202. The jury is fr e e , however, to consider any admissible evidence from any source showing that [the d e fe n d a n t ] was aware of his duty to file a return and to treat wages a s income, including evidence showing his awareness of the relevant p r o v is io n s of the Code or regulations, of court decisions rejecting his in t e r p r e t a t io n of the tax law, of authoritative rulings of the Internal R e v e n u e Service, or of any contents of the personal income tax r e t u r n forms and accompanying instructions that made it plain that w a g e s should be returned as income. Id .

This specific intent requirement for tax violations abrogates the common law rule that "ignorance of the law or a mistake of law is no defense to criminal prosecution," largely because of "the complexity of the tax laws." Cheek, 498 U.S. at 199­200.

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No. 09-41287 A defendant's good faith belief need not be objectively reasonable to d e m o n s t r a t e that he or she did not act willfully; rather, the inquiry is a s u b je c t iv e one. See id. However, the Supreme Court "distinguished a defense b a s e d on the defendant's good-faith belief that he was acting within the law from a defense based on the defendant's views that the tax laws are unconstitutional o r otherwise invalid." Simkanin, 420 F.3d at 404 (citing Cheek, 498 U.S. at 2 0 4 ­ 0 6 ). "[T]he latter belief, regardless of how genuinely held by the defendant, d o e s not negate the willfulness element." Id. Additionally, "the more

u n r e a s o n a b le the asserted beliefs or misunderstandings are, the more likely the ju r y will consider them to be nothing more than simple disagreements with k n o w n legal duties imposed by the tax laws." Cheek, 498 U.S. at 203­04. I n this case, although the Kellars paid no income tax from 2000 through 2 0 0 7 , they earned a substantial amount of income, which in some years exceeded $ 3 0 0 ,0 0 0 , and over the course of the years in question, totaled approximately $ 1 ,7 9 1 ,0 0 0 . See Chesson, 933 F.2d at 304 (listing "a failure to report a

s u b s t a n t ia l amount of income" as circumstantial evidence of willfulness) (c it a t io n omitted). The evidence introduced at trial also indicated that Philip c o m p lie d with the relevant IRC provisions prior to 1996, filed untimely returns fo r tax years 2001 through 2004, filed extensions of time requests with the IRS fo r tax years 2005 through 2007, and admitted to IRS employees that he knew h e was required to file taxes. The IRS also warned Philip on several occasions about the consequences o f his failure to file tax returns or pay his taxes. See Cheek, 498 U.S. at 202 (" T h e jury is free . . . to consider any admissible evidence from any source s h o w in g that . . . [the defendant] was aware of his duty to file a return and to t r e a t wages as income."). Finally, the Government introduced evidence that P h ilip obstructed the IRS's efforts to collect the taxes that he owed. See Chesson, 9 3 3 F.2d at 304 (listing "any conduct, the likely effect of which would be to 13

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No. 09-41287 m is le a d or to conceal," as circumstantial evidence of willfulness) (citation and e m p h a s is omitted). This obstructive conduct included the opening and

im m e d ia t e closing of a bank account with $25, and the subsequent sending of c h e c k s to the IRS for approximately $500,000 from the closed account, as well a s his attempt to have his income disbursed to the "Order of Gershom" and then r o u t e d back to him. P h ilip 's arguments to the contrary lack merit. The Government provided a m p le circumstantial evidence above and beyond Philip's correspondence with t h e IRS in 2006 in which he admitted his liability. Additionally, the

G o v e r n m e n t had no burden to demonstrate the law that required Philip to pay h is income taxes; instead, it only had the burden of demonstrating a tax d e fic ie n c y . See Miller, 588 F.3d at 907 ("The elements of a violation of 26 U.S.C. § 7201 are: (1) existence of a tax deficiency; (2) an affirmative act constituting an e v a s io n or an attempted evasion of the tax; and (3) willfulness.") (citation o m it t e d ). The Kellars do not dispute that a deficiency existed. Philip cites no caselaw suggesting why the "tremendous pressure" and " e x tr e m e duress" he was under when he sent his correspondence to the IRS, in w h ic h he admitted his tax liability, should negate his willfulness, and the jury w a s at liberty to make a credibility determination that Philip knew of his r e s p o n s ib ili t ie s well before this admission. Finally, Philip's beliefs, which

in c lu d e d that "where the Internal Revenue Code referenced `persons', it was t a lk in g about artificial persons such as corporations," seem unreasonable. See C h e e k , 498 U.S. at 203­04 ("[T]he more unreasonable the asserted beliefs or m is u n d e r s t a n d in g s are, the more likely the jury will consider them to be nothing m o r e than simple disagreements with known legal duties imposed by the tax la w s ." ). We thus hold that the Government introduced sufficient evidence to s u s t a in Philip's conviction.

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No. 09-41287 3. T h e Government Introduced Sufficient Evidence to Sustain t h e Jury's Verdict as to Michele

I n addition to adopting Philip's sufficiency of the evidence arguments, M ic h e le also contends that she merely followed Philip's directions. As discussed a b o v e , we must ask only whether the evidence is such that "a rational trier of fa c t could have found guilt beyond a reasonable doubt." Montes, 602 F.3d at 388 (c it a t io n omitted). As such, we find that Michele's additional argument fails. I n United States v. Anderson, a defendant's sufficiency of the evidence c h a lle n g e to her conviction for willfully filing a false withholding certificate " a p p e a r e d to be that she followed her husband's instructions in tax matters." 577 F.2d 258, 260 (5th Cir. 1978) (per curiam). The Anderson court noted that t h e defendant "herself filled out a W-4 form at her place of employment[,] . . . c la im e d ten withholding allowances[, and] [w]hen asked why she wished to a m e n d the form she offered only evasive answers." Id. As such, the Anderson c o u r t held that "a jury could reasonably have found that she possessed the r e q u is it e knowledge and willfulness." Id. at 261. I n this case, the Government introduced evidence showing that Michele fa ls ifie d W-4 forms, including two in 1998, one claiming eight allowances and a n o t h e r crossing out all allowances; one in 2006 claiming three allowances; and o n e in 2007 claiming four allowances but including the "U.T.C.D." notation. Michele freely admitted that she shared her husband's beliefs, and when q u e s t io n e d about an obstructive letter she sent to the IRS, testified that Philip " d o e s n 't force me to do anything." She also sent numerous letters challenging t h e authority of the IRS to collect taxes, and despite the IRS's warning that her c o n t in u e d defiance of the IRC could result in criminal punishment, she t h r e a te n e d a third party with legal action if the business disclosed information in response to an IRS subpoena. Finally, Michele opened a bank account with $ 1 0 , closed the account, and sent checks from the closed account to the IRS. We

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No. 09-41287 t h e r e fo r e hold that the Government introduced sufficient evidence to sustain the ju r y 's verdict as to Michele. C. S e n t e n c i n g Issues 1. S t a n d a r d of Review

W e review the "district court's interpretation or application of the S e n te n c in g Guidelines . . . de novo, and its factual findings . . . for clear error." United States v. Cisneros-Gutierrez, 517 F.3d 751, 764 (5th Cir. 2008) (citation a n d internal quotation marks omitted). For sentencing purposes, we must e x a m in e "the district court's determination of the tax loss for clear error." United States v. Clark, 139 F.3d 485, 490 (5th Cir. 1998) (citing United States v. M c C o r d , 33 F.3d 1434, 1453 (5th Cir. 1994)); see also United States v. Scher, 601 F .3 d 408, 412 (5th Cir. 2010) (stating, in a wire fraud case, that "[a] district c o u r t's loss calculation under the Sentencing Guidelines is a factual finding r e v ie w e d for clear error"). "There is no clear error if the district court's finding is plausible in light of the record as a whole." Cisneros-Gutierrez, 517 F.3d at 7 6 4 (citation and internal quotation marks omitted). We review a request for a downward departure for abuse of discretion, U n ite d States v. Lugman, 130 F.3d 113, 115 n.2 (5th Cir. 1997), and "[t]he d e f e n d a n t bears the burden of proving that his [or her] role in the offense was m in o r or minimal." United States v. Atanda, 60 F.3d 196, 198 (5th Cir. 1995) (c it a t io n omitted). "Less culpability than other codefendants does not

n e c e s s a r ily entitle a defendant to a role adjustment," as co-defendants must s h o w "substantially less culpabl[ity] than the average co-participant." United S ta te s v. Ladum, 141 F.3d 1328, 1348 (9th Cir. 1998) (citation omitted); see also U n ite d States v. Tilford, 224 F.3d 865, 869 (6th Cir. 2000) ("We have held that m in im a l participant status is reserved primarily for someone who played a s in g le , limited role in a very large organization."), abrogated on other grounds

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No. 09-41287 b y Burford v. United States, 532 U.S. 59, 64­65 (2001) (citation and internal q u o t a t io n marks omitted). 2. T h e District Court Did Not Abuse Its Discretion by Denying M i c h e le a Role Reduction at Sentencing

M ic h e le argues that nothing introduced at trial, in the PSR, or presented d u r in g the sentencing hearing justified her receiving the same forty-one month s e n te n c e as Philip. She contends that the majority of the Government's case r e la t e d to Philip, and that Philip himself testified that he was the "leader" and M ic h e le the "follower." She also argues that the district court should have c o n s id e r e d her "fragile mental state and the pain and suffering she has suffered a t the hands of the Government," and notes her diagnosis for both PTSD and MDD. Michele's arguments lack merit. As noted above, Michele did not play a " s in g le , limited role in a very large organization." Tilford, 224 F.3d at 869. Additionally, Michele has not demonstrated why her "fragile mental state" was relev a n t to the district court's sentencing determination. Further, Michele never p r e s e n t e d evidence of her mental state during her case, and nothing in the r e c o r d supports her request for a variance on this ground. For these reasons, we fin d that the district court did not abuse its discretion by denying Michele a role r e d u c t io n or downward departure at sentencing. 3. T h e District Court Did Not Clearly Err When It Calculated t h e Tax Loss for Purpose of the Kellars' Sentences

T h e Kellars argue that the district court clearly erred when it elected to a c c e p t , for purposes of sentencing, the Government's proposed tax loss c a lc u la t io n for tax years 2005 through 2007--years in which the Kellars filed no r e t u r n s -- w h ic h estimated the tax loss using standard deductions, rather than t h a t proposed by the Kellars' accountant, which estimated the tax loss using it e m iz e d deductions. The Government's proposed loss calculation for tax years

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No. 09-41287 2 0 0 5 through 2007 resulted in a loss total of $444,832.53, a base offense level of 2 0 , and a Guidelines range of thirty-three to forty-one months' imprisonment. Had the district court adopted the loss calculation proposed by the Kellars' a c c o u n t a n t for tax years 2005 through 2007, the loss would have amounted to $ 3 6 6 ,8 1 1 .2 9 , a base offense level of eighteen, and a Guidelines range of twentys e v e n to thirty-three months' imprisonment. The district court reasoned that it could rely on the Kellars' actual tax filin g s from 2001 through 2004 because the Kellars could no longer legally c h a n g e the amounts reported to the IRS for those years. In contrast, the district c o u r t discredited the calculation provided by the Kellars' accountant, finding t h a t because tax evasion is a crime of dishonesty and the Kellars' accountant c a lc u la t e d his estimation based almost entirely on documents provided by the K e lla r s , the Government's calculation was more reliable. The Kellars contend t h a t the district court clearly erred by doing so, arguing that "[t]here is no logical r e a s o n to believe [their] representations for years 2001­2004, then disbelieve t h e m for 2005­2007," and that the tax loss should be calculated using itemized d e d u c tio n s for every year, or no year at all. They also direct us to the fact that t h e Government altered its estimate after their accountant discovered errors in t h e Government's calculation. The district court did not clearly err when it calculated the tax loss for the p u r p o s e s of the Kellars' sentences. With regard to the Kellars' argument that t h e district court should either use itemized deductions for every year or for no y e a r at all, the Government directs us to the commentary of United States S e n te n c in g Guideline ("USSG") §2T1.1, which reads: In determining the tax loss attributable to the offense, the court s h o u ld use as many methods set forth in subsection (c) and this c o m m e n t a r y as are necessary given the circumstances of the p a r t ic u la r case. If none of the methods of determining the tax loss s e t forth fit the circumstances of the particular case, the court

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No. 09-41287 s h o u ld use any method of determining the tax loss that appears a p p r o p r ia te to reasonably calculate the loss that would have r e s u lt e d had the offense been successfully completed. Therefore, the Kellars' unsupported argument that the district erred by c o m b in in g calculation methods fails. The district court's choice to adopt the loss associated with the tax returns t h e Kellars filed for tax years 2001 through 2004, which included itemized d e d u c tio n s , was justified: the Kellars had no way to alter those numbers, and t h e y represented the figure that the IRS had then identified as their tax d e fic ie n c y . There exist several reasons for the district court to reject the

n u m b e r s submitted by the Kellars' accountant for tax years 2005 through 2007. First, as noted by the Government, a taxpayer must elect itemized deductions w h e n filing, as standard deductions are the default. The Kellars' failure to file t a x returns for 2005 through 2007 suggests that the district court did not clearly e r r by using the estimate that employed the default deductions. Additionally, the Kellars' accountant relied solely on documents provided b y the Kellars themselves and unverified tax information prepared by H&R B lo c k . Although the Kellars argue that the district court should have found the in fo r m a t io n pertaining to tax years 2005 through 2007 just as accurate and r e lia b le as that pertaining to tax years 2001 through 2004, the Kellars had every r e a s o n to minimize their tax loss amount for tax years 2005 through 2007, as t o t a l tax loss was the predominant consideration when calculating their G u id e lin e s range. The Kellars' accountant also failed to include interest and penalties in his o r ig in a l calculation, as is required in tax loss computation in tax evasion cases. S e e USSG §2T1.1, cmt. n.1. Finally, the Kellars' accountant never reviewed his t a x computations with the Kellars themselves to ensure their accuracy. Based

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No. 09-41287 o n these considerations, we find that the district court did not clearly err when it adopted the Government's proffered tax loss calculation. I I I . CONCLUSION T h e district court did not abuse its discretion when it declined to allow the K e lla r s to introduce their proffered opinion letters into evidence, nor did it abuse it s discretion when it declined to allow Michele to testify as to the circumstances o f the Kellars' arrest. Additionally, the Government introduced sufficient

e v id e n c e for a rational fact-finder to conclude, beyond a reasonable doubt, that t h e Kellars willfully failed to pay their income taxes and that Philip willfully fa ile d to file his tax returns. Finally, the district court did not abuse its

d is c r e t io n when it denied Michele's request for a role reduction, nor did it clearly e r r when it calculated the total tax loss for sentencing purposes. We therefore a ffir m the Kellars' convictions and sentences. AFFIRMED.

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