Cheek v. United States
112 L. Ed. 2d 617, 1991 U.S. LEXIS 348, 498 U.S. 192 (1991)
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Rule of Law:
For the government to prove willfulness in a criminal tax case, it must show the defendant intentionally violated a known legal duty. A defendant's subjective, good-faith belief that they are not violating the law negates willfulness, even if that belief is objectively unreasonable; however, a belief that the tax law itself is unconstitutional does not constitute a valid defense.
Facts:
- John L. Cheek, a pilot for American Airlines, filed federal income tax returns through 1979 but ceased filing thereafter.
- Beginning in mid-1980, Cheek claimed an increasing number of withholding allowances, eventually claiming 60, and later indicated on his W-4 forms that he was exempt from federal income taxes.
- Cheek became involved with a group that believed the federal tax system is unconstitutional and that wages do not constitute income.
- Based on seminars and his own study, Cheek developed a sincere belief that he was not required to file returns and that his actions were lawful.
- Between 1982 and 1986, Cheek was involved in several civil lawsuits where courts repeatedly informed him that his arguments, such as wages not being income, were frivolous.
- In 1980 or 1981, an attorney had also advised Cheek that courts had rejected the claim that wages are not income.
Procedural Posture:
- John L. Cheek was indicted in U.S. District Court for willfully failing to file income tax returns and willfully attempting to evade income taxes.
- At trial, the judge instructed the jury that to negate willfulness, a good-faith misunderstanding of the law must be 'objectively reasonable.'
- The jury returned a verdict finding Cheek guilty on all counts.
- Cheek, as appellant, appealed to the United States Court of Appeals for the Seventh Circuit.
- The Court of Appeals affirmed the convictions, upholding the district court's jury instruction that a belief must be objectively reasonable to be a valid defense.
- The U.S. Supreme Court granted certiorari to resolve a conflict among the circuit courts on this issue.
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Issue:
Does a good-faith misunderstanding of a known legal duty have to be objectively reasonable to negate the element of 'willfulness' in a criminal tax prosecution?
Opinions:
Majority - Justice White
No. A good-faith misunderstanding of the law does not have to be objectively reasonable to negate the element of willfulness. The standard for willfulness in criminal tax statutes is the 'voluntary, intentional violation of a known legal duty.' Due to the complexity of tax law, Congress created an exception to the general rule that ignorance of the law is no defense. If a jury believes a defendant's subjective claim of ignorance or misunderstanding of the law—such as a belief that wages are not income—then the government has failed to prove that the defendant knowingly violated their duty. However, a defendant's belief that the tax laws are unconstitutional is of a different order; it reveals knowledge of the law's requirements coupled with a decision that the law is invalid, which is not a defense against willfulness. Therefore, it was an error for the trial court to instruct the jury that Cheek's beliefs had to be objectively reasonable, but it was not an error to instruct them to disregard his claims about the unconstitutionality of the tax laws.
Dissenting - Justice Blackmun
Yes, implicitly. The dissent would have affirmed the Court of Appeals, thereby upholding the objective reasonableness instruction. The notion that a competent individual, such as an airline pilot, could sincerely believe that wages are not income more than 70 years after the modern income tax system began is incomprehensible. The District Court's instruction requiring the belief to be objectively reasonable provided an additional, and appropriate, hurdle for the prosecution. The majority's holding risks encouraging taxpayers to cling to frivolous legal views in the hope of convincing a jury of their sincerity, which goes beyond the limits of common sense.
Concurring - Justice Scalia
No, implicitly. Justice Scalia concurred in the judgment to reverse the lower court but disagreed with the majority's reasoning. Longstanding precedent holds that willfulness requires a 'bad purpose' or 'evil motive' to violate a 'known legal duty.' The majority's new distinction—that a misunderstanding of the law's requirements is a defense, but a belief in the law's unconstitutionality is not—is a departure from this precedent. It is impossible to say that a statute one believes to be unconstitutional represents a 'known legal duty.' This new test lacks any basis in the statutory text of 'willfully' and creates a revolution in past practice, potentially criminalizing taxpayers who in good faith believe a Treasury Regulation or ruling is invalid.
Analysis:
This case establishes a critical distinction in the 'willfulness' element of criminal tax law. By adopting a subjective standard for a defendant's misunderstanding of their legal duties, the Court protects individuals who may hold sincere but objectively unreasonable beliefs due to the complexity of the tax code. However, the decision sharply curtails the 'tax protestor' defense by carving out claims about the unconstitutionality of the law, deeming them irrelevant to willfulness. This creates a fine but significant line: a defense can be based on a misunderstanding of what the law says, but not on a disagreement with the law's validity. Future cases will have to carefully distinguish between a defendant's claimed confusion over their obligations and a principled refusal to comply with a known duty.
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