United States v. William L. Hayes
861 F.2d 1225, 63 A.F.T.R.2d (RIA) 306, 27 Fed. R. Serv. 55 (1988)
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Rule of Law:
Computer data compilations from a government agency are admissible as business records under Federal Rule of Evidence 803(6) in a criminal case, and are not automatically excluded by Rule 803(8)'s prohibition on law enforcement reports, provided a proper foundation is laid and the custodian or other qualified witness who prepared or obtained the records testifies and is subject to cross-examination.
Facts:
- For the tax years 1978, 1979, and 1980, defendant Hayes filed individual income tax returns.
- In 1980, acting on the advice of 'tax experts' Don Perry and Don Bearnson, Hayes invested $5,000 in foreign trust organizations as a way to reduce his tax liability.
- Bearnson referred Hayes to another 'tax expert,' John Grandbouche, who advised Hayes that certain individuals had no constitutional obligation to pay income tax.
- Hayes paid for a membership in a 'Commodity Exchange,' received books about the legality of taxation, and read Supreme Court cases provided by Grandbouche.
- After reviewing these materials, Hayes concluded he was not a person constitutionally required to file income taxes.
- Hayes had income in 1981 but did not file an income tax return for that year.
- In response to a delinquency notice from the Internal Revenue Service (I.R.S.), Hayes indicated that he was 'not liable this period.'
Procedural Posture:
- Hayes was charged in the United States District Court in a two-count indictment with willful income tax evasion and failure to file.
- Before trial, Hayes filed a motion to sever the two counts so he could testify on one but not the other; the trial court denied the motion.
- Hayes also filed a pre-trial motion to suppress computer data evidence from the I.R.S., which the trial court denied after a hearing.
- At a jury trial, Hayes was acquitted on the tax evasion charge (count I) but convicted on the lesser included offense of willful failure to file an income tax return for 1981 (count II).
- Hayes appealed his conviction to the United States Court of Appeals for the Tenth Circuit.
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Issue:
Are an agency's computer-generated records showing a defendant's failure to file a tax return admissible as a business record under Federal Rule of Evidence 803(6), despite the argument that they are untrustworthy and should be excluded as law enforcement reports under Rule 803(8)?
Opinions:
Majority - Holloway, Chief Judge
Yes, an agency's computer-generated records are admissible under Federal Rule of Evidence 803(6). The court held that the computer data evidence was properly admitted because a sufficient foundation was established under the business records exception. The defendant's general challenge to the trustworthiness of the entire I.R.S. computer system was insufficient without specific evidence showing that his records were unreliable. The court rejected the argument that the records must be excluded under the rationale of United States v. Oates, which bars the admission of law enforcement reports under other hearsay exceptions. The primary concern in Oates was the defendant's Sixth Amendment right to confrontation, a concern that is alleviated when the custodian of the records, in this case I.R.S. examiner Dorothy Vest, testifies at trial and is available for cross-examination about the records' preparation.
Analysis:
This decision clarifies the interaction between the business records hearsay exception (FRE 803(6)) and the public records exception (FRE 803(8)), particularly in the context of computer-generated government records. It narrows the application of the rule from United States v. Oates, which prevented the government from using 803(6) to admit law enforcement reports barred by 803(8). The holding establishes that if the author or custodian of a routine, non-adversarial government record testifies in court, the Confrontation Clause concerns underlying 803(8) are satisfied, rendering the record admissible if it meets the foundational requirements of 803(6). This solidifies a path for prosecutors to admit crucial administrative records in criminal cases like tax fraud.
