Bursten v. United States

Bursten (defendant) did not report any income for a year when his income exceeded $152,000. Two years later, the Internal Revenue Service received an amended return for that year that reported a capital gain of $156,000, a carryover capital loss of $140,000, and other losses of $14,000. Bursten was indicted for evading federal income taxes. The government (plaintiff) maintained that the carryover loss should have been treated as ordinary income. Bursten testified that his tax counsel advised him to claim the carryover loss. Bursten’s tax counsel testified that he thought the carryover loss was proper. Bursten requested that the jury be instructed that if it found that Bursten had discussed the carryover loss with competent tax counsel and his tax return was prepared based on counsel’s advice, the jury should find that Bursten did not willfully file a false return and should return a verdict of not guilty. The court gave a general instruction on the element of intent but refused to give the requested instruction concerning reliance on the advice of counsel. The court stated at one point that one can always find a crook to give the advice that no tax is owed and that he did not believe that Bursten’s tax counsel was a competent tax attorney. Bursten was convicted and appealed on the ground that the trial court’s refusal to give the requested instruction was reversible error.