United States v. Cheek

[Editor’s Note: The excerpt in Federal Tax Practice and Procedure, Watson, 3rd Ed., misstates the court as the United States Court of Appeals for the Third Circuit.] John Cheek (defendant) did not file federal income tax returns for 1980, 1981, and 1983 through 1986. Cheek was charged with failing to file tax returns in violation of Internal Revenue Code (code) § 7203 and willfully attempting to evade his taxes in violation of code § 7201. At trial, Cheek argued that he relied on faulty legal advice. Specifically, Cheek claimed that, starting after March 1980, he consulted with attorneys who told him that the tax system was based on voluntary compliance and that Cheek’s previous legal challenges to the federal tax system had failed for procedural rather than substantive reasons. Cheek requested a jury instruction regarding an advice-of-counsel defense. The United States responded that Cheek did not seek independent legal advice, but rather sought legal opinions that justified his existing conduct, and that Cheek ignored legal warnings that his conduct could lead to criminal charges. Thus, one attorney testified that Cheek consulted him solely to protect himself in the event Cheek was indicted, one attorney testified that she advised that Cheek had to obey the law until he obtained a legal ruling to the contrary, one attorney testified that he told Cheek that courts were interpreting the tax laws to require the filing of returns and that Cheek could face criminal charges for not filing a return, and one attorney testified that she told Cheek she could not verify his tax position. No attorney advised Cheek not to file his returns, and each warned about criminal jeopardy. The district court refused Cheek’s requested advice-of-counsel instruction. The jury convicted Cheek. Cheek appealed, arguing that the district court erred by not instructing the jury about an advice-of-counsel defense. The United States responded that Cheek failed to show that he (1) obtained legal advice regarding possible future conduct, (2) made a full and accurate report to his attorney of all known material facts, or (3) strictly adhered to his attorneys’ advice. The United States further argued that the jury effectively was instructed regarding an advice-of-counsel defense because the district court charged the jury that it must acquit Cheek if Cheek believed in good faith that he was acting legally.