Lynnette Harris and Leigh Ann Conley (defendants), who were twin sisters, each received over $500,000 from wealthy widower David Kritzik in the years leading up to his death. During that time, Harris was Kritzik’s mistress. Kritzik wrote letters to Harris expressing the joy that he felt from giving these gifts to her. But when describing her relationship with Kritzik to others, Harris described it as a job. Kritzik’s payments to Conley were mostly by means of a weekly check collected at Kritzik’s office, and Kritzik only included a small portion of the payments on his relevant annual gift-tax returns. Neither sister included the payments from Kritzik in her gross income for federal income-tax purposes. Consequently, the United States (plaintiff) indicted the sisters with knowing and willful evasion of tax liability. The sisters were convicted by the federal district court and appealed to the United States Court of Appeals for the Seventh Circuit.