United States v. Olbres

Anthony and Shirley Olbres (the Olbreses) (defendants) owned a business that built trade-show exhibit booths. Shirley Olbres handled the company’s books. The Olbreses deposited most business receipts into a checking account but also deposited some into a savings account without recording them in the cash-receipts journal. The Olbreses had an accountant prepare financial statements and tax returns based on information they provided, including projected revenue information and business receipts. The accountant typically attached a cover sheet to the Olbreses’ tax return summarizing the contents and containing the bill, which the Olbreses paid when they signed the return. The Internal Revenue Service (IRS) started investigating the Olbreses when an IRS employee noticed a Rolls-Royce owned by the Olbreses parked outside a restaurant. Investigation revealed that the Olbreses had understated their income on their tax returns by failing to report, among other items, the receipts deposited into the savings account. During the investigation, the Olbreses claimed to have misplaced an invoice log and the savings-account passbook. The Olbreses were convicted on one count of willfully attempting to evade income tax. The district court granted the Olbreses’ motion for judgment of acquittal. The government (plaintiff) appealed. The Olbreses argued that because they signed their tax return without reading it, the evidence did not establish willfulness.