United States of America v. Leroy M. Bennett

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 08-1849
UNITED STATES OF AMERICA
v.
LEROY M. BENNETT,
Appellant
Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Criminal Action No. 1-07-cr-00017-001)
District Judge: Honorable Maurice B. Cohill, Jr.
Submitted Under Third Circuit LAR 34.1(a)
July 7, 2009
Before: SLOVITER, AMBRO, and JORDAN, Circuit Judges
(Opinion filed: July 8, 2009)
OPINION
AMBRO, Circuit Judge
Leroy M. Bennett appeals his conviction for five counts of willfully failing to file
federal income tax returns for tax years 2000 through 2004, in violation of 26 U.S.C.

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The District Court had jurisdiction under 18 U.S.C. § 3231. We have appellate1
jurisdiction under 18 U.S.C. § 3742(a) and 28 U.S.C. § 1291.
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§ 7203. For the following reasons, we affirm the District Court’s judgment.1
Because we write solely for the parties, we recount only the facts relevant to our
analysis. In 1995, Bennett, a Pennsylvania resident, stopped filing federal income taxes
on various grounds, including that taxes were voluntary, could not apply to his income,
and could not be collected by the Internal Revenue Service (“IRS”). The IRS began
calculating Bennett’s tax liability using the withholding information reported on W-2
forms submitted by his employers (General Electric Company through 2002, and Wal-
Mart Stores Inc. beginning in 2004). Despite the withholdings, Bennett owed the IRS
money each year. The IRS told Bennett that it would begin levying against assets if he
refused to pay his taxes. He responded by filing bankruptcy when the IRS tried to garnish
his wages and, to reduce withholdings, claiming many more exemptions than applied to
him. The IRS eventually threatened Bennett with criminal sanctions, and in 2006 and
2007 he finally filed 12 years of tax returns for tax years 1995 through 2006. In them,
Bennett claimed that the IRS owed him almost $350,000, even though his employers
withheld much less than that over those years.
In August 2007, Bennett was indicted by a grand jury in the Western District of
Pennsylvania on five counts of § 7203 violations, and in December 2007 a jury found him
guilty of all five counts. Bennett was sentenced to 21 months’ imprisonment and one year

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Our review of a district court’s subject matter jurisdiction is de novo. See Pontarelli2
v. U.S. Dep’t of the Treas., 285 F.3d 216, 219 (3d Cir. 2002) (citing In re Phar-Mor, Inc.
Sec. Litig., 172 F.3d 270, 273 (3d Cir. 1999)). We exercise plenary review over the legal
findings of a district court, including its interpretation of federal income tax statutes, see
In re CM Holdings, Inc., 301 F.3d 96, 101 n.3 (3d Cir. 2002) (citing ACM Partnership v.
Commissioner, 157 F.3d 231, 245 (3d Cir. 1998)), and we apply a plain error standard to
alleged sentencing errors raised for the first time on appeal. See United States v. Russell,
564 F.3d 200, 203 (3d Cir. 2009) (citing United States v. Lloyd, 469 F.3d 319, 320 (3d
Cir. 2006)).
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supervised release, which was the lower end of the advisory Sentencing Guidelines range,
U.S.S.G. §§ 2T1.1 & 2T4.1, calculated by taking into account Bennett’s $80,000 owed in
back taxes to the IRS.
On appeal, Bennett argues that: (1) because his employers filed W-2 forms with
the IRS on his behalf, his filing of income tax returns was voluntary and therefore the
District Court lacked subject matter jurisdiction over the charges; (2) the Paper Reduction
Act of 1995 (“PRA”) provides a complete or “good faith” defense to a charge of willfully
failing to file an income tax Form 1040; (3) the Government was required to show that he
had knowledge of the specific provision he was alleged to have violated to meet its
burden of proof; and (4) it was error to include tax years 2000 through 2004 in calculating
the amount of tax loss caused by his crime for sentencing purposes.2
The crime charged here has three elements: (1) the duty or requirement to file a
tax return; (2) failure to file the return; and (3) willfulness. See United States v. McKee,
506 F.3d 225, 244 (3d Cir. 2007) (citing United States v. Foster, 789 F.2d 457, 460 (7th
Cir. 1986)). Bennett’s first claim—that the W-4 forms he completed for his employers,

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and the W-2 forms that his employers submitted to the IRS, made filing income tax
returns voluntary—goes to the “duty” element of the offense. This argument has been
rejected by us and other courts of appeals. In Bachner v. Commissioner, 81 F.3d 1274,
1280 (3d Cir. 1996), we held that information on the W-2 form is not independently
sufficient for tax-computation purposes, as it “fail[s] to provide facts addressed to or
determinative of other potential liabilities and therefore [is] not sufficient to be
considered a ‘return.’” See also Kartrude v. Commissioner, 925 F.2d 1379, 1384 (11th
Cir. 1991); United States v. Birkenstock, 823 F.2d 1026, 1030 (7th Cir. 1987); United
States v. Rickman, 638 F.2d 182 (10th Cir.1980). Bennett cites United States v. Patridge,
507 F.3d 1092 (7th Cir. 2007), as support for this contention. However, the portion of the
decision he cites relates to his PRA claim, not to whether he had an independent duty to
file. We therefore turn to Bennett’s PRA argument.
The Court in Patridge stated that “the obligation to file a tax return stems from 26
U.S.C. § 7203,” and the PRA does not “change any substantive obligation” or repeal
§ 7203. Id. at 1094-95. Bennett claims that, despite this, the PRA provides a complete or
“good faith” defense to a charge of willfully failing to file income tax returns because
Form 1040 does not comply with the PRA requirements. The Government points out that
this argument was soundly rejected in Miller-Wagenknecht v. Commissioner, 285 F.
App’x 956 (3d Cir. 2008), and in Barzeski v. Commissioner, 173 F. App’x 175 (3d Cir.
2006). Because these decisions are not precedential, we do not rely on them. That does

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not mean we come out any differently, however. The obligation to file federal income tax
returns stems from a Congressional statute, while the PRA applies to agency regulations,
and thus the PRA has no effect on the IRS’s ability to penalize taxpayers for failing to
provide a complete and candid report of their income. See Patridge, 507 F.3d at 1095;
United States v. Hicks, 947 F.2d 1356, 1359 (9th Cir. 1991). Additionally, it is well
established that Form 1040 bears the necessary control number and expiration date to be
in compliance with the PRA. See Patridge, 507 F.3d at 1095; United States v. Dawes,
951 F.2d 1189, 1193 (10th Cir. 1991).
Bennett also contends that the Tenth Circuit’s decisions in United States v.
Chisum, 502 F.3d 1092 (10th Cir. 2007), and Pond v. Commissioner, 211 F. App’x 749
(10th Cir. 2007), support his claim that the PRA provides a defense to failure to file
income taxes. There the Court held that the PRA was not implicated where a taxpayer
had filed false returns because it “protects a person only for failing to file information,”
Chisum, 502 F.3d at 1243–44, and that tax forms are collection requests within the
meaning of the PRA, see Pond, 211 F. App’x at 752. The problem at the outset for
Bennett is that the most recent Tenth Circuit decision on this issue is Lewis v.
Commissioner, 523 F.3d 1272 (10th Cir. 2008). It clarified Chisum and Pond; Chisum
“should not be read to support an argument that the PRA ultimately protects individuals
who fail to file tax information,” and Pond simply “declined to address the argument that
[Form 1040] violated the PRA because the defendant had not included any of the forms in

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See United States v. Cavins, 543 F.3d 456, 458–59 (8th Cir. 2008) (characterizing the3
language from Bryan regarding the Tax Code as dictum).
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the record,” and “even affirmed the district court’s dismissal of the PRA claims as
frivolous.” Id. at 1275 nn.4–5. After reviewing Lewis’ arguments, which were
comparable to those Bennett presents on appeal, the Tenth Circuit’s decision confirmed
that they lacked sufficient merit and held that Form 1040 satisfies the PRA requirements.
Id. at 1277.
Bennett next claims that, to satisfy its burden of proof regarding the “willfulness”
element of his crime, the Government was required to prove that he had actual knowledge
of the specific provision of the Tax Code he was violating. He cites Bryan v. United
States, 524 U.S. 184 (1998), arguing that it requires the Government to prove he was
aware of the “specific provision of the Tax Code he was charged with violating.” Id. at
194. But Bennett fails to acknowledge that (1) Bryan involved a firearms violation, and
thus the Court’s statement regarding the Tax Code could not possibly have been its
holding; (2) the Bryan Court specifically noted that the reason for requiring actual3
knowledge was that certain tax cases involve “highly technical statutes that present . . .
the danger of ensnaring individuals engaged in apparently innocent conduct”; and (3) the
Court further noted that, “[e]ven in tax cases, we have not always required this heightened
mens rea.” Id. at 194 & n.17. A heightened mens rea was not required here. Bennett
paid taxes for at least 20 years before he stopped filing. That he did so makes plain he

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The Government gave Bennett the standard deductions he could have claimed had he4
actually filed his tax returns, but the majority of the courts of appeals do not require this.
See, e.g., United States v. Delfino, 510 F.3d 468, 473 (4th Cir. 2007) (holding that the
Government is not required to include a taxpayer’s deductions in its calculation of the
amount of tax loss under U.S.S.G. § 2T1.1); United States v. Chavin, 316 F.3d 666, 679
(7th Cir. 2002) (rejecting the inclusion of deductions); United States v. Spencer, 178 F.3d
1365, 1368 (10th Cir. 1999) (rejecting the interpretation of the statute as “giving
taxpayers a second opportunity to claim deductions after having been convicted of tax
fraud”). But see United States v. Gordon, 291 F.3d 181, 187 (2d Cir. 2002) (concluding
that § 2T1.1(c)(1)(A) requires the calculation of deductions).
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knew of his duty to pay taxes and file proper tax returns, and no technical “ensnaring”
appears even remotely plausible.
Finally, Bennett challenges the District Court’s inclusion of tax years 2000 through
2004 in its calculation of the amount of tax loss caused by his violations. This argument
is an extension of his first claim, as he asserts that because his employers timely and
accurately filed W-2s on his behalf for these years, his income was therefore “reported”
and should not be used to enhance his sentence under tax loss. Just as Bennett’s
underlying claim fails, so too does its sentencing corollary. The Government’s
calculation of the tax loss caused by Bennett’s violations was consistent with the
Sentencing Guidelines set out in U.S.S.G. §§ 2T1.1 & 2T4.1. Indeed, its conclusion that
Bennett owed approximately $80,000 in back taxes was actually a conservative estimate.4
We note that Bennett was sentenced to 21 months’ imprisonment and one year supervised
release, a sentence at the bottom of the advisory Guidelines range of 21 to 27 months for

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We note that, while we agree with the Government that Bennett’s arguments on5
appeal are unpersuasive, the language used in its brief to us is often too cute for cricket.
Whatever the legal merit of his claims, Bennett takes them seriously enough to go to jail
for nearly two years. The Government should be equally serious.
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Bennett’s offense level of 16 (his criminal history category is I).5
* * * * *
For these reasons we affirm the judgment of the District Court.

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