498 U.S. 192, 111 S. Ct. 604, 112 L. Ed. 2d 617
John L. Cheek has been employed as a pilot by American Airlines since 1973.1 He filed federal income tax returns through 1979 but ceased to file returns thereafter.2 Cheek claimed an increasing number of withholding allowances on his W-4 forms, eventually claiming 60 allowances by mid-1980, and for the years 1981 to 1984 indicated that he was exempt from federal income taxes.3 In 1983, he unsuccessfully sought a refund of all tax withheld by his employer in 1982.4 His income during this period far exceeded the minimum necessary to trigger the statutory filing requirement.5
As a result of these activities, Cheek was indicted for ten violations of federal law.6 He faced six counts of willfully failing to file a federal income tax return for the years 1980, 1981, and 1983 through 1986.7 He was also charged with three counts of willfully attempting to evade his income taxes for the years 1980, 1981, and 1983.8 Because of the allowances and exempt status claimed on his W-4 forms, American Airlines withheld substantially less than the amount of tax Cheek owed.9 He was further charged with one count of presenting a false claim to an agency of the United States.10
At trial, evidence established that between 1982 and 1986 Cheek was involved in at least four civil cases challenging aspects of the federal income tax system.11 In those cases, courts informed the plaintiffs that arguments such as not being a taxpayer, wages not being income, and the Sixteenth Amendment not authorizing an income tax were frivolous.12 Cheek also attended at least two criminal trials of persons charged with tax offenses.13 An attorney had advised Cheek in 1980 or 1981 that courts had rejected the claim that wages are not income.14
Cheek represented himself and testified that since 1978 he had attended seminars sponsored by a group believing the federal tax system is unconstitutional.15 He produced a letter from an attorney stating that the Sixteenth Amendment did not authorize a tax on wages and salaries but only on gain or profit.16 Cheek claimed he sincerely believed his actions were lawful based on this indoctrination and his own study.17
The trial court instructed the jury on willfulness as the voluntary and intentional violation of a known legal duty.18 It advised that an objectively reasonable good-faith misunderstanding would negate willfulness but mere disagreement would not.19 After several hours of deliberation, the jury sent out another note.20 It stated that it still could not reach a verdict because it was divided on whether Mr. Cheek honestly and reasonably believed that he was not required to pay income tax.21 The court gave supplemental instructions stating that a person's opinion that tax laws violate constitutional rights does not constitute good faith misunderstanding, and that an honest but unreasonable belief is not a defense.22 The jury convicted Cheek on all counts approximately two hours after the final instruction.23
Cheek appealed, arguing error in the jury instructions requiring objective reasonableness.24 The Seventh Circuit affirmed the convictions.25 The Supreme Court granted certiorari because the Seventh Circuit's interpretation conflicted with decisions of other Courts of Appeals.26
Whether a good-faith misunderstanding of the tax laws must be objectively reasonable to negate willfulness under 26 U.S.C. §§ 7201 and 7203?27
Willfulness in §§ 7201 and 7203 requires the government to prove a voluntary and intentional violation of a known legal duty.28 A defendant's good-faith belief that he is not violating the law, if credited by the jury, negates willfulness regardless of whether the belief is objectively reasonable because the inquiry focuses on the defendant's actual awareness of the duty.29
No. The established facts show that Cheek stopped filing returns after 1979, claimed up to sixty withholding allowances, and testified that since 1978 he had attended seminars and studied materials leading him to sincerely believe the tax laws were unconstitutionally enforced and that his actions were lawful.30 The trial court instructed the jury that only an objectively reasonable good-faith misunderstanding negates willfulness and the Seventh Circuit affirmed that standard.31 The Supreme Court held this was error because knowledge and belief are questions for the jury and characterizing a belief as unreasonable converts the inquiry into a legal one that prevents jury consideration.32 The evidence of Cheek's seminars, attorney letter, and claimed sincere belief must be evaluated by the jury even if the beliefs appear irrational.33
The more unreasonable the beliefs the more likely the jury will reject them as mere disagreement, yet the jury must be permitted to consider them.34
A good-faith misunderstanding of the tax laws need not be objectively reasonable to negate willfulness under 26 U.S.C. §§ 7201 and 7203.35
Related opinions on this issue
Justice Scalia concurred only in the judgment.36 He observed that prior decisions from the 1930s through the 1970s interpreted willfully to require the bad purpose or evil motive of intentionally violating a known legal duty.37 He argued that the majority opinion reverses that construction by holding that a good-faith erroneous belief in the unconstitutionality of a tax law is no defense.38
It is impossible to describe a statute one believes unconstitutional as a known legal duty.39 He warned that the new test would subject taxpayers to criminal penalties for good-faith misinterpretations of regulations or rulings that they view as contrary to the Code.40 This innovation is unsupported by the statutory text and contrary to longstanding precedent.41
Whether a good-faith belief that the tax laws are unconstitutional negates willfulness?42
No. The established facts establish that Cheek paid taxes for years before attending seminars and concluding that the income tax laws could not constitutionally require him to pay tax.4546 He produced an attorney letter asserting that the Sixteenth Amendment authorized tax only on gain or profit and not on wages.47 The Supreme Court explained that claims of unconstitutionality differ from misunderstandings caused by complexity because they demonstrate awareness of the provisions and a deliberate judgment that the provisions are unenforceable.48 Congress provided mechanisms such as refund suits under 26 U.S.C. § 7422 and Tax Court proceedings under § 6213 for taxpayers to challenge validity, and Cheek declined to accept the outcomes of those procedures.49
Therefore his constitutional belief does not supply a defense to the criminal charges.50
A good-faith belief that the tax laws are unconstitutional does not negate willfulness.
Related opinions on this issue
Joined by Justice Marshall
Justice Blackmun dissented, joined by Justice Marshall.51 He emphasized that the case concerned the most elementary aspect of the income tax system, whether a wage earner is a taxpayer and whether wages constitute income.52 He found it incomprehensible that any taxpayer of competent mentality could assert that wages are not income more than seventy years after the modern federal income tax began.53
He noted that the district court's instruction requiring objective reasonableness added an extra hurdle for the prosecution and therefore provided additional protection to the defendant.54 He feared that the majority opinion would encourage taxpayers to cling to frivolous views in the hope of convincing a jury of their sincerity.55 He concluded that the Court had gone beyond the limits of common sense.56