United States v. McGill

Attorney Thomas McGill (defendant) did not pay his taxes for 1980 through 1987, leading the Internal Revenue Service (IRS) to levy against McGill’s personal bank accounts and certain fees that McGill would receive. McGill stopped using his accounts after the levies, instead utilizing an account in his wife’s name (the Lillie account) and an account that McGill shared with others (the McGill & Seay account). Per McGill, he used the alternate accounts because he believed his accounts had been closed, but McGill admitted that he did not believe the IRS would “bother” the McGill & Seay account. In March 1988, the United States initiated a criminal investigation into McGill’s nonpayment. In August, McGill opened an account with the Philadelphia Savings Fund Society (PSFS). Per McGill, he did so in response to IRS criticism about his use of the alternate accounts. McGill did not tell the IRS about the PSFS account. Also in approximately August, McGill received and deposited $9,000 in fees that he received despite the levies into his PSFS account. McGill reported the fees on his tax return. McGill was convicted of three felony counts of violating 26 U.S.C. § 7201 (tax-payment evasion) and two misdemeanor counts of willfully failing to pay taxes in violation of 26 U.S.C. § 7203. McGill appealed, challenging (1) the sufficiency of the evidence regarding his engagement in affirmative acts of tax-payment evasion, as required by § 7201, and (2) the jury instructions regarding the willfulness element of §§ 7201 and 7203 and the sufficiency of the evidence of willfulness. Regarding evasion, McGill contended that his use of the Lillie and McGill & Seay accounts did not qualify because he believed that his personal accounts had been closed and he thus lacked evasive intent. McGill also argued that he did not affirmatively try to evade payment by not telling the IRS about the PSFS account or his $9,000 deposit in the PSFS account because he had no disclosure duty. Additionally, McGill argued that the district court’s instruction that willfulness meant a voluntary intentional violation of a known legal duty was inadequate because the district court did not tell the jury that it had to find that McGill specifically knew that using alternative accounts was illegal.