Sentencing guidelines – sentence reviewed for reasonableness in light of the 18 U.S.C. §3553(a) factors, applying an abuse-of-discretion standard. See United States v. Booker, 543 U.S. 220, 261-62 (2005); United States v. Boss, 493 F.3d 986, 987 (8th Cir. 2007).

United States of America, Appellee v. Chad Wetzel, Appellant.

U.S. Court of Appeals, 8th Circuit; 07-1147, December 10, 2007.

Unpublished opinion affirming, per curiam, an unreported DC Minn. decision.

[ Code Sec. 7202]

Crimes: Tax evasion: Sentencing guidelines: Base sentence. --
A federal district court properly sentenced an individual to two concurrent 60-month terms of imprisonment and a consecutive 12-month prison term after he pleaded guilty to failure to collect and pay over taxes and theft and embezzlement from an employee benefit plan. The court took account of and weighed the relevant factors under the sentencing guidelines and considered and rejected the individual's arguments regarding mitigating circumstances before applying the advisory guidelines imprisonment range. Moreover, there was no unwarranted disparity of sentence among similar tax evaders because of the nature of the individual's case and criminal history.



Before: Bye, Riley and Melloy, Circuit Judges.

PER CURIAM: Chad Wetzel pleaded guilty to failure to collect and pay over taxes, in violation of 26 U.S.C. §7202; theft and embezzlement from an employee benefit plan, in violation of 18 U.S.C. §664; and false oath and account in a bankruptcy proceeding, in violation of 18 U.S.C. §152(2), each of which was punishable by a maximum of 5 years in prison. Using an undisputed advisory Guidelines imprisonment range of 63-78 months, and having addressed Wetzel's arguments for a lower sentence, the district court 1 imposed two concurrent 60-month prison terms and a consecutive 12-month prison term. Wetzel appeals, arguing the district court abused its discretion and imposed an unreasonable sentence by giving undue weight to the Guidelines, and by inadequately considering mitigating circumstances and the need to avoid unwarranted sentence disparities.

We review a sentence for reasonableness in light of the 18 U.S.C. §3553(a) factors, applying an abuse-of-discretion standard. See United States v. Booker, 543 U.S. 220, 261-62 (2005); United States v. Boss, 493 F.3d 986, 987 (8th Cir. 2007). We find no abuse of discretion here. First, Wetzel's disparity argument fails because, as the district court correctly determined, his case and criminal history were not at all similar to those of another individual who owned the predecessor to Wetzel's business. See 18 U.S.C. §3553(a)(6) (court is to consider "need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct"). Further, our review of the record convinces us that the district court considered and rejected Wetzel's arguments regarding mitigating circumstances, properly took into account only relevant section 3553(a) factors, and did not commit a clear error of judgment in weighing these factors. See United States v. Long Soldier, 431 F.3d 1120, 1123 (8th Cir. 2005) (sentencing court abuses its discretion if it fails to consider relevant factor that should have received significant weight, gives significant weight to improper or irrelevant factor, or considers only appropriate factors but commits clear error of judgment in weighing them).

Accordingly, we affirm.

1 The Honorable James M. Rosenbaum, Chief Judge, United States District Court for the District of Minnesota.

Willful Failure to File Return, Supply Information, or Pay Tax: Sentence: U.S. Sentencing Commission Guidelines: Base sentence

The U.S. Sentencing Commission Guidelines (Sentencing Reform Act of 1984, P.L. 98-473, codified at 18 U.S.C. §1335 --3742 and 28 U.S.C. §991 --998), apply to crimes committed on or after November 1, 1987. --CCH.

Taxpayer was properly sentenced under the U.S. Sentencing Guidelines.

J.J. Feola, CA-2, 2002-1 USTC ¶50,157, 275 F3d 216, aff'g, per curiam, an unreported District Court decision.

C.A. Willis, CA-8, 2002-1 USTC ¶50,207, 277 F3d 1026.

An individual who was convicted of conspiracy to defraud the government of taxes was properly sentenced under the U.S. Sentencing Guidelines. His base level for sentencing was the amount of tax loss attributable to him from all acts and omissions occurring as part of the same course of conduct or common plan and not just as part of those occasions where the individual and his co-conspirators were together or acted in unison. Further, the trial court did not err in denying a downward departure in the sentencing level for acceptance of responsibility.

H.D. Fleschner, CA-4, 96-2 USTC ¶50,536, 98 F3d 155.

The district court properly calculated an individual's base offense level according to the sentencing guidelines. The amount of the tax loss caused by his offense was based on stipulated facts. Moreover, the increase in the base offense level for concealing his crime by sophisticated means did not violate his plea agreement. Also, he began engaging in criminal conduct related to his offense as soon as he started receiving the unreported income, rather than when his return was due. Finally, his admission of wrongdoing did not constitute an acceptance of responsibility, especially in light of his continued assertion that he did not owe taxes on the unreported income.

J.E. Worthen, CA-10 (unpublished opinion), 99-2 USTC ¶50,788, aff'g an unreported District Court decision.

The lower court improperly calculated a doctor's offense level for the one count of tax evasion that fell under the federal sentencing guidelines by failing to examine the doctor's leadership role as it related to the specific offense charged. However, the one count that fell under the sentencing guidelines had no limiting effect on the lower court's discretion to impose consecutive sentences under the counts that fell outside of the guidelines.

W. Pollen, CA-3, 92-2 USTC ¶50,614, 978 F2d 78. Cert. denied, 5/17/93.

The appellate court vacated the lower court's application of the sentencing guidelines to the offenses committed by the individuals. The lower court's reference to an offense for which the individuals were not charged or convicted resulted in improperly calculated sentences.

L.G. Schmidt, CA-4, 93-1 USTC ¶50,074, 935 F2d 1440.

An individual who pled guilty to conspiracy to defraud the government and to tax evasion could not appeal the trial court's decision not to depart from the U.S. Sentencing Guidelines (USSG) in imposing a sentence. Judicial precedent on the standard for review of a court's decision to depart from the USSG did not establish a review standard for a court's decision not to depart. Moreover, despite the court's stated dissatisfaction with the prescribed sentence, the sentence could not be vacated because the court was aware of its authority to depart downward in appropriate circumstances.

D. Brown, CA-2, 96-2 USTC ¶50,557, aff'g, per curiam, an unreported District Court decision.

An individual's sentence for criminal tax evasion was based on his responsibility for both an understatement of tax for a corporation and himself as an individual. The tax loss was calculated by first determining the total hidden revenue, then applying the corporate tax rate to the amount that would have been corporate income, and applying the individual rate to the dividend (as reduced by the imputed corporate taxes). Also, all hidden funds were considered in determining the sentence, whether or not they were part of the evasion charged in this case, because the sentencing authority may consider all relevant conduct including the whole scheme of the taxpayer's activity.

J. Harvey, CA-7, 93-2 USTC ¶50,368, 996 F2d 919.

The Sentencing Guidelines, which became effective November 1, 1987, should have been applied to the taxpayers' conspiracy convictions. Even though no overt acts in furtherance of their conspiracies occurred after the effective date, the conspiracies continued past that date and therefore the guidelines applied.

W.J. Alt, CA-6, 93-2 USTC ¶50,385, 996 F2d 827.

A taxpayer's conviction by a district court for willful tax evasion, which was appealed on the ground that the sentencing guidelines were improperly applied, was affirmed. The sentencing guidelines allow all acts that are part of the same course of conduct to be included in the base offense level calculation. Accordingly, the court correctly included both the tax evaded for which the taxpayer was convicted, and the tax evaded for which the taxpayer was not charged in the indictment, in the base offense level calculation.

J.D. Meek, Jr., CA-10, 93-2 USTC ¶50,409, 998 F2d 776.

The trial court did not err by failing to hold an evidentiary hearing to resolve each controverted matter in the presentence report of an attorney who was convicted of failure to file tax returns. Further, imposing an enhancement for obstruction of justice based on the attorney checking into a hospital shortly before trial was not in error. Finally, contentions that the U.S. Sentencing Guidelines were misapplied in computing the offense level or that the corresponding fines were erroneous could not be raised for the first time on appeal.

G.V. Dubin, CA-9 (unpublished opinion), 96-2 USTC ¶50,541, 77 F3d 490. Cert. denied, 10/7/96. Rehearing denied, 1/21/97.

The sentence of an individual who pled guilty to willfully failing to account for and pay over certain taxes withheld from his employees was upheld. The addition of two points to the individual's criminal history score under the U.S. Sentencing Guidelines (USSG) for an offense committed while on probation did not violate his cooperation agreement. The government knew about the individual's employees before he made disclosures under the protection of the agreement.

D.M. Haught, CA-4 (unpublished opinion), 96-2 USTC ¶50,542, 98 F3d 1336, aff'g, per curiam, an unreported District Court decision.

The trial court appropriately enhanced an attorney's base offense level under the U.S. Sentencing Guidelines (USSG) for his role as a manager of a conspiracy through which his client fraudulently concealed assets. The base offense level was determined under the proper USSG subsection, the court's estimate of the tax loss was reasonable, and it did not err in refusing to make a downward departure based on the claimed atypical nature of the case. No upward adjustment was made for the attorney's alleged use of sophisticated means in evading tax because his personal involvement was minimal. Finally, a downward adjustment for acceptance of responsibility was not erroneous.

J.B. Kraig, CA-6, 96-2 USTC ¶50,616, 99 F3d 1361.

A married couple's sentences for tax evasion were vacated and remanded because it was unclear whether the trial court reached an adequate conclusion on the couple's willfulness in attempting to evade all or specific amounts of taxes when determining their base offense level under the U.S. Sentencing Guidelines. The court could not rely on a presentence investigation report (PSR) that did not resolve all the disputed factual issues.

A.G. Olbres, CA-1, 96-2 USTC ¶50,670, 99 F3d 28.

A subcontractor was properly convicted and sentenced for tax evasion and failure to file returns. The trial court did not err in using the government's evidence of the tax loss for which the individual was responsible in determining his base offense level for sentencing. The government attempted to measure the individual's income and expenses accurately while the individual gave speculative testimony. Further, the court did not violate the subcontractor's due process rights when it considered his gross income for closed tax years because the statute of limitations does not limit what actions a court may consider as relevant conduct when sentencing a defendant.

R.A. Valenti, CA-7, 97-2 USTC ¶50,629, 121 F3d 327.

An individual's sentence for obstructing the IRS, failing to pay over withheld taxes, and currency structuring was substantially less than that set forth in the U.S. Sentencing Guidelines for the most similar offense of tax evasion. Thus, the decision was vacated and remanded for the sentencing court to reconsider the taxpayer's intent and to explain any departure from the guidelines. It did not appear that the individual intended to repay all of the government's losses, he made false statements, and the structuring offenses alone should have produced a longer sentence.

J.A. Brennick, CA-1, 98-1 USTC ¶50,275, 134 F3d 10.

In determining the base offense level of an individual who was convicted of willfully evading the payment of taxes and filing false statements, the trial court erroneously included interest and penalties in the amount of the tax loss caused by his actions. Although the language of the U.S. Sentencing Guidelines was ambiguous, the commentary stated that tax loss does not include interest and penalties.

G.R. Hunerlach, CA-11, 99-2 USTC ¶51,009, 197 F3d 1059.

In determining the base offense sentencing level, the trial court did not error when it calculated the tax loss of a printer's filing of false returns and attempted tax evasion by taking into account losses arising from his failure to file timely returns for several tax years after he committed his crimes. Since his refusal to file also violated the tax code, it constituted part of a continuing course of conduct with his criminal activities.

J.E. Codner, CA-10 (unpublished opinion), 2000-1 USTC ¶50,389, aff'g an unreported District Court decision.

The district court improperly enhanced an individual's sentence for tax fraud under the U.S. Sentencing Guidelines by separately considering his conversion and mail fraud offenses, rather than aggregating the total loss derived from all conduct relevant to the tax evasion, for purposes of determining the base offense level. Because the guidelines for tax evasion, fraud and conversion measure harm by reference to the amount of monetary loss and because the offenses were of the same general type, they should have been aggregated for sentencing purposes. Moreover, the offenses were committed as part of a common scheme or plan, so that a large portion of the taxpayer's unreported income was derived from the fraud and conversion.

T. Fitzgerald, CA-2, 2001-1 USTC ¶50,245, 232 F3d 315.

Taxpayer was properly convicted of filing false returns in connection with improper deductions for purported business expenses that were personal in nature. Although the appellate courts have been divided on the question of whether the application of a revised edition of the guidelines to offenses that both predate and postdate the revision violates the Ex Post Facto Clause, the Fourth Circuit upheld the district court's retrospective application of the increased base level for filing a false tax return as set forth in the revised guidelines to her first offense. Because the taxpayer's later acts of tax evasion occurred after the enhancement was in effect, she was provided with ample warning that those acts would cause her sentence for earlier offenses to be determined in accordance with guidelines applicable to later offenses.

V.M. Lewis, CA-4, 2001-1 USTC ¶50,252, 235 F3d 215.

An individual who willfully committed numerous affirmative acts of tax evasion in connection with her scheme to divert her deceased mother's retirement benefits was properly convicted of tax evasion. However, the taxpayer's sentence was vacated and the case was remanded for analysis under the U.S. Sentencing Guidelines. The trial court was directed to determine on remand if there was only one victim, if the taxpayer's offenses were part of a single act or transaction, and whether grouping would be appropriate.

A.E. Corbett, CA-3 (unpublished opinion), 2002-2 USTC ¶50,576, 44 FedAppx 563, aff'g in part, vac'g and rem'g in part, an unreported District Court decision.

An individual's sentence for structuring and conspiracy to defraud the IRS and subscribing to a false return was properly calculated. The guideline for structuring invokes the application of the appropriate guideline for tax-related violations. In calculating the tax loss the District Court reasonably included: (1) the unpaid taxes of subcontractors, and (2) unreported income attributable to checks made out to subcontractors that were deposited in to the individual's personal bank account. There was no proof that the amounts deposited into his personal bank account were loan repayments. Finally, his claims that a portion of the tax loss was diverted income and, therefore, only a percentage was includible in calculating the tax loss, was rejected.

T. Kosinski, CA-6 (unpublished opinion), 2005-1 USTC ¶50,241 aff'g an unreported DC Mich. decision.

An individual's conviction for tax evasion and willful failure to account for and pay over payroll taxes was affirmed. However, the taxpayer's sentence was vacated and the case remanded for resentencing because the district court erroneously treated the U.S. Sentencing Guidelines as mandatory.

M.W. May, CA-6 (unpublished opinion),2006-1 USTC ¶50,260, aff'g, per curiam, an unreported DC Ohio decision.

A federal district court's interpretation and application of the sentencing guidelines regarding the conviction of an owner of a corporation for willful failure to pay employment tax was proper. The court was not obligated to give the owner credit for time served on his earlier convictions because all his offenses were unrelated and arose out of separate arrests and constituted separate offenses.

A.M. Armstrong, CA-8 (unpublished opinion), 2007-1USTC ¶50,105, aff'g, per curiam, an unreported DC Iowa decision.

A federal district court properly calculated an individual's offense level for filing a fraudulent income tax return. It also used the correct version of the sentencing guidelines in determining his sentence.

D. Musurlian, CA-7 (unpublished opinion), 2007-1 USTC ¶50,161, 209 FedAppx 592, aff'g an unreported DC Wis. decision.

A sentence imposed on an individual convicted for tax evasion that was substantially below the applicable Sentencing Guidelines range was unreasonable. The trial court reduced the sentence by placing too much weight on the individual's family circumstances and age without giving adequate weight to the other sentencing factors. Further, the sentence did not reflect the seriousness of the individual's tax evasion offense and it took into consideration an irrelevant variable of how much the IRS would collect him.

B. Trupin, CA-2, 2007-1 USTC ¶50,354, 475 F3d 71.

A federal district court did not err in calculating the amount of tax loss while determining the base offense level in sentencing an individual who pleaded guilty to conspiracy to defraud the government. The individual caused corporate monies to be falsely reported as wages paid to his family members. The amount of the tax loss that the individual intended to cause could not be reduced simply because his scheme to defraud inadvertently caused payment of excess social security taxes. The tax loss was properly calculated based on the intended tax loss, not on the government's actual tax loss.

C. Phelps, Jr., CA-5, 2007-1 USTC ¶50,377, 478 F3d 680, aff'g, per curiam, an unreported DC Texas decision.

The sentence imposed on an individual for tax evasion and for submitting a false declaration under oath was reasonable. The trial court properly relied on a post-verdict calculation of the amount of tax loss as part of the process of calculating the advisory guideline range and included interest and penalties in the amount of the tax loss. However, the case was remanded for an explanation regarding fines in excess of the guidelines' recommended range.

M.D. Greene, CA-10 (unpublished opinion), 2007-2 USTC ¶50,634, aff'g in part, rem'g in part, an unreported DC Okla. decision.

The sentence imposed by a federal district court on an individual who knowingly and voluntarily pleaded guilty to income tax evasion was proper. The court did not err in calculating the amount of tax loss while determining the individual's base offense level. The money that the individual received from his business associate constituted unreported income, and the expenses incurred in furtherance of his illegal activities were not deductible.

D.L. Lukasik, CA-6 (unpublished opinion), 2007-2USTC ¶50,738, aff'g an unreported DC Mich. decision.

The sentence imposed on an individual for tax evasion and willful failure to file an income tax return was proper because the state tax loss was relevant for calculating his base offense level under the sentencing guidelines. The individual's tax offenses were committed as part of a common scheme or plan.

W.M. Maken, CA-6, 2008-1 USTC ¶50,110.

A married couple was properly convicted and sentenced for tax evasion. The trial court did not err in using the government's evidence of the tax loss for which the couple was responsible in determining their base offense level for sentencing. The tax loss was calculated based on the tax amount which the government would have been deprived of if the couple's tax evasion scheme had been successful. Because the couple failed to file their income tax returns and refused to cooperate with the initial IRS audit, they forfeited their opportunity to claim deductions for the years at issue before the tax loss was determined.

J.D. Delfino, CA-4, 2008-1 USTC ¶50,114.