U.S. v. MAGA

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,

v.

DOMINIC JOSEPH MAGA, DEFENDANT-APPELLANT.

No. 10-4008.

United States Court of Appeals, Sixth Circuit.

Defendant-appellant Dominic Joseph Maga appeals a jury verdict finding him guilty of failing to file income tax returns. He contends that the trial proceedings violated his Sixth Amendment right to confrontation, that the district court erroneously denied his motion for acquittal, and that the district court abused its discretion in denying his motion for a new trial. For the reasons that follow, we affirm.

The IRS's records revealed that Maga stopped filing tax returns in 1996, years before he received the letter from the disclosure officer. When the IRS sent a levy notice, Maga requested a collection due-process hearing, purporting that he did not need to file tax returns.

A grand jury indicted Maga for failure to file a federal income tax returns between 2002 and 2006—five counts in all. It also indicted Maga for four counts of tax evasion.

Central to Maga's arguments on appeal is the government's preparation of his official tax transcripts for use at trial. These transcripts, also known as Form 4340s, document in lay terms the same information contained in an IMF transcript.

At trial, the prosecution called IRS employee John DePowell to explain how he generated and certified Maga's official tax transcripts. DePowell testified that he became involved in Maga's case when a special agent from the IRS Criminal Investigative Division asked him to obtain Maga's Form 4340s. According to DePowell, he first cross-referenced the social security number that the agent gave to him with the Social Security Administration to confirm that it belonged to Maga, then generated the Form 4340s by accessing the IRS master file remotely and printing them out at his desk. After verifying the accuracy of the Form 4340s against the data on the computer, he presented his findings to Resident Agent-in-Charge Martha Williams for further verification. Williams signed the certification at the end of each of the transcripts and DePowell affixed the seal. On the witness stand, DePowell identified the Form 4340s he generated and their accompanying "certificates of official record," observing that the Form 4340s revealed no record of Maga filing a tax return for the years 2002, 2003, 2004, 2005, and 2006.

After the prosecution rested, Maga objected to the admission of the Form 4340s and their certificates and moved for acquittal. The trial court denied the motion without comment. In his closing argument, Maga maintained that he did not willfully fail to file the tax returns because he could not have known from publicly available information that the IRS letter's explanation, "1040 not required," referred to the IRS's obligation to mail tax return forms, rather than his obligation to file tax returns. See 26 U.S.C. § 7203 (requiring proof of willfulness as element of "failure to file tax return" offense).

V. Conclusion

In a speech at the National Press Club, Shulman said IRS has made major progress on priorities such as creating new capabilities and efficiencies through technology, rethinking IRS's relationship with paid tax preparers, enhancing taxpayer service, confronting the challenges of a global economy, and positioning the IRS workforce to make sure the agency is prepared for the future.

“My plan is to leave at the end of this term,” Shulman said. He called his agency “a great institution” that will continue to serve millions of American taxpayers well.

So today, I wanted to share with you some of the results of four years of relentless focus on a handful of strategic priorities we set for the IRS. The priorities are:

I am pleased to report that this year the IRS successfully migrated from a weekly processing cycle to daily processing. This was a multi-year, incredibly complex undertaking that went to the heart of systems that process trillions of dollars in tax revenue. This is an incredibly important milestone for the IRS, one which we first set our sights on in the late 1980s. Our next major priority is leveraging data analytics in order to continually improve our operations.

Let me now talk about how the IRS is managing its responsibilities in an increasingly global environment. Both corporations and individuals operate in the global economy. For example, many individuals have global exposure through their investments and 401Ks. Yet, this fundamental shift to a more global economy has created a real set of challenges for the IRS. On the individual front, we have made putting a big dent in offshore tax evasion a major priority.

We have fundamentally changed the risk calculus of taxpayers who are thinking about hiding their money overseas, and we are well on our way to deterring the next generation of taxpayers from using hidden bank accounts to cheat on their taxes.

We are also moving from information sharing to more coordinated action among government tax authorities on a global basis. I’m the chairman of the main global body of tax authorities, which is comprised of my counterparts from 43 nations, including those from all G20 nations.

We have stepped up our coordinated efforts on offshore tax evasion by individuals, and have embarked on a project to conduct joint audits of certain multinational companies – which should reduce administrative burden on a company and help increase compliance.