Thursday, December 27, 2007
Ninth Circuit Overturns Tax Protester’s Conviction, Orders New Trial
By STEVEN M. ELLIS, Staff Writer
A tax protester convicted of willfully filing a false return should have been allowed to present expert testimony that he suffered from a mental disease bearing on the issue of his guilt, the Ninth U.S. Circuit Court of Appeals ruled yesterday.
Reversing Lawrence Cohen’s conviction for assisting others in filing “zero” returns, the court held that U.S. District Judge Kent J. Dawson of the District of Nevada erred when he prevented a psychiatrist from offering testimony that would have bolstered Cohen’s contention that he had a good faith belief that he was acting in accordance with the law because the testimony would have helped the jury to understand the evidence or determine a fact in issue.
Writing for the court, Judge Richard C. Tallman said that the district court’s decision had left Cohen “without any way to explain the effect that his mental disorder may have had on his ability to form the requisite mens rea.”
Cohen, an acolyte of well-known recidivist tax protester Irwin Schiff was convicted along with Schiff and another associate, Cynthia Neun. After Schiff’s last release from prison in 1991 for income tax evasion, he opened a store in Las Vegas, Nev., where he sold books, audio tapes, videos and instructional packages explaining how to “legally stop paying income taxes.”
Cohen and Neun worked at the store, and, together with Schiff, they provided “consultation services” to clients who wished to avoid paying federal income taxes. They encouraged their clients to file “zero returns,” federal individual income tax returns containing a zero on every line related to income and expenses, and, in most cases, seeking an improper refund of all federal income taxes withheld during the tax year for which it was filed.
On appeal, Cohen argued that his conviction should be overturned because the district court wrongfully excluded the expert testimony of his psychiatrist who would have offered evidence that Cohen suffered from narcissistic personality disorder. The psychiatrist was prepared to testify that the disorder left Cohen irrational to the point of dysfunction, as demonstrated by his stubborn adherence to Schiff’s arguments in the face of overwhelming contradictions and knowledge of substantial penalty.
Cohen contended that the doctor’s testimony would have assisted the jury under Federal Rule of Evidence 702, which allows the admission of expert testimony if it will assist the trier of fact to understand the evidence or to determine a fact in issue.
Tallman agreed, noting that the testimony could have bolstered Cohen’s argument that he had not assisted in the filing of a false tax return “willfully.” Pointing to Federal Rule of Evidence 704(b), he said that the only question was how far the psychiatrist should have been permitted to go in explaining his conclusions as they related to Cohen’s ability to form the intent to evade the tax laws.
Under that rule, expert testimony that might assist the trier of fact may still be excluded if it states an opinion or inference as to whether the defendant did or did not have the mental state or condition constituting an element of the crime charged.
“We have little doubt that if [the doctor] had been permitted to testify as to all of the conclusions contained in his report, some of that proffered testimony as contained in his report would have invaded the province of the jury and violated Rule 704(b),” Tallman wrote. “However, the best way for the district court to have insured the exclusion of the potentially inadmissible aspects of [the doctor’s] testimony was not to bar him from testifying altogether, but to sustain the government’s objections to particular questions likely to elicit inadmissible evidence.”
Concluding that the doctor’s testimony would have been highly probative on the issue of whether Cohen could have formed the requisite mens rea, and that it was unlikely to cause significant confusion with the jury if properly constrained by the rules of evidence, Tallman opined that the exclusion of the testimony was not harmless because it left Cohen without any way to explain the effect that his mental disorder may have had on his ability to form the requisite mens rea.
Tallman was joined in his opinion by Judges Sidney R. Thomas and Sandra S. Ikuta.
The case is United States v. Cohen, 06-10145.
Copyright 2007, Metropolitan News Company