                  UNITED STATES COURT OF APPEALS
                       For the Fifth Circuit



                             No. 93-2190
                          Summary Calendar


                    UNITED STATES OF AMERICA,

                                                 Plaintiff-Appellee,


                               VERSUS


                   HOUSTON M. WISENBAKER, JR.,

                                                Defendant-Appellant.




          Appeal from the United States District Court
               for the Southern District of Texas
                         (February 9, 1994)


Before WISDOM, JOLLY, and JONES, Circuit Judges.
WISDOM, Circuit Judge.


     Excise:   A hateful tax levied upon commodities, and
     adjudged not by the common judges of property, but
     wretches hired by those to whom excise is paid.
                               Samuel Johnson's Dictionary (1755)


     A jury found Houston M. Wisenbaker, Jr., a purveyor of diesel

fuels, guilty of two counts of attempting to evade federal excise

taxes in violation of I.R.C. § 7201.    On this direct appeal, he

challenges the sufficiency of the evidence to support his convic-

tions and some of the district court's evidentiary rulings and jury

instructions. He also complains that the district court improperly
allowed an amendment to or variance from the terms of the indict-

ment.       Because we find no merit to Wisenbaker's challenges, we

AFFIRM.

                                    I.

       Houston M. Wisenbaker, Jr., bought diesel fuel tax free and

resold it through four companies he owned or controlled.      He sold

the fuel to several different retailers at prices the buyers found

surprisingly cheap.1      Perhaps influenced by Johnson's low opinion

of excise taxes, Wisenbaker had devised a scheme to reduce his

costs of doing business.      Unfortunately for him, an IRS investiga-

tion revealed that Wisenbaker's lower prices stemmed not from

superior efficiency or economies of scale, but from the simple

expedient of failing to render unto Caesar those things due unto

him.       Wisenbaker's invoices to some of the retailers represented

that the price he charged them included the required federal and

state excise taxes on diesel fuel.         In fact, however, neither

Wisenbaker nor any of his businesses paid the required federal

excise taxes for the second and third quarters of 1986.       Many of

the companies who purchased fuel from Wisenbaker also failed to

file federal excise tax returns.

       Wisenbaker was charged with two counts of attempted tax

evasion.2      In the district court, he admitted failing to file the

       1
           5 Rec. 351-53 (trial transcript vol. 2).
       2
       I.R.C. § 7201. Because the federal excise tax returns
were required to be filed quarterly, each of the two quarters in
which Wisenbaker failed to do so constituted a separate offense.
See United States v. Minker, 312 F.2d 632, 636 (3d Cir. 1962),
cert. denied, 372 U.S. 953 (1963).

                                    2
required tax returns, but raised as a defense his good faith belief

that he was not responsible for filing them because he was not a

retailer. The district court instructed the jury that Wisenbaker's

belief that he was not responsible, even if unreasonable, was a

defense to the charges against him if held in good faith.3               The

jury found Wisenbaker guilty of both counts of attempted tax

evasion, and the district court sentenced him to five years on each

count, to run concurrently.    Wisenbaker appealed.



                                 II.

A.   Sufficiency of the Evidence

     Wisenbaker first challenges the sufficiency of the evidence to

support his    convictions.    When    reviewing    a   jury   verdict   for

sufficiency of the evidence, we ask whether a reasonable jury could

have found each element of the offense beyond a reasonable doubt,

viewing the evidence in the light most favorable to the verdict.4

Tax evasion is a felony of three elements:         (1) a tax deficiency,

(2) an affirmative act constituting an evasion or attempted evasion

of the tax, and (3) willfulness.5          Wisenbaker challenges the



     3
       2 Rec. 361-62; see Cheek v. United States, 498 U.S. 192
(1991).
     4
       United States v. Charroux, 3 F.3d 827, 830-31 (5th Cir.
1993). We apply this standard instead of the more deferential
"manifest miscarriage of justice" standard because Wisenbaker
preserved his sufficiency challenge by moving for a directed
verdict of acquittal. See id. at 831 n.5.
     5
         United States v. Sallee, 984 F.2d 643, 646 (5th Cir.
1993).

                                   3
sufficiency of the evidence on the second and third elements.              We

shall address each element in turn.



     1.    Affirmative Evasive Acts

     Wisenbaker contends on this appeal that "there was not a

scintilla of evidence that Houston M. Wisenbaker, Jr. didn't pay

all of the federal excise taxes in question".6                  That is not

precisely the issue in this case:           Wisenbaker is charged not only

with evading his own taxes but also those of his customers.7               We

shall deal with Wisenbaker's objection, though, on his own terms.

     We begin by noting that Wisenbaker conceded at trial that he

had failed to file quarterly excise tax returns.8               There is also

evidence in the record that Wisenbaker took great pains to conceal

his financial dealings.      He conducted his business affairs mostly

in cash.    He hired Rebecca Morgan as secretary-treasurer of one of

his companies but would not allow her to set up accounting records

for the company.         When Morgan attempted to set up accounts-

receivable    records,    Wisenbaker       destroyed   them.9     When   state

authorities asked Wisenbaker about state fuels taxes he owed, he




     6
         Brief of Appellant at 28.
     7
         See part II.B, infra at 8-9.
     8
       In his opening statement, Richard Kuniansky, the defen-
dant's lawyer, said: "We don't dispute that Mr. Wisenbaker never
filed any federal excise tax returns on a quarterly basis. He
didn't". 4 Rec. 44 (trial transcript vol. 1).
     9
         4 Rec. 53-54 (trial transcript vol. 1).

                                       4
began shredding boxes of documents.10   There is ample evidence from

which a reasonable jury could have concluded beyond a reasonable

doubt that Wisenbaker took affirmative acts to attempt to evade

payment of federal excise taxes.



     2.    Willfulness

     Wisenbaker asserts that his good faith belief that he was not

responsible for paying the taxes negates the element of willfulness

the government must prove to convict him.        To obtain a felony

conviction for tax evasion the government must prove the defen-

dant's specific intent to defeat or evade payment of a tax; a mere

showing of willful failure to file a return is insufficient.11   The

government must prove "that the law imposed a duty on the defen-

dant, that the defendant knew of this duty, and that he voluntarily

and intentionally violated that duty".12   A defendant's belief that

he is not liable for a tax, if held in good faith, is a defense to

a finding of willfulness even if the belief is unreasonable.13

     Many of the actions listed above under "Affirmative Evasive

Acts" also constitute evidence of Wisenbaker's willfulness.      To

defend against the abundance of proof of willfulness in the record,

Wisenbaker interposes his alleged good faith belief that the

retailers to whom he sold were liable for payment of all federal

     10
          Id. at 56-59.
     11
          United States v. Doyle, 956 F.2d 73, 75 (5th Cir. 1992).
     12
          Cheek, 498 U.S. at 201.
     13
          Id. at 203.

                                    5
excise taxes and he was not liable.        He bases this on his interpre-

tation of the applicable Treasury regulation at the time of his

offenses.     At that time, the regulation read, in part, as follows:


      The sale of diesel fuel to an owner, lessee, or other
      operator of a diesel-powered highway vehicle, . . . is
      considered a taxable sale of the liquid fuel if--
           (i) The liquid fuel is delivered by the seller into
           a bulk supply tank (or other container) that is not
           the fuel supply tank of a vehicle . . .; and
           (ii) The purchaser furnishes a written statement to
           the seller before or at the time of the sale stat-
           ing that the entire quantity of the liquid fuel
           covered by the sale is for a taxable purpose as a
           fuel in such a vehicle . . . .
      If the purchaser fails to provide the written statement
      required by paragraph (a)(2)(ii) of this section, the
      purchaser is liable for the tax on the later taxable sale
      or use.14


The tax that would otherwise have fallen on the seller of the

diesel fuel (i.e. Wisenbaker), therefore, falls instead on the bulk

purchaser unless the purchaser furnishes a written statement to the

seller.     The government proved at trial that some of the retailers

who   bought    fuel   from   Wisenbaker    furnished      him    with    written

statements     of   their   desire   to   purchase   the    fuel    with    taxes

included.      Nevertheless, Wisenbaker contends that the regulation

implicitly     requires     the   government   to    prove       also    that   he

(1) received the statements, and (2) accepted the tax liability

after receiving the statements.            We shall dispatch his second

proposed element first because it is the more frivolous and worthy

of decisive rejection.        Tax liability is not imposed by contract

between the seller and buyer of diesel fuel; there is no "offer"

      14
           26 C.F.R. § 48.041-5(a)(2) (1986) (emphasis added).

                                      6
the   taxpayer     must    "accept"     before     liability   attaches.       Tax

liability    attaches      by     operation   of   law   whether    the   taxpayer

"accepts" it or not.

      As to Wisenbaker's first purported element, we need not decide

whether the government must prove Wisenbaker received the statement

because    there   is     ample    evidence   in   the   record    from   which   a

reasonable jury could have concluded that he did.                  Several of the

companies    to    whom    Wisenbaker     sold     diesel   fuel    provided   his

companies with written statements clearly stating their desire that

Wisenbaker pay the applicable tax and include it in the selling

price of his fuel.15        Wisenbaker's companies responded by sending

some of the buyers letters assuring the buyers that taxes on the

diesel fuel had already been paid.16                 The acknowledgements by

Wisenbaker's companies are consistent with his having received the

written statements required by the regulation.                     There is also


      15
       A few examples listed in the appellant's own brief, at
10-11, should suffice. Great Western Trucking Co., Inc: "This
letter will serve as your authorization to collect both federal
and state taxes on the fuel we buy from you. It is our policy to
buy all fuel with taxes in". Bright Truck Leasing: "In the
future no invoice will be paid until we get an invoice on each
shipment that shows the amount of state and federal tax broken
out as a separate figure from the total invoice". H.E. Butt
Grocery Co.: "I, William M. Moynahan, duly authorized hereby
request ABCO Energy Inc., 806 Berwin St., Houston, Texas to
charge 15 cents federal excise tax on all our diesel fuel
purchases".
      16
       ABCO Energy, one of Wisenbaker's companies, made the
following statement in response to a request from Bright Truck
Leasing: "This is an official statement from ABCO Energy to
Bright Leasing Company that taxes on all fuels sold to Bright
Leasing Company from ABCO Energy are paid". Appellant's Brief at
10. ABCO Energy made the same statement to Haskins Trucking Co.
Id. at 13.

                                         7
evidence in the record of written statements being mailed and hand

delivered       to   Wisenbaker's    businesses.      We   conclude   that    a

reasonable jury could have found that Wisenbaker received written

statements from his customers instructing him to pay the applicable

federal excise taxes. Accordingly, we need not decide whether that

additional requirement is implied in the regulation Wisenbaker

relies on.



B.   Constructive Amendment to or Variance from the Indictment

     Wisenbaker next urges that the district court permitted the

prosecution to amend constructively the indictment during the

trial, a per se reversible error.17 Alternatively, he contends that

the proof adduced at trial varied from the allegations in the

indictment, which would constitute reversible error if he was

prejudiced by the variance.18            We reject both of Wisenbaker's

theories because both are based on the same misreading of the

indictment.

     Wisenbaker contends that the indictment charged him only with

evading his own taxes, and that the proof that he assisted others

(i.e.     his   customers)   in     evading   their   taxes   constituted    an



     17
          Stirone v. United States, 361 U.S. 212, 215-17 (1960).
     18
       See United States v. Jackson, 978 F.2d 903, 911 (5th Cir.
1992), cert. denied, ___ U.S. ___, 113 S. Ct 2429, 124 L. Ed. 2d
649, ___ U.S. ___, 113 S. Ct. 3055, 125 L. Ed. 2d 739 (1993). "A
variance . . . exists when the evidence establishes facts
different from those alleged in the indictment". United States
v. Bryan, 896 F.2d 68, 73 (5th Cir.), cert. denied, 498 U.S. 824,
498 U.S. 847 (1990).

                                        8
amendment or variance.19      We do not find the language of the

indictment susceptible to the restrictive reading Wisenbaker wishes

to impose on it.        The relevant portion of both counts of the

indictment charges that:


     [T]he defendant HOUSTON M. WISENBAKER, JR., did
     knowingly, willfully, and unlawfully attempt to evade and
     defeat federal excise taxes . . . by making and causing
     to be made false invoices; by using numerous entities to
     conceal the purchase of tax-free diesel fuel; by dealing
     in currency and cashier's checks; by failing to make a
     Quarterly Federal Excise Tax Return, Form 720, . . . as
     required by law, with any proper officer of the Internal
     Revenue Service; and by other means.20


The indictment contains no terms restricting it to an allegation

that Wisenbaker failed to pay his own taxes. It fairly encompasses

the government's theory that Wisenbaker also violated I.R.C. § 7201

by evading any taxes his customers owed but did not pay because of

Wisenbaker's false assurances that he had already paid the taxes.

The proof adduced at trial constituted neither a variance from nor

an amendment of the terms of the indictment, and the district court

did not err in admitting it.



C.   The "Deliberate Ignorance" Jury Instruction

     We noted above that willfulness is an essential element of

felony tax evasion.      Wisenbaker next contends that the district


     19
       Wisenbaker does not dispute, and in fact concedes, that
one who assists in the evasion of another's taxes can be found
guilty of an I.R.C. § 7201 violation. See, e.g., United States
v. Troy, 293 U.S. 58 (1934).
     20
          3 Rec. 1-2.

                                   9
court diluted the prosecution's burden of proving willfulness by

giving the following jury instruction:


     The fact of knowledge or willfulness may be established
     by direct or circumstantial evidence. The element of
     knowledge or willfulness may be satisfied by inferences
     drawn from proof that a defendant closed his eyes to or
     acted in deliberate ignorance of what would otherwise
     have been obvious to him. A showing of negligence or
     mistake is not sufficient to support a finding of
     willfulness or knowledge.21


Wisenbaker timely objected to the instruction.        Therefore, we

review his challenge using the standard of "whether the court's

charge, as a whole, is a correct statement of the law and whether

it clearly instructs jurors as to the principles of law applicable

to the factual issues confronting them".22

     A "deliberate ignorance" instruction has the potential to

confuse the jury, because it allows them to find "willfulness"

without finding that the defendant was "aware of the existence of

illegal conduct".23 For that reason, "the instruction should rarely

be given".24   A deliberate ignorance instruction is "properly given

only when [the] defendant claims a lack of guilty knowledge and the

proof at trial supports an inference of deliberate indifference".25

     21
          2 Rec. 362.
     22
       United States v. Cartwright, 6 F.3d 294, 300 (5th Cir.
1993) (emphasis, internal quotations, and citation omitted).
     23
       Id. at 301 (internal quotation omitted); see also United
States v. Ojebode, 957 F.2d 1218, 1229 (5th Cir. 1992), cert.
denied, ___ U.S. ___, 113 S. Ct. 1291, 122 L. Ed. 2d 683 (1993).
     24
          Cartwright, 6 F.3d at 301 (internal quotation omitted).
     25
          Id. (internal quotation omitted).

                                  10
      The district court's instruction in this case was appropriate.

First, the core of Wisenbaker's defense at trial was his contention

that he lacked the necessary willful mental state. Although he did

not   testify,26       his   attorney's     opening   statement     centered   on

Wisenbaker's       mental    state   defense.27       On   direct   examination,

Patricia Luden, the defense's only witness, testified at length

about the basis for Wisenbaker's belief that he was not responsible

for the taxes involved in this case.28 Second, the evidence plainly

supports an inference of deliberate indifference. Wisenbaker chose

not to file federal excise tax returns even after his bookkeepers,

including Ms. Luden, brought to his attention his duty to do so.

Because both parts of the test quoted above were met, the district

court      did   not   err   in   giving    the   deliberate   ignorance   jury

instruction.29



D.    Admission of Wisenbaker's Prior State Convictions

      Wisenbaker failed to pay Texas state taxes on diesel fuel and

was twice convicted by the courts of that state.30                  The district

      26
           Cf. id.
      27
           4 Rec. 37-38 (trial transcript vol. 1).
      28
           6 Rec. 449-50 (trial transcript vol. 3).
      29
       Because we hold that the district court did not err, we
need not reach the government's argument that any error was
harmless. But see Cartwright, 6 F.3d at 301, holding that:
"Error in giving the deliberate ignorance instruction is also
harmless where there is substantial evidence of actual
knowledge".
      30
       See, e.g., Wisenbaker v. State, 860 S.W.2d 681 (Tex.
App.--Austin 1993, writ requested), upholding conviction but

                                           11
court allowed the prosecution to introduce evidence of Wisenbaker's

two prior state convictions for failing to pay excise taxes on

diesel fuel, over Wisenbaker's Fed. R. Evid. 404(b) objection.     We

review the district court's admission of the convictions over a

404(b) objection under a heightened abuse of discretion standard.31

     United States v. Beechum32 calls for a two-part evaluation of

the admissibility of evidence over a Rule 404(b) objection.


     First, it must be determined that the extrinsic offense
     evidence is relevant to an issue other than the
     defendant's character. Second, the evidence must possess
     probative value that is not substantially outweighed by
     its undue prejudice and must meet the other requirements
     of rule 403.33


     The district court properly admitted the prior convictions at

issue here.     The government correctly urges that the prior state

convictions are relevant to an issue other than Wisenbaker's

character--specifically, that they are relevant to the element of

willfulness and tend to negate Wisenbaker's assertion that he had

a good-faith belief that he was not obligated to pay the taxes.34


remanding for resentencing.
     31
          United States v. Carrillo, 981 F.2d 772, 774 (5th Cir.
1993).
     32
       582 F.2d 898 (5th Cir. 1978) (en banc), cert. denied, 440
U.S. 920 (1979).
     33
          Id. at 911 (footnote omitted).
     34
       Both the state and federal offenses required proof that
Wisenbaker intentionally or knowingly engaged in the prohibited
conduct of tax evasion. Compare I.R.C. § 7201 with Tex. Tax Code
Ann. § 153.404(a). "Once it is determined that the extrinsic
offense requires the same intent as the charged offense and that
the jury could find that the defendant committed the extrinsic

                                  12
The probative value of the prior convictions outweighed the danger

of unfair prejudice to Wisenbaker, so we conclude that the district

court did not abuse its discretion in admitting them into evidence.



E.   Prosecutorial Misconduct

     Wisenbaker next argues that the following remarks made in the

prosecutor's opening statement constituted an improper comment on

his refusal to testify:


          Now, you may hear testimony from the defendant that
     he believed he that he wasn't the responsible party for
     filing excise tax returns.     Well, when you see those
     statements, the statements clearly say that the excise
     tax will be collected by Mr. Wisenbaker's company. Those
     letters were sent to his company.
          Secondly, you may hear the defendant believed he
     wasn't liable at all because the fuel was going to
     ships.35


After the prosecutor concluded his opening statement, Wisenbaker's

attorney moved for a mistrial on the grounds that the quoted text

constituted an improper comment on the defendant's refusal to

testify.    The district court overruled the motion.   We review the

grant or denial of a mistrial for abuse of discretion.36

     Wisenbaker casts the prosecutor's statement as a comment on

his failure to testify.   We disagree.   The context of the statement

plainly reveals that the prosecutor was merely outlining the



offense, the evidence satisfies the first step under rule
404(b)". Beechum, 582 F.2d at 913.
     35
          4 Rec. 32 (trial transcript vol. 1).
     36
          United States v. Willis, 6 F.3d 257, 263 (5th Cir. 1993).

                                  13
strategy he expected the defense to follow and highlighting its

weaknesses.37   Any error was immediately cured by the district

court's lengthy address to the jury at the conclusion of the

prosecution's   opening   statement38   and   by   its   jury   instruction




     37
       To determine whether a statement by the prosecution
constituted an improper comment on a defendant's refusal to
testify, we ask whether "the prosecutor's manifest intention was
to comment on the accused's failure to testify [or] was . . . of
such character that the jury would naturally and necessarily take
it to be a comment on the failure of the accused to testify".
United States v. Dula, 989 F.2d 772, 776 (5th Cir.) (quoting
United States v. Smith, 890 F.2d 711, 717 (5th Cir. 1989)), cert.
denied, ___ U.S. ___, 114 S. Ct. 172 (1993). "However, the
comments complained of must be viewed within the context of the
trial in which they are made". Id.
     38
       Upon overruling the defendant's motion for a mistrial,
the district court made the following statement to the jury:

     Ladies and gentlemen, [the government's] counsel made a
     statement during his opening which may have been taken
     by you as an indication that Mr. Wisenbaker will be
     testifying. I want to caution you and to instruct you
     again that Mr. Wisenbaker has absolutely no duty to
     testify and you are not to hold it against him or to
     consider that in any way as to whether or not he is
     guilty or not guilty of the crimes that are charged
     against him in the indictment. He has an absolute
     right under the Constitution of the United States not
     to testify and that is not to be held against him by
     the jury and I want you to keep that in mind at all
     times. I don't know whether he is going to testify and
     counsel for the government doesn't know whether he is
     going to testify and any remarks counsel for the
     government may have made that might lead you to expect
     Mr. Wisenbaker will testify, you should put that it out
     of your mind entirely. It is up to Mr. Wisenbaker's
     attorney to determine whether or not Mr. Wisenbaker
     will testify. He has an absolute right not to testify
     if he chooses not to do so.


4 Rec. 34-35 (trial transcript vol. 1).

                                  14
restating the defendant's absolute right not to testify.39         We find

no abuse of the district court's discretion.



F.   Rebecca Morgan's Testimony

     Finally, Wisenbaker alleges that the district court erred in

denying     his   motion   for   a   mistrial    after   Rebecca   Morgan,

Wisenbaker's      employee,   testified   on    direct   examination   that

Wisenbaker "had been in some trouble in Louisiana".40           Wisenbaker

challenges that statement under Fed. R. Evid. 404(b), contending

that it constituted inadmissible evidence of his bad character. We

agree that the statement was not relevant to any issue other than

Wisenbaker's bad character and was for that reason inadmissible.

The district court's error in admitting it, however, was harmless.

Although the district judge "didn't hear anything that made me

think she was talking about criminal trouble", she offered to give

     39
          2 Rec. 370.
     40
       The colloquy that led up to the statement Wisenbaker
complains of was as follows:

     Q.     Can you tell the members of the jury the
            approximate time that this took place when he
            asked you to become secretary-treasurer of Tejas?
     A.     I believe, if I remember correctly, it was late
            June of 1986.
     Q.     Did you become an officer of the company?
     A.     Yes, sir, I did.
     Q.     To your knowledge, was Mr. Wisenbaker an officer
            of the company?
     A.     He was not.
     Q.     Do you know why not?
     A.     Well, he said he had been in some trouble in
            Louisiana.


4 Rec. 50-51 (trial transcript vol. 1) (emphasis added).

                                     15
a curative jury instruction nonetheless.    Wisenbaker refused.   The

government's counsel stated that he had not intentionally elicited

the statement.41    The government did not elaborate on the comment,

and made no further mention of "trouble in Louisiana".    We find no

abuse of the district court's discretion in denying a mistrial.

     We AFFIRM the judgment of the district court.




     41
          See 4 Rec. 51-52 (trial transcript vol. 1).

                                  16
