     Case: 09-41287     Document: 00511229249          Page: 1    Date Filed: 09/09/2010




            IN THE UNITED STATES COURT OF APPEALS
                     FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                     Fifth Circuit

                                                  FILED
                                                                         September 9, 2010

                                       No. 09-41287                         Lyle W. Cayce
                                                                                 Clerk

UNITED STATES OF AMERICA,

                                                   Plaintiff–Appellee
v.

MICHELE G. KELLAR; PHILIP G. KELLAR,

                                                   Defendants–Appellants




                   Appeal from the United States District Court
                         for the Eastern District of Texas
                      USDC No. 4:08-cr-00145-RAS-DDB-2


Before STEWART, PRADO, and ELROD, Circuit Judges.
PER CURIAM:*
        Philip and Michele Kellar (collectively, the “Kellars”) appeal their
convictions and sentences for violations of the Internal Revenue Code (“IRC”).
A jury found both Michele and Philip guilty of one count of failure to pay income
taxes, in violation of 26 U.S.C. § 7201; and Philip guilty of four counts of failure
to file income tax returns, in violation of 26 U.S.C. § 7203. The district court
sentenced the Kellars each to forty-one months’ imprisonment, the high end of
the recommended Guidelines range.

        *
         Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
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        On appeal, the Kellars make several common arguments, and several
unique to one or the other. Both argue that the Government did not introduce
sufficient evidence as to whether they willfully violated the IRC, and that the
district court erred when it calculated the tax loss for purposes of sentencing.
Philip argues that the district court abused its discretion when it prohibited him
from offering into evidence opinion letters that Philip alleges created his good
faith belief that he owed no income tax. Michele argues that the district court
abused its discretion by not allowing her to testify as to the circumstances of her
arrest, and by denying her request for a minor role reduction or downward
departure at sentencing.
        Because the district court allowed Philip to testify as to the contents of the
opinion letters without admitting them into evidence, it did not abuse its
discretion. Likewise, it did not abuse its discretion by refusing to allow Michele
to testify as to the circumstances of their arrest, as those circumstances have no
relevance as to whether Michele willfully failed to comply with the IRC.
Furthermore, the Government introduced sufficient evidence for a rational jury
to conclude that the Kellars willfully violated the IRC, and to conclude that
Michele actively and willingly participated. Similarly, the Government did not
abuse its discretion when it found that Michele was not entitled to a minor role
reduction or downward departure at sentencing. Finally, the district court did
not clearly err by adopting the Government’s proffered tax loss calculation for
the years that the Kellars failed to file income tax returns. For these reasons,
we affirm the Kellars’ convictions and sentences.
             I. FACTUAL AND PROCEDURAL BACKGROUND
A.      Factual Background
        Prior to 1995, Philip paid his income taxes consistently. That year,
however, Philip met Dr. Sweet, author of Good News for Form 1040 Filers, Bad
News for the IRS, and subsequently failed to “voluntarily” file any tax returns

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or pay any income taxes from 1996 to 2007. Four months after his first failure
to file a tax return, Philip purchased “opinion letters,”1 and began to conduct his
own research as to whether the federal income tax was mandatory. Philip
alleges that he did not believe that his commission income was taxable, and
formed his beliefs after researching “Supreme Court cases, books, the Internal
Revenue Code, seminars, and professional advice from CPA[s], enrolled agents,
tax attorneys,” and anyone else who had “a real professional knowledge of the
tax code.”
       In 1996, Philip married Michele, who testified that she would write, mail,
notarize, or sign things for Philip because “he was her husband and she trusted
him.” Michele admitted that she failed to pay income taxes while married to
Philip, and chose not to because Philip told her that the IRS could not tax their
wages. She also stated that she and Philip “had a lengthy and communicative
relationship” with the IRS, and that they responded to all IRS correspondence
with the same request: “show me where it says my income/wages are taxable.”
The Kellars allege that they never received a response to those requests.
Michele admitted that she also believed that she did not have to pay income
taxes, and that those beliefs were not based solely on those of Philip.
       The Government reports that the Kellars earned approximately $177,757
in 2000, $242,068 in 2001, $246,156 in 2002, $206,426 in 2003, $218,000 in 2004,
$289,445 in 2005, $305,046 in 2006, and $163,661 in 2007. In 2005, after the
IRS provided notice that it had initiated a criminal investigation into the
Kellars’ deficiencies, the Kellars filed untimely tax returns for 2001, 2002, 2003,
and 2004, but failed to pay any amounts owed. Despite filing extensions in 2005,
2006, and 2007, the Kellars filed no tax returns at all for those years.



       1
        The parties do not define “opinion letters,” but it seems clear that they were not issued
by the IRS and do not constitute any official Government position or policy.

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      During the years in question, Philip repeatedly filed forms with and sent
letters to his employers claiming “99 withholding allowances,” or that “no federal
withholding is authorized,” and signed each document “U.T.C.D.,” which stands
for “under threat, coercion, and duress.” Michele acted similarly, filing W-4
forms which falsely claimed various withholding allowances with her employers.
These actions prevented the Kellars’ employers from withholding any of their
income for federal taxes.
      Additionally, the Kellars sent the IRS correspondence, including
challenges to jurisdiction, threats to file criminal complaints, objections to bills,
“administrative notices,” and “administrative interrogatories.”             Michele
threatened third parties with lawsuits if the third parties complied with IRS
summonses or levies. Additionally, Philip attempted to hide his income by
having his paychecks disbursed to an entity called the “Order of Gershom,” and
then having the payments routed back to him. The Kellars also held other bank
accounts under “nominee names,” such as “PMK Trust, Unlimited,” and “MGK
Trust, Unlimited.”
      In 2004, the IRS instituted a tax lien to offset its deficiency. In response
to the IRS’s correspondence with the Kellars, the Government states that the
Kellars attempted to further conceal their income and obstruct IRS collection
efforts. As an example, the Government describes how Philip opened a bank
account, depositing only $25 and withdrawing that sum seven days later. Philip
then submitted checks to the IRS totaling more than $500,000 as “Tender of
payment in Adjustment and Set-Off.” After the bank returned the checks for
insufficient funds, Philip sent letters to the IRS stating that his checks “were not
‘bankable items’” and insisting that the IRS cancel his debt. Around this time,
Michele attempted a similar maneuver, sending checks totaling over $20,000 to
the IRS on an account opened with a $10 deposit and closed nine days after
opening.

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        In July 2008, law enforcement officials, including an IRS agent, rang the
doorbell at the Kellars’ residence, and then kicked in the door to execute arrest
warrants for the Kellars on tax evasion charges. Michele alleges that the officers
dragged her, Philip, and their teenage daughter out of bed and handcuffed them
for officer safety. Although Michele requested to use the restroom, officers would
only permit her to do so if they accompanied her. Without elaboration, Michele
also alleges that the officers touched her in a “sexually inappropriate manner.”
Pursuant to an order from the court, a psychologist evaluated Michele, and
concluded that Michele exhibited signs of Post Traumatic Stress Disorder
(“PTSD”), Major Depressive Disorder (“MDD”), and “had no trust in the federal
system.”
B.      Procedural Background
        A grand jury issued a superseding indictment charging both Michele and
Philip with one count of willful evasion of the payment of taxes, in violation of
26 U.S.C. § 7201, and Philip with four additional counts of willful failure to file
income tax returns, in violation of 26 U.S.C. § 7203. At trial, the Kellars argued
that they did not act “willfully.” Philip attempted to introduce into evidence the
opinion letters that he alleged caused him to believe in good faith that the
Government could not tax his income.           The district court, however, only
permitted Philip to testify as to their contents, read a few excerpts, electronically
project excerpts from the opinion letters to the jury, and offer biographical
information and professional qualifications of the authors. The district court
also provided a limiting instruction to the jury, ordering that they only consider
the letters to the extent that they may have affected Philip’s willfulness. Philip
testified that the proffered information influenced his understanding of the
federal income tax, such as his beliefs that only activities requiring a license
from the Government are taxable and that where the IRC referred to “persons,”
it meant only artificial persons such as corporations.

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      In addition to Philip’s proffer, Michele attempted to testify about the
circumstances of their arrest. The Government objected on relevance grounds,
and Michele responded that the circumstances would help the jury understand
her perspective that “you cannot trust the government, the IRS does not want
you to know that your wages are not taxable; they will come after you if you try
to fight them,” and that “[t]he Government’s actions that morning only solidified
her beliefs that she and her husband were right and the IRS was trying to scare
them into being quiet.” The district court sustained the Government’s objection.
      At the close of the Government’s case, the district court denied the Kellars’
motion for acquittal under Federal Rule of Criminal Procedure 29, the jury
convicted the Kellars of all counts for which they had been charged, and the
Kellars proceeded to sentencing. Both the Kellars and the Government made
objections to the pre-sentence report (“PSR”) and filed sentencing memoranda.
Michele requested a minor role adjustment, which the district court denied.
      The Kellars’ base offense level turned largely on the amount of tax loss
associated with their criminal conduct.       Although they failed to pay any
deficiency, the Kellars filed untimely tax returns for tax years 2001 through
2004, but failed to make any filings for tax years 2005 through 2007. For tax
years 2001 through 2004, the district court calculated the tax loss based on the
Kellars’ filed tax returns, which included itemized deductions. For tax years
2005 through 2007, however, the district court accepted the Government’s loss
estimation—which used standard deductions—despite the fact that the Kellars’
accountant provided a tax loss estimate using itemized deductions. The district
court justified using the Government’s proffered loss estimate because most of
the information the Kellars’ accountant used in making his estimate had been
provided either by the Kellars themselves or by an unverified H&R Block tax
return. The district court concluded that it could not rely on the underlying



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information provided by the Kellars because tax evasion is a crime involving
dishonesty.
        The total tax loss calculated by the district court, including interest and
penalties, amounted to $444,832.53 and resulted in a base offense level of twenty
and a Guidelines range of thirty-three to forty-one months’ imprisonment for
both Philip and Michele. Had the district court adopted the tax loss calculated
by    the    Kellars’    accountant— $366,811.29,      including    interest   and
penalties—Philip and Michele’s base offense level would have been eighteen with
a Guidelines range of twenty-seven to thirty-three months’ imprisonment. The
district court sentenced both Kellars to forty-one months’ imprisonment, and the
Kellars timely appealed.
                                  II. ANALYSIS
A.      Evidentiary Issues
        1.    Standard of Review
        We review evidentiary rulings in criminal cases “on a heightened abuse of
discretion basis.” United States v. Franklin, 561 F.3d 398, 404 (5th Cir. 2009)
(citing United States v. Nguyen, 504 F.3d 561, 571 (5th Cir. 2007)). Even if we
find that the district court abused its discretion, the Kellars’ evidentiary
challenges are subject to harmless error review. Id. This Court has defined
harmless error “as ‘any error, defect, irregularity or variance that does not affect
substantial rights.’” Nguyen, 504 F.3d at 571 (quoting United States v. Treft, 447
F.3d 421, 425 (5th Cir. 2006)). “‘The government bears the burden of proving
beyond a reasonable doubt that the error was harmless.’” Id. (quoting Treft, 447
F.3d at 425).
        2.    The District Court Did Not Abuse Its Discretion by Limiting
              the Introduction of the Proffered Opinion Letters
        On appeal, Philip argues that the district court abused its discretion by
refusing to admit into evidence his proffered opinion letters because (1) the


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opinion letters seemed very persuasive, (2) the authors were “in a position to
offer advice upon which a lay person could reasonably rely,” and (3) the opinion
letters were narrowly focused on his case’s main issues and written with a high
degree of detail.      Thus, Philip argues that the district court erred by not
permitting the jury to view the documents themselves in order to gauge how
they may have influenced his beliefs. Philip also argues that (1) the district
court could have offered a limiting instruction that would have negated any
confusion by permitting the jury to read the full contents of the proffered opinion
letters, (2) the district court should have considered each document individually
before     excluding    every    one   of   them,    and    (3)   “the   court’s    limiting
instruction—that the law upon which [he] relied was incorrect—may have
further prejudiced [him] as it could have misled the jury into thinking that the
documents were so poorly written as to be obvious shams on their faces.”
       Federal Rule of Evidence 403 states that “[a]lthough relevant, evidence
may be excluded if its probative value is substantially outweighed by the danger
of unfair prejudice, confusion of the issues, or misleading the jury . . . .” In cases
addressing the willfulness prong of failure to pay taxes or file returns, we have
consistently upheld allowing a defendant to testify about the documents giving
rise to his or her beliefs, but excluding the documents themselves.2 Because “the
introduction of the documents themselves would have . . . little further probative
value” once a defendant testifies as to their contents, but would present “a
danger of confusing the jury by suggesting that the law is unsettled and that it
should resolve such doubtful questions of law,” Flitcraft, 803 F.2d at 186, we
have held that a district court satisfies the “delicate balance required by Rule
403” by “excluding the documents themselves but allowing the defendant to


       2
          See United States v. Simkanin, 420 F.3d 397, 412–13 (5th Cir. 2005); United States
v. Stafford, 983 F.2d 25, 27–28 (5th Cir. 1993); United States v. Barnett, 945 F.2d 1296, 1301
(5th Cir. 1991); United States v. Flitcraft, 803 F.2d 184, 186 (5th Cir. 1986).

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testify as to their contents, and the effect in forming his beliefs.” Barnett, 945
F.2d at 1301 (citing Flitcraft, 803 at 185–86).3
       In this case, the district court adopted the approach approved by our
caselaw. Philip has not attempted to distinguish these cases in any meaningful
way, arguing only that the Government favors a “blanket rule” which would
always prevent a district court from introducing evidence of this sort in tax
evasion cases.”4 We thus find that the district court did not abuse its discretion
by excluding the opinion letters.5
       3.     The District Court Did Not Abuse Its Discretion by
              Excluding Testimony Relating to the Kellars’ Arrest
       At trial, the Kellars testified that they believed the Government would go
to great lengths to keep the public from learning the truth about the IRC.
Michele’s attorney questioned her during direct examination about the
circumstances of her arrest, which Michele claims helped solidify her distrust of
the Government, and the district court sustained an immediate Government
objection on the basis of relevance. On appeal, Michele argues that the district


       3
         See also Simkanin, 420 F.3d at 404 (“The defendant in a criminal tax trial . . . must
be permitted to present evidence to show what he purportedly believed the law to be at the
time of his allegedly criminal conduct. At the same time, however, the district court must be
permitted to prevent the defendant’s alleged view of the law from confusing the jury as to the
actual state of the law, especially when the defendant has constructed an elaborate, but
incorrect, view of the law based on a misinterpretation of numerous IRC provisions taken out
of proper context.”).
       4
         Although Philip cites United States v. Gaumer, a Sixth Circuit case reversing a
defendant’s conviction because the trial court refused to admit a book, three legal opinions,
and a excerpt from a Congressional Quarterly article, 972 F.2d 723, 724–25 (6th Cir. 1992),
he neglects to cite the portion from Gaumer that states “[t]his does not mean that the trial
court was required to permit the physical introduction of exhibits comprising hundreds of
pages. At a minimum, [the] defendant should have been allowed to read the relevant excerpts
to the jury.” Id. at 725.
       5
         Philip’s argument that the district court violated the “best evidence rule” of Federal
Rule of Evidence 1002, by not admitting the letters themselves is unavailing. Rule 1002
applies when a party wishes to “prove the content of a writing,” and in this case, Philip wishes
to introduce the writing to demonstrate its effect on his subjective state of mind.

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court abused its discretion by doing so because the facts surrounding her arrest
informed her state of mind and beliefs regarding the IRS, including the payment
of income taxes and whether she willfully failed to do so.
        “‘Relevant evidence’ means evidence having any tendency to make the
existence of any fact that is of consequence to the determination of the action
more probable or less probable than it would be without the evidence.” F ED. R.
E VID. 401.      Although, as a general rule, “[a]ll relevant evidence is
admissible, . . . [e]vidence which is not relevant is not admissible.” F ED. R. E VID.
402.
        In this case, Michele has not demonstrated how the circumstances of her
arrest have any bearing on whether she willfully failed to pay her income taxes.
Michele’s distrust of the Government does not mean that she did not willfully
violate the IRC. Additionally, the Kellars’ arrest occurred after the issuance of
the indictment accusing her of willful failure to pay her income taxes from 2001
through 2008. Her subsequent arrest obviously could not have affected her state
of mind or served as a basis for her justification for alleged violations occurring
before her arrest.    We thus hold that the district court did not abuse its
discretion by excluding this testimony.
B.      Sufficiency of the Evidence Issues
        1.    Standard of Review
        Because the Kellars filed a motion for judgment of acquittal under Federal
Rule of Criminal Procedure 29, we review “the district court’s denial of that
motion by examining the evidence and all reasonable inferences drawn
therefrom in the light most favorable to the verdict, and asking whether a
rational trier of fact could have found guilt beyond a reasonable doubt.” United
States v. Montes, 602 F.3d 381, 388 (5th Cir. 2010) (citing United States v.
Valdez, 453 F.3d 252, 256 (5th Cir. 2006)). “‘[I]t is not necessary that the
evidence exclude every reasonable hypothesis of innocence or be wholly

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inconsistent with every conclusion except that of guilt, provided a reasonable
trier of fact could find that the evidence establishes guilt beyond a reasonable
doubt.’” Id. (quoting United States v. Bell, 678 F.2d 547, 549 (5th Cir. Unit B
1982) (en banc)) (alteration in original).
      2.    The Government Introduced Sufficient Evidence to Sustain
            the Jury’s Verdict as to Phillip
      On appeal, Philip offers several arguments as to why the Government’s
evidence did not suffice to prove that he willfully failed to pay his income taxes
or file tax returns. First, Philip argues that the Government never proved that
the Kellars had any duty to pay income taxes, instead describing the
Government’s proof as “the assumption that most Americans have that if you
work and make money, you have to pay income taxes.” Next, Philip challenges
the strength of a letter introduced by the Government sent from Philip to an IRS
agent in 2006 that caused the IRS agent to “speculate” that Philip’s “beliefs
regarding his liability to pay taxes had changed.” Philip argues that the IRS
agent knew that Philip was under “tremendous pressure” and “extreme duress”
when he wrote the letter, and that in any event, the letter could not suffice to
demonstrate that any steps he took to avoid paying his income taxes or filing his
returns before 2006 were not done with the good faith belief that he need not pay
income taxes. Finally, Philip directs us to his “stubborn refusal to recant his
stated beliefs . . . and his refusal to cooperate with Government efforts to force
[him] to file tax returns or pay taxes except under extreme duress” as
“overwhelming” evidence that his failure to file returns or pay taxes was not
willful.
      To establish liability for tax evasion, the Government must prove, beyond
a reasonable doubt, “(1) existence of a tax deficiency; (2) an affirmative act
constituting an evasion or an attempted evasion of the tax; and (3) willfulness.”
United States v. Miller, 588 F.3d 897, 907 (5th Cir. 2009) (citing United States


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v. Nolen, 472 F.3d 362, 377 (5th Cir. 2006)). For the Kellars’ convictions, the
only disputed element is whether the Kellars willfully failed to pay their income
taxes and whether Philip willfully failed to file his tax returns. In tax evasion
cases, “[e]vidence of willfulness is ordinarily circumstantial,” and
       may consist of, among other things, a failure to report a substantial
       amount of income, a consistent pattern of underreporting large
       amounts of income, the spending of large amounts of cash that
       cannot be reconciled with the amount of reported income, or any
       conduct, the likely effect of which would be to mislead or to conceal.
United States v. Chesson, 933 F.2d 298, 304 (5th Cir. 1991) (emphasis, citations,
and internal quotation marks omitted).
       The Supreme Court has held that “[w]illfulness . . . requires the
Government to prove that the law imposed a duty on the defendant, that the
defendant knew of this duty, and that he voluntarily and intentionally violated
that duty.” Cheek v. United States, 498 U.S. 192, 201 (1991). “[C]arrying this
burden requires negating a defendant’s claim of ignorance of the law or a claim
that because of a misunderstanding of the law, he had a good faith belief that he
was not violating any of the provisions of the tax laws.”6 Id. at 202. The jury is
free, however, to
       consider any admissible evidence from any source showing that [the
       defendant] was aware of his duty to file a return and to treat wages
       as income, including evidence showing his awareness of the relevant
       provisions of the Code or regulations, of court decisions rejecting his
       interpretation of the tax law, of authoritative rulings of the Internal
       Revenue Service, or of any contents of the personal income tax
       return forms and accompanying instructions that made it plain that
       wages should be returned as income.
Id.




       6
        This specific intent requirement for tax violations abrogates the common law rule that
“ignorance of the law or a mistake of law is no defense to criminal prosecution,” largely
because of “the complexity of the tax laws.” Cheek, 498 U.S. at 199–200.

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      A defendant’s good faith belief need not be objectively reasonable to
demonstrate that he or she did not act willfully; rather, the inquiry is a
subjective one. See id. However, the Supreme Court “distinguished a defense
based on the defendant’s good-faith belief that he was acting within the law from
a defense based on the defendant’s views that the tax laws are unconstitutional
or otherwise invalid.” Simkanin, 420 F.3d at 404 (citing Cheek, 498 U.S. at
204–06). “[T]he latter belief, regardless of how genuinely held by the defendant,
does not negate the willfulness element.”         Id.     Additionally, “the more
unreasonable the asserted beliefs or misunderstandings are, the more likely the
jury will consider them to be nothing more than simple disagreements with
known legal duties imposed by the tax laws.” Cheek, 498 U.S. at 203–04.
      In this case, although the Kellars paid no income tax from 2000 through
2007, they earned a substantial amount of income, which in some years exceeded
$300,000, and over the course of the years in question, totaled approximately
$1,791,000.   See Chesson, 933 F.2d at 304 (listing “a failure to report a
substantial amount of income” as circumstantial evidence of willfulness)
(citation omitted). The evidence introduced at trial also indicated that Philip
complied with the relevant IRC provisions prior to 1996, filed untimely returns
for tax years 2001 through 2004, filed extensions of time requests with the IRS
for tax years 2005 through 2007, and admitted to IRS employees that he knew
he was required to file taxes.
      The IRS also warned Philip on several occasions about the consequences
of his failure to file tax returns or pay his taxes. See Cheek, 498 U.S. at 202
(“The jury is free . . . to consider any admissible evidence from any source
showing that . . . [the defendant] was aware of his duty to file a return and to
treat wages as income.”). Finally, the Government introduced evidence that
Philip obstructed the IRS’s efforts to collect the taxes that he owed. See Chesson,
933 F.2d at 304 (listing “any conduct, the likely effect of which would be to

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mislead or to conceal,” as circumstantial evidence of willfulness) (citation and
emphasis omitted).       This obstructive conduct included the opening and
immediate closing of a bank account with $25, and the subsequent sending of
checks to the IRS for approximately $500,000 from the closed account, as well
as his attempt to have his income disbursed to the “Order of Gershom” and then
routed back to him.
      Philip’s arguments to the contrary lack merit. The Government provided
ample circumstantial evidence above and beyond Philip’s correspondence with
the IRS in 2006 in which he admitted his liability.              Additionally, the
Government had no burden to demonstrate the law that required Philip to pay
his income taxes; instead, it only had the burden of demonstrating a tax
deficiency. See Miller, 588 F.3d at 907 (“The elements of a violation of 26 U.S.C.
§ 7201 are: (1) existence of a tax deficiency; (2) an affirmative act constituting an
evasion or an attempted evasion of the tax; and (3) willfulness.”) (citation
omitted). The Kellars do not dispute that a deficiency existed.
      Philip cites no caselaw suggesting why the “tremendous pressure” and
“extreme duress” he was under when he sent his correspondence to the IRS, in
which he admitted his tax liability, should negate his willfulness, and the jury
was at liberty to make a credibility determination that Philip knew of his
responsibilities well before this admission.      Finally, Philip’s beliefs, which
included that “where the Internal Revenue Code referenced ‘persons’, it was
talking about artificial persons such as corporations,” seem unreasonable. See
Cheek, 498 U.S. at 203–04 (“[T]he more unreasonable the asserted beliefs or
misunderstandings are, the more likely the jury will consider them to be nothing
more than simple disagreements with known legal duties imposed by the tax
laws.”). We thus hold that the Government introduced sufficient evidence to
sustain Philip’s conviction.



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      3.    The Government Introduced Sufficient Evidence to Sustain
            the Jury’s Verdict as to Michele
      In addition to adopting Philip’s sufficiency of the evidence arguments,
Michele also contends that she merely followed Philip’s directions. As discussed
above, we must ask only whether the evidence is such that “a rational trier of
fact could have found guilt beyond a reasonable doubt.” Montes, 602 F.3d at 388
(citation omitted). As such, we find that Michele’s additional argument fails.
      In United States v. Anderson, a defendant’s sufficiency of the evidence
challenge to her conviction for willfully filing a false withholding certificate
“appeared to be that she followed her husband’s instructions in tax matters.”
577 F.2d 258, 260 (5th Cir. 1978) (per curiam). The Anderson court noted that
the defendant “herself filled out a W-4 form at her place of employment[,] . . .
claimed ten withholding allowances[, and] [w]hen asked why she wished to
amend the form she offered only evasive answers.” Id. As such, the Anderson
court held that “a jury could reasonably have found that she possessed the
requisite knowledge and willfulness.” Id. at 261.
      In this case, the Government introduced evidence showing that Michele
falsified W-4 forms, including two in 1998, one claiming eight allowances and
another crossing out all allowances; one in 2006 claiming three allowances; and
one in 2007 claiming four allowances but including the “U.T.C.D.” notation.
Michele freely admitted that she shared her husband’s beliefs, and when
questioned about an obstructive letter she sent to the IRS, testified that Philip
“doesn’t force me to do anything.” She also sent numerous letters challenging
the authority of the IRS to collect taxes, and despite the IRS’s warning that her
continued defiance of the IRC could result in criminal punishment, she
threatened a third party with legal action if the business disclosed information
in response to an IRS subpoena. Finally, Michele opened a bank account with
$10, closed the account, and sent checks from the closed account to the IRS. We


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therefore hold that the Government introduced sufficient evidence to sustain the
jury’s verdict as to Michele.
C.      Sentencing Issues
        1.    Standard of Review
        We review the “district court’s interpretation or application of the
Sentencing Guidelines . . . de novo, and its factual findings . . . for clear error.”
United States v. Cisneros-Gutierrez, 517 F.3d 751, 764 (5th Cir. 2008) (citation
and internal quotation marks omitted). For sentencing purposes, we must
examine “the district court’s determination of the tax loss for clear error.”
United States v. Clark, 139 F.3d 485, 490 (5th Cir. 1998) (citing United States v.
McCord, 33 F.3d 1434, 1453 (5th Cir. 1994)); see also United States v. Scher, 601
F.3d 408, 412 (5th Cir. 2010) (stating, in a wire fraud case, that “[a] district
court’s loss calculation under the Sentencing Guidelines is a factual finding
reviewed for clear error”). “There is no clear error if the district court’s finding
is plausible in light of the record as a whole.” Cisneros-Gutierrez, 517 F.3d at
764 (citation and internal quotation marks omitted).
        We review a request for a downward departure for abuse of discretion,
United States v. Lugman, 130 F.3d 113, 115 n.2 (5th Cir. 1997), and “[t]he
defendant bears the burden of proving that his [or her] role in the offense was
minor or minimal.” United States v. Atanda, 60 F.3d 196, 198 (5th Cir. 1995)
(citation omitted).     “Less culpability than other codefendants does not
necessarily entitle a defendant to a role adjustment,” as co-defendants must
show “substantially less culpabl[ity] than the average co-participant.” United
States v. Ladum, 141 F.3d 1328, 1348 (9th Cir. 1998) (citation omitted); see also
United States v. Tilford, 224 F.3d 865, 869 (6th Cir. 2000) (“We have held that
minimal participant status is reserved primarily for someone who played a
single, limited role in a very large organization.”), abrogated on other grounds



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                                  No. 09-41287

by Burford v. United States, 532 U.S. 59, 64–65 (2001) (citation and internal
quotation marks omitted).
       2.    The District Court Did Not Abuse Its Discretion by Denying
             Michele a Role Reduction at Sentencing
       Michele argues that nothing introduced at trial, in the PSR, or presented
during the sentencing hearing justified her receiving the same forty-one month
sentence as Philip. She contends that the majority of the Government’s case
related to Philip, and that Philip himself testified that he was the “leader” and
Michele the “follower.” She also argues that the district court should have
considered her “fragile mental state and the pain and suffering she has suffered
at the hands of the Government,” and notes her diagnosis for both PTSD and
MDD.
       Michele’s arguments lack merit. As noted above, Michele did not play a
“single, limited role in a very large organization.” Tilford, 224 F.3d at 869.
Additionally, Michele has not demonstrated why her “fragile mental state” was
relevant to the district court’s sentencing determination. Further, Michele never
presented evidence of her mental state during her case, and nothing in the
record supports her request for a variance on this ground. For these reasons, we
find that the district court did not abuse its discretion by denying Michele a role
reduction or downward departure at sentencing.
       3.    The District Court Did Not Clearly Err When It Calculated
             the Tax Loss for Purpose of the Kellars’ Sentences
       The Kellars argue that the district court clearly erred when it elected to
accept, for purposes of sentencing, the Government’s proposed tax loss
calculation for tax years 2005 through 2007—years in which the Kellars filed no
returns—which estimated the tax loss using standard deductions, rather than
that proposed by the Kellars’ accountant, which estimated the tax loss using
itemized deductions. The Government’s proposed loss calculation for tax years



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                                   No. 09-41287

2005 through 2007 resulted in a loss total of $444,832.53, a base offense level of
20, and a Guidelines range of thirty-three to forty-one months’ imprisonment.
Had the district court adopted the loss calculation proposed by the Kellars’
accountant for tax years 2005 through 2007, the loss would have amounted to
$366,811.29, a base offense level of eighteen, and a Guidelines range of twenty-
seven to thirty-three months’ imprisonment.
      The district court reasoned that it could rely on the Kellars’ actual tax
filings from 2001 through 2004 because the Kellars could no longer legally
change the amounts reported to the IRS for those years. In contrast, the district
court discredited the calculation provided by the Kellars’ accountant, finding
that because tax evasion is a crime of dishonesty and the Kellars’ accountant
calculated his estimation based almost entirely on documents provided by the
Kellars, the Government’s calculation was more reliable. The Kellars contend
that the district court clearly erred by doing so, arguing that “[t]here is no logical
reason to believe [their] representations for years 2001–2004, then disbelieve
them for 2005–2007,” and that the tax loss should be calculated using itemized
deductions for every year, or no year at all. They also direct us to the fact that
the Government altered its estimate after their accountant discovered errors in
the Government’s calculation.
      The district court did not clearly err when it calculated the tax loss for the
purposes of the Kellars’ sentences. With regard to the Kellars’ argument that
the district court should either use itemized deductions for every year or for no
year at all, the Government directs us to the commentary of United States
Sentencing Guideline (“USSG”) §2T1.1, which reads:
      In determining the tax loss attributable to the offense, the court
      should use as many methods set forth in subsection (c) and this
      commentary as are necessary given the circumstances of the
      particular case. If none of the methods of determining the tax loss
      set forth fit the circumstances of the particular case, the court


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                                  No. 09-41287

      should use any method of determining the tax loss that appears
      appropriate to reasonably calculate the loss that would have
      resulted had the offense been successfully completed.
Therefore, the Kellars’ unsupported argument that the district erred by
combining calculation methods fails.
      The district court’s choice to adopt the loss associated with the tax returns
the Kellars filed for tax years 2001 through 2004, which included itemized
deductions, was justified: the Kellars had no way to alter those numbers, and
they represented the figure that the IRS had then identified as their tax
deficiency.   There exist several reasons for the district court to reject the
numbers submitted by the Kellars’ accountant for tax years 2005 through 2007.
First, as noted by the Government, a taxpayer must elect itemized deductions
when filing, as standard deductions are the default. The Kellars’ failure to file
tax returns for 2005 through 2007 suggests that the district court did not clearly
err by using the estimate that employed the default deductions.
      Additionally, the Kellars’ accountant relied solely on documents provided
by the Kellars themselves and unverified tax information prepared by H&R
Block. Although the Kellars argue that the district court should have found the
information pertaining to tax years 2005 through 2007 just as accurate and
reliable as that pertaining to tax years 2001 through 2004, the Kellars had every
reason to minimize their tax loss amount for tax years 2005 through 2007, as
total tax loss was the predominant consideration when calculating their
Guidelines range.
      The Kellars’ accountant also failed to include interest and penalties in his
original calculation, as is required in tax loss computation in tax evasion cases.
See USSG §2T1.1, cmt. n.1. Finally, the Kellars’ accountant never reviewed his
tax computations with the Kellars themselves to ensure their accuracy. Based




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                                   No. 09-41287

on these considerations, we find that the district court did not clearly err when
it adopted the Government’s proffered tax loss calculation.
                              III. CONCLUSION
      The district court did not abuse its discretion when it declined to allow the
Kellars to introduce their proffered opinion letters into evidence, nor did it abuse
its discretion when it declined to allow Michele to testify as to the circumstances
of the Kellars’ arrest.   Additionally, the Government introduced sufficient
evidence for a rational fact-finder to conclude, beyond a reasonable doubt, that
the Kellars willfully failed to pay their income taxes and that Philip willfully
failed to file his tax returns.    Finally, the district court did not abuse its
discretion when it denied Michele’s request for a role reduction, nor did it clearly
err when it calculated the total tax loss for sentencing purposes. We therefore
affirm the Kellars’ convictions and sentences.
      AFFIRMED.




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