## Facts

- Leonard L. Bursten, a practicing lawyer, was prosecuted for willfully attempting to evade federal income tax for the 1957 taxable year under 26 U.S.C. § 7201.
- Bursten filed his 1957 individual income tax return late, in 1960, reporting no taxable income and no tax due.
- The government alleged the return was false and fraudulent and that Bursten had substantial taxable income (about $152,767) and a large tax deficiency (about $93,093).
- The return eliminated tax liability through, among other items, a claimed $140,000 capital loss carryover and a claimed $14,000 loss from his law practice, tied to several transactions (including dealings involving Kadison Corporation, East Corporation, and a land contract).
- After investigation, the IRS disallowed the claimed losses as lacking factual basis and treated the loss reporting as a willful attempt to offset real gains.
- Bursten asserted a lack-of-willfulness defense based on reliance on advice from tax counsel (Goldworn), claiming he disclosed relevant facts and followed counsel’s advice in reporting the disputed items.
- A jury convicted Bursten in federal district court; he appealed, challenging timeliness, jury instructions, and the fairness of the trial in light of the trial judge’s comments and interventions.

## Issues

1. Whether the § 7201 prosecution was time-barred when the indictment was returned in 1965 for a return due in 1958 but filed late in 1960.
2. Whether the district court erred by refusing a requested “advice of counsel” instruction on good-faith reliance on tax counsel as bearing on willfulness.
3. Whether the trial judge’s interventions and comments before the jury were so prejudicial as to deprive the defendant of a fair trial.

## Decision

- The Fifth Circuit held the prosecution was timely because, for a late-filed return, the limitations period runs from the date the return is actually filed, not the due date.
- The court held the district court erred by refusing an advice-of-counsel instruction where there was evidence supporting the theory that Bursten fully disclosed material facts and relied in good faith on tax counsel.
- The court held the trial judge’s repeated interventions and comments in the jury’s presence created an appearance of partiality and a substantial risk of influencing the jury against the defense.
- The conviction was reversed and the case remanded for a new trial.

## Legal Principles

- In a § 7201 tax-evasion case involving a late-filed return, the statute of limitations begins to run on the date of actual filing, not on the statutory due date.
- When a defendant produces evidence that he made full disclosure of material facts to competent counsel and acted in good-faith reliance on counsel’s advice, he is entitled to a jury instruction explaining that such reliance may negate willfulness.
- A trial judge may clarify evidence but must not, through frequent or disparaging interventions and comments before the jury, convey partiality or discredit one side; prejudicial judicial conduct that likely affects the jury’s assessment warrants reversal.

## Conclusion

The Fifth Circuit affirmed that timeliness in late-return evasion cases is measured from the actual filing date, but reversed Bursten’s conviction because the jury was not instructed on a supported reliance-on-counsel defense to willfulness and because the trial judge’s conduct before the jury compromised the fairness of the proceeding, requiring a new trial.


Bursten v. United States, 395 F.2d 976 (5th Cir. 1968)