## Facts

- Leland M. Carriger was indicted for willfully evading federal income taxes for 1971 and 1972 in violation of 26 U.S.C. § 7201.
- The government used the net worth method to prove unreported taxable income, requiring proof of an opening net worth as of December 31, 1970 and comparison to year-end net worth plus nondeductible expenditures.
- A jury convicted Carriger on the 1971 count and acquitted him on the 1972 count.
- To challenge the government’s opening net worth computation and support a non-taxable-source explanation, Carriger offered two promissory notes totaling $24,000 allegedly signed by his brother, Vernon.
- Carriger also offered testimony from a witness familiar with Vernon’s handwriting that the signatures on the notes matched Vernon’s signature.
- The district court excluded the notes on the ground that they were not properly authenticated.

## Issues

1. Whether the evidence was sufficient under the net worth method because the government established Carriger’s opening net worth with “reasonable certainty” and investigated relevant leads to non-taxable sources.
2. Whether the district court erred under Federal Rule of Evidence 901 by excluding the promissory notes for lack of authentication despite evidence sufficient to support a finding that they were what Carriger claimed.

## Decision

- The court held the government presented sufficient evidence to establish opening net worth with reasonable certainty and to support the net worth prosecution; denial of the motion for acquittal was proper.
- The court held the promissory notes met Rule 901’s threshold for authentication because the defense produced evidence sufficient to support a finding that the notes were genuine, making ultimate authenticity a jury question.
- The exclusion was prejudicial in a net worth case where such evidence could affect the opening net worth computation or the inference of taxable income.
- The court reversed the 1971 conviction and remanded for a new trial.

## Legal Principles

- In net worth tax evasion prosecutions, the government must establish an opening net worth with “reasonable certainty” to serve as the starting point for later net worth increases.
- The government must investigate reasonable leads supplied by the taxpayer that could explain increases in net worth through non-taxable sources.
- Under Fed. R. Evid. 901(a), a document is authenticated by evidence sufficient to support a finding that the item is what the proponent claims; the judge decides only whether the prima facie showing is met, while the jury decides ultimate authenticity and weight.
- Excluding defense evidence that bears materially on opening net worth or non-taxable-source explanations can be reversible error when it likely affected the verdict.

## Conclusion

The Sixth Circuit found the net worth evidence legally sufficient but reversed because the district court applied an overly demanding authentication standard to promissory notes central to the defense, depriving the jury of evidence that could have altered the net worth inference and the outcome.


United States v. Carriger, 592 F.2d 312 (6th Cir. 1979)