## Facts

- Richard Hebel and Carlyle Merritt filed false 1975 federal income tax returns that substantially understated income and tax liability.
- Each consulted experienced tax counsel and was told the IRS’s pre-1952 nonprosecution policy for voluntary disclosure had been rescinded, though counsel believed true voluntary disclosures usually were not prosecuted.
- Acting on counsel’s advice, both defendants made voluntary disclosures to the IRS, filed amended returns, and paid additional tax due.
- Shortly after the disclosures, the IRS advised that the 1975 returns had been selected for audit, raising a question whether the disclosures were truly voluntary.
- A grand jury indicted each defendant on four counts related to the 1975 tax year.
- Defendants moved to enjoin the indictments, dismiss the prosecutions (including for selective prosecution), and suppress evidence, arguing an IRS practice of nonprosecution in voluntary disclosure cases.
- After an evidentiary hearing, a magistrate recommended denying all motions; the district court adopted the findings and recommendations.
- In a bench trial on stipulated facts, Merritt was convicted under 26 U.S.C. § 7206(1) (false subscription) and fined $5,000; Hebel was convicted under 26 U.S.C. § 7201 (tax evasion) and fined $10,000.
- On appeal, defendants did not contest the tax-law violations, but argued prosecution was unlawful given the alleged voluntary disclosure practice and related constitutional theories.

## Issues

1. Whether an alleged governmental practice of not prosecuting taxpayers who make voluntary disclosures barred prosecution and required injunctive relief, dismissal, or suppression.
2. Whether defendants established unconstitutional selective prosecution.
3. Whether prosecuting defendants after disclosures made on counsel’s advice violated due process or denied effective assistance of counsel.

## Decision

- The Eighth Circuit affirmed the convictions and affirmed denial of the motions to enjoin, dismiss, and suppress.
- The court held defendants failed to prove an enforceable governmental policy or practice barring prosecution of voluntary disclosure cases.
- The court held defendants failed to meet the burden for selective prosecution.
- The court held there was no due process violation and no denial of effective assistance of counsel where no government promise or misconduct induced the disclosures and counsel’s advice was not constitutionally deficient.

## Legal Principles

- A voluntary disclosure of tax violations does not confer immunity from prosecution; it is at most a factor in prosecutorial decisionmaking.
- To bar prosecution based on an asserted policy or practice, a defendant must show a clear, authoritative governmental commitment not to prosecute; a pattern of few prosecutions is insufficient.
- Absent governmental deception, promises of immunity, or other misconduct, prosecuting after a disclosure does not violate due process and does not justify suppressing evidence derived from the disclosure.
- Ineffective assistance is not established merely because counsel’s prediction about the likelihood of prosecution proves wrong; correct advice that no binding nonprosecution policy exists defeats the claim.
- Selective prosecution requires proof of both differential treatment of similarly situated persons and an impermissible motive; failure to show either defeats the claim.

## Conclusion

The court upheld tax convictions despite defendants’ voluntary disclosures because the government had not made a binding nonprosecution commitment, the record showed no governmental misconduct warranting suppression or due process relief, counsel’s advice was not constitutionally ineffective, and defendants failed to prove selective prosecution.


United States v. Hebel, 668 F.2d 995 (8th Cir. 1982)