## Facts

- Kelley organized and led the “Constitutional Tax Association,” which taught that federal income tax on wages was unconstitutional and that employees could lawfully stop withholding.
- Kelley collected dues and distributed packets containing IRS forms (including Form W‑4), a “legal brief” asserting wages were not taxable, and detailed instructions for completing W‑4s to claim exemption or inflated allowances to reduce or eliminate withholding.
- Members were instructed to attach the legal brief to their W‑4s and submit the materials to employers.
- Kelley also advised members to reduce traceable financial activity (e.g., destroy credit cards and use cash) to avoid detection.
- Evidence showed Kelley did not follow his own program: he reported his wages on his own returns while selling contrary advice to others.
- Kelley admitted he consulted multiple attorneys and none agreed with his theory.

## Issues

1. Whether the evidence was sufficient to prove Kelley aided and abetted the willful supply of false or fraudulent information on Form W‑4 to reduce or eliminate withholding.
2. Whether Kelley's claimed belief that wages were not taxable negated the willfulness element required for criminal liability.
3. Whether prior precedent involving an obviously non-deceptive protest W‑4 required reversal because the challenged W‑4s were not “false or fraudulent.”

## Decision

- The court affirmed the conviction.
- The evidence permitted a finding that Kelley intentionally assisted others in submitting W‑4s containing false or fraudulent withholding information.
- The court distinguished earlier precedent involving an openly impossible protest claim because the W‑4s here appeared facially ordinary and were capable of misleading.
- The jury could reject Kelley's asserted good-faith belief based on his contradictory personal tax filings and his acknowledgment that attorneys disagreed with his theory.

## Legal Principles

- Aiding-and-abetting liability attaches when a defendant organizes, instructs, and provides materials intended to cause others to submit W‑4s with false or fraudulent withholding information, even if the defendant does not sign or file the forms.
- “False or fraudulent” information under the withholding statute includes W‑4 submissions that are reasonably capable of misleading the government; a filing is not exempt merely because it is accompanied by an argumentative attachment.
- A claimed legal or constitutional belief does not bar conviction where the evidence supports a finding that the defendant knew the position was incorrect and acted willfully.
- Willfulness may be inferred from circumstantial evidence, including inconsistent conduct (such as filing accurate returns while urging others to file contrary forms) and awareness that competent legal advice rejected the defendant’s theory.

## Conclusion

The Fourth Circuit upheld Kelley's conviction because the record supported findings that he knowingly promoted and facilitated W‑4 submissions designed to misrepresent withholding status, and his asserted tax-protest belief did not prevent the jury from finding willfulness.


United States v. Kelley, 769 F.2d 215 (4th Cir. 1985)