## Facts

- Michael T. McCaffrey, a tax accountant, failed to file joint federal income tax returns for himself and his wife for tax years 1980–1992.
- He was charged by information with four counts of willful failure to file federal returns for 1989–1992 under 26 U.S.C. § 7203; earlier years were time-barred.
- McCaffrey had a long-term neurological disorder requiring extensive sleep and suffered chronic depression, but maintained an accounting career, professional licensure with continuing-education requirements, and other sustained personal and financial responsibilities.
- After learning in early 1994 that the IRS was investigating him, he filed 13 delinquent federal returns within eight days and later filed 13 delinquent state returns for the same years.
- In a bench trial before a magistrate judge, McCaffrey was convicted on all counts and sentenced (including an order to file additional delinquent returns); the district court affirmed.
- At trial, defense experts offered limited and equivocal testimony on whether depression affected his ability to file; one conceded the neurological condition did not prevent filing. The government’s expert testified McCaffrey was capable of filing.
- Over objection, the court admitted evidence of McCaffrey’s failure to file federal returns in uncharged years and his failure to file state returns.

## Issues

1. Whether the evidence was sufficient for a rational factfinder to conclude beyond a reasonable doubt that McCaffrey “willfully” failed to file federal income tax returns for 1989–1992 under 26 U.S.C. § 7203.
2. Whether the trial court abused its discretion by admitting evidence of nonfiling in other federal tax years and nonfiling of state tax returns to prove willfulness.

## Decision

- The Seventh Circuit affirmed the convictions and sentence.
- The court held the evidence supported a finding that McCaffrey’s failures to file were willful despite his medical conditions.
- The court held there was no abuse of discretion in admitting evidence of nonfiling in other years and of state nonfiling as probative of willfulness and absence of mistake.

## Legal Principles

- For 26 U.S.C. § 7203, “willfulness” requires a voluntary, intentional violation of a known legal duty.
- Sufficiency review asks whether, viewing the evidence in the government’s favor, any rational factfinder could find the elements beyond a reasonable doubt.
- Evidence of a pattern of similar noncompliance may be admissible to prove willfulness and to rebut claims of mistake or inability, subject to prejudice/probative-value limits.
- In a bench trial, the risk of unfair prejudice from other-acts evidence is reduced because the judge is presumed to consider evidence only for proper purposes.
- Medical or psychological conditions do not negate willfulness absent proof they rendered the defendant unable to understand or comply with the known duty to file.

## Conclusion

The court upheld McCaffrey’s § 7203 convictions, reasoning that his sustained professional functioning, longstanding pattern of nonfiling, and rapid filing only after learning of IRS scrutiny permitted a finding of intentional noncompliance, and that related evidence of other-year and state nonfiling was properly admitted to show willfulness.


United States v. McCaffrey, 181 F.3d 854 (7th Cir. 1999)