## Facts

- Thomas L. McGill, Jr., an attorney, failed to pay federal income taxes for multiple years, prompting IRS collection activity and levies on his personal bank accounts and certain fees owed to him.
- After levies, McGill stopped using his personal accounts and instead conducted financial transactions through an account in his wife’s name and a joint account (“McGill & Seay”).
- The government alleged these banking arrangements were used to keep assets beyond IRS reach and constituted affirmative acts to evade payment of taxes.
- In 1988, during a criminal investigation, McGill opened a new bank account and deposited approximately $9,000 in legal fees; he did not disclose the account to the IRS but reported the income on his tax return.
- McGill contended he used alternative accounts because levies effectively made his accounts unusable and claimed he had no duty to disclose the new account beyond accurate income reporting.
- A jury convicted McGill of felony evasion of payment under 26 U.S.C. § 7201 for tax years 1985–1987, and of misdemeanor willful failure to pay under 26 U.S.C. § 7203 (as lesser-included offenses) for earlier charged years.
- The district court granted a two-level Sentencing Guidelines reduction for acceptance of responsibility on one count; the government appealed that reduction, and McGill appealed his convictions.

## Issues

1. Whether sufficient evidence supported the § 7201 felony convictions for evasion of payment for 1985–1987, including proof of affirmative acts beyond nonpayment.
2. Whether the jury instructions correctly defined “willfulness” for §§ 7201 and 7203 and adequately allowed consideration of a good-faith defense.
3. Whether alleged misjoinder or evidentiary exclusions warranted reversal.
4. Whether the acceptance-of-responsibility reduction under the Sentencing Guidelines was erroneous.

## Decision

- The court affirmed the § 7203 misdemeanor convictions.
- The court affirmed the § 7201 felony conviction for 1985, holding the evidence permitted a finding of affirmative acts intended to frustrate IRS collection.
- The court reversed the § 7201 felony convictions for 1986 and 1987, holding the record lacked sufficient year-specific affirmative acts of evasion for those years.
- The court rejected challenges to the willfulness instructions, concluding the definition given (“voluntary, intentional violation of a known legal duty”) adequately stated the law and need not track the defendant’s preferred wording.
- The court did not reach the government’s appeal of the acceptance-of-responsibility reduction because the affected Guidelines count was reversed; it noted the reduction would have been within the district court’s discretion.

## Legal Principles

- Evasion of payment under 26 U.S.C. § 7201 requires: (1) a tax due and owing, (2) willfulness, and (3) an affirmative act constituting an attempt to evade or defeat payment; nonpayment alone is insufficient.
- An “affirmative act” for payment evasion must reflect conduct designed to conceal assets or otherwise impede collection, not merely continued nonpayment or unchanged banking practices.
- In criminal tax cases, “willfulness” means a voluntary, intentional violation of a known legal duty; jury instructions are adequate if they fairly convey this standard and the good-faith theory supported by evidence.
- A defendant is not entitled to jury instructions in the defendant’s chosen phrasing so long as the charge, taken as a whole, correctly states the law and permits consideration of the defense theory.

## Conclusion

The Third Circuit held that felony evasion of payment demands proof of affirmative acts beyond nonpayment and reversed two tax-year convictions for insufficient evidence, while affirming other convictions and approving standard willfulness instructions; the government’s sentencing challenge became moot after reversal of the relevant count.


United States v. McGill, 964 F.2d 222 (3d Cir. 1992)