## Facts

- Anthony G. Olbres and Shirley A. Olbres (the Olbreses), a married couple, owned and operated Design Consultants, a business that designed and built trade-show exhibit booths.
- By 1987, the business had grown substantially, employing roughly two dozen people and generating revenue of more than $1.9 million.
- Shirley handled the company’s bookkeeping without formal training, using an invoice log and journals for cash receipts, cash disbursements, and petty cash.
- The Olbreses retained an outside accountant to compile financial statements and prepare tax returns, but the accountant did not perform the underlying bookkeeping and relied on information the Olbreses provided.
- The accountant commonly attached a cover sheet to the tax-return package summarizing contents and listing the accountant’s bill; the Olbreses typically paid the bill when signing the return.
- The Olbreses deposited most business receipts into a checking account, but they also deposited some receipts into a savings account.
- The government’s evidence showed that receipts deposited into the savings account were not recorded in the cash-receipts journal and were not included in income figures provided to the accountant, contributing to understated income on the filed returns.
- The IRS investigation began after an IRS employee noticed the Olbreses’ Rolls-Royce parked outside a restaurant, which led to scrutiny of their tax reporting.
- During the investigation, the Olbreses claimed they had misplaced both the invoice log and the savings-account passbook.
- A jury convicted the Olbreses of one count of willfully attempting to evade income tax in violation of 26 U.S.C. § 7201.
- After the verdict, the district court granted the Olbreses’ motions for judgments of acquittal under Federal Rule of Criminal Procedure 29, finding the evidence of willfulness insufficient.
- The United States appealed. On appeal, the Olbreses argued that signing the returns without reading them (and using an accountant) meant the government failed to prove willfulness.

## Issues

1. Whether, viewing the evidence in the light most favorable to the verdict, a rational jury could find beyond a reasonable doubt that the Olbreses willfully attempted to evade income tax under 26 U.S.C. § 7201.
2. Whether the district court properly entered Rule 29 judgments of acquittal based on the Olbreses’ claims that they did not read the returns and relied on their accountant.

## Decision

- The First Circuit reversed the district court’s Rule 29 judgments of acquittal.
- The court held that the evidence permitted a rational jury to find willfulness beyond a reasonable doubt, even given the defendants’ claims that they signed the returns without reading them and used an accountant.
- The court reinstated the jury’s guilty verdicts.

## Legal Principles

- Willfulness in a criminal tax case requires proof of a voluntary, intentional violation of a known legal duty; it may be proved by circumstantial evidence.
- On review of a Rule 29 acquittal entered after a jury conviction, the appellate court views the evidence and reasonable inferences in the light most favorable to the verdict and asks whether a rational jury could have found guilt beyond a reasonable doubt.
- A trial court may not set aside a guilty verdict merely because it would weigh the evidence differently or draw different inferences than the jury could reasonably draw.
- Reliance on an accountant does not defeat willfulness as a matter of law when the accountant’s work depends on figures and records supplied by the taxpayer and there is evidence the taxpayer failed to provide complete and accurate information.
- A taxpayer’s claim that he or she signed a return without reading it carefully does not automatically negate willfulness; the jury may infer willfulness where omissions correspond to unrecorded receipts and the taxpayer had control over the business records and reporting.

## Conclusion

The First Circuit held that the jury could reasonably infer deliberate tax evasion from the pattern of unrecorded receipts deposited into a savings account, the resulting understatement of income on filed returns prepared from figures the defendants supplied, and the claimed loss of important records during the IRS inquiry; therefore, the district court erred in granting Rule 29 acquittals, and the convictions were reinstated.


United States v. Olbres, 61 F.3d 967 (1995)