## Facts

- Franklin Wright owed the Internal Revenue Service (IRS) money arising from federal income tax deficiencies.
- Franklin’s attorney and tax preparer, Robert Barger, worked with the IRS to address the liability through an Offer in Compromise that required Franklin to make monthly installment payments.
- During the period when the Wrights were dealing with the IRS, Franklin’s wife, Annette Wright, planned to sell an existing home and purchase a new residence.
- Annette asserted she could not obtain financing in her own name because of Franklin’s tax problems and the ongoing IRS collection posture.
- To complete the purchase, Annette arranged for a friend, Caroline Haggard, to buy the new house in Haggard’s name.
- Barger later amended the Offer in Compromise materials to reflect that the Wrights had sold their prior home.
- In those amended submissions, Barger did not disclose the newly acquired residence held in Haggard’s name.
- The government charged Franklin Wright, Annette Wright, and Barger with conspiracy to defraud the United States under 18 U.S.C. § 371 based on conduct aimed at keeping the IRS from learning about assets relevant to collection and compromise.
- A jury convicted all three defendants, and they appealed to the United States Court of Appeals for the Fifth Circuit.

## Issues

1. Whether the evidence was sufficient to support convictions for conspiracy to defraud the United States under 18 U.S.C. § 371 based on alleged concealment of assets from the IRS during an Offer in Compromise.
2. Whether defendants may be convicted of a tax-related § 371 conspiracy when, at the time of prosecution, the remaining IRS claim was characterized as interest and penalties rather than unpaid tax principal.

## Decision

- The Fifth Circuit affirmed the convictions.
- The court held that the evidence permitted a rational jury to find an agreement and acts intended to impair the IRS’s lawful functions by hiding the Wrights’ true financial condition and assets during the compromise process.
- The court rejected the argument that prosecution was barred merely because the underlying liability was framed as interest and penalties (or because tax principal had been paid).

## Legal Principles

- Under 18 U.S.C. § 371’s “defraud” clause, a conspiracy exists where two or more persons agree to interfere with or obstruct a lawful government function (such as IRS assessment, collection, or compromise) by deceitful or dishonest means, and at least one overt act is committed in furtherance of the agreement.
- In the tax context, § 371 protects the IRS’s ability to obtain truthful information and to carry out collection and compromise decisions; it is not limited to schemes involving unpaid tax principal at a particular moment.
- Concealing ownership or control of property through a third party, and submitting misleading or incomplete information in an IRS Offer in Compromise, can constitute deceitful means that impair IRS functions and support a § 371 conviction.
- On appellate review of sufficiency of the evidence, the question is whether, viewing the evidence in the light most favorable to the verdict, a rational jury could find the elements of the offense beyond a reasonable doubt.

## Conclusion

United States v. Wright held that a § 371 conspiracy conviction may rest on conduct designed to keep the IRS from learning about assets relevant to an Offer in Compromise, including placing a newly acquired home in a friend’s name and omitting that asset from compromise submissions. The Fifth Circuit concluded the evidence supported the jury’s finding that the defendants agreed to obstruct the IRS through deceptive omissions and concealment, and it affirmed the convictions even though the government’s claim could be described as involving interest and penalties rather than unpaid tax principal.


United States v. Wright, 211 F.3d 233 (2000)