The opinion of the court was delivered by: BECHTLE
The above defendant was charged in a two-count indictment with the willful and knowing failure to file an income tax return, in violation of 26 U.S.C. § 7203.
The case was tried before a jury and on February 22, 1974, a guilty verdict on both counts of the indictment was returned. Presently before the Court is a motion of the defendant for judgment of acquittal or, in the alternative, a new trial. For reasons enumerated hereinafter, the motion will be denied.
Count I of the indictment charged that during the calendar year 1970 Greenlee received a gross income of $44,210.50; that by reason of the receipt of such income he was required by law to file an income tax return on or before April 15, 1971; and that, well knowing the foregoing facts, the defendant willfully failed to file the tax return as required by law. In support of the allegation that Greenlee failed to file the 1970 tax return, the Government introduced evidence consisting primarily of the testimony of several witnesses employed at the Internal Revenue Service Center in Philadelphia. Essentially, Internal Revenue Service (IRS) employees explained the methods and procedures whereby a tax return is received, handled, recorded, and processed through the computer-based system in operation at the Service Center. The testimony of the above witnesses revealed that upon receipt at the Service Center the return is placed in a batch of 100 other similar returns, given a document locator number, and sent to a tax examiner. The examiner reviews each return in a particular batch and underlines with a pencil several items listed on the return. The complete batch of returns is then furnished to a keypunch operator who records on a magnetic tape the items designated by the examiner. The critical feature of the keypunch process is the recording on the magnetic tape of the taxpayer's Social Security Number, as shown on the gum label that the taxpayer affixes to the return at the time of filing. A second keypunch operator, referred to as a "verifier," repeats the performance of the first operator as a protection against the recordation of incorrect information on the magnetic tape. Once the necessary information from the return is placed on the computer tape, the tape is sent to Martinsburg, Virginia.
At the computer center in Martinsburg, the Social Security Number on the tape is checked against the number provided by the Social Security Administration. If a conflict in numbers appears, the tape is returned to the Service Center for correction; otherwise, it is stored in the computers at Martinsburg.
The actual return remains at the Service Center. Upon completion of the above-described keypunch operation, the batch of 100 returns is reassembled. According to the testimony of the IRS employees, every return originally contained in the batch must be accounted for in order that the batch be considered complete. Augustus Stewart, Assistant Director of the Philadelphia Service Center, testified that of the approximately 25 million returns handled each year at the Service Center he could not recall one return ever being irretrievably lost from its original batch. Six weeks after the batch is complete, the returns are transported to the Federal Records Center at Wissahickon and Abbottsford Avenues in Philadelphia, where they are kept as a permanent record for seven years and thereafter destroyed.
In addition to the testimony of the IRS employees, the prosecution introduced what was referred to at trial as the taxpayer's transcript of account (G-7) and the certificate of assessments and payments (G-6). The transcript of account, a computer printout, was produced from the information in the computer files of the taxpayer at Martinsburg. The certificate of assessments and payments was a document manually prepared at the Service Center and which reflected information stored on microfilm in Martinsburg. Both documents, which were admitted pursuant to the Federal Business Records Act, 28 U.S.C. § 1732, were introduced to prove that the IRS had no record of a Form 1040 tax return for James W. Greenlee for the tax year 1970.
In summary, the witnesses for the Government testified in detail as to each step in the processing of the return. The various controls and procedures both at the Philadelphia Service Center and at Martinsburg were explained in order to demonstrate the strong improbability that Greenlee's return had been lost or misplaced. Similarly, the systems of cross-checks and verifications in connection with the transmission of information from the tax return to the computer tapes were thoroughly and fully described for the avowed purpose of establishing the accuracy of the documentary evidence introduced at trial, specifically the certificate of assessments and payments and the transcript of accounts.
In addition to proving that the tax return was in fact not filed, the Government must show that the taxpayer willfully failed to file the return on or before the required day. With regard to the issue of willfulness in this case, the prosecution introduced evidence which showed that Greenlee was aware of the filing requirement, had filed returns in previous years, and had no lawful reason for not filing in 1970.
The Government alleged in Count II of the indictment that the defendant received an income of $126,014 during the calendar year 1971; that by reason of such income Greenlee was required to file an income tax return on or before May 19, 1972;
and that he willfully and knowingly failed to file the return by the required day.
To prove the contentions outlined in Count II of the indictment, the Government introduced in evidence the envelope in which Greenlee mailed his 1971 tax return. The envelope, postmarked December 28, 1972, was preserved by IRS employees because the return was not timely filed.
It is important to note at this juncture that Greenlee alleged that he mailed the return to the Service Center on December 24, 1972. The defendant claimed that his failure to file by May 19, 1972, was attributable to his constant harassment by local municipal authorities and his personal preoccupation with an investigation by a Federal Grand Jury in connection with his official position as legal counsel for the Philadelphia Redevelopment Authority.
Special Agent David Patella, of the IRS Intelligence Division, testified that an investigation of certain members of the Philadelphia Redevelopment Authority revealed that the IRS had no record of tax returns filed by James W. Greenlee for the calendar years 1970 and 1971. The agent stated that on December 26, 1972, he contacted Greenlee at his office in Philadelphia and requested that Greenlee come to the agent's office to discuss the matter of the 1970 and 1971 tax returns. At approximately 5:00 p.m., the defendant appeared at the agent's office and was advised that the IRS was investigating his apparent failure to file returns for the above-stated years. At this meeting, Greenlee asserted that he had filed the 1970 return on time and that he had filed the 1971 return "last week." On the next day, December 27, 1972, at approximately 5:00 p.m., Greenlee returned to the agent's office and presented Agent Patella with purported copies of the returns that the defendant contended were filed for the two years in question.
The Government offered the testimony of Edward DeLong, Superintendent of Collections, United States Postal Service, who stated that an envelope postmarked December 28 had to have been postmarked at sometime between 9:00 p.m. December 27 and 9:00 p.m. December 28, 1972. DeLong further testified that the earliest possible time that an envelope postmarked December 28 could have been collected by a postman was 5:00 p.m. December 27, 1972. The purpose of DeLong's testimony was to prove that Greenlee filed the 1971 return after his meeting with Special Agent Patella on December 26 and thereby impeach the defendant's testimony that he filed the 1971 return on December 24 and to generally discredit the defendant's entire testimony.
Greenlee testified on his own behalf and claimed that he had timely filed the 1970 tax return. As previously discussed, Greenlee also stated that he filed the 1972 return on December 24, 1972, which testimony appeared to be in ...