“Circumstantial Tax Liability Evidence & Voir-Dire Discretion”
A Comprehensive Commentary on United States v. Jonathan Michael, 71 F.4th ___ (3d Cir. 2025)

Introduction

The Third Circuit’s non-precedential opinion in United States v. Jonathan Dean Michael touches several recurring themes in federal tax-crime litigation: the boundary between “good-faith misunderstanding” and “willful” evasion, the admissibility of past tax-related conduct as Rule 404(b) evidence, and the broad latitude trial courts enjoy when screening jurors with anti-tax sentiments.

Jonathan Michael, a long-time wage earner who had historically complied with his tax obligations, embraced a fringe “lawful money” theory in 2014, stopped income-tax withholding, and failed to file returns for five consecutive years. After conviction on one count of tax evasion (26 U.S.C. § 7201) and five counts of failing to file returns (26 U.S.C. § 7203), he challenged jury instructions, several evidentiary rulings, and the removal of a juror for cause. The Court of Appeals affirmed in full.

Summary of the Judgment

• Jury Instructions: The panel held the district court correctly and adequately charged the jury on “willfulness” and “good-faith belief,” tracking the Supreme Court’s definition in Cheek v. United States, 498 U.S. 192 (1991). The court reasonably refused additional language that risked confusing the burden of proof.
• Use of Outstanding Liability: The trial court properly allowed the Government to argue that the amount of unpaid tax was circumstantial evidence of willfulness, and no limiting instruction excluding that inference was required.
• Evidentiary Rulings: No abuse of discretion occurred in admitting evidence of (i) Michael’s disallowed 2012 charitable deduction, (ii) post-2018 non-payment, and (iii) passport applications—which collectively bore on intent—while excluding testimony about the IRS’s civil-collection alternatives.
• Juror Excusal: The district judge acted within his “most deferential” discretion in striking for cause a venire member who expressed disbelief in federal income taxation.
• Cumulative Error: Absent individual error, the cumulative-error challenge necessarily failed.

Analysis

1. Precedents Cited & Their Influence

• Cheek v. United States, 498 U.S. 192 (1991) – The anchor for willfulness instructions in tax prosecutions. The district court’s charge verbatim echoed Cheek’s “voluntary, intentional violation of a known legal duty” formulation.
• United States v. Phillips, 959 F.2d 1187 (3d Cir. 1992) – Affirmed that refusal to deliver a requested instruction is permissible when the substance is already covered. This justified denying Michael’s additional language.
• United States v. Kim, 884 F.2d 189 (5th Cir. 1989) – Cited for the principle that circumstantial evidence is often necessary to prove tax-crime intent.
• Fed. R. Evid. 404(b) & United States v. Daraio, 445 F.3d 253 (3d Cir. 2006) – Daraio’s holding that a defendant’s prior tax record is admissible to show willfulness paralleled the district court’s admission of Michael’s 2012 audit and unpaid liability.
• United States v. Buras, 633 F.2d 1356 (9th Cir. 1980) – Grounded exclusion of testimony about non-criminal collection alternatives.
• United States v. Nasir, 17 F.4th 459 (3d Cir. 2021) – Provided the “manifest error” review standard for juror excusal.

2. Court’s Legal Reasoning

1. Willfulness Instruction: The panel differentiated between legal sufficiency and wording. Because the Cheek standard was accurately stated, the absence of Michael’s custom language—especially where it might invert the burden—was no abuse.
2. Outstanding Liability as Circumstantial Evidence: The court classified the unpaid balance as classic circumstantial evidence; it was logically probative of a conscious intent to violate a known duty, fitting Rule 401 and surviving Rule 403 scrutiny.
3. 404(b) & Limited Instructions: Relying on Daraio, the panel emphasized both logical relevance (pattern change post-audit) and adequate limiting instructions that shielded against propensity misuse.
4. Rule 403 Challenges: Evidence of passports, post-charged conduct, and state-tax omissions was not “unfairly” but only “persuasively” prejudicial. The court reiterated that Rule 403 targets unfair prejudice rooted in emotion or moral condemnation, not mere damaging effect.
5. Alternative IRS Remedies: Borrowing from Buras, the panel agreed such testimony risks jury confusion because civil remedies are legally irrelevant to criminality once the mens rea threshold is met.
6. Juror With Anti-Tax Beliefs: The venireman’s expressed view that “the federal government has no right to impose a direct tax” plus equivocation on impartiality justified excusal. The decision harmonizes with Supreme Court voir-dire jurisprudence recognizing district courts’ superior vantage.

3. Impact on Future Litigation

Although the disposition is “Not Precedential,” it still signals how the Third Circuit is likely to resolve similar issues:

• Circumstantial Tax Liability Evidence: Prosecutors may confidently introduce the amount of unpaid taxes to establish willfulness, provided Rule 403 balancing and limiting instructions are observed.
• Pattern-Change Evidence: Sudden behavioral shifts (e.g., after an audit) remain highly probative of intent and will likely be admitted under 404(b).
• Voir-Dire Latitude: Trial judges have wide discretion to remove jurors harboring sovereign-citizen or anti-tax views, even when the juror professes conditional impartiality.
• Appellate Review of Juror Excusal: Footnote 1 highlights—but sidesteps—a growing inter-circuit split over whether erroneous grants of for-cause challenges are reviewable. Practitioners should monitor future precedential opinions that may adopt the Seventh Circuit’s non-reviewability stance.
• Exclusion of “Civil Remedy” Evidence: Defendants cannot reframe criminal trials into debates over IRS collection policy; district courts will likely keep the focus on mens rea.

Complex Concepts Simplified

• Willfulness (Tax Crimes): The government must prove the defendant knew the law required filing/paying and chose to violate it. Honest misunderstanding of the law is a defense.
• Circumstantial Evidence: Indirect proof (e.g., large unpaid balance) that makes a fact (intent) more or less probable without directly testifying about the defendant’s state of mind.
• Rule 404(b): A Federal Evidence rule allowing “other-acts” evidence for non-propensity purposes such as intent, knowledge, or absence of mistake, provided probative value exceeds unfair prejudice.
• Rule 403 Balancing: The court may exclude relevant evidence if its danger of unfair prejudice substantially outweighs its probative value.
• Voir-Dire “For-Cause” Challenge: Removal of a prospective juror when bias or inability to follow the law is shown. Trial judges receive great deference because they witness demeanor firsthand.
• Plain-Error Review: An appellate standard requiring (1) error, (2) that is clear, (3) affects substantial rights, and (4) seriously impugns the fairness or integrity of the proceedings.

Conclusion

United States v. Michael reinforces two practical doctrines in tax-crime prosecutions: (1) unpaid tax balances, prior audits, and related financial evidence are powerful, admissible indicators of willfulness when properly cabined by limiting instructions; and (2) district judges hold expansive authority to dismiss potential jurors whose ideological stances undermine impartiality. Although the opinion lacks precedential weight, its reasoning dovetails with existing Third Circuit and Supreme Court precedent, offering a reliable forecast of how similar objections will fare. Defense counsel should therefore approach willfulness disputes by tackling the probative narrative head-on rather than relying on exclusion, and should prepare for searching voir-dire on tax-law attitudes.

In the broader legal landscape, the decision illustrates the judiciary’s continued intolerance of “sovereign citizen” tax theories and its commitment to safeguarding the integrity of the tax system through principled evidentiary analysis and juror management.