Jury Instruction

1. That the Defendant owed substantial income tax in addition to that declared in his or her tax return; and
2. That the Defendant knowingly and willfully attempted to evade or defeat such tax.

The proof need not show the precise amount of the additional tax due as alleged in the indictment, but it must be established beyond a reasonable doubt that the Defendant knowingly and willfully attempted to evade or defeat some portion of such additional tax as charged.

The word “attempt” contemplates that the Defendant had knowledge and an understanding that, during the particular tax year involved, he or she had income which was taxable, and which the Defendant was required by law to report; but that he or she nevertheless attempted to evade or defeat the tax, or a substantial portion of the tax on that income, by willfully failing to report all of the income which he or she knew that he or she had during that year.

Federal income taxes are levied upon income derived from compensation for personal services of every kind and in whatever form paid, whether as wages, commissions, or money earned for performing services. The tax is also levied upon profits earned from any business, regardless of its nature, and from interest, dividends, rents and the like. The income tax also applies to any gain derived from the sale of a capital asset. In short, the term “gross income” means all income for whatever source unless it is specifically excluded by law.

On the other hand, the law does provide that funds acquired from certain sources are not subject to the income tax. The most common of these non-taxable sources are loans, gifts, inheritances, the proceeds of an insurance policy, and funds derived from the sale of an asset to the extent those funds equal the cost of the asset.