Bank Records and Net Worth Increases 1 Page5

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There was not a probated will or other record of any inheritance, and the testimony of the inheritance came from Goldstein's relatives. The jury was under no duty to accord face value to this self-serving, undocumented testimony.

Further, even if Goldstein had a cash hoard from this inheritance, Goldstein's financial statements with the Peoria banks indicate that most of this claimed inheritance was expended before 1976. According to Goldstein's May 1975 financial statement, he had a cash hoard of only $9,200. This was not enough to account for Goldstein's increase in net worth in 1976. Finally, Goldstein argues that the Government did not fulfill its obligation to investigate and negate reasonable explantations of nontaxable sources of income. See Holland , 348 U. S. at 135-36; United States v. Mackey [65-1 USTC ¶9328], 345 F. 2d 499, 506 (7th Cir.), cert. denied, 382 U. S. 824 (1965). The steps the Government took, including interviewing Goldstein's relatives, fulfilled its obligation. The Government does not have to negate every possible nontaxable source of income. Scott, 660 F. 2d at 1161. Information on nontaxable income should be supplied by the taxpayer. The only suggestion here was the claimed but undocumented inheritance.

[Jury Instructions]

II. Goldstein's second argument is that the jury instructions were erroneous, particularly in their failure to make clear that the Government had to establish an opening net worth for each year. Specifically, he argues that the district court erred in (1) not giving a proposed instruction which emphasized the Government's duty to establish cash on hand at the beginning of each year, (2) delivering instructions which used the plural "years," thereby suggesting that opening net worth need be established only for the series of years, not each year, (3) delivering an instruction that compared net worth in 1974 with the net worth in years 1974, 1975, and 1976, also suggesting that an opening net worth for each year was unnecessary, and (4) saying that illegal income is taxable, thereby prejudicing Goldstein.

When reviewing jury instructions, we must consider them in their entirety and not in "artificial isolation." United States v. Baskes, [80-2 USTC ¶9761], 649 F. 2d 471, 479 (7th Cir. 1980), cert. denied, 450 U. S. 1000 (1981). Assuming for the sake of argument that Goldstein is correct in saying that some of the instructions could be called misleading, the instructions were clear when viewed in context. For instance, the court said in Instruction No. 12, "[T]he evidence in the case must establish beyond a reasonable doubt that the defendant's assets at the beginning of the year, plus his reported income for the taxable year do not add up to an amount sufficient to account for the increases in his net worth, plus his non-deductible expenditures during that year." Trial Transcript at 812. When the entire instructions are reviewed, they are not misleading.

The court also acted properly in delivering the instruction on the taxability of illegal income. There was testimony that Goldstein engaged in illegal gambling during the years in question. Furthermore, the court minimized any possible prejudice by instructing the jury that Goldstein was not on trial for anything not alleged in the indictment. Trial Transcript at 819. Therefore, we find no prejudicial error in the instructions.

[Supplemental Instruction]

III. Goldstein's final argument is that he was prejediced by a supplemental instruction. The instruction came in response to an inquiry from the jury: "Does the Government have to prove where the questionable source of income came from, or what does the Government have to prove?" The court answered:

"A short answer to the first part of the question is "No"; but the second part of the question is important also, and I think it requires that I read to you the essential elements which the Government does have to prove and also under instructions on the net worth method which by its nature does not specify source.

Trial Transcript at 834. The court then proceeded to reread some of the instructions.

A. There are two aspects to Goldstein's complaint about the supplemental instruction. The first is that the repeated instructions included some of those he objected to originally. However, they also included Instruction No. 12, which, as stated above, clarifies any ambiguity as to the Government's burden.

B. Goldstein also argues that the court's answer was incomplete when it responded "No" to the question of whether the Government had to prove the source of the income. Goldstein suggests that the court should have said, "No, if and only if the Government has proved beyond a reasonable doubt that all nontaxable sources of income have been negated." We do not consider the court's response improper or prejudicial.

First, the court's "short answer" was semantically correct. The Government could win its case without even introducing evidence of a likely source of income, much less proving it beyond a reasonable doubt. The Supreme Court held in a post-Holland case that proof of a likely source is not necessary in every case. United States v. Massei, [58-1 USTC ¶9326], 355 U. S. 595, 595 (1958). Proving a likely source of the income is merely one of the ways that the Government can prove that the increased net worth resulted from taxable sources. It does not seem apparent to us how a "No" answer to the jury's question would ordinarily imply that the Government also had no duty to negate nontaxable sources, where reasonable information or leads were supplied to the Government.

Nevertheless, in the instant case a simple "No" answer only answered the first part of the question, and the second part of the jury's question indicated that it was confused as to the Government's burden in general. Therefore, the district court properly repeated some of the instructions, including those on the Government's burden. The court explicitly stated: "The burden is always upon the prosecution to establish beyond a reasonable doubt that any amounts reflected in the defendant's increased net worth, plus non-deductible expenditures, were from taxable, rather than nontaxable sources." Trial Transcript at 838. The court also stated:

[I]f the evidence in the case also establishes beyond a reasonable doubt that the defendant had one or more possible sources of taxable income, and that the receipts did not come from non-taxable income, then the jury may draw the further inference and find that such receipts constituted taxable income to the defendant.

Id. at 837. When we read these statements and the entire response to the jury's question, id. at 834-41, we cannot believe the jury would have understood that the Government neither had to prove a likely source of the income nor had to negate reasonable nontaxable sources. Therefore we find no prejudicial error in the supplemental instructions.

Goldstein also raises other issues as to the admissibility of certain evidence. We have considered these issues and find them without merit, particularly in light of our disposition of the other issues in this case.

The judgment of the district court is affirmed.

^* Hon. Floyd R. Gibson, Senior U. S. Circuit Judge, United States Court of Appeals for the Eighth Circuit, sitting by designation.

¹ Government Exhibit 121 is as follows:

William & Charmaine Goldstein Net Worth Statement 1973 through 1976

                                            1973           1974            1975            1976

ASSETS:

C ash on hand ..................            100.           237.            100.            297.

Bank balances ..................           5913.         11132.         (4784).           8400.

Stocks and Bonds ...............          11795.         18791.          17086.          40394.

Loans Receivable ...............                                         11000.

Tax Shelter Investment .........                                          7000.          17000.

Personal Residence .............                                         72294.          95484.

Autos ..........................           9841.          8345.          15214.          15214.

Yard Machinery .................                                                           391.

Furniture and Fixtures .........           3579.          4323.           8161.          20643.

Jewelry ........................                                           404.            498.

Total Assets ...................          31228.         42828.         126475.         198321.

Liabilities:

Notes Payable ..................           9449.          6859.           2534.           1064.

Accounts Payable ...............            None           None           9556.          17951.

Total Liabilities ..............           9449.          6859.          12090.          19015.

Net Worth December 31 ..........          21779.         35969.         114385.         179306.

Net Worth Beginning of Year ....         (5688.)         21779.          35969.         114385.

Increase for Year ..............          27467.         14190.          78416.          64921.

 

 

[80-2 USTC ¶9730] United States of America , Plaintiff-Appellee v. Raymond E. Smith, Defendant-Appellant

(CA-6), U. S. Court of Appeals, 6th Circuit, No. 79-5111, 11/13/79, Affirming an unreported District Court decision

[Code Sec. 7201]

Crimes: Income tax evasion: Reconstruction of income: Net worth method: Investigation of other leads.--The government properly used the net worth method to establish the taxpayer's taxable income and thus to convict him of income tax evasion. The inability of the government to establish a "cash on hand" figure did not invalidate the method because even if there was cash on hand it was for the jury to decide whether the cash was sufficient to account for the net worth increase. Therefore the government established the taxpayer's opening net worth with the required reasonable certainty. In addition the government checked all "leads" that were furnished by the taxpayer that were reasonably susceptible of being checked.

Before EDWARDS, Chief Circuit Judge, CELEBREZZE and LIVELY, Circuit Judges.

Order

Raymond E. Smith appeals from his jury conviction for willfully evading payment of income taxes in violation of 26 U. S. C. §7201. In the appeal Smith contends that the district court erred in denying his motion for acquittal because the government did not investigate relevant and exculpatory pre-trial leads, resulting in a failure of the government's proof to establish Smith's opening net worth with reasonable certainty when using the net worth method of proof.

Under the net worth method of proof, the government seeks to compute taxable income by determining a taxpayer's net worth at the end of each year plus his nondeductible expenditures during the year. The difference between this figure and the net worth figure at the beginning of the year is treated as the taxable income received during the year.

The net worth method of proof in income tax evasion cases was approved by the Supreme Court in Holland v. United States [54-2 USTC ¶9714], 348 U. S. 121 (1954). The Court stated that "an essential condition in cases of this type is the establishment, with reasonable certainty, of an opening net worth, to serve as a starting point from which to calculate future increases in the taxpayer's assets." To this end the Court imposed upon the government an obligation to investigate all "leads" furnished by the taxpayer relative to nontaxable sources which are "reasonably susceptible of being checked." In analyzing the "leads" alleged by appellant the district court concluded that all leads that could reasonably be investigated were, in fact, pursued by an I. R. S. Agent. The other "leads" were either unknown to the government before trial, involved insignificant amount of money, or could not reasonably be investigated.

Relying on United States v. Giacalone [78-1 USTC ¶9350], 574 F. 2d 328 (6th Cir.), cert. denied, 99 S. Ct. 114 (1978), the district court also concluded that the inability of the government to establish a figure for "cash on hand" did not invalidate the net worth statement. In that case this court approved a net worth statement that did not contain a figure for "cash on hand," stating that even if the evidence showed that there was cash on hand, it was for the jury to determine whether there was enough to account for the net worth increase.

With respect to the issues raised by appellant, we conclude that the government established appellant's opening net worth with the "reasonable certainty" required by law, and adequately investigated the leads which were reasonably susceptible of being checked.

Accordingly, it is ORDERED that the judgment of the district court be, and hereby is, affirmed.

 

 

[78-2 USTC ¶9717] United States of America , Plaintiff-Appellee v. Charles A. Schafer, Defendant-Appellant

(CA-5), U. S. Court of Appeals, 5th Circuit, No. 77-5736, 580 F2d 774, 9/20/78, Affirming unreported District Court decision

[Code Sec. 7201]

Criminal penalties: Attempt to evade or defeat taxes: Net worth method of proof: Willfulness.--The taxpayer's conviction for the willful attempt to evade or defeat taxes was affirmed on appeal. Using the net worth method, the government proved that there was a substantial tax due and owing on the taxpayer's income, but he had reported and paid only a small portion of that amount. Also, there was more than substantial evidence from which willfulness could be inferred. Finally, the government did discharge its burden of examining all leads furnished by the taxpayer that were inconsistent with the taxpayer's guilt and reasonably susceptible of being checked.

William T. Moore, Jr., United States Attorney, M. Carr Ferguson , Assistant Attorney General, Rob ert E. Lindsy, Richard B. Buhrman, Gilbert Andrews, Department of Justice, Washington , D. C. 20530, for plaintiff-appellee. William L. Runyon, Jr., P. O. Box 99 , 18 Broad St. , Charleston , S. C. 29402, for defendant-appellant.

Before COLEMAN, GEE and HILL, Circuit Judges.

COLEMAN, Circuit Judge:

Charles A. Schafer appeals from his conviction by a jury on three counts of willful evasion of federal income taxes. ¹ The government established its case through the "net worth" approach, a method of circumstantial proof which basically consists of five steps: (1) calculation of net worth at the end of a taxable year, (2) subtraction of net worth at the beginning of the same taxable year, (3) addition of non-deductible expenditures for personal, including living, expenditures, (4) subtraction of receipts from income sources that are non-taxable, and (5) comparison of the resultant figure with the amount of taxable income reported by the taxpayer to determine the amount, if any, of under-reporting. Because the evidence established with reasonable certainty the beginning net worth and the increase in net worth for each year in question (with proper allowance for corrections in expenditures and sources of income), and because there was sufficient evidence from which a jury could infer the requisite element of willfulness, we affirm the judgment of conviction. ² We also find that the government discharged its burden under Holland v. United States [54-2 USTC ¶9714], 348 U. S. 121, 75 S. Ct. 127, 99 L. Ed. 150 (1954), to follow up all leads furnished by the taxpayer that are inconsistent with the taxpayer's guilt and reasonably susceptible of being checked.

I. Background

To his friends and neighbors in Augusta , Georgia , Charles A. Schafer must have been the very embodiment of the entrepreneur who builds a small company into a sprawling corporate empire and acquires substantial wealth in the process. From a small partnership, National Audiotronics (National), which apparently specialized in supplying long-playing stereo tapes to funeral homes, Schafer expanded his operations in the early part of this decade until either he or members of his immediate family owned or substantially controlled the following business enterprises: Bluebird Auto Music Corp. (Bluebird); Custom Recording Company (Custom); Stereo City, Inc.; National Audiotronics; Stereo Village, Inc.; International Recording Studios, Inc. (International); Cutlass Records, Inc. (Cutlass); Charles A. Schafer Industries; Redball Electronics Corp. (Redball); WABB Corp.; Stamps and Collectors Items, Inc.; Charles A. Schafer Collections; Land Ho, Inc.; and perhaps others. Although his primary line of business activity continued to be stereo tapes, he branched out into other fields, such as ice cream parlors.

By the time of the tax years in issue (1970, 1971, and 1972), Schafter began to lead a lifestyle of conspicuous consumption. ³ He accumulated large, expensive collections of coins and stamps. He purchased diamond rings from Tiffany & Co., fur coats and other apparel for women from Bergdorf Goodman in New York , and art work from the Ormond Beach , Florida , Art Galleries . He and his wife purchased two large adjacent lots in Augusta , built a fence along the rear property line, paid substantial sums to an architectural firm to design a 7,000 sq. ft. house and, in 1972, began construction work on that house. He also invested heavily in stocks and bonds. Charles A. Schafer had become a man of means. ⁴

There was only one problem with this success story--Schafer allegedly evaded the the payment of his lawful share of the federal income tax burden for the years in question. On his returns, he reported net taxable income of $4,525.00; $9,235.32; and $11,823.94 for those three years. He paid a total of $4,294.24. At trial, the government's expert witness, who based his testimony solely upon the evidence adduced in court, calculated the defendant's net taxable income at $51,935.17; 58,897.28; and 92,567.36 for the same three respective years. The expert witness further testified that the tax on that net income would total $64,505.69, a figure over fifteen times the amount which the defendant actually declared and paid.

In this criminal prosecution for the willful evasion of income taxes, the government was required to prove three elements of the crime beyond a reasonable doubt: (1) an additional tax due and owing, (2) an attempt to evade or defeat such taxes, and (3) willfulness. Sansone v. United States [65-1 USTC ¶9307], 380 U. S. 343, 351, 85 S. Ct. 1004, 13 L. Ed. 2d 882 (1964); Holland v. United States [54-2 USTC ¶9714], 348 U. S. 121, 130-139, 75 S. Ct. 127, 99 L. Ed. 150 (1954); United States v. Calles [73-2 USTC ¶9544], 5 Cir. 1973, 482 F. 2d 1155, 1158. In any tax evasion case where the government attempts to prove the violation through the net worth method, ⁵ the jury is necessarily asked to determine guilt or innocence largely through circumstantial evidence. Specifically, the jury is asked to infer guilt from the existence of a substantial increase in net worth, which, when coupled with the negation of all reasonably possible sources of non-taxable income, can only be attributed to unreported taxable income. See Holland v. United States , supra, 348 U. S. at 125, 75 S. Ct. 127; United States v. Tunnell [73-2 USTC ¶9560], 5 Cir. 1973, 481 F. 2d 149, cert. denied, 415 U. S. 948, 94 S. Ct. 1469, 39 L. Ed. 2d 563 (1974); Merritt v. United States, 5 Cir. 1964, 327 F. 2d 820. See also United States v. Horton [76-1 USTC ¶9219], 5 Cir. 1976, 526 F. 2d 884, 886, cert. denied, 429 U. S. 820, 97 S. Ct. 67, 50 L. Ed. 2d 81 (1976). Because of the dangers inherent in this type of prosecution, where many figures represent only approximations and where the defendant has a constitutional right to remain silent and put the government to its proof, the government must prove that it has conducted a full and adequate investigation of the defendant's finances and that it has followed up all leads furnished by the taxpayer that are "reasonably susceptible of being checked." Holland, supra, 348 U. S. at 138, 75 S. Ct. 127.

In this case, the government's investigation consumed some four years and uncounted manhours. The taxpayer's individual records, including bank accounts, were minutely examined, as were the records of all of Schafer's associated business enterprises, with the sole apparent exception of Cutlass' records, a fact which will later be discussed in detail. The trial lasted four days, and the 24 witnesses produced 628 pages of transcript. The government introduced some 553 documents in evidence, for the most part without objection. The defense rested on the government's case. On appeal, Schafer advances a number of contentions, which, for purposes of discussion, we divide into two categories: (1) the sufficiency of the evidence, and (2) the asserted failure of the government to follow up leads.

II. Sufficiency of the Evidence

A. The Existence of a Tax Deficiency

Schafer first attacks the government's computation of his tax liability. He argues that the calculation of opening net worth was inadequate, that much of the evidence was unduly speculative, and that the prosecution's expert witness should not have been allowed to testify. It has been somewhat difficult for us to analyze the nature of his complaints, however, because of the shotgun approach taken in the brief and the lack of focus on specific items. Because of these difficulties, we now attempt to construct an item-by-item description of the computation of Schafer's tax liability for the first prosecution year, 1970.

The case was exceedingly complex, but much of the complexity must be directly attributed to the tangled, interlocking financial affairs of the taxpayer and his numerous associated business entities. On numerous occasions, Schafer paid for personal expenses and purchases with checks drawn on the accounts of those entities.

Mr. Schafter also bases part of his defense on large losses allegedly sustained by Cutlass, whose affairs have been about as difficult to untie as the proverbial Gordian Knot. In order to assist the jury in organizing and understanding the mass of testimony and documents before them, the government relied upon its expert witness, Mr. Ralph Williams, an IRS agent, who has testified in over seventy such trials. Williams prepared one large chart which summarized the evidence presented at the trial and computed the tax owed under the net worth approach, as well as a smaller chart which summarized Schafer's stamp transactions. He stated that all of his figures were based upon either direct testimony or documents admitted in evidence. Schafer has failed to point out a single figure which was improperly computed (although he does mount other challenges to Williams' testimony), and our independent examination of the record convinces us that a solid evidentiary foundation had successfully and properly been laid for his testimony. It is well settled that such expert testimony is permissible in a tax evasion case, provided, of course, that the expert testifies on the basis of facts in evidence. United States v. Johnson [43-1 USTC ¶9470], 319 U. S. 503, 519-20, 63 S. Ct. 1233, 87 L. Ed. 1546 (1943). The trial judge properly charged the jury as to the weight to be given to the expert's testimony, and he therefore committed no error in allowing Williams to testify. Indeed, without Williams' testimony, the jury might well have been hopelessly confused, for it would have been well-nigh impossible for them to determine whether Schafer in fact had substantially underpaid his taxes.

To compute Schafer's net worth at the beginning of 1970, Williams added up Schafer's assets and then subtracted his liabilities. Contrary to what Schafer argued at trial and now presses on appeal, it was not necessary for the government to establish the basis for every asset the taxpayer owned. It was sufficient for the government to identify with reasonable specificity Schafer's basis in every asset, including cash, in which a purchase or sales transaction occurred in the tax years in question. For example, the government did not list furniture owned by Schafer in its net worth computation, but it seems reasonable to suspect that he owned furniture at the beginning and at the end of this three-year period. If, however, Schafer neither bought nor sold furniture during this period, it is totally immaterial whether furniture is included in the computation. If he owned $20,000 of furniture at the beginning of 1970 and $20,000 of furniture at the end of that year, the two figures would balance in the net worth computation. If, on the other hand, he owned $100,000 of furniture at the beginning, sold $80,000 without realizing a profit and invested the proceeds in stocks, the omission of furniture from the beginning net worth computation would make it appear that the taxpayer had experienced an $80,000 increase in net worth, namely through an increased investment in stocks. If such transactions have occurred, the taxpayer has a burden to furnish "leads" on them, so that the government can investigate and perhaps clear the taxpayer prior to trial. See Holland v. United States, 348 U. S. at 135-136, 75 S. Ct. 127; part III, infra.

The most frequent challenge to the government's computations in a net worth case is to the opening cash balance. See, e.g., Hayes v. United States [69-1 USTC ¶9204], 5 Cir. 1969, 407 F. 2d 189, cert. dismissed, 395 U. S. 972, 89 S. Ct. 2133, 23 L. Ed. 2d 777 (1969). This is understandable, since it is often difficult to disprove the existence of a large "cash hoard", but nevertheless the government must establish this figure with reasonable specificity. Here, the taxpayer himself told the IRS agents in April, 1973, that he never had more than three or four-thousand dollars on hand (representing undeposited business receipts), that in 1968 he rarely had more than twenty dollars in cash, and that in April, 1973, he had about eight hundred dollars in cash. The agents therefore credited him with $800.00 in cash at the beginning of 1970 and at the end of each year in question, and they gave his wife credit for $200.00 in cash at each point, for a total of $1,000.00. The jury could certainly have concluded that Schafer's propensity to incorporate and place many of his personal assets in the corporate solution negated the existence of a large cash hoard and corroborated the agent's figure of $1,000.00. Furthermore, Schafer has never asserted that such a hoard did in fact exist.

As for other assets, the parties stipulated that the balances in the checking accounts totaled $142.67 and that there were no funds in savings accounts. No balance for coins was listed, because there was no indication from the taxpayer that he possessed significant coin holdings, the sale of which might explain the increases in his other assets. Schafer did, however, make several purchases of coins in 1970 and 1972, and the IRS agents properly added those purchases to his holdings. The only evidence concerning Schafer's stamp collection at the beginning of 1970 were invoices from Rob ert A. Siegel and Southeastern Stamp Company indicating total purchases of $4,945.82. The agents used this figure for the opening balance. Although Schafer strenuously objects to this figure, he has furnished no "lead" that the government could track down nor has he introduced any rebuttal evidence. Absent some indication of other purposes, the jury could readily find that the value of Schafer's stamps was established with reasonable certainty. ⁶ The only investment in stocks and bonds which the agents were able to discover totaled $824.67. He had no loans receivable at the start of 1970, and his two Pontiac automobiles cost a total of $9,477.39. One car was later traded in, and both remaining cars were then transferred to Schafer's related entities. As for real estate, an affidavit established that the Schafers had purchased their house and lot for a total of $31,050.00. There was no evidence introduced concerning possible additions to this property before 1970, and the figure of $31,050.00 was carried forward for each taxable year. This house, therefore, did not affect the net worth computation.

The final and perhaps most elusive asset listed was investments in related entities and was valued by the IRS at $38,221.64. Williams first took the tax returns filed by National and determined that Schafer's 50% investment in that partnership amounted to $10,221.64. Since the bulk of National's assets were transferred in 1970 to Custom and National filed no further tax returns, the agents concluded that National no longer operated as a partnership and that Schafer had no investment in it. The agents also identified five separate infusions of Schafer's money into Bluebird prior to 1970, and they concluded that his investment in that corporation totalled $28,000. They could identify no other investments in business entities prior to 1970, so the total figure for investments was $38,221.64. Schafer's assets therefore totalled $85,662.19 in the net worth computation.

The calculation of Schafer's liabilities was more straight-forward. Based upon the evidence admitted, acounts payable totalled $541.85; loans payable, $24,090.05; mortgage payable, $26,383.51; and judgments payable, $19,013.87. Since total liabilities were $69,029.28, Schafer's beginning net worth was determined to be $16,632.91. We find no disparity in this computation sufficient to warrant reversal.

Williams then proceeded to calculate Schafer's net worth at the end of each successive tax year, but we shall go into detail only for the year 1970. In that year, Schafer's assets climbed to $114,559.65, with the increase primarily attributable to increases in loans receivable, stamps, and coins. His liabilities declined to a total of $52,314.77, with the decline due mainly to large drops in loans payable and judgments payable. We are satisfied that the calculation of Schafer's end-of-1970 net worth as $62,244.88 met all legal requirements. To this increase in net worth, Williams added personal expenditures of $12,718.38. This figure was based on testimony that Schafer had: (1) purchased jewelry from Tiffany in the amount of $6,307.50; (2) paid $1,172.00 on an inherited apartment; (3) paid an old debt of $2,937.20 to Frank Carpenter; (4) paid another debt of $50.00 to Fred M. Simms; (5) paid yet another debt of $1,002.68 to a third individual; and (6) paid $499.00 in tax. Plainly, Schafer has nothing to complain of with respect to these additions, for the IRS did not even attempt to introduce evidence of other non-deductible general expenses, such as food, utility bills, etc.

The agents also deducted a total of $6395.18 to reflect allowable deductions and certain non-taxable sources of income. In 1970, Tiffany refunded $955.00 to Schafer. He received a judgment debt of $2303.38. He got the maximum allowable credits for dividend exclusion, personal exemption, and sales tax. All told, Williams calculated Schafer's taxable income for 1970 at $51,935.17, which was more than 11 times the $4,525.00 Schafer reported. Schafer would have owed $10,791.30 on his 1970 income; he actually paid only $651.00. The jury was certainly warranted in finding that a substantial tax was due and owing on that income.

Similarly, the evidence was more than sufficient for the jury to find beyond a reasonable doubt that tax deficiencies existed for 1971 and 1972. We are also convinced that the net worth