United States v. Leonard Dixon

This appeal is from conviction of conspiring to evade payment of income taxes and evasion of payment of income taxes for the years 1966 through 1970.

1. Sufficiency of Evidence

Appellant contends that the Government has failed to prove essential elements of the cash-expenditure variant of the net-worth method of proving taxable income; that the Government has failed to establish that unreported income attributed to appellant was earned in the year for which it was taxed; that the Government failed to establish appellant’s net worth at the opening of the taxable period in question to refute the possibility that expenditures in excess of reported income could be attributed to resources on hand at the beginning of the tax period.

Appellant’s principal defense at trial appears to have been that he did not realize that income derived from illegal sources was taxable. The contentions advanced on appeal were not asserted at trial. Instead, appellant stipulated to the amounts of gross income and tax owing as specified in the indictment, and admitted that the figures in his delinquent tax returns correctly reflected his gross income for the years in question. These open court…