Khalaf

MEMORANDUM **

Mohamed Khalaf appeals his convictions of three counts of tax evasion for the tax years 1992, 1998 and 1994. Finding no error in the district court proceedings and the evidence presented by the government sufficient to support the jury’s verdict, we affirm.

ANALYSIS

To convict Khalaf under 26 U.S.C. § 7201 , the government was required to prove beyond a reasonable doubt that: (1) there was a tax deficiency; (2) Khalaf wil-fully attempted to evade the tax; and (3) he committed some affirmative act as a prelude to that end. 1 Khalafs points of error, as raised on appeal, all relate to the tax deficiency element.

Khalafs Proposed Jury Instruction

Khalaf contends that the trial court erred in refusing to instruct the jury on his defense of sham transaction. We review whether the instructions as given adequately covered Khalafs proffered defense.

A transaction is a sham for tax purposes if it has no “practical economic effects other than the creation of income tax losses.” 3 We have adopted a two-part test for determining whether a transaction has practical economic effects outside of creating tax losses: (1) whether the taxpayer had a business purpose for…