Moore, Friendly and Adams,*fn* Circuit Judges.
Max Platt, sole owner of a pharmacy in Mamaroneck, N. Y., appeals from his conviction, after a jury trial in the District Court for the Southern District of New York, of the misdemeanor of willfully failing to file his personal income tax returns for 1963 and 1964 "at the time or times required by law or regulations," 26 U.S.C. § 7203. The returns were not filed until April 1966, long after extensions proved to have been granted by the Internal Revenue Service had expired. The only issue of substance was whether the failure to file the returns when required was willful.
From about 1939 until mid-1960 Platt was a client of a New York City accounting firm, Knopf, Raeman & Tepper. A representative of the firm would make quarterly visits to the pharmacy, where the accountant would audit and write up the store's books of account, and then prepare payroll and sales tax returns. After the close of the year, the firm would prepare personal income tax returns, which were presented for Platt's signature along with appropriate checks. During this long period all Platt's Federal income tax returns were filed by the due date or within an extension granted by the I.R.S.; indeed the Government so stipulated with respect to the years 1950-59.
In mid-1960 the accounting firm was dissolved. Raeman, who continued to maintain his office with the former partnership, was assigned various accounts, including Platt's, but was no longer under Knopf's supervision. It is unclear whether Platt was made aware of the change.
The 1960 federal income tax return was not filed until October 17, 1961, although there was no proof of extensions beyond August 15.*fn1 That was a minor peccadillo compared with what was to come. The returns for 1961 (not a subject of the indictment), 1962 (as to which the jury acquitted, rather unaccountably in light of its verdict for the two later years), 1963 and 1964, were not filed until April 1966.*fn2 Late in 1965, Knopf, who was a close personal friend of Platt's, visited the pharmacy to suggest that Platt sell it or take in a partner, because the store was open seven days a week and "Mr. Platt, in my judgment, found it awfully difficult to contend with." When Knopf's request for the pharmacy's general ledger and the information which it should have contained revealed that neither was available, he discovered the failure to file income tax returns for the years 1961-1964. Knopf thereupon initiated action intended to cure the defaults by calling Raeman and telling him to "get those books written up and get tax returns prepared immediately." During the same period, the I.R.S. for the first time sent Platt a letter concerning his delinquency.*fn3 After some delay due to Platt's hospitalization, Raeman prepared the long overdue returns, and these were filed in April 1966. Although the returns showed liabilities of $17,690.44 for 1963 and $19,803.08 for 1964, Platt made only token payments of $250 for each year. With this and other evidence the Government had a strong case.
Platt's principal defense was that he had relied on Raeman to keep him in compliance with the law and therefore lacked the willfulness required for conviction under § 7203. Since Platt did not testify, the defense was presented through Raeman. He stated that he had requested and received extensions of time for filing the federal income tax returns, that these extensions had been sent by the I.R.S. to his office, and that he had told Platt that extensions had been granted. The record shows that extensions were issued in respect of 1962 from April to June 1963, in respect of 1963 from April to June 1964, then to July, to August, to September, and finally to October 1964, and in respect of 1964 from April to June 1965. However, despite a long cross-examination, the prosecutor never elicited from Raeman whether his statements to Platt that extensions had been granted related merely to the limited extensions that had in fact been obtained or constituted an assurance that these were continuing.
With the record so pleasingly ambiguous, defense counsel submitted two requested instructions here relevant, which we set forth in the footnote.*fn4 In his charge, after telling the jury that to ask it to conclude that the returns were filed within periods of extension "would be an atrocious imposition on your intelligence," which was correct enough although a bit on the vigorous side, the trial judge dealt with the point raised by these requests by saying only:
There is evidence which entitles you to come to the conclusion that certain applications for extension were made and while we are not absolutely certain that they are all here, we know that in two instances misrepresentation was made that for the prior year there had been a timely return filed.
We also know that in the other cases of applications which we know about, which we have here, there was no representation made as to whether the return had been filed the previous year or not. So, somebody at some time did something about getting applications here in to the Internal Revenue, but there is no proof before you that there was a timely filing and there is no proof before you that there was a filing in 1966 within any periods of extension granted by the Internal Revenue Service.*fn5
Counsel objected that the charge had "totally eliminated" a consideration of the extensions on the question of willfulness, sought and apparently obtained agreement that no further exception was needed where he had submitted a specific charge, and expressly excepted "to the failure to charge that the jury could infer that the defendant had been told by Mr. Raeman that extensions had been granted and that he could rely upon that."
Although defendant, in challenging the court's refusal to charge more adequately with respect to the defense of reliance, relies principally on this court's decision in Haywood Lumber & Mining Co. v. C.I.R., 2 Cir., 178 F.2d 769 (1950), and the Government seeks to distinguish it on the grounds of Platt's failure to provide Raeman with necessary information, we do not find the case to have much bearing. We there reversed a holding by the Tax Court that failure to file returns as a personal holding company was due to "willful neglect" rather than "reasonable cause" when a corporate taxpayer had requested a qualified accountant to prepare the proper returns and the accountant, although knowing the taxpayer to have been a personal holding company, had prepared only the ordinary corporation returns. The facts in that case were not in dispute. The only question was whether a corporate taxpayer who selects a competent tax expert to prepare its returns and provides him with the necessary information to do so, has done all that ordinary business care and prudence can reasonably demand -- the applicable standard for "reasonable cause" as defined by the regulations. In answering that question in the affirmative, the court was careful to point out, doubtless because of the limitations on review of the Tax Court, that it was dealing not with the question of fact whether the elements which constitute reasonable cause were present, but with a question of law, what elements must be present to constitute reasonable cause.
We have here the different question whether the record contained an evidentiary basis sufficient to entitle the defendant to an instruction on the defense of reliance. The threshold required for this is not very high:
A criminal defendant is entitled to have instructions presented relating to any theory of defense for which there is any foundation in the evidence, no matter ...