For seven years, American Airlines pilot John L. Cheek refused to pay taxes.
He claimed as many as 60 withholding allowances, sued his employer for taking money out of his $83,000 annual salary and repeatedly went to court to argue that his wages were not taxable income, that he was not subject to the tax code and that the whole system was unconstitutional. His lawyer says Cheek was under the spell of tax protesters he compared with snake-oil salesmen.
Persisting in his refusal to file tax returns, Cheek eventually was charged with various criminal tax offenses, convicted and sentenced to a year and a day in prison.
Yesterday, the Supreme Court voted 6 to 2 to overturn his conviction for willful failure to file tax returns and tax evasion. It said the jurors in his trial were improperly instructed that they should find Cheek guilty if they thought him unreasonable in his belief that he need not pay taxes -- no matter how sincere he might be.
Ignorance of the law is generally no defense. But in the tax law, in part because of its complexity, conviction requires "willful" conduct. A person has to know what he is doing is wrong to be convicted.
In Cheek's case, the federal appeals court in Chicago said that defense -- that the person charged with the crime simply misunderstood the law and therefore did not act willfully -- is not available if his position is "objectively unreasonable" -- in other words, irrational.
Cheek's basic argument was that he did not think he had to pay taxes because his wages from American Airlines were not "income" subject to taxation under the code, but merely an even swap of his services (flying the plane) for a paycheck.
That, the appeals court said, was the epitome of an objectively unreasonable position, and therefore not available to Cheek as a basis for arguing that his actions were not a willful violation of the law.
The Supreme Court, in an opinion written by Justice Byron R. White, disagreed. "In this case, if Cheek asserted that he truly believed that the Internal Revenue Code did not purport to treat wages as income, and the jury believed him, the Government would not have carried its burden to prove willfulness, however unreasonable a court might deem such a belief," the justices said. Cheek was entitled to try to convince the jury of his views, the court said.
It noted, though, that "the more unreasonable the asserted beliefs," the more likely a jury will reject the idea that they are sincerely held and convict the tax protester.
In a dissenting opinion joined by Justice Thurgood Marshall, Justice Harry A. Blackmun warned that the ruling "will encourage taxpayers to cling to frivolous views of the law in the hope of convincing a jury of their sincerity."
Blackmun said it was "incomprehensible," 70 years after the institution of the present federal income tax system, that "any taxpayer of competent mentality" could argue the wages are not income. As "a licensed pilot for one of our major commercial airlines," Cheek "presumably was a person of at least minimum intellectual competence," Blackmun wrote.
Assistant Attorney General James A. Bruton, who oversees criminal tax prosecutions at the Justice Department, said the ruling will not be "a huge impediment to us being able to convict" tax protesters.
Other appeals courts had taken the position adopted by the Supreme Court yesterday, he noted, "We think juries see through these issues and deal with them in a reasonable way."
Bruton also saw a silver lining for the government in the ruling, noting that the court also made clear yesterday that a tax protester's assertion that the law is unconstitutional -- as opposed to a mistaken interpretation of a rule -- would not be entitled to the sincere belief defense.
Bruton said taxpayers trying to figure out their deductions could take comfort in the idea that if they are unreasonable but sincere they are safe from criminal prosecution.
As for Cheek, 48, a Boeing 727 captain who has flown for American Airlines since 1973, he said he has paid more than $60,000 in back taxes, penalties and interest plus legal fees, and no longer believes he is exempt from taxation.
Although not a lawyer, he represented himself during the criminal trial and said he has "learned my lesson. If anyone has tax problems, he should go to a competent attorney."
Walsh reported from Chicago.