Eleventh Circuit Court of Appeals - Published Opinions

Friday, August 20, 2010

Kottwitz: Good Faith Reliance Instruction Should Have Been Given

In U.S. v. Kottwitz, No 08-13740 (Aug. 19, 2010), the Court held that the evidence was insufficient to sustain some tax fraud charges, and that a new trial was required on others because the district court denied a special instruction regarding the defendants’ good faith reliance on their accountant’s advice.

The Court found that the evidence was sufficient to show that the owners of a closely held corporation fraudulently failed to report to the IRS as personal income moneys received from their corporation to pay for personal expenses, such as suits, night-club visits, and landscaping fees. However, as to this conduct, the district court erred in not failing to give the good faith reliance instruction requested by the defense, because it was supported by evidence that the defendants (1) provided all material information to their accountant, (2) and relied on their accountant’s advice and decisions.

As to other counts of conviction, the Court found no evidence to support them, and therefore vacated those convictions.