NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 06a0220n.06
Filed: March 29, 2006
No. 04-3073
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA, )
)
Plaintiff-Appellee, )
) ON APPEAL FROM THE UNITED
v. ) STATES DISTRICT COURT FOR THE
) SOUTHERN DISTRICT OF OHIO
MARK W. MAY, )
)
Defendant-Appellant. )
Before: BOGGS, Chief Judge, MOORE and COOK, Circuit Judges.
PER CURIAM. After a jury trial, Mark May was convicted of tax evasion for violating 26
U.S.C. § 7201 and willful failure to account for and pay over payroll taxes for violating 26 U.S.C.
§ 7202. We affirm the district court’s decision to deny May’s motion for judgment of acquittal, and
we vacate the sentence, remanding for resentencing under United States v. Booker, 543 U.S. 220
(2005).
I
Evidence at trial established the following facts. May operated and controlled the finances
of Maranatha Financial Group, Inc., as its registered agent, majority shareholder, and president.
Investigating May’s tax-filing conduct, the Internal Revenue Service (IRS) found that from June
1990 through December 1996 May withheld federal income taxes from his employees’ paychecks,
No. 04-3073
United States v. May
but failed to pay over those taxes to the IRS and failed to file employment and corporate income tax
returns. Although May filed individual income tax returns for 1995 and 1996, he failed to pay over
taxes he reported withholding from his own salary. The taxes May claimed to have withheld from
his and his employees’ paychecks remained in Maranatha’s bank account. Maranatha’s payroll tax
liability amounted to $1,441,812, and May’s personal income tax liability amounted to $418,325.
The district court sentenced May to 72 months’ incarceration and three years’ supervised
release, and it ordered May to pay $600 in special assessments and $728,090 in restitution to the
IRS. On appeal May argues that the district court: (1) erred by denying his motion for judgment of
acquittal on the tax-evasion charges; (2) plainly erred by failing to instruct the jury on the meaning
of “willfully”; and (3) plainly erred by treating the U.S. Sentencing Guidelines as mandatory.
II
First, the district court did not err in denying May’s motion for judgment of acquittal on the
tax evasion charges. In general, an employer must withhold an employee’s share of federal income
tax from each paycheck. 26 U.S.C. §§ 3102(a), 3402(a). The employer must then pay over those
sums to the IRS. If the taxes are actually withheld from the employee’s wages, but not remitted to
the IRS, the employee may credit the taxes against his tax liability. 26 U.S.C. § 31 (“The amount
withheld as tax under chapter 24 . . . shall be allowed to the recipient of the income as a credit
against the tax imposed by this subtitle . . . .”); Treas. Reg. § 1.31-1(a) (“If the tax has actually been
withheld at the source, credit or refund shall be made to the recipient of the income even though
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No. 04-3073
United States v. May
such tax has not been paid over to the Government by the employer.”); Slodov v. United States, 436
U.S. 238, 243 (1978).
May contends that the evidence at trial was insufficient to prove that federal income taxes
were not actually withheld from his wages. He adds that because the evidence proves that the taxes
were actually withheld, he should receive credit for those taxes and thus cannot be convicted of tax
evasion. As proof that the taxes were actually withheld, May points to his pay stub from
Paychex—a payroll processing company that issued paychecks to Maranatha’s employees in 1995
and 1996—reporting taxes it deducted from Maranatha employees’ wages.
Evidence at trial, however, established that neither Paychex nor May, acting on behalf of
Maranatha, actually withheld the taxes from May’s wages. May gave Paychex funds covering only
the employees’ wages; Paychex never received or possessed the gross pay sums. May, moreover,
retained those corporate funds (the difference between the gross and net pay due employees) in
Maranatha’s corporate bank account, an account May personally controlled and accessed for
personal expenditures. Because the evidence supports a finding that May did not actually withhold
the taxes from his wages as reflected on his Paychex pay stub, May cannot claim a credit for those
taxes. We therefore affirm the district court’s decision denying May’s motion for judgment of
acquittal.
Second, we reject May’s argument that the district court plainly erred in failing to instruct
the jury on the meaning of “willfully,” an element of tax evasion and failure to pay over. The record
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No. 04-3073
United States v. May
establishes that the district court did instruct the jury at length on the meaning of “willfully” and
therefore did not plainly err.
Third, in light of the government’s concession that the district court plainly erred by treating
the U.S. Sentencing Guidelines as mandatory, we vacate the sentence and remand the case for
resentencing under United States v. Booker, 543 U.S. 220 (2005). We therefore decline to address
May’s other challenges to his sentence and urge him to present those to the district court on remand.
III
For these reasons, we affirm the district court’s decision to deny May’s motion for a
judgment of acquittal, vacate May’s sentence, and remand the case for Booker resentencing.
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