Court: Court of Appeals for the Fifth Circuit; September 6, 1994; Federal Appellate Court
Elvis C. Stout, a former judge from Monroe, Louisiana, appeals aspects of his sentencing related to his failure to file tax returns and pay taxes from 1982 to 1989. The United States Court of Appeals for the Fifth Circuit affirmed part of the sentence but vacated and remanded other parts. Stout had filed for extensions but failed to submit timely returns for the years in question, ultimately revealing a tax liability of $112,393 after filing returns for 1984-89, with an estimated additional $6,000 for 1982-83. His total tax liability, including penalties and interest, amounts to $119,450.55.
Stout pleaded guilty to failing to file a timely tax return for 1988 under 26 U.S.C. Sec. 7203. The plea agreement allowed the court to impose conditions related to his civil tax liabilities. At sentencing, the district court determined Stout's offense level as nine and his criminal history category as one, which suggested a sentencing range of four to ten months. However, the court sentenced Stout to the maximum of twelve months, citing aggravating factors that included his failure to file for 1982 and 1983, continued non-payment of taxes, and his elevated lifestyle during the years he neglected his tax obligations. The court emphasized Stout's role as a judge, arguing he should be held to a higher standard of accountability.
In addition to the prison sentence, Stout received one year of supervised release, was ordered to pay $20,189 in restitution for his 1988 tax liability, and required to establish a repayment plan for $98,204 in back taxes for 1982-87 and 1989 during his supervised release. Stout's appeal raised two primary issues regarding the upward departure of his sentence and the conditions of his supervised release, with the government later conceding a third issue which Stout sought to address.
Stout appeals the district court's upward departure in his sentencing. An upward departure from the Sentencing Guidelines is affirmed if the district court provides acceptable reasons and the departure is reasonable. The court cited six reasons for the upward departure, including Stout's failure to file tax returns, his ongoing tax delinquency, an excessive lifestyle, violations of Louisiana tax laws, and his background as a judge. Stout argues that two reasons related to his socioeconomic status are unacceptable, thus constituting an abuse of discretion. Precedents indicate that considering socioeconomic status can invalidate a sentencing decision. However, the court found that other acceptable reasons supported the upward departure, including the minimal increase in his sentence and the distinct nature of the cited cases. The socioeconomic statements, while improper, were deemed harmless error due to the presence of other valid justifications. Consequently, the upward departure is affirmed. Stout also contests the district court's requirement for him to establish a repayment schedule with the IRS during his supervised release, amounting to $98,204 for back taxes. The law permits restitution as a supervised release condition if agreed upon by both parties in a plea agreement.
Stout contends that the plea agreement's clause regarding his tax liabilities does not impose an obligation to pay those taxes or make restitution, only requiring him to negotiate a settlement with the IRS. The court agrees, noting that Stout did not explicitly commit to paying any portion of his tax liability but only to "resolve" it. Consequently, the court vacates this aspect of Stout's sentence and remands the case to determine if another condition of supervised release should be imposed in line with the plea agreement and relevant statutes.
Additionally, the court finds the separate restitution order for Stout's 1988 tax liability improper since the restitution statute only allows such orders for offenses under Title 18 or Title 49, while Stout was convicted under Title 26. The government admitted this error and requested remand for re-sentencing, which the court grants, instructing that no restitution order be included in Stout's sentence. The ruling affirms part of Stout's sentence while vacating and remanding other parts.
Stout also appeals factual findings regarding his offense level but concedes that if the upward departure is affirmed, his appeal becomes moot. The court affirms the upward departure and does not address his factual findings appeal. The government’s argument regarding the court's comments on Stout's socioeconomic status is rejected; such considerations are impermissible under sentencing guidelines. Stout's claim for a downward departure based on his case's atypicality is also not reviewed since there is no evidence that the refusal violated the law or guidelines. The plea agreement does not specify any obligation for Stout to pay his taxes, limiting the court's ability to impose restitution.
