11th Cir. Pattern Jury Instr. (Criminal) O107.3

In this case the Government relies upon the “bank -deposits method” of

proving unreported income.

Under this method of proof, when a taxpayer participates in an income -

producing business or occupation and periodically deposits money in bank

accounts under the taxpayer's name or control, an inference is created that the

deposits represent taxable income unless it appears that the deposits were actually

redeposits or transfers of funds between accounts, or that the deposits came from

nontaxable sources such as gifts, inheritances, or loans.

Similarly, when the taxpayer spends cash or currency from funds not

deposited in any bank and not derived from a nontaxable source, an inference is

created that the cash or currency is taxable income.

Because the “bank-deposits method” of proving unreported income involves

reviewing the Defendant's deposits and cash expenditures that came from taxable

sources, the Government must establish an accurate cash- on-hand figure for the

beginning of the tax year.

But the proof need not show the exact amount of the beginning cash-on -

hand as long as it establishes that the Government's claimed cash -on-hand figure is

reasonably accurate.

So if you decide that the evidence doesn’t prove with reasonable certainty

what the Defendant's cash-on-hand was at the beginning of the year, you must find

the Defendant not guilty.

To decide whether the Defendant’s claimed cash- on-hand at the starting

point is reasonably accurate, you may consider whether Government agents

sufficiently investigated all reasonable leads suggested to them by the Defendant or

that otherwise surfaced during the investigation concerning the existence of other

funds.

If you find that the Government's investigation failed to reasonably follow

up on or failed to refute (1) plausible explanations advanced by the Defendant, or

(2) explanations that otherwise arose during the investigation, concerning the

Defendant's cash-on-hand at the beginning of the year, then you should find the

Defendant not guilty.

But the Government’s obligation to reasonably investigate applies only to

suggestions or explanations made by the Defendant, or to reasonable leads that

otherwise turn up. The Government isn’t required to investigate every conceivable

source of nontaxable funds.

If you decide that the evidence in the case proves beyond a reasonable doubt

that the Defendant's bank deposits plus the nondeductible cash expenditures during

the year were much more than the amount of income reported on the Defendant's

tax return for that year, you must then decide whether the evidence also proves

beyond a reasonable doubt that the additional deposits and expenditures are from

taxable income that the Defendant willfully attempted to evade paying taxes on.