United States v. Donald Wanland, Jr. ( 2016 )


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  •                    FOR PUBLICATION
    UNITED STATES COURT OF APPEALS
    FOR THE NINTH CIRCUIT
    UNITED STATES OF AMERICA,                 No. 14-10170
    Plaintiff-Appellee,
    D.C. No.
    v.                    2:09-cr-00008-LKK-1
    DONALD M. WANLAND, JR.,
    Defendant-Appellant.                OPINION
    Appeal from the United States District Court
    for the Eastern District of California
    Lawrence K. Karlton, District Judge, Presiding
    Argued and Submitted June 15, 2016
    San Francisco, California
    Filed July 27, 2016
    Before: J. Clifford Wallace, Mary M. Schroeder,
    and John B. Owens, Circuit Judges.
    Opinion by Judge Owens
    2                 UNITED STATES V. WANLAND
    SUMMARY*
    Criminal Law
    The panel affirmed the district court in all respects in a
    case in which the defendant was convicted of tax related
    charges, including tax evasion.
    The panel held that neither the district court nor the jury
    erred in concluding that the defendant’s monthly income from
    his law practice qualified as “salary or wages” under 
    26 U.S.C. § 6331
    (e), and therefore rejected the defendant’s
    contention that the government could not prove concealment
    of property subject to a levy, as required for conviction under
    
    26 U.S.C. § 7206
    (4).
    Rejecting the defendant’s contention that the district court
    erred in dismissing the levy counts because they exceeded the
    three-year statute of limitations, the panel held that the six-
    year statute of limitations of 
    26 U.S.C. § 6531
    (1), covering
    tax offenses “involving the defrauding or attempting to
    defraud” the government, applies to prosecutions under
    § 7206(4).
    The panel held that the district court properly rejected the
    defendant’s argument that res judicata precludes the
    government from pursuing a criminal action concerning his
    debts that were already discharged in bankruptcy. The panel
    held res judicata cannot apply because the IRS in a
    *
    This summary constitutes no part of the opinion of the court. It has
    been prepared by court staff for the convenience of the reader.
    UNITED STATES V. WANLAND                         3
    bankruptcy action and the United States government in a
    criminal action are not in privity.
    The panel resolved several of the defendant’s arguments
    in a concurrently-filed memorandum disposition.
    COUNSEL
    John R. Hurley (argued) and Eduardo G. Roy, Prometheus
    Partners LLP, San Francisco, California, for Defendant-
    Appellant.
    Christopher Hales (argued) and Matthew D. Segal, Assistant
    United States Attorneys; Camil A. Skipper, Appellate Chief;
    United States Attorney’s Office, Sacramento, California; for
    Plaintiff-Appellee.
    OPINION
    OWENS, Circuit Judge:
    Defendant Donald Wanland, Jr. appeals from his jury
    convictions and sentence for tax related charges, including
    tax evasion. Although Wanland raises many arguments
    challenging his convictions and sentence, none has merit, so
    we affirm the district court in all respects.1
    1
    We resolve several of Wanland’s arguments in a concurrently-filed
    memorandum disposition.
    4                UNITED STATES V. WANLAND
    I. Factual Background
    Wanland was a successful civil attorney in Sacramento,
    California, and his law practice generated considerable
    income. In the 1990s, he entered into two partnership
    agreements with Richard Bernstein—the Law Offices of
    Wanland and Bernstein (from which Wanland drew his
    income) and 705 University Partners (which held the real
    estate at 705 University Avenue, the partnership’s law office).
    Wanland received 75% of the profits, while Bernstein
    received 25% of the profits, in scheduled monthly draws.
    More specifically, partners were entitled to “withdraw from
    the partnership funds in equal monthly installments an
    amount equal to four-fifths of his distributive share of
    partnership net profits for the preceding year.” 705
    University Partners had its own bank account (“705
    Account”), which Wanland used as both his business and
    personal account.2
    Wanland’s disputes with the Internal Revenue Service
    (“IRS”) began in the 1990s, and they continued into the new
    millennium. For tax years 2000–2003, Wanland filed
    personal tax returns reporting many hundreds of thousands of
    dollars of income, and owing around $450,000 in taxes.
    Wanland never paid these taxes, and then stopped filing
    personal tax returns altogether. His law partnership
    continued to file returns showing income of around $300,000
    each year.
    2
    Throughout the relevant time period, 705 University Partners had
    several different bank account numbers. We refer to them jointly as the
    “705 Account.”
    UNITED STATES V. WANLAND                      5
    After several failed attempts to resolve his tax
    deficiencies, an IRS Officer was assigned to Wanland’s case.
    Following some initial correspondence, the officer sent a
    Collection Information Statement (IRS Form 433A) to
    Wanland’s personal accountant to complete. Form 433A
    discloses an individual’s income, expenses, assets, accounts,
    and liabilities so the IRS can assess an individual’s ability to
    pay outstanding taxes.
    In November 2003, Wanland completed, signed, and
    submitted the Form 433A. He listed only one bank account
    with a balance of $9. He did not list the 705 Account, even
    though, in the previous month alone, he had deposited
    $35,000 from his law practice into and spent over $18,000
    from the 705 Account. He also did not list his American
    Express card, even though he had used roughly $15,000 from
    the 705 Account in October and November to pay down its
    balance. He also never disclosed the 705 Account to his
    accountants, who would have told Wanland that he needed to
    disclose it on the Form 433A.
    In April 2004, the IRS reassigned Wanland’s case to a
    different IRS Officer, who concluded that Wanland had the
    ability to pay his tax liabilities, penalties, and interest. In
    May 2004, she met with Wanland and his accountant, and
    Wanland promised to pay $10,000 per month towards his
    outstanding tax balance, and to get a loan to obtain more
    funds. He never got the loan, and stopped making payments
    after four months.
    In April 2005, Wanland provided an updated Form 433A,
    which reported the same account as the previous Form 433A,
    this time with an account balance of “minimal/unknown.” He
    again omitted the 705 Account, even though he had deposited
    6              UNITED STATES V. WANLAND
    $20,000 into it just a few days earlier. The IRS Officer,
    suspicious that Wanland had been hiding accounts, issued a
    summons to Wanland’s bank around the same time. She then
    learned about the 705 Account, and issued levies on both
    partnerships—the Law Offices of Wanland and Bernstein and
    705 University Partners. The levies stated:
    This levy requires you to turn over to us: this
    taxpayer’s wages and salary that have been
    earned but not paid, as well as wages and
    salary earned in the future until this levy is
    released, and (2) this taxpayer’s other income
    that you have now or for which you are
    obligated.
    The levies gave notice that “[w]ages and salary include fees,
    commissions, and bonuses.” A levy served on wages and
    salary is “continuous from the date such levy is first made
    until such levy is released” by the IRS, and therefore covers
    property acquired after the date on which it was served.
    
    26 U.S.C. § 6331
    (e).
    Prior to the levies being served, Wanland’s law partner
    Bernstein wrote Wanland checks to the 705 Account on
    Wanland’s request. After the levies were served, Bernstein
    refused to write any more checks for Wanland’s partnership
    draws, and shortly thereafter left the partnership. Wanland
    then wrote checks to himself from the 705 Account. Donald
    Spaulding then joined the partnership, assumed Bernstein’s
    check writing responsibilities, and wrote checks to Wanland
    at the 705 Account when asked to do so. Wanland never told
    Spaulding about the levies, and Spaulding would not have
    written the checks had he known about the levies.
    UNITED STATES V. WANLAND                      7
    By now, the amount of unpaid taxes, penalties, and
    interest exceeded $900,000. Although he only disclosed one
    account with $9 or a “minimal/unknown” amount, from 2000
    through 2006 Wanland deposited $1.95 million into the 705
    Account ($1.8 million from the law partnership), and spent
    $1.92 million from that account. This included spending on
    trips to Hawaii, Lake Tahoe resorts and casinos, and Las
    Vegas casinos. Additionally, Wanland used about $422,000
    to pay off the undisclosed American Express card (which
    included spa and tanning charges, clothing purchases, and
    other non-business related expenses).
    II. Procedural History
    A. The Indictments and Pretrial Litigation
    A 2009 indictment charged Wanland with tax evasion
    (
    26 U.S.C. § 7201
    ). A January 2012 superseding indictment
    charged Wanland with tax evasion, numerous counts of
    concealment of property subject to a levy (
    26 U.S.C. § 7206
    (4)), and several counts of willful failure to file a tax
    return (
    26 U.S.C. § 7203
    ). The superseding indictment
    alleged that Wanland committed tax evasion by:
    (1) concealing the nature and extent of his assets; (2) making
    false statements about his income and ability to pay his taxes;
    (3) placing funds and property in the name of a nominee;
    (4) defying a tax levy; and (5) paying creditors other than the
    United States. As for the levy counts, the superseding
    indictment tied each count to a particular transaction,
    including checks, debit card purchases, and cash withdrawals.
    8              UNITED STATES V. WANLAND
    1. Motions to Dismiss the Levy Counts
    Wanland moved to dismiss the levy counts, arguing that
    under 
    26 U.S.C. § 6331
    (e), continuous levies are only
    authorized for “salary or wages,” and his partnership draws
    did not qualify as such. Therefore, the government could not
    prove that Wanland’s partnership profits were “property upon
    which levy is authorized,” as section 7206(4) requires. The
    district court concluded that the question ultimately was a
    factual dispute, and reserved it for trial. Wanland renewed
    this argument when he moved for a judgment of acquittal on
    the levy counts under Federal Rule of Criminal Procedure
    29(a), which the district court again denied.
    Wanland also moved to dismiss the levy counts on statute
    of limitations grounds, arguing that the limit for these counts
    was three years, not six. The district court rejected that
    motion. It reviewed the language of 
    26 U.S.C. § 6531
     (which
    governs the statute of limitations for tax crimes) to conclude
    that the six-year statute of limitations described in section
    6531(1) applied to the levy counts, because it applies to “all
    offenses where fraud is an essential element.” Section
    7206(4), titled “Removal or concealment with intent to
    defraud,” fell “under the umbrella of § 6531(1).”
    2. Motion to Dismiss for Res Judicata
    Wanland filed for bankruptcy in 2007, and listed the IRS
    as his biggest creditor. The IRS eventually received limited
    proceeds from the liquidation of Wanland’s assets. In June
    2011, Wanland obtained his discharge under 
    11 U.S.C. § 727
    .
    The attached “Explanation Of Bankruptcy Discharge In A
    Chapter 7 Case,” however, stated that “[d]ebts for most
    UNITED STATES V. WANLAND                      9
    taxes” are one of the “common types of debts” that are “not
    discharged.”
    After the return of the superseding indictment, Wanland
    moved to dismiss the charges on res judicata grounds. He
    argued that “because the Government failed to raise the
    claims in the indictment during the bankruptcy proceeding to
    prevent nondischargeability, and failed to stay the bankruptcy
    proceedings pending the outcome of the current criminal
    matter,” res judicata prevented the government from
    “pursuing a criminal action concerning the assets and tax
    liabilities the bankruptcy court already discharged.” The
    district court rejected that argument, explaining that res
    judicata “does not apply where the claim in question could
    not have been brought in the prior proceeding due to
    limitations on the prior court’s jurisdiction.”
    B. Trial
    At trial, Wanland raised many defenses. He argued that
    the levy counts were invalid, as they were continuous levies,
    which apply only to “salary or wages.” Because his
    partnership draws were neither salary nor wages, he
    contended that he lacked the requisite intent by ignoring the
    levies. He also said that an attorney opined that the levies did
    not apply to him.
    In its jury instructions, the trial court defined “salary or
    wages” as follows:
    The funds levied against were the defendant’s
    “salary,” if they represent remuneration paid
    to defendant on an annual basis, but were
    predetermined, or owed, to be paid out (or
    10                  UNITED STATES V. WANLAND
    advanced) at regular intervals (for example,
    weekly, bi-weekly, monthly or quarterly) in a
    fixed amount.
    The funds levied against were “wages” if they
    were remuneration for services performed by
    an employee for his employer, including the
    cash value of all remuneration (including
    benefits) paid in any medium other than cash.
    You must use your common-sense
    understanding of any terms not specifically
    defined here, including “employee” and
    “employer.”
    The jury returned guilty verdicts on the tax evasion count,
    the willful failure to file counts, and 24 of the 26 levy counts.3
    The trial court sentenced Wanland to 46 months in prison and
    36 months of supervised release.
    III.      STANDARD OF REVIEW
    A district court’s denial of a motion to dismiss an
    indictment based on its interpretation of a federal statute and
    its denial of a motion for a judgment of acquittal are both
    reviewed de novo. United States v. Olander, 
    572 F.3d 764
    ,
    766 (9th Cir. 2009); United States v. Sanchez, 
    639 F.3d 1201
    ,
    1203 (9th Cir. 2011). “We review the district court’s
    formulation of jury instructions for an abuse of discretion,
    and we review de novo whether the instructions misstated or
    omitted an element of the charged offense.” United States v.
    Hofus, 
    598 F.3d 1171
    , 1174 (9th Cir. 2010) (citation omitted).
    “The district court’s conclusion regarding the applicability of
    3
    The government voluntarily dismissed five levy counts prior to trial.
    UNITED STATES V. WANLAND                     11
    a statute of limitations is a matter of law reviewed de novo.”
    United States v. Workinger, 
    90 F.3d 1409
    , 1412 (9th Cir.
    1996). “Res judicata claims are reviewed de novo.” Intri-
    plex Techs., Inc. v. Crest Grp., Inc., 
    499 F.3d 1048
    , 1052 (9th
    Cir. 2007).
    IV.      ANALYSIS
    A. Legal Sufficiency of The Levy Counts
    On appeal, Wanland renews his attacks on the levy
    counts, arguing that his partnership draws were neither salary
    nor wages as a matter of law and fact. The district court
    correctly left that decision to the jury, and ample evidence
    supported the guilty verdicts on these counts.
    An inquiry into tax evasion does not end with how the
    defendant labels his income. Otherwise, evaders could paint
    their salary and wages as “fruits of labor,” “donations for
    work,” or “gifts from my boss” and avoid the levy process
    altogether. The district court put it this way: “[n]obody in his
    right mind would think that somehow or other lawyer’s draws
    ought to be treated differently than wages and salary in
    general.” Wanland cannot point to anything that suggests
    Congress had a different take.
    Rather than limiting our review to labels, we look at the
    substance of Wanland’s partnership draws, which the district
    court correctly cast as a jury question. The district court’s
    jury instruction, quoted above, captured the essence of the
    inquiry. Under the partnership agreement, Wanland was
    entitled to receive routine, equal monthly draws that were
    remuneration solely for services provided to the partnerships’
    clients. These draws were set at a predetermined amount,
    12             UNITED STATES V. WANLAND
    identical to wages or salary in all relevant respects. This
    included a routine $3,000 per month payment for the rent on
    his house. That Wanland occasionally withdrew more money
    in one month than another does not change the routine
    income he was guaranteed and that he received for his work
    as a lawyer.
    Not surprisingly, other courts agree with our analysis.
    For example, in United States v. Jefferson-Pilot Life
    Insurance Co., 
    49 F.3d 1020
     (4th Cir. 1995), a civil case, the
    Fourth Circuit held that section 6331’s “salary or wages”
    language covered commissions paid to an insurance
    salesman, rejecting the same argument that Wanland now
    makes. 
    Id. at 1021
    . Even though the defendant did not label
    his commissions as “salary” or “wages,” they were payments
    made to the individual on a repeat basis and at consistent
    amounts. 
    Id.
     As such, they fit directly within “[t]he
    underlying purpose of the [continuous levy] provision,”
    which was designed “to provide a means of levying upon
    remuneration payable to a taxpayer on a recurring basis for
    personal services performed for the payor.” 
    Id. at 1022
    .
    Similarly, in United States v. Moskowitz, Passman &
    Edelman, 
    603 F.3d 162
     (2d Cir. 2010), another civil case, the
    Second Circuit applied Jefferson-Pilot to law firm partnership
    draws. The court explained that the “salary or wages”
    provision applies to “compensation for services paid in the
    form of fees, commissions, bonuses, and similar items.” 
    Id. at 168
     (quoting 
    26 C.F.R. § 301.6331-1
    (b)(1)). Partnership
    draws are similar to fees, commissions, or bonuses, and are
    compensation directly for services rendered to clients. 
    Id.
     at
    168–69; see also Mission Primary Care Clinic, PLLC v. Dir.,
    Internal Revenue Serv., 370 F. App’x 536 (5th Cir. 2010)
    (holding that payments remunerated to doctor-members of a
    UNITED STATES V. WANLAND                      13
    PLLC could constitute “salary or wages” because the “critical
    characteristics” of the payments were similar to traditional
    salaries or wages).
    Wanland falls back on the rule of lenity to argue that we
    should dismiss his levy convictions because the extent of the
    “salary or wages” language was ambiguous. But the rule of
    lenity has limited application generally, and none here.
    While no previous Ninth Circuit case has addressed this
    particular issue, that is not determinative. “[A] lack of prior
    appellate rulings on the topic does not render the law vague.”
    United States v. Kahre, 
    737 F.3d 554
    , 568 (9th Cir. 2013)
    (quoting United States v. George, 
    420 F.3d 991
    , 995 (9th Cir.
    2005)). “The rule of lenity only applies . . . where there is a
    grievous ambiguity or uncertainty in the language and
    structure of the statute, such that even after a court has seized
    every thing from which aid can be derived, it is still left with
    an ambiguous statute.” Id. at 572 (quoting United States v.
    Carona, 
    660 F.3d 360
    , 369 (9th Cir. 2011)).
    Lenity is especially inappropriate here, as “[i]nclusion of
    a scienter requirement ‘mitigates a law’s vagueness,
    especially with respect to the adequacy of notice to the
    complainant that his conduct is proscribed.’” 
    Id.
     (quoting
    United States v. Guo, 
    634 F.3d 1119
    , 1123 (9th Cir. 2011));
    see also Guo, 
    634 F.3d at 1123
     (reasoning that a scienter
    requirement in the statute “alleviates any concern over the
    complexity of the regulatory scheme”). The jury had to find
    that Wanland acted with the intent “to evade and defeat the
    collection of the assessed taxes,” a stringent mens rea
    element. Moreover, the continuous levy, served on Wanland,
    stated that “[w]ages and salary include fees, commissions,
    and bonuses.” Wanland was therefore on notice that his rigid
    definition of “salary or wages” may have been incorrect. See
    14              UNITED STATES V. WANLAND
    United States v. Cabaccang, 
    332 F.3d 622
    , 635 n.22 (9th Cir.
    2003) (explaining that the rule of lenity is concerned with
    ensuring that “defendants have notice of the criminality of
    their actions” and “that legislatures . . . define criminal
    activity” (quoting United States v. Bass, 
    404 U.S. 336
    , 348
    (1971))). Moreover, as requested by Wanland, the district
    court gave the jury advice of counsel and good faith
    instructions. Had the jury believed Wanland relied on an
    attorney or was genuinely uncertain about his responsibilities
    under the law, it could have acquitted him. Accordingly,
    neither the district court nor the jury erred in concluding that
    Wanland’s monthly income from his law practice qualified as
    “salary or wages” under section 6331(e).
    Finally, Wanland argues that it is incorrect to treat
    partnership draws as “salary or wages” under section 6331(e)
    because the Internal Revenue Code treats self-employment
    income differently from the salary and wages of employees.
    He contends that the “salary” and “wages” referenced in
    section 6331 must have the same meanings that they have in
    the employment tax code. We disagree. “There is no
    indication in the Code . . . that Congress intended to
    coordinate the meanings of these terms between the two
    separate sets of provisions.” Jefferson-Pilot, 
    49 F.3d at 1023
    .
    As the Fourth Circuit pointed out, “[i]f Congress had so
    intended, it easily could have included in § 6331(e) a cross
    reference to the employment tax provisions, as it has done
    repeatedly in other sections of the Code.” Id.
    Instead, like the district court, we construe “salary or
    wages” in section 6331(e) in accordance with its plain or
    natural meaning. Black’s Law Dictionary defines a “salary”
    as “[a]n agreed upon compensation for services—esp.
    professional or semiprofessional services—usu. paid at
    UNITED STATES V. WANLAND                     15
    regular intervals on a yearly basis, as distinguished from an
    hourly basis.” The jury instructions closely tracked this
    definition. Here, there was ample evidence for the jury to
    find that Wanland’s partnership draws were remuneration
    paid for professional services (legal services), defined on a
    yearly basis (based on the year’s profits), and payable at
    regular intervals (monthly), rendering them a “salary.”
    B. Statute of Limitations—Levy Counts
    Wanland argues that the district court erred in not
    dismissing the levy counts because they exceeded the three-
    year statute of limitations. All of the levy counts covered
    2006 transactions, while the superseding indictment was
    returned in January 2012. The district court was correct to
    reject this argument and apply a six-year statute of
    limitations.
    Criminal tax proceedings generally have a three-year
    statute of limitations. See 
    26 U.S.C. § 6531
    . There are,
    though, several exceptions for which a six-year statute of
    limitations applies. 
    Id.
     § 6531(1)–(8). Under section
    6531(1), tax offenses “involving the defrauding or attempting
    to defraud” the government have a six-year statute of
    limitations. “Section 6531(1), by its own terms, does not
    require that a defendant be expressly indicted for tax fraud.”
    Workinger, 
    90 F.3d at 1413
    . Congress intended for a six-year
    statute of limitations for “all offenses which are fairly
    identifiable as those in which fraud is an essential ingredient,
    by whatever words they be defined.” 
    Id. at 1414
     (quoting
    United States v. Grainger, 
    346 U.S. 235
    , 244 (1953)). This
    includes statutes not labeled “‘fraud,’ if those offenses did
    reflect fraudulent activity.” Id. at 1413.
    16             UNITED STATES V. WANLAND
    As noted above, section 7206(4) requires one to act “with
    intent to evade or defeat the assessment or collection of any
    tax imposed by this title.” An individual must know of a tax
    liability and a levy on his property to remedy that tax
    liability, but still deliberately take some action to “evade or
    defeat” that levy. As in Workinger, that is exactly the type of
    “defrauding” that section 6531(1) was intended to cover. We
    agree with the district court that the six-year statute of
    limitations of section 6531(1) applies to prosecutions under
    section 7206(4).
    Wanland makes several arguments in favor of a three-year
    statute of limitations. First, he contends that continuing to
    interpret section 6531(1) broadly would allow the six-year
    statute of limitations exception to become more prevalent
    than the three-year rule. This is not persuasive in light of
    Workinger. As this court explained, Congress intended for
    the exception for offenses involving fraud to sweep broadly
    and “cover most acts that a person could perform in an
    attempt to avoid paying taxes.” Workinger, 
    90 F.3d at 1413
    ;
    see also 
    id.
     (acknowledging the reality that section 6531(1)
    and its counterpart, section 6531(2), may be broad enough to
    effectively “render the 3-year period almost irrelevant”
    (quoting Patricia T. Morgan, Tax Procedure and Tax Fraud
    in a Nutshell, § 13.1.7 (1990))). We thus do not hesitate to
    apply the six-year statute of limitations to violations of
    section 7206(4), which necessarily require fraudulent
    conduct.
    Second, Wanland argues more specifically that applying
    section 6531(1) to section 7206(4) is inappropriate because
    one of the eight specifically enumerated exceptions, section
    6531(5), is for a crime under another subsection of section
    7206—section 7206(1). He argues that because Congress
    UNITED STATES V. WANLAND                      17
    elected to extend the statute of limitations for a particular
    subsection of section 7206, it deliberately omitted the other
    subsections of section 7206. This argument is likewise
    untenable under Workinger.           Specifically enumerated
    exceptions providing for a six-year statute of limitations were
    included so that Congress could be “sure that mere technical
    distinctions would not make a difference in the statute of
    limitations.” Workinger, 
    90 F.3d at 1413
    . In other words,
    they reflect a rather-be-safe-than-sorry approach, and are
    sometimes duplicative of conduct that would also be
    encompassed under sections 6531(1) and (2). 
    Id.
     That
    Congress specifically enumerated that section 7206(1) have
    a six-year statute of limitations says little, if anything, about
    the statute of limitations for section 7206(4).
    Finally, Wanland points out that the Internal Revenue
    Manual (IRM) provides that the statute of limitations for
    section 7206(4) is three years. IRM § 9.1.3.3.7.3.1. The
    IRM, however, does not bind this court. See Fargo v.
    Comm’r, 
    447 F.3d 706
    , 713 (9th Cir. 2006) (stating that the
    IRM “does not have the force of law and does not confer
    rights on taxpayers”); see also United States v. Mead Corp.,
    
    533 U.S. 218
    , 234–35 (2001) (explaining that agency
    manuals are “beyond the Chevron pale,” and we afford them
    deference only to the extent that we value the “thoroughness,
    logic, and expertness” of the writer). For the above described
    reasons, we do not conclude that the IRM’s recommendation
    is persuasive, and we hold that the six-year statute of
    limitations applies to violations of section 7206(4).
    C. Res Judicata
    Wanland argues that because his debts were discharged in
    bankruptcy, he no longer owes the debts for the unpaid taxes
    18             UNITED STATES V. WANLAND
    from which the criminal charges arose. According to
    Wanland, the government should “be precluded from
    pursuing a criminal action concerning the assets and tax
    liabilities the bankruptcy court already discharged.” The
    district court properly rejected this argument.
    Res judicata requires Wanland to establish three elements:
    (1) privity between parties in the actions; (2) an identity of
    claims between actions; and (3) a final judgment on the
    merits in the previous action. See Tahoe-Sierra Pres.
    Council, Inc. v. Tahoe Reg’l Planning Agency, 
    322 F.3d 1064
    , 1077 (9th Cir. 2003).
    First, Wanland fails to demonstrate privity between the
    parties. Courts have not assumed that all federal agencies are
    in privity for res judicata purposes, and instead look to the
    substance of claims. See Sunshine Anthracite Coal Co v.
    Adkins, 
    310 U.S. 381
    , 402–03 (1940) (explaining that while
    there are occasions when privity exists between different
    officers or agencies of the government, this consideration is
    not just a “matter of form, but of substance”); see also United
    States v. Ledee, 
    772 F.3d 21
    , 30 (1st Cir. 2014) (“[C]ourts
    have recognized in the preclusion context the folly of treating
    the government as a single entity in which representation by
    one government agent is necessarily representation for all
    segments of the government.”). For example, in United
    States v. Hickey, 
    367 F.3d 888
     (9th Cir. 2004), this court held
    that the Securities and Exchange Commission (SEC) and the
    United States in a criminal prosecution are not in privity
    because when the SEC brings an action under the Securities
    Act of 1933 or Securities Exchange Act of 1934, it is “not
    acting as ‘the federal sovereign vindicating the criminal law
    of the United States.’” 
    Id. at 893
     (quoting United States v.
    Heffner, 
    85 F.3d 435
    , 439 (9th Cir. 1996)).
    UNITED STATES V. WANLAND                        19
    Just as in Hickey, the IRS’s role in pursuing tax debts in
    a bankruptcy action is not to act as a “federal sovereign
    vindicating the criminal law.” In a bankruptcy proceeding,
    the IRS is acting as a creditor trying to recover debts. In this
    capacity, its interests will often differ from the interests of the
    United States government in a criminal prosecution. For
    example, if the IRS were in a position where it had to “make
    a claim against the estate and at the same time preserve a
    subsequent criminal prosecution” against a defendant, it
    “would have to pursue an opposition to the bankruptcy based
    on fraud, even if to do so might be contrary to its interest” as
    a debtor. United States v. Tatum, 
    943 F.2d 370
    , 381 (4th Cir.
    1991).
    The different roles of the IRS and the United States
    government in criminal prosecutions correspond to the
    different purposes of bankruptcy and criminal proceedings.
    The purpose of a bankruptcy action is to help those in bad
    financial positions move forward, not, as with a criminal
    prosecution, to resolve harms against society deserving of
    punishment. See Gruntz v. County of Los Angeles, 
    202 F.3d 1074
    , 1085 (9th Cir. 2000) (“The purpose of bankruptcy is to
    protect those in financial, not moral difficulty,” and the
    bankruptcy code “reflects [that] philosophy.”); Tatum,
    
    943 F.2d at
    381–82 (referring to bankruptcy proceedings and
    criminal tax prosecutions, explaining that “[t]he pursuit of
    one proceeding will seldom resolve the other”). Thus, the
    IRS in a bankruptcy action and the United States government
    in a criminal action are not in privity.
    While we need not go further because Wanland has failed
    on the first prong, he raises several arguments related to the
    identity of claims prong that we briefly address. He takes
    issue with the district court’s reasoning that res judicata
    20              UNITED STATES V. WANLAND
    cannot apply here because the bankruptcy court had no
    authority to adjudicate criminal matters. He points primarily
    to United States v. Liquidators of European Federal Credit
    Bank, 
    630 F.3d 1139
     (9th Cir. 2011), to argue that, even if the
    government could not have made a particular claim in an
    earlier proceeding, it can still be barred from making that
    claim in a second proceeding. In Liquidators, this court held
    that res judicata barred the government from bringing a
    criminal forfeiture proceeding with respect to the same
    property involved in a prior civil forfeiture proceeding
    because both claims involved the same “transactional nucleus
    of facts.” 
    Id.
     at 1151–52. This was in spite of the fact that
    the government could not have brought a criminal forfeiture
    action in the civil forfeiture proceeding because the criminal
    and civil forfeiture statutes do not permit consolidation. 
    Id. at 1151
    .
    This court acknowledged that the result of its holding no
    longer fit within the pattern reflected in our circuit’s case law
    that res judicata only applies where a claim could have been
    asserted in a previous action. 
    Id.
     (citing Tahoe-Sierra,
    322 F.3d at 1078). It explained, however, that this decision
    was “driven by the unique context of forfeiture.” Id. at 1152.
    “Unlike in other contexts, the two types of forfeiture actions
    always seek the same result,” “arise from exactly the same
    facts,” “necessarily always involve the same potential
    plaintiff,” and “involve the same general determination.” Id.
    In sum, “[t]he two forfeiture options—civil and criminal—
    provide the government two different paths to reaching the
    same goal—forfeiture of the property.” Id. For the reasons
    described above, the IRS in bankruptcy proceedings and the
    United States government in criminal prosecutions are not the
    same plaintiff, nor do bankruptcy and criminal actions
    purport to achieve the same goal. Accordingly, it would be
    UNITED STATES V. WANLAND                             21
    inappropriate to expand Liquidators, decided for the
    peculiarities of the forfeiture context, to the facts here.4
    AFFIRMED.
    4
    We also doubt that there has been a final judgment on the merits with
    respect to Wanland’s tax debts. Wanland received a general discharge
    under 
    11 U.S.C. § 727
    . Under a general discharge order, most debts are
    automatically discharged. There are a few exceptions, though, including
    for a tax “with respect to which the debtor made a fraudulent return or
    willfully attempted in any manner to evade or defeat.” 
    Id.
     § 523(a)(1)(C).
    In accordance with the statutory exceptions to discharge, Wanland was
    warned in his discharge order that some types of debt are not discharged,
    including “debts for most taxes.” Even if, as Wanland points out, the
    intent requirements for demonstrating “willful tax evasion” for non-
    dischargeability of debt and willful tax evasion for a criminal tax evasion
    charge are the same, Hawkins v. Franchise Tax Bd. of Cal., 
    769 F.3d 662
    ,
    669 (9th Cir. 2014), the issue had likely not been adjudicated prior to the
    jury verdict in this trial.