STATE OF NEW JERSEY VS. GREGORY P. COBBS (13-07-0893, MERCER COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4479-14T2
STATE OF NEW JERSEY,
APPROVED FOR PUBLICATION
Plaintiff-Respondent, June 23, 2017
v. APPELLATE DIVISION
GREGORY P. COBBS,
Defendant-Appellant.
___________________________________
Submitted November 29, 2016 – Decided June 23, 2017
Before Judges Fisher, Ostrer and Leone.
On appeal from the Superior Court of New
Jersey, Law Division, Mercer County,
Indictment No. 13-07-0893.
Joseph E. Krakora, Public Defender, attorney
for appellant (Jaime B. Herrera, Assistant
Deputy Public Defender, of counsel and on
the brief).
Angelo J. Onofri, Acting Mercer County
Prosecutor, attorney for respondent (Mary E.
Stevens, Special Deputy Attorney General/
Acting Assistant Prosecutor, of counsel and
on the brief).
The opinion of the court was delivered by
OSTRER, J.A.D.
This appeal requires us to determine when the five-year
statute of limitations begins to run against a prosecution for
intentional failure to pay New Jersey taxes. N.J.S.A. 54:52-
9(a). Upon reconsideration, the trial court denied defendant's
motion to dismiss count one of the July 10, 2013 indictment,
which charged him with failure to pay $194,817.56 in gross
income tax for tax year 2007. Thereafter, defendant entered a
conditional guilty plea to that charge, and the State dismissed
count two of the indictment, which timely alleged failure to pay
$18,336 in 2008 tax. Defendant did so after the court affirmed
denial of his application to pretrial intervention (PTI).
Having considered the plain language of the tax law, and
applicable principles of statutory interpretation, we conclude
that the limitations period under N.J.S.A. 2C:1-6 for failure to
pay tax under N.J.S.A. 54:52-9(a) begins to run when the
defendant has failed to pay taxes when due and owing, and has
done so with the intent to evade, avoid or otherwise fail to
make timely payment. This can occur on the day taxes are first
due, or on a later date when the necessary state of mind first
emerges.
In this case, the indictment alleged that both non-payment
and intent coexisted as early as July 8, 2008. Therefore, count
one of the July 10, 2013 indictment was time-barred. We reject
the State's argument that the limitations period was tolled
until February 2010, when defendant engaged in his last
affirmative act to evade and avoid payment.
2 A-4479-14T2
We also affirm the court's denial of defendant's PTI
appeal. We therefore reverse defendant's conviction and remand
for further proceedings with respect to count two of the
indictment.
I.
For purposes of this appeal, we assume the facts alleged in
the indictment. State v. Morrison, 188 N.J. 2, 12-13 (2006) (on
motion to dismiss indictment, court must consider evidence
presented to the grand jury in light most favorable to the
State); State v. Riley, 412 N.J. Super. 162, 167 (Law Div. 2009)
(on motion to dismiss indictment, court accepts facts alleged by
State). According to count one, "on diverse dates between July
8, 2008 and February 27, 2013," defendant "fail[ed] to pay or
turn over when due" $194,817.56 in tax due for tax year 2007,
and he did so "with the intent to evade, avoid or otherwise not
make timely payment or deposit . . . ." Count two alleges that
between October 15, 2008 and February 27, 2013, defendant failed
to pay when due $18,336 in tax for the 2008 tax year, while
having the same state of mind. Neither count charged defendant
with failing to pay a specific amount of interest, fees or
penalties.
The State also alleged, and defendant did not dispute for
purposes of his motion, that defendant filed his gross income
3 A-4479-14T2
tax return on July 7, 2008. It was due April 15, 2008 and he
did not seek an extension. Defendant reported over $2.3 million
in taxable income, but failed to remit any tax then due, which
he calculated to be $196,065. Defendant was thereafter given a
modest credit, producing the $194,817.56 amount stated in the
indictment.
On February 17, 2009, an outside tax collector for the
Division of Taxation (Division), Pioneer Credit Recovery, Inc.
(Pioneer), notified defendant by mail of his tax delinquency and
sought payment of $274,453.82, consisting of $194,065 in tax;
interest of $16,012.28 through March 15, 2009; penalties of
$38,915.20; and a recovery fee of $24,950.34.1 Pioneer personnel
communicated with defendant by telephone multiple times between
March 2009 and February 2010. Defendant repeatedly promised
Pioneer and Division personnel that he would make payments, but
he did not. On February 9, 2010, defendant contacted the
Division and said the proverbial "check was in the mail" —
actually in a Federal Express package. He supplied the tracking
number, but no payment was enclosed. The case was transferred
to the Attorney General in April 2010. Aside from his
1
The slight differences between Pioneer's calculation of tax
owed and the amount alleged in the indictment are unexplained by
the record.
4 A-4479-14T2
continuing non-payment, the State proffered no acts of evasion
thereafter, although the indictment referred to actions on
"diverse dates" as late as February 2013.
Over three years later, a Mercer County grand jury returned
the two-count indictment against defendant.2 Defendant was
denied admission to PTI, and the trial court rejected
defendant's appeal. After the plea cut-off date, see R. 3:9-
3(g), defendant filed his motion to dismiss count one as time-
barred.
The court initially granted the motion, but reversed itself
upon the State's reconsideration motion. Defendant contended
the five-year limitations period under N.J.S.A. 2C:1-6(b)(1)
began to run on April 16, 2008, the day after his taxes were
due. The State argued the crime was complete, and the statute
of limitations commenced, after defendant satisfied two
elements: he failed to pay the tax when due; and he engaged in
his last affirmative act to evade or avoid payment, which was in
February 2010, when defendant falsely stated he sent a check by
Federal Express.3
2
The State offers no explanation for the delay.
3
Initially, the State also contended the limitations period did
not begin to run as long as taxes were due and owing. In first
granting defendant's motion, the trial court focused on and
rejected this argument. On reconsideration, the State
(continued)
5 A-4479-14T2
In ultimately denying defendant's dismissal motion, the
court held that the Legislature intended to designate criminal
failure to pay tax under N.J.S.A. 54:52-9(a) as a continuing
crime, although it did not do so explicitly. The court agreed
the limitations period began to run after a defendant's last act
that evidenced an intent to evade or avoid payment of tax. As
that occurred in February 2010, the July 10, 2013 indictment was
timely.
Defendant thereafter entered an open, conditional plea of
guilty to count one. In his allocution, defendant admitted he
filed his 2007 tax return on July 8, 2008; it reflected
$194,817.56 in tax due; he intended to avoid payment; and he
thereafter made multiple unkept promises to pay, and sent an
empty Federal Express envelope after promising to enclose a
payment. On April 17, 2015, the court sentenced defendant, then
fifty-one years old, to five years of probation and 100 hours of
community service. The court required restitution of $150,000,
in monthly payments of a least $500 over ten years.4
(continued)
emphasized its alternative argument that the last affirmative
act of evasion or avoidance triggered the limitations period.
4
The court also purported to impose, in advance, 364 days of
incarceration if defendant failed to complete probation. We
note that such a sentence is contrary to State v. Bayless, 114
N.J. 169, 175-78 (1989), which requires the trial court, at a
resentencing for violation of probation, to consider the
(continued)
6 A-4479-14T2
This appeal followed. Defendant raises the following
points for our consideration:
POINT I
THE STATUTE OF LIMITATIONS BEGAN TO RUN ON
JULY 7, 2008 BECAUSE FAILURE TO PAY IS A
POINT-IN-TIME CRIME AND NOT A CONTINUING
OFFENSE.[5]
POINT II
MR. COBBS' REJECTION FROM PTI CONSTITUTES A
PATENT AND GROSS ABUSE OF DISCRETION BECAUSE
THE PROSECUTOR INAPPROPRIATELY WEIGHED HIS
PRIOR CONVICTION AND FAILED TO CONSIDER ALL
RELEVANT FACTORS.
II.
As defendant does not challenge any trial court fact
findings, we review de novo, as a question of law, the court's
denial of his motion to dismiss count one of the indictment on
statute of limitations grounds. See State v. Cagno, 211 N.J.
488, 505-06 (2012). The Code of Criminal Justice (Code) sets
forth guiding principles.6 Subject to various exceptions not
relevant here, "[a] prosecution for a crime must be commenced
within five years after it is committed." N.J.S.A. 2C:1-
(continued)
aggravating factors found to exist at the original sentencing
and the mitigating factors affected by the probation violation.
5
We omit sub-headings that simply outline defendant's argument.
6
Although the crime is defined in Title 54, the State concedes
that N.J.S.A. 2C:1-6 governs.
7 A-4479-14T2
6(b)(1). The limitations period starts the day after the crime
is committed, ibid., and the prosecution is "commenced" when an
indictment is found. N.J.S.A. 2C:1-6(d). The statute of
limitations is an absolute bar to untimely prosecution. State
v. Diorio, 216 N.J. 598, 613 (2014).
To determine when a crime "is committed," the statute
creates a dichotomy between "discrete act" crimes, and
"continuing crimes." Id. at 614. "An offense is committed
either when every element occurs or, if a legislative purpose to
prohibit a continuing course of conduct plainly appears, at the
time when the course of conduct or the defendant's complicity
therein is terminated." N.J.S.A. 2C:1-6(c).
We must first consider whether the Legislature expressed a
purpose, explicitly or impliedly, to treat the intentional
failure to pay tax as a continuing course of conduct crime, that
is, a continuing crime. The Code "'establishes a presumption
against finding that an offense is a continuous one.'" Diorio,
supra, 216 N.J. at 614-15 (quoting II The New Jersey Penal Code,
Final Report of the N.J. Criminal Law Revision Commission §
2C:1-6 commentary 2 at 15 (1971) (Final Report)). "An offense
should not be considered a continuing offense 'unless the
explicit language of the substantive offense compels such a
conclusion, or the nature of the crime involved is such that
8 A-4479-14T2
[the legislative body] must assuredly have intended that it be
treated as a continuing one.'" Id. at 614 (quoting Toussie v.
United States, 397 U.S. 112, 115, 90 S. Ct. 858, 860, 25 L. Ed.
2d 156, 161 (1970)).
A.
We begin with the statute's plain language. See In re
Kollman, 210 N.J. 557, 568 (2012). The intentional failure to
pay statute consists of two elements: first, the failure "to pay
or turn over when due any tax, fee, penalty or interest or any
part thereof required to be paid pursuant to the provisions of
the State Tax Uniform Procedure Law, [N.J.S.A.] 54:58-1 et seq.,
as amended and supplemented, or any State tax law," and, second,
"the intent to evade, avoid or otherwise not make timely payment
or deposit of any tax, fee, penalty or interest or any part
thereof." N.J.S.A. 54:52-9(a). The statute also expressly
provides that if a taxpayer submits a bad check, a fact-finder
may infer the requisite state of mind not to pay:
The fact that any payment was made with a
subsequently dishonored negotiable
instrument shall constitute prima facie
evidence that the actor failed to pay within
the meaning of subsection a. of this
section, and the trier of fact may draw a
permissive inference therefrom that the
actor did not intend to make the payment.
[N.J.S.A. 54:52-9(b).]
9 A-4479-14T2
In short, to be criminally liable, the taxpayer must have,
first, failed to pay the tax "when due," and, second, acted
"with the intent to evade, avoid or otherwise not make timely
payment . . . ." N.J.S.A. 54:52-9(a). A taxpayer may satisfy
these two elements as early as the day taxes are due, which is
April 15 in the case of gross income tax. See, e.g., N.J.S.A.
54A:8-1(a) (stating that payment of gross income tax is due
April 15).7 Although unpaid taxes may remain due and owing
after they first become due, the first element is satisfied when
the taxpayer initially fails to pay.
We reject defendant's suggestion that the statute does not
commence until the taxpayer's late filing, in this case, July
2008. If that were so, then the statute would never begin to
run if a taxpayer never filed. Instead, we understand "when
due" to mean that, absent an extension of the payment date,
gross income taxes are due on April 15, regardless of the
taxpayer's unilateral decision to file late.8
7
The State did not allege that defendant failed to pay estimated
tax during the 2007 tax year, which would involve an earlier due
date. N.J.S.A. 54A:8-5.
8
Under N.J.S.A. 54A:8-1(a), "the director may extend either the
filing or payment due date, or both, for any return under the
'New Jersey Gross Income Tax Act,' N.J.S.[A.] 54A:1-1 et seq.,
to coincide" with similar extensions for filing or payment of
federal personal income tax returns. This statute also permits
reasonable extensions, not greater than six months, for good
(continued)
10 A-4479-14T2
A taxpayer may conceivably fail to pay, but do so without
the requisite intent. For example, when a taxpayer carelessly
forgets to mail a return and payment, criminal culpability may
be absent. Consequently, the State must also show that the
taxpayer failed to pay with an intent to evade payment. Cf.
State v. Barasch, 372 N.J. Super. 355, 364-65 (App. Div. 2004)
(noting that the "intent to evade, avoid, or otherwise not make
timely payment" state of mind requirements in N.J.S.A. 54:52-8,
-13, and -14 were added to avoid punishing "simple carelessness
or poor business practices").9 If the taxpayer realizes the
oversight a month later, and then intentionally persists in non-
payment, the crime would be complete at that point.10
(continued)
cause. N.J.S.A. 54A:8-1(b). Here, however, defendant did not
seek an extension for filing or paying his 2007 taxes, under
either circumstance.
9
We need not address what other facts would defeat intent to
evade, avoid or otherwise not make timely payment. We note but
do not address the view of some federal courts that financial
inability to pay does not negate willfulness in a prosecution
for willful failure to pay taxes under 26 U.S.C.A. § 7203. See,
e.g., United States v. Blanchard, 618 F.3d 562, 571-72 (6th Cir.
2010); United States v. Easterday, 564 F.3d 1004, 1010 (9th Cir.
2009).
10
We reject the notion that there is no violation of N.J.S.A.
54:52-9(a) if a defendant, who failed to pay a tax without the
intent when it was originally due, subsequently fails to pay
with the "intent to evade, avoid or otherwise not make timely
payment." Ibid. Notably, the Legislature did not include the
phrase "when due" in the mens rea element. Instead, it included
(continued)
11 A-4479-14T2
Although N.J.S.A. 54:52-9(a) is complete upon satisfaction
of the two elements — non-payment and intent — the State
contends that the crime should be treated as a continuing one.
The State concedes that the intentional failure to pay statute
does not explicitly define the crime as a continuing offense.
The State contends the Legislature nonetheless must have
intended that the offense be treated as a continuing one. Yet,
as it did before the trial court, the State has jettisoned the
argument that the offense continues as long as taxes are
intentionally unpaid, which would mean the limitations period
would rarely run. Rather, the State contends that an essential
element of the crime is the evasion or avoidance of payment;
consequently, the crime continues, and the limitations period
does not begin to run, until the last affirmative act of evasion
or avoidance.
The State misinterprets the elements of the crime. No
affirmative act of evasion or avoidance is required, other than
non-payment of taxes when due. The taxpayer's "intent to evade,
(continued)
the phrase "timely payment." "Timely" means "[o]ccurring at a
suitable or opportune time; well-timed." The American Heritage
Dictionary 1271 (2d Coll. ed. 1985). A taxpayer who carelessly
overlooked payment — i.e. failed to pay tax "when due" — and
then discovered the oversight, but intentionally continued to
withhold payment — i.e. with an intent to avoid "timely payment"
— would satisfy the elements of the statute.
12 A-4479-14T2
avoid or otherwise not make timely payment," N.J.S.A. 54:52-
9(a), may certainly manifest itself in other affirmative acts of
evasion or avoidance — such as unkept promises to pay, hiding of
assets, or underreporting of income. However, those are not
elements of the crime, although they may be circumstantial
evidence of the taxpayer's requisite intent.
The State's position is also belied by subsection (b) of
the statute. Under this subsection, payment with a subsequently
dishonored negotiable instrument is prima facie evidence of
failure to pay, and permits an inference of the requisite intent
not to pay. N.J.S.A. 54:52-9(b). In other words, the crime may
be complete, in all respects, upon payment with a dishonored
instrument. No further proof is necessary. This provision thus
suggests that the crime is a "discrete offense."
B.
The State's position also finds no support in the
legislative history. The Legislature passed the intentional
failure to pay statute in 1987 as part of a general
strengthening of criminal tax offenses. L. 1987, c. 76, §§ 15-
29 (now codified at N.J.S.A. 54:52-5 to -19). The get-tough
approach was a counterweight to the temporary tax amnesty that
the law established. See Senate Revenue, Finance and
13 A-4479-14T2
Appropriations Committee Statement to Assembly Committee
Substitute for Assembly No. 823, at 1-2 (June 12, 1986).
The Legislature created two sets of tax-related offenses,
distinguished by the requisite state of mind. It is a
disorderly persons offense if a taxpayer "recklessly or
negligently . . . [f]ails to pay over any tax required by any
State tax law[,]" N.J.S.A. 54:52-6(b), or engages in other
proscribed conduct, such as "[f]ail[ing] to file any return or
report[,]" N.J.S.A. 54:52-6(a); filing or making false
statements, N.J.S.A. 54:52-6(c); failing to withhold taxes as
required, N.J.S.A. 54:52-6(j); and failing to keep required
records, N.J.S.A. 54:52-6(k).11
In contrast, it is a third-degree crime if a person fails
to pay or turn over tax "with the intent to evade, avoid or
otherwise not make timely payment . . . ." N.J.S.A. 54:52-9(a).
This same mens rea requirement — "intent to evade, avoid or
otherwise not make timely payment" — is incorporated into
several other provisions in the 1987 statute. These include
third-degree crimes to file false or fraudulent returns,
N.J.S.A. 54:52-10; maintain or prepare false or fraudulent
11
N.J.S.A. 54:52-6 is apparently drawn from N.J.S.A. 54:32B-
26(b), which was repealed by L. 1987, c. 76, § 39. However, the
prior law defined a disorderly persons offense without including
an express mens rea requirement.
14 A-4479-14T2
books, N.J.S.A. 54:52-11; fail to maintain books or records,
N.J.S.A. 54:52-12; fail to collect or withhold tax, N.J.S.A.
54:52-14;12 and the fourth-degree crime to knowingly swear to,
affirm, certify or verify any false or fraudulent statement,
N.J.S.A. 54:52-19.13 The Legislature evidently contemplated that
the failure to pay taxes, as well as other violations of tax-
related obligations, may be inadvertent or careless, which would
warrant lesser sanctions as disorderly persons offenses. See
Barasch, supra, 372 N.J. Super. at 364-65.
As the court did in Barasch, supra, we look to the
statutory structure of the 1987 criminal tax provisions to
discern legislative intent. Ibid.; see also State v. Smith, 197
12
Prior law made it a misdemeanor to fail to file a report, or
to file a false or fraudulent report "with the intent to defraud
the state or evade the payment of any tax, fee, penalty or
interest or any part thereof, which shall be due . . . ." L.
1936, c. 263, § 601, codified at N.J.S.A. 54:52-1, and repealed
by L. 1987, c. 76, § 65. Applying a slightly different mens rea
requirement, the old law also made it a misdemeanor to
"knowingly swear to, affirm, or verify any false or fraudulent
statement with intent to evade the payment of any state tax
. . . ." L. 1936, c. 263, § 602, codified at N.J.S.A. 54:52-2,
and repealed by L. 1987, c. 76, § 65. However, the old law
apparently did not make it a misdemeanor to fail to pay tax with
a similar state of mind requirement.
13
The state of mind requirement in N.J.S.A. 54:52-19 uses the
formulation "intent to evade, avoid or otherwise not pay any
tax" as opposed to "otherwise not make timely payment of any
tax" used in the other provisions. Whether the indictment would
have been timely had it charged defendant with this or any other
offense is not before us.
15 A-4479-14T2
N.J. 325, 333 (2009) (stating that, in construing a statute, the
court should "draw inferences concerning the meaning from its
composition and structure" (internal quotation marks and
citation omitted)). There is no indication in the structure of
the criminal tax provisions that an affirmative act of evasion
or avoidance is an essential element of the intentional failure
to pay crime under N.J.S.A. 54:52-9(a). Rather, as noted above,
various kinds of deceptive, fraudulent, or evasive acts are
separately criminalized as third- or fourth-degree offenses.
See N.J.S.A. 54:52-10, -11, -14, and -19. We infer from this
separate treatment that the Legislature did not intend to make
affirmative acts of avoidance or evasion an essential element of
the intentional failure to pay crime; nor did the Legislature
intend that the offense would be a continuing one until the last
such affirmative act occurred.
C.
The State contends, citing United States v. Dandy, 998 F.2d
1344 (6th Cir. 1993), that the Legislature could not have
intended to permit a taxpayer to avoid prosecution simply by
hiding the nature of a tax fraud scheme for five years. We are
unpersuaded. Dandy involved a prosecution for filing a false
return under 26 U.S.C.A. § 7201, which states: "Any person who
willfully attempts in any manner to evade or defeat any tax
16 A-4479-14T2
imposed by this title or the payment thereof shall, in addition
to other penalties provided by law, be guilty of a felony
. . . ." 998 F.2d at 1349. The court held that the limitations
period began to run upon the last affirmative evasive act. Id.
at 1355-56. The court reasoned that to hold that the statute
ran upon filing "would reward [the] defendant for successfully
evading discovery of his tax fraud . . . ." Id. at 1355.
First, there was no false filing in this case. Cf. United
States v. McGill, 964 F.2d 222, 230 (3d Cir. 1992) (stating that
evasion of assessment cases under § 7201 can be established with
the filing of a false tax return). In fact, the State knew
defendant failed to pay his taxes no later than when he filed
his 2007 return almost three months late, without an extension,
and reported close to $200,000 in tax due. Furthermore, as the
Court observed in Diorio, supra, "Our 'Code is drafted on the
theory that it is ordinarily desirable to start the running of
the period of limitation at the time when a crime is committed
rather than at the time the offense is detected or the offender
discovered.'" 216 N.J. at 620 (quoting Final Report, supra, §
2C:1-6 commentary 2 at 14).
Second, to prove tax evasion under 26 U.S.C.A. § 7201 there
must be: "1) the existence of a tax deficiency, 2) an
affirmative act constituting an attempt to evade or defeat
17 A-4479-14T2
payment of the tax, and 3) willfulness." McGill, supra, 964
F.2d at 229. By contrast, "[w]illful failure to pay tax under §
7203 contains two elements: 1) failure to pay a tax when due,
and 2) willfulness." Ibid. The crime described in Dandy is
most analogous to the crime defined by N.J.S.A. 54:52-10, which
proscribes filing false or fraudulent returns. We need not
decide when a crime under that provision is committed under
N.J.S.A. 2C:1-6, and when the limitations period begins to run.
The elements of § 7203, not § 7201, are analogous to those of
N.J.S.A. 54:52-9(a). Section 7203 covers willful failure to
file, supply information or pay tax, stating it is a misdemeanor
for
[a]ny person required under this title to
pay any estimated tax or tax, or required by
this title or by regulations made under
authority thereof to make a return, keep any
records, or supply any information, who
willfully fails to pay such estimated tax or
tax, make such return, keep such records, or
supply such information, at the time or
times required by law or regulations . . . .
[26 U.S.C.A. § 7203.]
Federal cases applying § 7203 support our interpretation of
N.J.S.A. 54:52-9(a). In United States v. Sams, 865 F.2d 713,
714 (6th Cir. 1988), a taxpayer submitted his federal return
without payment, stating he was short of funds and intended to
make payment arrangements. After he failed to do so, the
18 A-4479-14T2
government prosecuted him for willful failure to pay tax under
26 U.S.C.A. § 7203. Ibid. The Sixth Circuit rejected the
defendant's contention that the limitations period began, as a
matter of law, when the tax return was due. Id. at 715.
However, it also rejected the government's contention that it
did not run until the tax was actually paid. Ibid. The court
held that the crime was complete when willfulness manifested
itself, which was a fact issue. Id. at 716.
The court in United States v. Pelose, 538 F.2d 41, 44-45
(2d Cir. 1976), reached a similar conclusion with respect to
willful failure to file tax returns under 26 U.S.C.A. § 7203.
The court held that the crime would not be complete if the
taxpayer failed to file when due because of ill-health or lapse
of memory, but would become complete if the taxpayer persisted
in non-filing after the illness or other supervening condition
passed. Id. at 44-45. See also United States v. Andros, 484
F.2d 531, 532 (9th Cir. 1973) (stating, under 26 U.S.C.A. §
7203, that "[t]he period of limitation begins to run not when
the taxes are assessed or when payment is demanded, but rather
when the failure to pay the tax become willful -- an essential
element of the crime"), overruled on other grounds by United
States v. Easterday, 564 F.3d 1004, 1011 (9th Cir. 2009).
19 A-4479-14T2
In sum, we find no support in federal case law for the
State's position. Rather, to the extent 26 U.S.C.A. § 7203 is
analogous to N.J.S.A. 54:52-9(a), federal cases support the
conclusion that there are just two elements to the New Jersey
offense: the failure to pay when due, and required state of
mind.
D.
In arguing that it charged defendant with a continuing
crime, the State also misplaces reliance on the provisions that
authorize the Division to impose fees, interest and penalties on
unpaid taxes. See N.J.S.A. 54:49-3. We recognize that interest
and penalties accrue monthly on unpaid taxes. See id.; N.J.S.A.
54:49-4 (late filing penalty). Interest is also compounded
annually. See N.J.S.A. 54:49-3. While a taxpayer may commit an
intentional failure to pay tax on the day the taxes are due —
say, April 15, 2008 on 2007 taxes — a taxpayer could not commit
the intentional failure to pay interest on the overdue 2007
taxes until the State imposes the interest thereafter.
However, the possibility of an intentional failure to pay
subsequently charged interest or fees does not toll the
limitations period on the intentional failure to pay the
underlying tax, which charge may be a separate offense
altogether. The State did not charge defendant with intentional
20 A-4479-14T2
failure to pay interest, penalties, or fees on his unpaid 2007
taxes — which may well have been timely.
E.
Based on the foregoing principles, count one of the
indictment was time-barred. As the State itself alleged in the
indictment, defendant failed to pay his 2007 taxes when due —
which was April 15, 2008. According to the indictment,
defendant did so, beginning July 8, 2008, with the intent to
evade, avoid or otherwise not make timely payment. Defendant's
subsequent empty promises to pay did not toll the limitations
period. Based on the State's allegations, which we accept as
true for purposes of the motion, the crime was committed, under
N.J.S.A. 2C:1-6, no later than July 8, 2008.
Inasmuch as we reverse the trial court's denial of the
motion to dismiss count one, we remand for further proceedings
as to count two of the indictment, which the State dismissed
only as part of the defendant's conditional plea to count one.
III.
Finally, defendant's PTI appeal lacks sufficient merit to
warrant extended discussion in a written opinion. R. 2:11-
3(e)(2). The prosecutor's rejection of defendant's application
was not a patent and gross abuse of discretion in view of the
circumstances. See State v. K.S., 220 N.J. 190, 200 (2015).
21 A-4479-14T2
These included defendant's previous conviction in 1997 of a
significant theft for which he was required to make restitution
of $220,500, and serve a five-year probationary term
(conditioned on ninety days in jail) that presumably ended just
five years before defendant's failure to pay tax. Defendant's
claimed inability to pay any 2007 tax was belied by his
substantial earnings in 2007 and his decision to purchase a $1.2
million home in February 2008, rather than set aside funds for
taxes. We do not minimize defendant's personal tragedy — the
illness and passing of his wife — and his personal economic
reversals, but these later events did not excuse his failure to
pay tax on his 2007 income when due.
Reversed as to the denial of the motion to dismiss count
one. Affirmed as to the denial of PTI. Remanded for further
proceedings as to count two.
22 A-4479-14T2