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UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 91-7251
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
VERSUS
NORMA MOORE, E. JAMES HOLMES,
FRED RODRIGUEZ, and BETTY FLOREZ,
Defendants-Appellants.
Appeals from the United States District Court
for the Northern District of Texas
July 21, 1993
Before WIENER, BARKSDALE AND DeMOSS, Circuit Judges
DeMoss, Circuit Judge:
I
FACTS AND PROCEEDINGS
In 1987, E. James Holmes started a tax preparation
organization for the primary purpose of assisting taxpayers in
preparing amended income tax returns that would reflect substantial
previously unclaimed deductions. Holmes' fee for this service was
10% of the amount to be refunded. He required the taxpayers to pay
him this amount in advance, in cash. Holmes also conducted classes
on how to prepare such amended tax returns.

The government describes Holmes' method of preparing these
amended returns as a reverse process which starts with the total
tax withheld. The preparer would then claim sufficient deductions
to entitle the taxpayer to a refund of approximately 75% of the tax
that had been withheld. The newly claimed deductions would be
spread among several categories to minimize the chances of
triggering an audit. Apparently, the vast majority of these
deductions were simply fabricated by the preparer and were not
supported by any documentation.
Norma Moore was a member of Holmes' organization for several
months during 1987 until she left to start her own tax return
preparation service using the same methods. Similarly, Betty
Florez attended classes for approximately two months before she
left to continue her own business preparing tax returns using the
same methods. Fred Rodriguez started attending Holmes' classes in
November 1987 and continued with the organization until after the
IRS shut it down.
The IRS eventually identified 534 tax returns as fraudulently
prepared by this organization and approximately $566,000 in tax
refunds as fraudulent. All four defendants were indicted on one
count each of conspiracy and multiple counts of aiding and
assisting in the preparation of false tax returns. The case was
tried to a jury and all defendants were convicted on the conspiracy
count. Holmes, Moore, and Florez were each convicted on all
respective counts of aiding and assisting. Rodriguez was convicted
on three of the four aiding and assisting counts that he was
2

charged with. Holmes received a 60 month prison sentence, while
Moore, Florez and Rodriguez were each sentenced to 24 months.
All the defendants in this appeal raise issues concerning: (1)
the admissibility of an expert summary witness' testimony and (2)
the application of the sentencing guidelines. Defendant Rodriguez
raises two additional grounds. He challenges both the sufficiency
of the evidence against him and the effectiveness of his counsel.
We AFFIRM.
II
EXPERT SUMMARY WITNESS TESTIMONY
Upon review of the record, we find that Holmes never objected
to Agent Copeland's testimony. Under FED. R. EVID. 103(a)(1),
Holmes has waived his right to raise this issue on appeal.
Nonetheless, we will address this issue as if all the defendants
had properly objected.IRS Agent Copeland testified for the
government in several capacities. As an expert witness, Copeland
was proffered for his knowledge of tax law, of audits, and of
preparing tax returns. His expertise extended far beyond mere
income tax matters: Copeland was also a case agent in charge of the
IRS' criminal investigations of tax violations. In addition to his
specialized background, Copeland testified as one of two IRS agents
who had investigated the present case. He had interviewed the
defendants as well as many of the witnesses. He had personally led
the raid on Holmes' home, had reviewed the documentation and had
helped to prepare the case for trial. He was therefore both a
general tax expert and a direct witness of the events leading to
the defendants' indictment.
3

Copeland was also used in a third capacity. As an expert
summary witness, he was to summarize both the government's own
evidence and the trial testimony of all the witnesses. Present
throughout the course of the trial, Copeland was to remind the
jury of the detailed evidence which they had heard. His testimony
therefore covered three areas: (1) general income tax matters; (2)
the IRS' criminal investigation of the defendants; (3) the trial
proceedings. The multifaceted nature of this testimony lies at the
heart of the defendants' claims.
A district court's ruling on the admissibility of expert
testimony is reviewed under the manifest error standard of review.
We are required to sustain the court's decision unless it was
manifestly erroneous. Salem v. United States Lines Co., 370 U.S.
31, 35, 82 S. Ct. 1119, 8 L. Ed. 2d 313 (1962); Peteet v. Dow
Chem. Co., 868 F.2d 1428, 1431 (5th Cir.), cert. denied, 110 S. Ct
328 (1989).
Federal Rule of Evidence 702 provides:
If scientific, technical, or other specialized knowledge
will assist the trier of fact to understand the evidence
or determine a fact in issue, a witness qualified as an
expert by knowledge, skill, experience, training or
education, may testify thereto in the form of an opinion
or otherwise.
An expert's testimony may take the form of an opinion if it
"serves to inform the jury about affairs not within the
understanding of the average man." United States v. Webb, 625 F.2d
709, 711 (5th Cir. 1980). Furthermore, this opinion is not
inadmissible should it address an ultimate issue to be decided by
4

the jury. Federal Rule of Evidence 704(a) expressly provides, in
pertinent part, that:
[e]xcept as provided in subdivision (b) [prohibiting
expert testimony as to a criminal defendant's mental
state], testimony in the form of an opinion or inference
otherwise admissible is not objectionable because it
embraces an ultimate issue to be decided by the trier of
fact. (emphasis added).
The basis of the "ultimate issue" rule under the Federal Rules of
Evidence was to prevent a witness from "usurping the province of
the jury." Rule 704 specifically abolished the "ultimate issue"
rule, though the opinion must still satisfy Rules 701 and 702.
FED.R.EVID. 704, Advisory Committee Notes. Therefore, it does not
matter if Copeland testified as to an "ultimate issue" so long as
the evidentiary thresholds in Rules 702 and 704 are satisfied. Once
these requirements are met, an expert witness may be a summary
witness. Courts have found that IRS agents, in specific, may
testify as expert summary witnesses. See, e.g., United States v.
Mohney, 949 F.2d 1397, 1406 (6th Cir. 1992); United States v.
Bosch, 914 F.2d 1239 (9th Cir. 1990); United States v. DeClue, 899
F.2d 1465, 1473 (6th Cir. 1990); United States v. Dotson, 817 F.2d
1127, 1132 (5th Cir. 1987); United States v. Barnette, 800 F.2d
1558 (11th Cir. 1986). As a summary witness, an IRS agent may
testify as to the agent's analysis of the transaction which may
necessarily stem from the testimony of other witnesses. The agent
may also explain his analysis of the facts based on his special
expertise. Dotson, 817 F.2d at 1132.
5

In the present case, the appellants do not contest the
qualifications of Agent Copeland as an expert. Nor do they attack
the general admissibility of summary testimony by an expert
witness. The appellants argue, however, that the scope of such
testimony is very limited. They assert that the testimony is
restricted to matters within the special expertise of the witness.
Appellants contend that Agent Copeland did not testify as to
any matters requiring special expertise. Instead, he only repeated
selected testimony that was favorable to the government without
providing any expert analysis. Appellants, therefore, conclude
that the government presented Copeland in the guise of an expert
summary witness in order to elicit otherwise inadmissible
testimony. In specific, appellants argue that Agent Copeland's
"selective" testimony was improperly used to bolster the
credibility of government witnesses and to impermissibly suggest
Agent Copeland's opinion of the credibility of the testimony. The
question, therefore, is whether Copeland's testimony fell within
his field of expertise. The answer turns, ultimately, upon what
exactly Copeland's expertise was and what type of expert he was
proffered as.
As a witness for the government, Copeland's purpose was
obviously to strengthen the government's case. Perhaps, his
testimony was selective but that is why cross examination is
allowed. Furthermore, merely because testimony is selective does
not mean that witness is not giving his expert opinion. An expert
"may have been selective in relying on certain evidence while
6

rejecting other evidence, but that was within his domain as an
expert." United States v. Barnette, 800 F.2d 1158, 1569 (11th Cir.
1986).
If a witness' expertise would be helpful to the jury, FED. R.
EVID. 702, and the facts which he recounts fall within his area of
expertise, then there is nothing improper about a selective
summary. In this case, Copeland's specialized knowledge would
help the jury with the complicated tax issues and evidence that
were necessary to prove the indictment. He was, therefore,
properly qualified as an expert. The facts which he recounted also
satisfy evidentiary requirements because they were well within his
area of expertise. As an IRS agent, he was qualified to explain to
the jury the procedures used to prepare income tax returns and the
types of deductions claimed by the defendants. As an IRS law
enforcement agent, the recruitment and training techniques of
Holmes' organization also fell within his expertise. And the raid
and interviews of the defendants which he conducted were within his
personal knowledge as a direct fact witness.
The appellants, however, argue that Copeland's summary
testimony runs afoul of the Seventh Circuit's opinion in United
States v. Benson, 941 F.2d 598 (7th Cir. 1991). In Benson, the IRS
agent improperly opined that the defendant was not entitled to
Social Security benefits for disability. We find that Benson is
inapposite as authority. Benson is distinguishable because the IRS
agent in that case was testifying about an area clearly outside of
his expertise.
7

The more pertinent authority is United States v. Dotson, 817
F.2d 1127 (5th Cir.), aff'd in pertinent part on reh'g, 821 F.2d
1034 (1987). In Dotson, we held that it was permissible for the
IRS expert to summarize and analyze the facts indicating willful
tax evasion so long as he did not "directly embrace the ultimate
question of whether [the defendant] did in fact intend to evade
income taxes." Id. at 1132. After examining the record in this
case, we found that Copeland never testified explicitly as to the
defendants' intent or state of mind. Instead, he testified to
facts that were either well within his area of expertise or were
personally experienced by him. That this testimony "bolstered" the
government's remaining evidence appears to be the point. The
defendants had ample opportunity to cross examine Copeland and to
present the jury with any controverted evidence or discrepancies in
his testimony.
Appellants also assert that, as Agent Copeland only repeated
favorable testimony, he impermissibly made implicit credibility
choices for the jury. As authority, they cite to United States v.
Price, 722 F.2d 88 (5th Cir. 1983). Price, however, prohibited
only an express statement by the expert that he believed the
government's witnesses. The record in this case reveals no such
statement. Copeland's testimony was in large part factual
testimony by a witness with personal knowledge of the subject
matter. Other portions are summary in nature, but we cannot find
even a strong inference that Copeland made a credibility
suggestion.
8

The government's questions sought both summary testimony and
testimony stemming from Copeland's personal investigation of the
defendants. And that is precisely the testimony given. The answer
gave neither an opinion nor a credibility determination but merely
a factual recitation. Even if Copeland had given his opinion of
the evidence, it would be impermissible only if the underlying
facts were outside the scope of his expertise. We find that they
were not; Copeland's role as case agent rendered him uniquely
knowledgeable about the events in question.
After examining the record as a whole, we do not believe that
the district court was manifestly erroneous in admitting Agent
Copeland's testimony. In our view, the multifaceted nature of
Copeland's expertise encompassed all of his testimony and was
admissible.
III
THE SENTENCING GUIDELINES
The defendants were sentenced under the United States
Sentencing Guidelines (except for two of Moore's convictions for
aiding and assisting that were pre-guidelines offenses). Under the
Guidelines, a sentencing court should begin with the base offense
level for the object offense. All the defendants in this case were
convicted, in part, under 18 U.S.C. � 371 (Conspiracy to commit
offense or to defraud United States).
A review of the record shows that the defendants all: took
classes from Holmes to learn the method of preparing illegal
amended tax returns; conducted or assisted in the teaching of other
such classes; recruited new members to the organization; and
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prepared the illegal amended tax returns which Holmes often signed.
The record shows that the 26 tax preparers employed in total by the
organization often worked in small groups on the returns, shared
the profits after giving Holmes his share, and were bound by a
promise of secrecy in regard to the organization. The applicable
sentencing provision is � 2X1.1, Conspiracy.
The district court calculated the base offense level for the
appellants' sentences using the "intended tax loss" figure of
approximately $566,000. Section 2T4.1(J) of the applicable 1987
Sentencing Guidelines assesses a base offense level of 15 for
offenses involving a tax loss of $500,001 to $1,000,000. However,
if a defendant was in the business of preparing or assisting in the
preparation of tax returns, � 2T1.4(b)(3) requires the addition of
two levels. The court relied on this provision to enhance the
offense level from 15 to 17 for all the defendants. With the
exception of Holmes, the defendants were found to have a total
offense level of 17. The court subsequently imposed the 24 month
minimum sentence within that level on Moore, Florez and Rodriguez.
The court used the same aggregated "intended tax loss" figure of
$566,000 to reach a base offense level of 15 for the ringleader
Holmes, before enhancing the level to 25 for various other offense
characteristics and imposing a 60 month sentence.
The appellants contend that their base offense levels should
have been calculated on the government's actual tax loss of $0.
They point out that, although the government actually paid out some
of the fraudulently claimed refunds before discovering the scheme,
10

those amounts apparently were recovered from the taxpayers. They
therefore argue that, without the "intended tax loss" figure, the
court would have reached a dramatically reduced base offense level
and lower sentences. The government responds that the evidence
presented at sentencing clearly shows that the district court
properly calculated the "tax loss" for sentencing.
"In examining a challenge to a sentence based on the
Guidelines, we must accept the factual findings of the district
court unless they are clearly erroneous, but we fully review its
application of the Guidelines for errors of law." United States v.
Rodriguez, 925 F.2d 107, 109-10 (5th Cir. 1991).
The United States Sentencing Commission, Guidelines Manual,
under which the parties were sentenced, is the focus for our
review. The parties were sentenced under � 2T1.4 (Aiding,
Assisting, Procuring, Counselling, or Advising Tax Fraud).
Multiple cross references exist between this section and those
dealing with false statements on tax returns (� 2T1.3) and tax
evasion (� 2T1.1). The amount of the "tax loss" is relevant to
determining the base offense level for all of these offenses. The
cross references in these sections and the accompanying comments
plainly indicate that the amount of the "tax loss" is to be
calculated in a similar manner in each provision, and that the
amount the parties attempted to illegally obtain from the
government controls over their eventual failure to actually acquire
and retain their illegal refunds.
11

Section 2T1.4(a) states that the base offense level is either:
(1) Level from � 2T4.1 (Tax Table) corresponding to the
resulting tax loss, if any; or
(2) 6, otherwise.
This subsection also instructs the court:
For purposes of this guideline, the "tax loss" is the tax
loss, as defined in � 2T1.3, resulting from the
defendant's aid, assistance, procurance or advise." Id.
The background comments to this section provide:
An increased offense level is specified for tax preparers
and advisors because their misconduct poses a greater
risk of revenue loss and is more clearly willful. Other
consideration are similar to those in � 2T1.3. U.S.S.G.
� 2T1.4, comment (backg'd) (emphasis added).
To determine the tax loss, we must therefore turn to Section
2T1.3 (Fraud and False Statements Under Penalty of Perjury) which
provides, in turn:
(a) Base Offense Level:
(1)
Level from � 2T4.1 (Tax Table) corresponding
to the tax loss, if the offense was committed
in order to facilitate evasion of a tax; or
(2)
6, otherwise.
For purposes of this guideline, the "tax loss" is 28
percent of the amount by which the greater of gross
income and taxable income was understated, plus 100
percent of the total amount of any false credits claimed
against tax. U.S.S.G. � 2T1.3(a) (emphasis added).
The background comment to this section states:
This guideline covers conduct that usually is
analogous to tax evasion, although the elements differ.
Accordingly, the offense is treated much like tax
evasion.
Existence of a tax loss is not an element of these
offenses. Furthermore, in instances where the defendant
is setting the groundwork for evasion of a tax that is
expected to become due in the future, he may make false
statements that underreport income that as of the time of
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conviction may not yet have resulted in a tax loss. In
order to gauge the seriousness of these offense, the
guidelines establish a rule for determining a "tax loss"
based on the nature and magnitude of the false statements
made. Use of this approach also avoids complex problems
of proof and invasion of privacy when returns of persons
other than the defendant and co-defendants are involved.
U.S.S.G. � 2T1.3 comment (backg'd) (emphasis added).
Tax evasion is addressed in � 2T1.1. This section defines the
base offense level as:
(a)
Base Offense Level: Level from � 2T4.1 (Tax Table)
corresponding to the tax loss.
For purposes of this guideline, the "tax loss" is
the greater of: (A) the total amount of tax that
the taxpayer evaded or attempted to evade; and (B)
the "tax loss" defined in � 2T1.3.1
The application notes to this section reiterate that: "[f]or
purposes of the guideline, the tax loss is the amount of tax that
the taxpayer evaded or attempted to evade." U.S.S.G. � 2T1.1
(comment n.2) (emphasis added).
In our view, the Guideline's cross referencing and comments
all indicate that the sections must be read concurrently. As �
2T1.4 specifies that the "tax loss" for that section is the same as
the "tax loss" for � 2T1.3, and � 2T1.3 defines the "tax loss" as
a percentage of the amount by which income was understated, it
seems that the "tax loss" under � 2T.1.4 should be based on the
amount by which income was understated on the amended tax returns
rather than on the net amount actually paid out by the government.
The comments to these sections and � 2T1.1 reinforces this
interpretation.
1 U.S.S.G. � 2T1.1(a) (emphasis added).
13

The appellants point to the alternative base offense level of
"6" provided for in both � 2T1.3 and � 2T1.4 as a catchall
provision providing a sentencing level when other calculated levels
do not apply. This appears to be an accurate characterization of
the alternative provision, but it does not affect the Guidelines'
definition of "tax loss." The background comment to � 2T1.3 set
forth previously eviscerates appellants' reliance on this argument.
The appellants also argue that their presentence reports
erroneously state that they should be sentenced under � 2T1.4 for
their conspiracy convictions as well as for their aiding and
assisting convictions. They claim that they should have been
sentenced under � 2T1.9 (Conspiracy to Impair, Impede or Defeat
Tax) for their conspiracy convictions. The district court adopted
the findings and guideline applications in each defendant's
presentence report. Even if we assume that the reports incorrectly
advise that sentencing on the conspiracy convictions be based on �
2T1.4 rather than � 2T1.9, such error would not change the
appellants' sentences. Section 2T1.9 specifies that the base
offense is the greater of:
(1) Offense level determined from � 2T1.1 or � 2T1.3, as
applicable; or
(2) 10.
U.S.S.G. � 2T1.9(A).
The application notes to this section advise:
The base offense level is the offense level (base offense
level
plus
any
applicable
specific
offense
characteristics) from � 2T1.1 or � 2T1.3 (whichever is
applicable to the underlying conduct), if that offense
level is greater than 10. Otherwise the base offense
level is 10. Id. comment. (n.2).
14

As both � 2T1.4 and � 2T1.9, depend on the same criteria (� 2T1.3
and � 2T4.1) to calculate the base offense level, the appellants
would have received the same base offense level regardless of which
section was cited in the calculation of that level.
The appellants attempt to rely on the Fourth Circuit's opinion
in United States v. Schmidt, 935 F.2d 1440 (4th Cir. 1991), in
support of their argument that the "tax loss" should be the amount
of taxes actually not paid to the government. The government
successfully distinguishes Schmidt from the instant case and cites
a subsequent Fourth Circuit case limiting Schmidt, United States v.
Hirschfeld, 964 F.2d 318 (4th Cir. 1992). The government also
cites United States v. Brimberry, 961 F.2d 1286 (7th Cir. 1992), in
which the Seventh Circuit held that � 2T1.3 expressly and
unambiguously defined "tax loss" as the amount owed to the
government rather than the amount of money that the IRS could
actually recover. Id. at 1292.

In our view, the plain language of the Guidelines and the
comments to the Guidelines appear to clearly support the district
court's calculation of the "tax loss." We, therefore, find no
error.
IV
SUFFICIENCY OF THE EVIDENCE
Appellant Rodriguez also attacks the sufficiency of the
evidence against him. A review of the record convinces us that
there is little merit to this claim. The evidence presented by the
government was substantial and a reasonable jury could have found
15

beyond a reasonable doubt that Rodriguez was guilty. We therefore
dismiss this claim.
V
INEFFECTIVE ASSISTANCE OF COUNSEL
Rodriguez also contends that he was denied the effective
assistance of counsel. We do not agree. Rodriguez cites no
authority to support his claim of ineffective assistance of
counsel. Even if he had done so, Rodriguez fails to satisfy the
requirements articulated by the Supreme Court in Strickland v.
Washington, 466 U.S. 668, 687 (1984). We therefore dismiss this
claim.
VI
CONCLUSION
For all the reasons mentioned above, we find no error in the
district court's decisions to admit Agent Copeland's testimony and
to base the defendants' sentences upon an "intended tax loss"
figure instead of an "actual tax loss" amount. We AFFIRM.
c:br:opin:91-7251p.ss2
16