Petitioner Sansone was indicted for willfully attempting to evade federal income taxes for the year 1957 in violation of § 7201 of the Internal Revenue Code of 1954. Section 7201 provides:
The following facts were established at trial. In March 1956 petitioner and his wife purchased a tract of land for $22,500 and simultaneously sold a portion of the tract for $20,000. In August 1957 petitioner sold another portion of the tract for $27,000. He did not report the gain on either the 1956 or 1957 sale in his income tax returns for those years.
To counter this defense, the Government introduced the following signed statement made by petitioner during the Treasury investigation of his tax return:
At the conclusion of the trial, petitioner requested that the jury be instructed that it could acquit him of the charged offense of willfully attempting to evade or defeat taxes in violation of § 7201, but still convict him of either or both of the asserted lesser-included offenses of willfully filing a fraudulent or false return, in violation of § 7207,
The requested instructions were denied.
We are faced with the threshold question as to whether or not § 7207, which proscribes the willful filing with a Treasury official of any known false or fraudulent "return," applies to the filing of an income tax return.
This Court held in Achilli v. United States, 353 U.S. 373. that § 7207's statutory predecessor, § 3616 (a) of the Internal Revenue Code of 1939, which made it a misdemeanor for any person to deliver to the Collector of Revenue "any false or fraudulent list, return, account, or statement, with intent to defeat or evade the
There were two major bases of this Court's conclusion in Achilli that § 3616 (a) did not apply to such returns. First, unlike other criminal provisions clearly applicable to income taxes which appeared in the income tax chapter of the 1939 Code and were specifically designed to punish evasion of that tax, § 3616 (a) was placed among the Code's "General Administrative Provisions" and did not specifically refer to income taxes. Second, § 3616 (a) required that the false or fraudulent return be filed "with intent to defeat or evade the valuation, enumeration, or assessment intended to be made." This provision, as the Court had already held in Berra v. United States, 351 U.S. 131, if applied to income tax returns would have made § 3616 (a) completely co-extensive with the predecessor of § 7201 where the attempt to evade income taxes was accomplished by filing a fraudulent income tax return. It was clear that the predecessor of § 7201 applied to this method of attempting to evade income taxes and the Court was unwilling to presume that Congress intended to enact both felony and misdemeanor provisions which completely overlap in this important area.
Both of these bases of decision were removed by the 1954 Code. Unlike their predecessors in the 1939 Code, §§ 7201, 7203, and 7207, together with other sections clearly applicable to income tax violations, were all placed in the same section (Part I of Chapter 75) of the 1954 Code. Congress specifically stated that it placed all these provisions in the same part of the Code because it wished them to apply to taxes generally, including income taxes. See S. Rep. No. 1622, 83d Cong., 2d Sess., 147; H. R. Rep.
Further, Congress, in enacting § 7207 did not re-enact § 3616 (a)'s requirement that the false or fraudulent return be made with "intent to defeat or evade" the tax due. Thus the second basis for the Court's conclusion in Achilli that § 3616 (a) did not apply to income taxes was removed. See Berra v. United States, supra, at 134, n. 5. Finally, in providing that the false or fraudulent return be made "willfully," § 7207 was conformed to the language contained in the other misdemeanor provisions clearly applicable to income taxes. See, e. g., § 7203.
We conclude, therefore, that § 7207 applies to income tax violations. Since there is no doubt that §§ 7201 and 7203 also apply to income tax violations, with obvious overlapping among them, there can be no doubt that the lesser-included offense doctrine applies to these statutes in an appropriate case. See Spies v. United States, 317 U.S. 492, 495; Berra v. United States, supra.
The basic principles controlling whether or not a lesser-included offense charge should be given in a particular case have been settled by this Court. Rule 31 (c) of the Federal Rules of Criminal Procedure provides, in relevant part, that the "defendant may be found guilty of an offense necessarily included in the offense charged." Thus, "[i]n a case where some of the elements of the crime charged themselves constitute a lesser crime, the defendant, if the evidence justifie[s] it . . . [is] entitled to an instruction which would permit a finding of guilt of the lesser offense." Berra v. United States, supra, at 134. See Stevenson v. United States, 162 U.S. 313. But a lesser-offense charge is not proper where, on the
The offense here charged was a violation of § 7201, which proscribes willfully attempting in any manner to evade or defeat any tax imposed by the Internal Revenue Code. As this Court has recognized, this felony provision is "the capstone of a system of sanctions which singly or in combination were calculated to induce prompt and forthright fulfillment of every duty under the income tax law and to provide a penalty suitable to every degree of
As has been held by this Court, the elements of § 7201 are willfulness; the existence of a tax deficiency, Lawn v. United States, 355 U.S. 339, 361; Spies v. United States, supra, at 496; and an affirmative act constituting an evasion or attempted evasion of the tax, Spies v. United States, supra. In comparison, § 7203 makes it a misdemeanor willfully to fail to perform a number of specified acts at the time required by law—the one here relevant being the failure to pay a tax when due. This misdemeanor requires only willfulness and the omission of the required act—here the payment of the tax when due. As recognized by this Court in Spies v. United States, supra, at 499, the difference between a mere willful failure to pay a tax (or perform other enumerated actions) when due under § 7203 and a willful attempt to evade or defeat taxes under § 7201 is that the latter felony involves "some willful commission in addition to the willful omissions that make up the list of misdemeanors." Where there is, in a § 7201 prosecution, a disputed issue of fact as to the existence of the requisite affirmative commission in addition to the § 7203 omission, a defendant would, of course, be entitled to a lesser-included offense charge based on § 7203. Cf. Spies v. United States, supra. In this case, however, it is undisputed that petitioner filed
Section 7207 requires the willful filing of a document known to be false or fraudulent in any material manner. The elements here involved are willfulness and the commission of the prohibited act. Section 7207 does not, however, require that the act be done as an attempt to evade or defeat taxes. Conduct could therefore violate § 7207 without violating § 7201 where the false statement, though material, does not constitute an attempt to evade or defeat taxation because it does not have the requisite effect of reducing the stated tax liability. This may be the case, for example, where a taxpayer understates his gross receipts and he offsets this by also understating his deductible expenses. In this example, if the Government in a § 7201 case charged tax evasion on the grounds that the defendant had understated his tax by understating his gross receipts, and the defendant contended that this was not so, as the misstatement of gross receipts had been offset by an understatement of deductible expenses, the defendant would be entitled to a lesser-included
Petitioner makes one final contention. He argues that he could have been acquitted of attempting to evade or defeat his 1957 taxes, in violation of § 7201, but still have been convicted for willfully failing to pay his tax when due in violation of § 7203 or willfully filing a fraudulent return in violation of § 7207, if the jury believed his statement contained in the government-introduced affidavit, that, although he knew that profit on the sale in question was reportable for 1957 and that tax was due thereon, he intended to report the sale and pay the 1957 tax at some unspecified future date. The basic premise of this argument
No defense to a § 7201 evasion charge is made out by showing that the defendant willfully and fraudulently understated his tax liability for the year involved but intended to report the income and pay the tax at some later time. As this Court has recognized, § 7201 includes the offense of willfully attempting to evade or defeat the assessment of a tax as well as the offense of willfully attempting to evade or defeat the payment of a tax. Lawn v. United States, supra. The indictment here charged an attempt to evade income taxes by defeating the assessment for 1957. The fact that petitioner stated to a revenue agent that he intended to report his 1957 income in some later year, even if taken at face value, would not detract from the criminality of his willful act defeating the 1957 assessment. That crime was complete as soon as the false and fraudulent understatement of taxes (assuming, of course, that there was in fact a deficiency) was filed. See United States v. Beacon Brass Co., 344 U.S. 43, 46. See also Spies v. United States, supra, at 498-499.
In sum, it is clear here that there were no disputed issues of fact which would justify instructing the jury that it could find that petitioner had committed all the elements
MR. JUSTICE BLACK and MR. JUSTICE DOUGLAS dissent, believing that there was evidence sufficient to require the Court to charge the jury, as petitioner requested, that they could acquit him on this felony charge of having willfully attempted to evade or defeat taxes in violation of § 7201 but still convict him of the lesser misdemeanor offenses included in the felony charge. See Berra v. United States, 351 U.S. 131, 135 (dissenting opinion). Cf. Achilli v. United States, 353 U.S. 373, 379 (dissenting opinion).
"Any person who willfully delivers or discloses to the Secretary or his delegate any list, return, account, statement, or other document, known by him to be fraudulent or to be false as to any material matter, shall be fined not more than $1,000, or imprisoned not more than 1 year, or both."
"Any 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 (other than a return required under authority of section 6015 or section 6016), 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, shall, in addition to other penalties provided by law, be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $10,000, or imprisoned not more than 1 year, or both, together with the costs of prosecution."
No. 1. "Under the law you may find a defendant guilty of a lesser crime than the crimes charged in the indictment.
"A statute upon which a lesser crime is based (Section 7203 of the Internal Revenue Code of 1954), omitting that part of the Act which does not apply in this case, reads as follows:
"`Any person required under this title to pay any . . . tax, . . . who willfully fails to pay such tax, . . . at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor.'
"and then the statute provides for the penalty.
"Therefore, if you find beyond a reasonable doubt that (with respect to either or both of the counts in this indictment) the defendant willfully failed to pay the correct tax to the United States at the time of the filing of his return, but you further find that the defendant did not willfully attempt to defeat and evade his income taxes by the filing of a false and fraudulent return, you will in your verdict say `Guilty of violating a lesser-included offense.'
"If you have a reasonable doubt as to whether defendant willfully failed to pay the correct tax when filing his income tax return or returns under any count or counts of this indictment, you will resolve the doubt in favor of the defendant and acquit him of the lesser-included offense as to such count or counts."
No. 2. "As I have said previously, the law permits the jury to find a defendant guilty of any lesser offense which is necessarily included in the crime charged. The offense charged in the indictment here necessarily includes a lesser offense based upon the following statute (Section 7207 of the Internal Revenue Code of 1954), omitting that part of the Act which does not apply in this case; it reads as follows:
"`Any person who willfully delivers or discloses to the Secretary [of the Treasury] or his delegate any . . . return, . . . or other document known by him to be fraudulent or to be false as to any material matter,'
"and then the statute provides for the penalty.
"Therefore, if you find beyond a reasonable doubt that (with respect to either or both of the counts in this indictment) the defendant willfully delivered to the District Director of Internal Revenue at St. Louis, Missouri his and his wife's federal joint income tax return or returns for the years 1956 and 1957 which were known by him to be fraudulent or false as to any material matter, but you further find that the defendant did not willfully attempt to defeat and evade his income tax by the filing of a false and fraudulent return, you will in your verdict say 'Guilty of violating a lesser-included offense.'
"If you have a reasonable doubt as to whether defendant willfully so delivered under any count or counts of this indictment his and his wife's federal joint income tax return or returns which were known by him to be fraudulent or false as to a material matter, you will resolve the doubt in favor of the defendant and acquit him of the lesser-included offense as to such count or counts."