Different Statute
Cited
7203:
Willful Failure to File Return, Supply Information, or Pay Tax:
Sufficiency of Indictment or Information: Different Statute Cited
[50-2
USTC ¶9412]Alfred C. Gaunt, Defendant Appellant v.
United States of America
, Appellee
(CA-1),
In the
United States
Court of Appeals for the First Circuit, No. 4479. October Term, 1949,
184 F2d 284,
July 28, 1950
Appeal from the
United States
District Court for the District of Massachusetts.
Penalties: Sufficiency of indictment: Wilful filing of false and
fraudulent returns.--The language of Code Sec. 145(b) is broad
enough to include the filing of a false and fraudulent return as a
punishable manner of attempted tax evasion. Code Sec. 145(c) merely
imposed the penalties for perjury upon those who wilfully falsify their
returns regardless of the tax consequences of the falsehood. The
indictment under Code Sec. 145(b) was sufficient.
Penalties: Sufficiency of indictment: Conviction sustained on basis
of statute other than that cited in indictment.--A count in the
indictment against taxpayer under Sec. 35(A) of the old Criminal Code
adequately charged an offense under Code Sec. 145(c) and did not mislead
the taxpayer to his prejudice in the preparation or presentation of his
defense.
Penalties: Sentence imposed on more inclusive count.--Although a
count may charge a crime which is within a crime charged in another
count, submission of both counts to the jury is not prevented. Sentence
is imposed on the more inclusive count only, or a single sentence is
imposed on the counts as a whole, provided that the penalty is within
the maximum limits specified for the more inclusive offense, or
sentences within the applicable limits are imposed on both counts to run
concurrently. Judgment appealed from was amended by striking the fine
imposed on the less inclusive count.
Penalties: Sufficiency of indictment: Proof of wilfulness.--Direct
proof of wilfulness is not essential and from the evidence the jury
could have reasonably inferred that beyond a reasonable doubt the
taxpayer's understatements of income were made wilfully in an attempt to
evade or defeat taxes.
Penalties: Trial: Motion for new trial denied.--The trial court
did not abuse its discretion in denying a motion for a new trial raised
on a political issue as well as upon an improper question which was cut
short and excluded.
Rob
ert F. Bradford, with whom John A.
Perkins was on brief, for appellant. Fred G. Folsom, Special Assistant
to the Attorney General, with whom Theron Lamar Caudle, Assistant
Attorney General, Ellis N. Slack, Special Assistant to the Attorney
General, George F. Garrity, United States Attorney, and Philip T. Jones,
Assistant U. S. Attorney, were on brief, for appellee.
Before
MAGRUDER, Chief Judge, and CLARK and WOODBURY, Circuit Judges.
Opinion
of the Court
WOODBURY,
Circuit Judge:
The
defendant-appellant was indicted in six counts for alleged offenses with
respect to his federal income taxes for the calendar years 1944, 1945,
and 1946, during which period he was on the cash-calendar year basis and
filed joint returns with his wife. In counts 1, 2, and 3 it was charged
that he "did wilfully and knowingly attempt to defeat and evade a
large part of the income tax due and owing by him and his wife to the
United States of America" for each of the above calendar years,
respectively, "by filing and causing to be filed with the Collector
of Internal Revenue for the Internal Revenue Collection District of
Massachusetts, at Boston, Massachusetts, a false and fraudulent joint
income tax return on behalf of himself and his said wife," wherein,
it may fairly be said without quoting the figures alleged, he had
grossly understated their net income for each of the above years,
respectively, "in violation of Section 145(b), Internal Revenue
Code; 26 U. S. C. Sec. 145(b)." In counts 4 and 6 Gaunt was charged
with criminal offenses with respect to amended income tax returns which
he filed for himself and his wife jointly for the calendar year 1946,
but these counts were dismissed by the trial court on the Government's
motion and hence are not before us for consideration. And in count 5 it
was charged that Gaunt "did knowingly and wilfully make and cause
to be made false and fraudulent statements and representations in a
matter within the jurisdiction of a department and agency of the United
States, namely, the Collector of Internal Revenue for the Internal
Revenue Collection District of Massachusetts," in that he "did
file and cause to be filed" with that Collector "a false and
fraudulent joint income tax return for the calendar year 1946 on behalf
of himself and his said wife," wherein, again we can fairly say
without quoting the figures alleged, his total business receipts as a
sales agent, and his total compensation as an industrial executive were
both grossly understated, "in violation of Section 35(A) of the
Criminal Code, as amended; 18 U. S. C. Sec. 80."
A
trial by jury on pleas of not guilty as to each of the four counts above
described resulted in a verdict of not guilty on the first count, but
verdicts of guilty on counts 2, 3, and 5. The court below thereupon
sentenced the defendant to concurrent terms of imprisonment for 18
months on each of those three counts, and also sentenced him to separate
fines of $2,000 on each, and this appeal is from the judgment and
commitment embodying those sentences.
[Sufficiency
of Indictment Attacked]
The
defendant first attacks the sufficiency of the indictment as to counts 2
and 3 on the ground that "The mere making and subscribing of a
false return, even though done wilfully and with an intent to evade or
defeat the tax, is not an 'attempt' to evade or defeat the tax under
Internal Revenue Code, Section 145(b)," which, so far as material,
provides that "any person who wilfully attempts in any manner to
evade or defeat any tax imposed by this chapter or the payment thereof,
shall, in addition to other penalties provided by law, be guilty of a
felony and, upon conviction thereof, be fined not more than $10,000, or
imprisoned for not more than five years, or both, together with the
costs of prosecution." Arguing by analogy from the case of Spies
v. United States, 317 U. S. 492 [43-1 USTC ¶9243], the defendant
contends that the offense of wilfully attempting to evade or defeat the
payment of income taxes by the expedient of filing a false and
fraudulent return grossly understating taxable income, which is the
offense with which he was charged in counts 2 and 3, is not comprehended
within the meaning of the above quoted subsection for the reason that
that offense is specifically described in the succeeding subsection
(145(c)) which, as in force at the times involved, read: "Any
individual who wilfully makes and subscribes a return which he does not
believe to be true and correct as to every material matter, shall be
guilty of a felony, and, upon conviction thereof, shall be subject to
the penalties prescribed for perjury in section 125 of the Criminal
Code," to wit, a fine of not more than $2,000 and imprisonment for
not more than five years.
In
the Spies case it was held that mere proof of a wilful failure to
file any return at all, coupled with failure to pay any tax, will not
support a conviction for the felony described in §145(b) supra,
for the reason that such proof establishes nothing more than the
misdemeanor described in §145(a), quoted so far as material in the
margin, 1
and it ought not to be assumed "That Congress by the felony defined
in §145(b) meant no more than the same derelictions it had just defined
in §145(a) as a misdemeanor." id. 497.
[Scope
of Code Secs. 145(b) and 145(c)]
The
defendant's argument is that in the case at bar the Government has
proved at most that he wilfully made and subscribed a tax return which
he did not believe to be true and correct as to every material matter,
and hence proved only the offense described in §145(c). Therefore he
says that it follows by parity of reasoning from the Spies case
that he could not be validly convicted of a wilful attempt in any manner
to evade or defeat taxes under §145(b), for to sustain a conviction
under that subsection more must be shown than a false return wilfully
made, as, for instance, "keeping a double set of books, making
false entries or alterations, or false invoices or documents,
destruction of books or records, concealment of assets or covering up
sources of income, handling of one's affairs to avoid making the records
usual in transactions of the kind, and any conduct, the likely effect of
which would be to mislead or to conceal" (Spies v. United
States, supra, at page 499), which, he says, the Government failed
to do.
The
defendant's argument rests upon the fallacious premise that an
indictment under §145(b) charging the filing of a false and fraudulent
return as the manner of attempting to evade or defeat payment of income
taxes defines a crime the elements of which are identical with the crime
defined and made punishable by §145(c). It seems to us clear that the
latter subsection makes it a felony merely to make and subscribe a tax
return without believing it to be true and correct as to every material
matter, whether or not the purpose in so doing was to evade or defeat
the payment of taxes. That is to say, it seems to us that the
subsection's purpose is to impose the penalties for perjury upon those
who wilfully falsify their returns regardless of the tax consequences of
the falsehood. Whereas subsection 145(b) condemns as felonious wilful
attempts to evade or defeat taxes "in any manner," and one
manner, certainly, is by the wilful filing of a return known to be false
in some material respect. Thus while the proof of an offense under
subsection 145(b) may incidentally also prove an offense under §145(c),
it must in addition indicate an intent in some manner to evade or defeat
a tax which is due. In brief, it seems to us evident that the scope of
the two subsections is different with respect to an attempt to evade or
defeat taxes, and certainly the language of §145(b) is broad enough to
include the filing of a false and fraudulent return as a punishable
manner of attempted tax evasion. And we are not precluded from regarding
a wilfully false tax return as a punishable manner of at tempted tax
evasion by the enumeration of other possible methods by the Supreme
Court in the above quotation from its opinion in the Spies case,
for the court was careful to say that its list of possible methods was
given "By way of illustration, and not by way of limitation"
upon the scope of the statutory language. In accord in principle with
our view see Cave v. United States, 159 Fed. (2d) 464 [47-1 USTC
¶9171], cert. den. 331
U. S.
847, reh. den. 332
U. S.
786; Myres v.
United States
, 174 Fed. (2d) 329 [49-1 USTC ¶9275], cert. den. 338
U. S.
849;
United States
v. Crossant, 178 Fed. (2d) 96 [49-2 USTC ¶9483], cert. den. 339
U. S.
927; and in direct accord see Taylor v. United States, 179 Fed.
(2d) 640 [50-1 USTC ¶9151]. Jones v.
United States
, 164 Fed. (2d) 398 [47-2 USTC ¶9402], heavily relied upon by the
defendant, is not in point for in that case the court ordered a new
trial for error in the charge, not dismissal for failure properly to
allege a crime. 2
[Application
of Criminal Code]
The
next matters for consideration are the defendant's allied contentions
first that count 5 of the indictment states no offense under §35(A) of
the Criminal Code under which it was drawn, and hence should have been
dismissed or the defendant ordered acquitted thereunder, and second
that, if by any theory both counts 3 and 5 of the indictment are held to
be valid, then they are for one and the same offense, and for that
reason the defendant's motion to require the Government to elect between
those counts, which the court below denied, should have been granted.
Section
35(A) of the old Criminal Code, 18 U. S. C. §80, (1946 ed.) under which
count 5 was drawn, as in effect at the time of the offenses alleged,
provided so far as material that ". . . whoever shall knowingly and
wilfully falsify or conceal or cover up by any trick, scheme, or device
a material fact, or make or cause to be made any false or fraudulent
statements or representations . . . knowing the same to contain any
fraudulent or fictitious statement or entry in any matter within the
jurisdiction of any department or agency of the United States . . .
shall be fined not more than $10,000 or imprisoned not more than ten
years, or both." It is the defendant's first contention that
Congress by the subsequent enactment in 1942 of §145(c) of the Internal
Revenue Code repealed the above quoted section of the Criminal Code in
so far as offenses defined in the later enactment are concerned, for in
that later enactment as already appears, Congress specifically provided
that "any individual who wilfully makes and subscribes a return
which he does not believe to be true and correct as to every material
matter, shall be guilty of a felony, and upon conviction thereof, shall
be subject to the penalties prescribed for perjury in section 125 of the
Criminal Code." He does not contend that subsequently enacted §145(c)
of the Internal Revenue Code repealed §35(A) of the Criminal Code for
all purposes, or even for all internal revenue purposes. He concedes
that as to some internal revenue matters there is a distinction between
the scope of the is a distinction between the scope of the two statutes.
What he contends is that where the attempt is to make out a violation of
§35(A) by the filing of a false income tax return, as in the case at
bar, there is no distinction between the offense defined in that section
and the offense defined in §145(c) of the Internal Revenue Code, and
hence that the specific provisions of the later statute must be
construed as superseding the general provisions of the earlier one.
We
concede the force of the contention, as did the court below. We incline
to the view, however, that the court below was correct in its conclusion
that the contention is ruled against the defendant in United States
v. Gilliland, 312
U. S.
86. See also Bartlett v. United States, 166 Fed. (2d) 920, 927;
United States
v. Heine, 149 Fed. (2d) 485, 487, cert. den. 325
U. S.
885, and Ex Parte Barkoff, 65 Fed. Supp. 976. But however, this
may be, the point is now moot for it is authoritatively established that
a conviction may be sustained on the basis of a statute other than that
cited in the indictment, if the error in citation did not mislead the
defendant to his prejudice (Williams v. United States, 168 U. S.
382, 389; United States v. Hutcheson, 312 U. S. 219, 229; Rule
7(c) of the Federal Rules of Criminal Procedure) it being enough if an
indictment or count clearly charges an offense under any law of the
United States. And it seems to us that count 5 adequately charges an
offense under §145(c) of the Internal Revenue Code, and that the
citation therein of §35(A) in its stead did not mislead the defendant
to his prejudice in the preparation or presentation of his defense. In
short, we think the count fully apprised the defendant of the charge
which he was called upon to defend and did defend. Therefore there was
no error in permitting the jury to consider the question of the
defendant's guilt under count 5, and since the sentence imposed on count
5, both as to fine and imprisonment, is within the permissible maximum
limits of §145(c), it follows that so far as the contention under
consideration is concerned there was no error in the sentence imposed on
that account.
[Sentence
Imposed on More Inclusive Count]
But
the defendant contends that counts 3 and 5 allege one and the same
offense, and for that reason his motion to require the Government to
elect between them should have been granted. What we have already said
with respect to the difference in the scope of §145(b) and the scope of
§145(c) disposes of this contention. To be sure the offense charged in
count 5 is an incidental step in the consummation of the completed
offense of attempted defeat or evasion of tax by means of a false and
fraudulent return charged in count 3. In short, count 5 charges a crime
within the crime charged in count 3. But, as this court recently held in
Ekberg v. United States, 167 Fed. (2d) 380, 384 et seq.
this does not prevent submission of both counts to the jury. It does,
however, require that sentence be imposed on the more inclusive count
only, or that a single sentence be imposed on the counts as a whole,
provided, of course, that the penalty is within the maximum limits
specified for the more inclusive offense, or that sentences within the
applicable limits be imposed on both counts to run concurrently. id.
385, 386. Thus as we see it the judgment appealed from must be amended
by striking therefrom the separate $2,000 fine imposed on count 5.
[Proof
of Wilfulness]
We
turn now to the defendant's contention that "The evidence did not
prove beyond a reasonable doubt that the defendant acted 'wilfully', and
the Court erred in refusing to give requested instructions as to the
meaning of the term."
The
defendant rests the first part of this contention on the broad
proposition that "wilfulness within the meaning of any of the
statutes in question cannot be inferred merely from proof of
understatement of income on the defendant's tax returns," and that
"such proof was the only proof offered by the Government in the
course of its case." At the outset it must be pointed out that the
defendant by offering evidence on his own behalf elected to abandon his
motion for acquittal made at the close of the Government's case and to
rely upon a subsequent motion to the same effect made at the close of
all the evidence (United States v. Goldstein, 168 Fed. (2d) 666,
669, 670; Mosca v.
United States
, 174 Fed. (2d) 448, 450, 451 and cases cited 3)
which he made, so that this later motion is the only one for
consideration on this appeal. Hence the sufficiency of the evidence as a
whole to establish the defendant's wilfulness must be considered, not
merely the sufficiency of the evidence offered by the Government alone
on that issue. And an examination of all the evidence convinces us of
its sufficiency with respect to the defendant's wilfulness.
Wilfulness
is, of course, a question of fact. But direct proof thereof is not
essential. It may be inferred from acts and circumstances, and the
inference may be drawn from a combination of acts and circumstances,
although each separate act and circumstance, standing alone is
unimportant. Battjes v.
United States
, 172 Fed. (2d) 1, 5 [49-1 USTC ¶9149]. Moreover, in cases of this
sort "affirmative wilful attempt may be inferred from . . . any
conduct, the likely effect of which would be to mislead or to
conceal." Spies v.
United States
, supra, 499. Thus mere understatements of income by the defendant
are not by any means the sole criterion for determining the wilfulness
of his alleged attempts to evade or defeat his taxes. His
understatements of income must be viewed in their setting, and so viewed
we are convinced that the jury could well find that the understatements
were wilful, for if the jury accepted the Government's evidence, as it
was entitled to do, it could well have found that the defendant was an
intelligent, astute and successful business executive with many years of
experience who had full records of his income available, and that the
understatements in his returns for the years involved, which he made out
himself, were gross. Under these circumstances it seems to us clear that
the jury could very reasonably have inferred that beyond a reasonable
doubt the defendant's understatements of income were made wilfully in an
attempt to evade or defeat taxes, and wholly discounted his defense that
those understatements for the most part were made stupidly or
carelessly. Thus we do not have here a case in which on the objective
facts an inference of innocence is as strong as an inference of guilt,
and the defendant's argument on that score does not call for
consideration.
And
the trial court's instructions on the issue of wilfulness were clear and
adequate. Without going into a detailed analysis of each of the
defendant's requested instructions on this issue which the court below
denied, it will suffice to say that an examination of the evidence and
the charge discloses that such of those requests as were not given in
substance were either erroneous or misleading, or if given would have
unduly burdened the charge with unnecessary and confusing detail. The
charge as given seems to us accurate and adequate, and eminently fair to
the defendant on the issue of wilfulness as the excerpt therefrom in the
margin indicates. 4
The
defendant also complains of the charge in that the trial court refused
his requests to instruct the jury as to the law with respect to the
taxability of income received by the defendant as the result of several
business transactions entered into by the defendant during the years
involved, which income the Government contends he grossly understand in
his returns--his theory being that "In order for the jury to
conclude with respect to any transaction that the defendant did what he
did with a fraudulent purpose to defeat and evade his tax, it would be
essential for the jury first to find that in his treatment of the
transaction he did defeat and evade the tax."
A
careful examination of the record discloses no basis for the conclusion
that the defendant reported any one of the business transactions in
question in compliance with the applicable tax law or Treasury
Regulations. Indeed his defense at the trial was not to deny that he had
illegally understated his taxable net income from those transactions,
but that his understatements with respect thereto were not wilful, but
were the result of carelessness, stubbornness, or negligence, and that
certain other misstatements in his returns as to minor matters, although
technically erroneous, did not in fact result in an understatement of
his taxable net income. The Government's evidence, on the other hand,
tended clearly to disprove all this. The issue at the trial, and as we
read the record the only issue there, was whether the understatements
were made wilfully or innocently, not whether the returns complied with
the applicable law and regulations, and from this it follows the there
was no occasion to burden the charge, and undoubtedly confuse the jury,
with a discussion, which could only be complicated, of several intricate
aspects of income tax law.
Of
the two objections to the admission and exclusion of evidence argued by
the defendant but one calls for any notice at all, and that only by the
citation of United States v. Johnson, 319 U. S. 503, 519 [43-1
USTC ¶9470].
[Denial
of Motion for New Trial]
This
brings us to the defendant's last contention which is that the court
below abused its discretion in denying his motion for a new trial. We
deem it necessary to discuss only two of the grounds advanced in support
of this motion.
Counsel
for the defendant in the course of his argument to the jury called
attention to the fact that the defendant had been elected to the
Governor's Council in November 1946, that his term of office began in
January 1947, that investigation of his income tax returns for the years
involved began in February 1947, that at no time had he been sent a
thirty day letter, a ninety day letter, or been given by the Government
"an opportunity to pay what he owed" and then asked
rhetorically: "Is it possible, Mr. Foreman and Gentlemen, that the
Government, the Internal Revenue Bureau, the agents, jumped in with
alacrity upon him as a Governor's Councillor?" Subsequently, no
doubt moved by these remarks, the court below said in its charge:
"I am very sorry that there was an issue of politics raised in this
case. No man in this courtroom, I am sure, is interested in considering
political questions with respect to this case. You are not here as
Republicans or Democrats or Socialists, and I have no reason to believe
that anyone else is here in a partisan capacity. A man is here to be
judged on the basis of his tax record, not his political record. And I
have no reason to suppose that the Grand Jury differed one bit from you
gentlemen in acting according to their consciences and their views of
justice. A man who is or has been a member of the Governor's Council is
entitled to just as good a break as a man who has not been, and he is
not entitled to one bit better break."
Counsel
for the defendant contends that the above portion of his argument
constituted a "legitimate comment upon evidence in the case"
and that although the trial court "was entitled to comment on the
evidence," it was not entitled to take from the jury "the
right to consider any inference based on evidence, however slight, of an
attempt to use the criminal law against a citizen for political
purposes." Indeed, he says that the action of the court in so doing
was so highly prejudicial as to warrant a new trial, not as a matter of
discretion, but as a matter of law. We cannot agree. In fact we think
the court below correctly refused to permit a charge so serious as that
government officials were actuated by political motives in matters of
this sort to rest upon so slight a foundation. Furthermore, the proper
issue before the jury was the guilt or innocence of the defendant on the
evidence presented; and pure speculation as to motivation of the
prosecuting officials introduced an extraneous issue of the red herring
variety. Certainly we cannot say that the court below abused its
discretion in doing what it did. Nor do we need to pause for long over
the defendant's further contention that the sentence in the above quoted
portion of the charge with respect to the Grand Jury constituted highly
prejudicial error in that it permitted the jury to give "weight to
the action of the Grand Jury which it was not entitled to have." It
will suffice to say that the court's passing comment with respect to
lack of reason to suppose any impropriety on the part of the Grand Jury
was warranted under the circumstances, and that misinterpretation of
that remark by the jury can hardly be supposed in view of the court's
instruction at the outset of its charge that the indictment "is not
evidence in the case," but "a mere charge or presentment which
was made by the Grand Jury after hearing only one side of the case.
Moreover, the Grand Jury may or may not have heard some of the same
evidence which you heard."
Finally
the defendant contends that a grave enough error to warrant a new trial
as a matter of law occurred when the prosecutor toward the end of the
trial asked a defense character witness: "Did you also hear that
the defendant was convicted for violation of the labor laws in--."
Concededly the question was cut short as indicated by objection of
counsel for the defendant, and the court at once told the jury:
"The objection is sustained and it is an improper reference, and
the jury will totally disregard it." A conference at the bench
followed at which the court said to counsel that it was "not the
sort of thing that should be done," but that "It is not
sufficiently prejudicial to warrant a new trial."
We
agree with the court below that the question was properly cut short and
excluded. The controlling cases (Michelson v. United States, 335
U. S.
469, and Malatkofski v. United States, 179 Fed. (2d) 950) do not
go further than somewhat unenthusiastically to permit in discretion
questions of the kind under consideration with respect to offenses
involving moral turpitude or dereliction of some sort, such as
conspiracy to steal, or receiving stolen goods, respectively, whereas
the broad general question in the present case with respect to some
unspecified violation of the labor laws has no more direct tendency to
show moral turpitude or dereliction than a broad general question with
respect, for instance, to some unspecified violation of the motor
vehicle laws. And it is more prejudicial. In short, discretion exists as
to questions with respect to offenses from which defective moral
character may be inferred, but does not exist as to questions with
respect to offenses from which no such inference is permissible.
Questions of the latter sort probe not only irrelevant but also
prejudicial matter which must be excluded as a matter of law. But we are
not by any means prepared to say that the question asked was so highly
prejudicial as to warrant us in ordering another trial as a matter of
law. The court below was in a far better position than we to judge the
prejudicial effect of the question upon the jury, and the adequacy of
the corrective measure taken. We cannot say that the corrective measure
was so hopelessly inadequate as to warrant the conclusion that the trial
court abused its discretion in refusing to grant a new trial on that
score.
The
judgment of the District Court is modified by striking therefrom that
part imposing a fine of $2,000 on count 5, and by changing the total of
fines from $6,000 to $4,000, and as modified said judgment is offirmed.
1
Any person required under this chapter to pay any . . . tax, or required
by law . . . to make a return . . . who wilfully fails to pay such . . .
tax, make such return . . . shall, in addition to other penalties
provided by law, be guilty of a misdemeanor and, upon conviction
thereof, be fined not more than $10,000 or imprisoned for not more than
one year, or both, together with the costs of prosecution."
2
This conclusion renders it unnecessary for us to discuss the defendant's
argument that the court below erred in certain of its rulings, and also
in certain of its instructions to the jury, with respect to the
requirements for an "attempt" within the meaning of §145(b)
for those arguments are predicated upon the hypothesis that the mere
filing of a false return, even though done wilfully with an intent to
evade or defeat taxes, is not an "attempt" under that
subsection. Since the hypothesis is in error, there is no need to
discuss these argument.
3
We are unable to discern any contrary indication in the per curiam
decisions of the Supreme Court in Sherwin v. United States, 312
U. S. 654, and Hemphill v. United States, 312 U. S. 657 upon
which the defendant relies.
4
`Wilfully' means knowingly, and with a bad heart, and a bad intent; it
means having the purpose to cheat or defraud or do a wrong in connection
with a tax matter. It is not enough if all that is shown is that the
defendant was stubborn or stupid, careless, negligent, or grossly
negligent. A defendant is not wilfully evading a tax if he is careless
about keeping his books. He is not wilfully evading a tax if all that is
shown is that he made errors of law. He is not wilfully evading a tax if
all that is shown is that he in good faith acted contrary to the
regulations laid down by the Bureau of Internal Revenue and the United
States Department of the Treasury. He certainly is not wilful if he acts
without the advice of a lawyer or accountant, for there is no
requirement that a taxpayer, no matter how large his income, should
engage a lawyer or an accountant."
[Concurring
Opinion]
MAGRUDER,
Chief Judge (concurring):
I
concur in the judgment and in general in the opinion of the Court.
With
reference to the question which the prosecutor asked of a defense
character witness, "Did you also hear that the defendant was
convicted for violation of the labor laws in--": This type of
question may be permissible in the discretion of the trial judge,
provided the proper factual basis for it exists. Malatkofski v.
United States
, 179 Fed. (2d) 905, 913-14 (C. A. 1st, 1950); Michelson v.
United States
, 335
U. S.
469 (1948). Here the judge excluded the question at the outset and
directed the jury to disregard it. Counsel for the defendant did not ask
for a mistrial at that point. After the jury brought in its verdict, the
defendant moved for a new trial for the reason, among others, that he
had been substantially prejudiced and deprived of a fair trial as a
result of the action of the prosecutor in asking the character witness
the foregoing question. The reasons given by the judge for denying a new
trial on that score seem to me to be adequate. Defendant was not
entitled to a new trial as a matter of law, and it seems to me obvious
that the trial court cannot be said to have committed an abuse of
discretion in denying the motion. See Sears v.
United States
, 264 Fed. 257, 264 (C. A. 1st, 1920).
The
effect of what we do is that the defendant will have to serve concurrent
sentences of 18 months and pay aggregate fines of $4,000. I think the
conviction on count 5 is clearly invulnerable, for the reasons indicated
in the Court's opinion. Therefore, though I agree that the convictions
on counts 2 and 3 should also be affirmed, it may be worth while to
point out that even if we had concluded that the defendant had been
improperly convicted on those two counts, all we would have done would
have been to set aside the judgment of conviction and the sentences as
applied to counts 2 and 3, leaving standing the judgment of conviction
on count 5 with the sentence thereon of 18 months' imprisonment and a
fine of $2,000. See Jarvis v.
United States
, 90 Fed. (2d) 243, 246-47 (C. A. 1st, 1937). Giugni v.
United States
, 127 Fed. (2d) 786, 792 (C. A. 1st, 1942).