274 U.S. 259 (1927), 851, United States v. Sullivan

Docket Nº:No. 851
Citation:274 U.S. 259, 47 S.Ct. 607, 71 L.Ed. 1037
Party Name:United States v. Sullivan
Case Date:May 16, 1927
Court:United States Supreme Court

Page 259

274 U.S. 259 (1927)

47 S.Ct. 607, 71 L.Ed. 1037

United States



No. 851

United States Supreme Court

May 16, 1927

Argued April 27, 1927




1. Gains from illicit traffic in liquor are subject to the income tax. P. 263.

2. The Fifth Amendment does not protect the recipient of such income from prosecution for willful refusal to make any return under the income tax law. P. 263.

3. If disclosures called for by the return are privileged by the Amendment, the privilege should be claimed in the return. P. 264.

15 F.2d 809 reversed.

Certiorari (273 U.S. 689) to a judgment of the circuit court of appeals which reversed a judgment of the district court sentencing Sullivan for willfully refusing to make a return of net income under the Revenue Act of 1921.

Page 262

HOLMES, J., lead opinion

MR. JUSTICE HOLMES delivered the opinion of the Court.

The defendant in error was convicted of willfully refusing to make a return of his net income as required by the Revenue Act of 1921, Act Nov. 23, 1921, c. 136, §§ 223(a), 253, 42 Stat. 227, 250, 268. The judgment was reversed by the circuit court of appeals. Sullivan v. United States, 15 F.2d 809. A writ of certiorari was granted by this Court.

We may take it that the defendant had sufficient gross income to require a return under the statute unless he was exonerated by the fact that the whole or a large

Page 263

part of it was derived from business in violation of the National Prohibition Act. The circuit court of appeals held that gains from illicit traffic in liquor were subject to the income tax, but that the Fifth Amendment to the Constitution protected the defendant from the requirement of a return.

The Court below was right in holding that the defendant's gains were subject to the tax. By § 213(a), gross income includes

gains, profits, and income derived from . . . the transaction of any business carried on for gain or profit, or gains or profits and income derived from any source whatever.

These words are also those of the earlier Act of October 3, 1913, c. 16, § II, B, 38 Stat. 114, 167, except that the word "lawful" is omitted before "business" in the passage just quoted. By § 600, 42 Stat. 285, and by another Act approved on the same day, Congress applied other tax laws to this forbidden traffic. Act of Nov. 23, 1921, c. 134, § 5, 42 Stat. 222, 223. United...

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