Dorgan v. Kouba

• Decision Date: 28 November 1978
• Docket Number: No. 9493,9493
• Citation: 274 N.W.2d 167
• Parties: Byron L. DORGAN, Tax Commissioner, State of North Dakota, Petitioner and Appellee, v. Albert W. KOUBA, Respondent and Appellant. Civ.
• Court: North Dakota Supreme Court

Page 167

274 N.W.2d 167

Byron L. DORGAN, Tax Commissioner, State of North Dakota Petitioner and Appellee, v. Albert W. KOUBA, Respondent and Appellant.

Civ. No. 9493.

Supreme Court of North Dakota.

Nov. 28, 1978.

Rehearing Denied Feb. 1, 1979.

Robert W. Wirtz, Sp. Asst. Atty. Gen., State Tax Dept., Bismarck, for petitioner and appellee.

Albert W. Kouba, pro se.

PEDERSON, Justice.

The district court granted the tax commissioner's petition for a writ of mandamus (§ 57-38-47, NDCC) and decreed that Albert W. Kouba, having received in excess of specified gross income in each of the taxable years, 1974, 1975 and 1976, was "required and directed to file a true and complete" return for each of those years (§§ 57-38-31 and 57-38-33, NDCC). Kouba appealed and the trial court granted a stay pending disposition of the appeal. We affirm.

In each of the years 1974, 1975 and 1976, Kouba filed the prescribed individual income tax Form 37. On the form he supplied the following information: his name and his wife's name, his home address and zip code, the amount of state income tax withheld, and the amount claimed as refund. Thereafter, the response to every item of information required on the form was "Object." Kouba thus objected to supplying his telephone number, whether he was single, whether he was a resident, identification of his school district, his occupation, the number of exemptions claimed, as well as every other item which, if responded to, would permit the computation of his tax liability.

He attached to Form 37 a copy of his wife's wage and tax statement (federal tax Form W-2), and a copy of federal Form 1040. Form 1040 also contained the response of "object" to every item of information upon which computation of tax liability could be based, except that the amount withheld and claimed as refund was the amount of federal income tax withheld. Also attached were affidavits, letters, memoranda, newspaper clippings, the Declaration of Independence, portions of the Constitution of the United States, and briefs of legal questions, all of which purportedly relate to or explain Kouba's objection to supplying information upon which his tax liability can be ascertained under the income tax law of North Dakota.

Kouba, who has represented himself throughout this entire proceeding, attempts to raise the following issues:

(1) That § 57-38-31, NDCC, is unconstitutional;

(2) That he has complied with the statutes requiring that a tax return be filed with the tax commissioner (§§ 57-38-31, 57-38-33, NDCC); and

(3) That he asserted on Form 37 a valid Fifth Amendment privilege and that he is prevented from claiming this privilege by the writ of mandamus.

The threshold question is whether § 57-38-31, NDCC, is constitutional. This section provides, in part:

"1. Every resident individual, every fiduciary for a resident individual, estate or trust, and every individual or fiduciary who receives income derived from sources in this state, who is required by the provisions of the United States Internal Revenue Code of 1954, as amended, to file a federal income tax return, shall file an income tax return with the state tax commissioner in such form as he may prescribe."

In State v. Nichols, 66 N.D. 355, 265 N.W. 859 (N.D.1935), our court held that the state income tax statutes do not violate the equal protection and the due process clauses of the federal and North Dakota constitutions. In upholding the inherent power of the legislature to enact tax laws, we said:

"The legislature must determine all questions of state necessity, discretion or policy involved in ordering a tax and in apportioning it; must make all the necessary rules and regulations which are to be observed in order to produce the desired returns, . . ." State v. Nichols, 265 N.W. at 863, Supra, citing 1 Cooley on Taxation (4th Ed.).

A statute is conclusively presumed to be constitutional unless it is clearly shown that the statute contravenes the state or federal constitution. Souris River Telephone Mutual Aid Corp. v. State, 162 N.W.2d 685, 688 (N.D.1968). Kouba has not presented us with a sufficient reason for reconsidering our holding in Nichols, supra, and invalidating acts of the legislature which are presumptively enacted for the general welfare of the citizens of this state.

A jury trial is not mandatory under our constitution in an action to compel the filing of a tax return. Section 7, North Dakota Constitution. Our constitution preserves a trial by jury in "all cases in which it could have been demanded as a matter of right at common law." In re R. Y., 189 N.W.2d 644, 651 (N.D.1971). An action for the collection of revenue was not recognized as a form of action at common law. Wickwire v. Reinecke, 275 U.S. 101, 105, 48 S.Ct. 43, 72 L.Ed. 184 (1927); Olshausen v. C. I. R., 273 F.2d 23, 27 (9th Cir. 1960). Moreover, § 1-01-06, NDCC, provides that "(i)n this state there is no common law in any case where the law is declared by the code." It is only where "there is no express constitutional or statutory declaration upon the subject (that) the common law is applied." McLaughlin Oil Co. v. First State Bank of Buffalo, 79 N.D. 525, 57 N.W.2d 860, 864 (N.D.1953).

Section 57-38-47, NDCC, authorizes the district court to compel a taxpayer, by writ of mandamus, to file a proper return, if he has failed to do so. The payment of taxes is a quasi-public obligation imposed by the legislature upon each citizen who has earned a prescribed amount of income. Taxpayers' rights are protected by the procedural requirements of the statute. When a writ of mandamus is issued, a hearing must be provided to the taxpayer for the speediest possible determination of the case consistent with the rights of the parties. The procedure was correctly followed and Kouba had adequate notice and the opportunity to present his response to the petition made by the tax commissioner.

Kouba asserts that he filed a return in 1974, 1975 and 1976 and therefore the writ of mandamus was improperly issued by the district court. We do not agree.

Section 57-38-31, NDCC, provides that if income is taxable under federal law, the taxpayer "Shall file a return prescribed by the tax commissioner in such form as will permit computation of the tax liability." (Emphasis added.) Section 57-38-33, NDCC, states in part:

"If the tax commissioner shall be of the opinion that any taxpayer has failed to file a return, or to include in a return filed, either intentionally or through error, items of taxable income, he may require from such taxpayer a return, or supplementary return, under oath, in such form as he shall prescribe, of all the items of income which the taxpayer received during the year for which the return is made, whether or not taxable under the provisions of this chapter." ¹

To permit a taxpayer to file a tax form upon which tax liability cannot be ascertained would frustrate the purpose of the statute. Filing a tax form is not synonymous with filing a tax return. A "return" is a tax form containing sufficient information from which the commissioner can determine tax liability. See United States v. Porth, 426 F.2d 519, 523 (10th Cir. 1970). The district court properly issued the writ of mandamus.

Kouba next contends that filing a return "could possibly" deprive him of his privilege against self-incrimination under the Fifth and Fourteenth Amendments to the United States Constitution. Kouba states that he fears that the information supplied by him on his tax return would be accessible to government agencies for purposes of determining whether he had violated any of their regulations. While repeatedly stating that he has not committed any crimes, thus discounting any fear of self-incrimination, he solemnly avers that the constitutional privilege is for the innocent as well as the guilty.

The Fifth Amendment provides that "no person . . . shall be compelled in any criminal case to be a witness against himself." It is available to taxpayers on their returns. United States v. Sullivan, 274 U.S. 259, 47 S.Ct. 607, 71 L.Ed. 1037 (1927). Taxpayers are not considered "volunteers" when they file their returns because the "Government compels the filing of a return much as it compels . . . the appearance of a 'witness' before a grand jury." Garner v. United States, 424 U.S. 648, 652, 96 S.Ct. 1178, 1181, 47 L.Ed.2d 370 (1975).

Three questions must be considered before determining that a witness has invalidly exercised the privilege:

(1) Who decides whether a response would be incriminatory?

(2) By what standard is the question to be determined?

(3) Who bears the burden of making a factual record to show whether there has been a valid assertion of the privilege? See McCormick on Evidence, § 139 (2d Ed. 1972).

It is within the province of the court to determine whether or not a question may compel the witness to disclose incriminatory evidence. Hoffman v. United States, 341 U.S. 479, 486, 71 S.Ct. 814, 95 L.Ed. 1118 (1951). If the court determines that an answer of a witness may incriminate him, the witness is free to remain silent if he states, upon oath, that he cannot answer without incriminating himself. United States v. Burr, 25 F.Cas. 38, 40 (C.C.D.Va.1807) (No. 14692e).

The standard upon which a valid assertion of the privilege is determined is whether the danger of incrimination is "real and appreciable." ² Marchetti v. United States, 390 U.S. 39, 48, 88 S.Ct. 697, 19 L.Ed.2d 889 (1968). In re Atterbury, 316 F.2d 106, 108 (6 Cir. 1963). It must appear that the answer may disclose a "necessary and essential link" in the chain of testimony, sufficient to prosecute the taxpayer of a crime. United States v. Burr, supra.

"To sustain the privilege, it need only be evident from the implications of the question, in the setting in which it is asked, that a responsive answer to the question or an explanation of why it cannot be answered might be dangerous because injurious disclosure could...