Gaunt v. United States, 4479.

• Decision Date: 08 January 1951
• Docket Number: No. 4479.,4479.
• Citation: 184 F.2d 284
• Parties: GAUNT v. UNITED STATES.
• Court: U.S. Court of Appeals — First Circuit

184 F.2d 284 (1950)

GAUNT v. UNITED STATES.

No. 4479.

United States Court of Appeals First Circuit.

July 28, 1950.

Rehearing Denied September 18, 1950.

Writ of Certiorari Denied January 8, 1951.

COPYRIGHT MATERIAL OMITTED

Robert F. Bradford, Boston, Mass. (John A. Perkins, Boston, Mass., with him on the brief), for appellant.

Fred G. Folsom, Special Assistant to the Attorney General (Theron Lamar Caudle, Assistant Attorney General, Ellis W. Slack, Special Assistant to the Attorney General, George F. Garrity, United States Attorney, and Philip T. Jones, Assistant U. S. Attorney, both of Boston, Mass., with him on the brief), for appellee.

Before MAGRUDER, Chief Judge, and CLARK and WOODBURY, Circuit Judges.

Writ of Certiorari Denied January 8, 1951. See 71 S.Ct. 350.

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) 26 U.S.C.A. § 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 1948 Revised Criminal Code, 18 U.S. C.A. § 1001."

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.

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 willfully 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 willfully 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, 63 S.Ct. 364, 87 L.Ed. 418, 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 willfully 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 18 U.S.C.A. § 1621", 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." 317 U.S. 497, 63 S.Ct. 367.

The defendant's argument is that in the case at bar the Government has proved at the 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, 317 U.S. at page 499, 63 S.Ct. at page 368, 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 attempted 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, 8 Cir., 159 F.2d 464, certiorari denied 331 U.S. 847, 67 S.Ct. 1732, 91 L.Ed. 1856, rehearing denied 332 U.S. 786, 68 S. Ct. 34, 92 L.Ed. 369; Myres v. United States, 8 Cir., 174 F.2d 329, certiorari denied 338 U.S. 849, 70 S.Ct. 91; United States v. Croessant, 3 Cir., 178 F.2d 96, certiorari denied 339 U.S. 927, 70 S.Ct. 626 and in direct accord see Taylor v. United States, 9 Cir., 179 F.2d 640. Jones v. United States, 5 Cir., 164 F.2d 398, 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

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.A. § 80,...