Guzik v. United States
| Citation | 54 F.2d 618 |
| Decision Date | 11 January 1932 |
| Docket Number | No. 4533.,4533. |
| Parties | GUZIK v. UNITED STATES. |
| Court | United States Courts of Appeals. United States Court of Appeals (7th Circuit) |
William F. Waugh, George N. Murdock, and J. J. Goshkin, all of Chicago, Ill., for appellant.
George E. Q. Johnson, U. S. Atty., Jacob I. Grossman, Asst. U. S. Atty., and Dwight I. Green, all of Chicago, Ill., for the United States.
Before ALSCHULER, EVANS, and SPARKS, Circuit Judges.
Appellant was convicted on all three counts of an indictment charging willful attempts to defeat and evade an income tax to the extent of: $150,934.87 upon an alleged gross taxable income of $642,154.43 for 1927; $71,569.85 upon an alleged gross taxable income of $338,147.92 for 1928; and $3,394.87 upon an alleged taxable income of $54,900 for 1929. Each count charged the willful attempt to evade the tax by filing a return wherein it was stated that the taxpayer's income was much less than that actually received by him for each of the years in question. Upon a verdict of guilty, the court sentenced appellant to two years in the penitentiary and imposed a fine of $7,500 on both counts 1 and 2, and a year and a day in the penitentiary and a fine of $2,500 on count 3. The sentences were to be served consecutively, and the fines imposed were cumulative.
The assignments of error may be divided into three classes: (1) Errors in overruling appellant's demurrer to the indictment asserted to be invalid because (a) charging a crime under section 1266, title 26, USCA, which is not applicable to income tax violations; (b) of the lack of an assessment of the tax, which assessment it is alleged is required by 26 USCA §§ 1045, 1047, 1048, and 1050; (c) charging a consummated offense; and (d) the Revenue Acts of 1926 and 1928 are unconstitutional because of indefiniteness. (2) The second class of assigned errors relates to the admission in evidence: (a) Of the bank's records, (b) of computations and conclusions of an accountant based upon assumptions claimed not to have been proved, (c) the refusal to admit in evidence testimony showing no taxes due by appellant, and (d) the refusal to admit evidence of policy of the Department with respect to the preparation and form of returns of taxpayers engaged in illegal occupations. (3) The remaining assignments of error are directed to the overruling of appellant's motion to direct a verdict and to the court's instructions to the jury.
In order to prove gross income, and therefore probable taxable income of the appellant, the government introduced the following evidence: Bank deposits in two banks (one account was under an assumed name) totaling $953,303.93; cashier's checks cashed by appellant but not deposited, totaling $48,000; dividends of $37,500 received by appellant's physician on stock alleged to have been transferred to him by appellant in order to evade surtax; the testimony of a general cashier of appellant's gambling establishments that he, under instruction of the appellant, converted surplus from the operation of a gambling business into cashier's checks (totaling $147,500), which he delivered to appellant's messenger.
Appellee contends that the evidence showed reported and actual income as follows:
Reported Actual
Income Income
1927 $18,090 $ 647,654.43
1928 24,000 333,654.92
1929 18,150 63,044.11
_______ _____________
$60,240 $1,044,353.46
It will be unnecessary to again discuss the various assignments of error passed upon by this court since this appeal was taken. The indictment is properly drawn under section 1266, 26 USCA, which we held applicable to income tax violations in Capone v. United States, 51 F.(2d) 609; O'Brien v. United States, 51 F.(2d) 193; and Oliver v. United States, 54 F.(2d) 48, decided by this court on December 2, 1931. The contention that the indictment for attempt to evade was not good because the attempt was consummated was rejected in O'Brien v. United States (C. C. A.) 51 F.(2d) 193. Appellant contends that the bank records were not admissible in evidence because they neither proved nor tended to prove gross or net income. In the Oliver Case, supra, we stated that "this (the deposits) alone, perhaps, is not sufficient to justify the conclusion that this was all income, but it is substantial evidence to be considered in determining that question." Such bank records were also held admissible, if properly established, in Capone v. United States (C. C. A.) 51 F.(2d) 609.
The contention is made, and is here rejected, that an assessment of the deficiency tax due is necessary before the taxpayer can be prosecuted criminally for the charges preferred. The crime is complete when the violator has, as in this instance, knowingly and willfully filed fraudulent returns with intent to evade and defeat a part or all of the tax.
The contention, that the court erred in refusing to admit records of the collector of internal revenue to show that no tax was due, is answered by the above discussion relative to the necessity of an assessment of a deficiency tax by the collector preliminary to prosecution for evasion of tax liability. The failure of the government to discover the error in the return or its failure to assess promptly a deficiency tax after discovery of the taxpayer's deception has no connection with the commission of the crime.
Objection was made to the submission of a hypothetical question asking a witness to calculate the amount of tax which would be due on the assumption that the government's evidence (bank deposits and dividends, etc.) reflected taxable income. Since the computation is merely an arithmetical process, thereby...
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