Marchetti v. United States, No. 2

CourtUnited States Supreme Court
Writing for the CourtHARLAN
Citation19 L.Ed.2d 889,88 S.Ct. 697,390 U.S. 39
Decision Date29 January 1968
Docket NumberNo. 2
PartiesJames MARCHETTI, Petitioner, v. UNITED STATES. Re

390 U.S. 39
88 S.Ct. 697
19 L.Ed.2d 889
James MARCHETTI, Petitioner,

v.

UNITED STATES.

No. 2.
Reargued Oct. 10, 1967.
Decided Jan. 29, 1968.

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Jacob D. Zeldes, Bridgeport, Conn., for petitioner.

Francis X. Beytagh, Jr., Cleveland, Ohio, for respondent, pro hac vice, by special leave of Court.

Mr. Justice HARLAN delivered the opinion of the Court.

Petitioner was convicted in the United States District Court for the District of Connecticut under two indictments which charged violations of the federal wagering tax statutes. The first indictment averred that petitioner and others conspired to evade payment of the anuual occupational tax imposed by 26 U.S.C. § 4411. The second indictment consisted of two counts: the first

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alleged a willful failure to pay the occupational tax, and the second a willful failure to register, as required by 26 U.S.C. § 4412, before engaging in the business of accepting wagers.

After verdict, petitioner unsuccessfully sought to arrest judgment, in part on the basis that the statutory obligations to register and to pay the occupational tax violated his Fifth Amendment privilege against self-incrimination. The Court of Appeals for the Second Circuit affirmed, 352 F.2d 848, on the authority of United States v. Kahriger, 345 U.S. 22, 73 S.Ct. 510, 97 L.Ed. 754, and Lewis v. United States, 348 U.S. 419, 75 S.Ct. 415, 99 L.Ed. 475.

We granted certiorari to re-examine the constitutionality under the Fifth Amendment of the pertinent provisions of the wagering tax statutes, and more particularly to consider whether Kahriger and Lewis still have vitality.1 383 U.S. 942, 86 S.Ct. 1195, 16 L.Ed.2d 205. For reasons which follow we have

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concluded that these provisions may not be employed to punish criminally those persons who have defended a failure to comply with their requirements with a proper assertion of the privilege against self-incrimination. The judgment below is accordingly reversed.

I.

The provisions in issue here are part of an interrelated statutory system for taxing wagers. The system is broadly as follows. Section 4401 of Title 26 imposes upon those engaged in the business of accepting wagers an excise tax of 10% on the gross amount of all wagers they accept, including the value of chances purchased in lotteries conducted for profit. Parimutuel wagering enterprises, coin-operated devices, and state-conducted sweepstakes are expressly excluded from taxation. 26 U.S.C. § 4402 (1964 ed. Supp. II). Section 4411 imposes in addition an occupational tax of $50 annually, both upon those subject to taxation under § 4401 and upon those who receive wagers on their behalf.

The taxes are supplemented by ancillary provisions calculated to assure their collection. In particular, § 4412 requires those liable for the occupational tax to register each year with the director of their local internal revenue district. The registrants must submit Internal Revenue Service Form 11—C, 2 and upon it must provide their residence and business addresses, must indicate whether they are engaged in the business of accepting wagers, and must list the names and addresses of their agents and employees. The statutory obligations to register

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and to pay the occupational tax are essentially inseparable elements of a single registration procedure;3 Form 11-C thus constitutes both the application for registration and the return for the occupational tax.4

In addition, registrants are obliged to post the revenue stamps which denote payment of the occupational tax 'conspicuously' in their principal places of business, or, if they lack such places, to keep the stamps on their persons, and to exhibit them upon demand to any Treasury officer. 26 U.S.C. § 6806(c). They are required to preserve daily records indicating the gross amount of the wagers as to which they are liable for taxation, and to permit inspection of their books of account. 26 U.S.C. §§ 4403, 4423. Moreover, each principal internal revenue office is instructed to maintain for public inspection a listing of all who have paid the occupational tax, and to provide certified copies of the listing upon request to any state or local prosecuting officer. 26 U.S.C.

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s 6107. Finally, payment of the wagering taxes is declared not to 'exempt any person from any penalty provided by a law of the United States or of any State for engaging' in any taxable activity. 26 U.S.C. § 4422.

II.

The issue before us is not whether the United States may tax activities which a State or Congress has declared unlawful. The Court has repeatedly indicated that the unlawfulness of an acivity does not prevent its taxation, and nothing that follows is intended to limit or diminish the vitality of those cases. See, e.g., License Tax Cases, 5 Wall. 462, 18 L.Ed. 497. The issue is instead whether the methods employed by Congress in the federal wagering tax statutes are, in this situation, consistent with the limitations created by the privilege against self-incrimination guaranteed by the Fifth Amendment. We must for this purpose first examine the implications of these statutory provisions.

Wagering and its ancillary activities are very widely prohibited under both federal and state law. Federal statutes impose criminal penalties upon the interstate transmission of wagering information, 18 U.S.C. § 1084; upon intersate and foreign travel or transportation in aid of racketeering enterprises, defined to include gambling, 18 U.S.C. § 1952; upon lotteries conducted through use of the mails or broadcasting, 18 U.S.C. §§ 1301—1304; and upon the interstate transportation of wagering paraphernalia, 18 U.S.C. § 1953.

State and local enactments are more comprehensive. The laws of every State, except Nevada, include broad prohibitions against gambling, wagering, and associated activities.5 Every State forbids, with essentially minor

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and carefully circumscribed exceptions, lotteries.6 Even Nevada, which permits many forms of gambling, retains criminal penalties upon lotteries and certain other wager-

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ing activities taxable under these statutes. Nev.Rev.Stat. §§ 293.603, 465.010 (1957).

Connecticut, in which petitioner allegedly conducted his activities, has adopted a variety of measures for the punishment of gambling and wagering. It punishes '(a)ny person, whether as principal, agent or servant, who owns, possesses, keeps, manages, maintains or occupies' premises employed for purposes of wagering or pool selling. Conn.Gen.Stat.Rev. § 53—295 (1958). It imposes criminal penalties upon any person who possesses, keeps or maintains premises in which policy playing occurs, or lotteries are conducted, and upon any

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person who becomes the custodian of books, property, appliances, or apparatus employed for wagering. Conn.Gen.Stat.Rev. § 53—298 (1958). See also §§ 53—273, 53—290, 53—293. It provides additional penalties for those who conspire to organize or conduct unlawful wagering activities. Conn.Gen.Stat.Rev. § 54—197 (1958). Every aspect of petitioner's wagering activities thus subjected him to possible state or federal prosecution. By any standard, in Connecticut and throughout the United States, wagering is 'an area permeated with criminal statutes,' and those engaged in wagering are a group 'inherently suspect of criminal activities.' Albertson v. SACB, 382 U.S. 70, 79, 86 S.Ct. 194, 199, 15 L.Ed.2d 165.

Information obtained as a consequence of the federal wagering tax laws is readily available to assist the efforts of state and federal authorities to enforce these penalties. Section 6107 of Title 26 requires the principal internal revenue offices to provide to prosecuting officers a listing of those who have paid the occupational tax. Section 6806(c) obliges taxpayers either to post the revenue stamp 'conspicuously' in their principal places of business, or to keep it on their persons, and to produce it on the demand of Treasury officers. Evidence of the possession of a federal wagering tax stamp, or of payment of the wagering taxes, has often been admitted at trial in state and federal prosecutions for gambling offenses;7 such evidence has doubtless proved useful even more frequently to lead prosecuting authorities to other evidence upon which convictions have subsequently

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been obtained.8 Finally, we are obliged to notice that a former Commissioner of Internal Revenue has acknowledged that the Service 'makes available' to law enforcement agencies the names and addresses of those who have paid the wagering taxes, and that it is in 'full cooperation' with the efforts of the Attorney General of the United States to suppress organized gambling. Caplin, The Gambling Business and Federal Taxes, 8 Crime & Delin. 371, 372, 377.

In these circumstances, it can scarcely be denied that the obligations to register and to pay the occupational tax created for petitioner 'real and appreciable,' and not merely 'imaginary and unsubstantial,' hazards of self-incrimination. Reg. v. Boyes, 1 B. & S. 311, 330; Brown v. Walker, 161 U.S. 591, 599—600, 16 S.Ct. 644, 647, 648, 40 L.Ed. 819; Rogers v. United States, 340 U.S. 367, 374, 71 S.Ct. 438, 442, 95 L.Ed. 344. Petitioner was confronted by a comprehensive system of federal and state prohibitions against wagering activities; he was required, on pain of criminal prosecution, to provide information which he might reasonably suppose would be available to prosecuting authorities, and which would surely prove a significant 'link in a chain'9 of evidence tending to establish his guilt.10 Unlike the income tax return

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in question in United States v. Sullivan, 274 U.S. 259, 47 S.Ct. 607, 71 L.Ed. 1037, every portion of these requirements had the direct and unmistakable consequence of incriminating petitioner; the application of the constitutional privilege to the entire registration procedure was in this instance neither 'extreme' nor 'extravagant.'...

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1024 practice notes
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    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • August 12, 2011
    ...States v. Kahriger, 345 U.S. 22, 28, 73 S.Ct. 510, 513, 97 L.Ed. 754 (1953), overruled on other grounds by Marchetti v. United States, 390 U.S. 39, 88 S.Ct. 697, 19 L.Ed.2d 889 (1968); see also Kahriger, 345 U.S. at 31, 73 S.Ct. at 515 (“Unless there are provisions, extraneous to any tax ne......
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    ...their privilege against self-incrimination is being destroyed, and against which the Supreme Court has ruled. Marchetti v. United States, 390 U.S. 39, 88 S.Ct. 697, 19 L.Ed.2d 889 (1968); Grosso v. United States, 390 U.S. 62, 88 S.Ct. 709, 19 L.Ed.2d 906 (1968); Haynes v. United States, 390......
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    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
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    ...by substantial and real, and not merely trifling or imaginary hazards of incrimination") (citations omitted); Marchetti v. United States, 390 U.S. 39, 53, 88 S.Ct. 697, 19 L.Ed.2d 889 (1968); Heike v. United States, 227 U.S. 131, 144, 33 S.Ct. 226, 57 L.Ed. 450 The testimony latent in Sweet......
  • Marchetti v. United States Grosso v. United States, Nos. 2
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    • United States Supreme Court
    • January 29, 1968
    ...a fair trial. We granted certiorari, 385 U.S. 810, 87 S.Ct. 47, 17 L.Ed.2d 53, and the case was argued with Marchetti v. United States, 390 U.S. 39, 88 S.Ct. 697, 19 L.Ed.2d 889, decided today.1 For reasons which follow, we reverse. I. We turn first to petitioner's contention that payment o......
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1013 cases
  • Morgan v. Thomas, Civ. A. No. 4622.
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    • November 3, 1970
    ...v. United States, 354 U.S. 118, 77 S.Ct. 1145, 1 L.Ed.2d 1225 (1957); Bailey v. Muse, supra, note 54. 57 See Marchetti v. United States, 390 U.S. 39, 53, 61, 88 S.Ct. 697, 19 L.Ed.2d 889, 901, 905 (1968); Brown v. Walker, 161 U.S. 591, 599-600, 16 S.Ct. 644, 40 L.Ed. 819, 822 58 Bloom v. Il......
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    • U.S. Supreme Court
    • June 17, 2013
    ...need not comply with tax requirements that would, inherently and directly, lead to self-incrimination. Marchetti v. United States, 390 U.S. 39, 60–61, 88 S.Ct. 697, 19 L.Ed.2d 889 (1968); Grosso v. United States, 390 U.S. 62, 67–68, 88 S.Ct. 709, 19 L.Ed.2d 906 (1968). All told, this third ......
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    ...v. United States, 300 F.Supp. 1332 (D.Conn.1969), and Stoney v. United States, 302 F.Supp. 145 (E.D.Mo. 1968). Marchetti v. United States, 390 U.S. 39, 88 S.Ct. 697, 19 L.Ed.2d 889 (1968), dealing with compelled self-incrimination under federal wagering statutes, was held not to be fully re......
  • Vaccaro v. United States, No. 28852.
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    ...to turn on predilections, not principles." 404 U.S. at 290, 92 S.Ct. at 923 10 Cr.L.R. 3091. 31 Marchetti v. United States, 1968, 390 U.S. 39, 88 S.Ct. 697, 19 L.Ed.2d 889; Grosso v. United States, 1968, 390 U.S. 62, 88 S.Ct. 709, 19 L.Ed.2d 906; Haynes v. United States, 1968, 390 U.S.......
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2 books & journal articles
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    ...opinion by Justice White (vote: 7-2,Douglas and Black dissenting), that the Marchetti and Grosso decisions (Mar- chetti v. United States, 390 U.S. 39 and Grosso v. United States, 390 U.S. 1968) are not to be applied retroactively since here there was no threat to the fact finding process an......
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    ...Disenfranchisement of nonincarcerated felons in the United States. Perspectives on Politics, 2, 491-505.Marchetti v. U.S. (1968). 390 U.S. 39.Martin, A. D., & Quinn, K. M. (2002). Dynamic ideal point estimation via Markov chain Monte Carlo for the U.S. Supreme Court, 1953-1999. Political An......

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