Sansone v. United States, 365

• Citation: 13 L.Ed.2d 882,85 S.Ct. 1004,380 U.S. 343
• Decision Date: 29 March 1965
• Docket Number: No. 365,365
• Parties: Michael C. SANSONE, Petitioner, v. UNITED STATES
• Court: United States Supreme Court

380 U.S. 343

85 S.Ct. 1004

13 L.Ed.2d 882

Michael C. SANSONE, Petitioner,

v UNITED STATES.

No. 365.

Argued March 10, 1965.

Decided March 29, 1965.

Merle L. Silverstein, Clayton, Mo., for petitioner.

Paul Bender, Philadelphia, Pa., for respondent, pro hac vice, by special leave of Court.

Mr. Justice GOLDBERG delivered the opinion of the Court.

Petitioner Sansone was indicted for willfully attempting to evade federal income taxes for the year 1957 in violation of § 7201 of the Internal Revenue Code of 1954. Section 7201 provides:

'Any person who willfully attempts in any maner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $10,000, or imprisoned not more than 5 years, or both, together with the costs of prosecution.'

The following facts were established at trial. In March 1956 petitioner and his wife purchased a tract of land for $22,500 and simultaneously sold a portion of the tract for $20,000. In August 1957 petitioner sold another portion of the tract for $27,000. He did not report the gain on either the 1956 or 1957 sale in his income tax returns for those years.¹ Petitioner conceded that the 1957 transaction was reportable and that, in not reporting it, he understated his tax liability for that year by $2,456.48. He contended, however, that this understatement was not willful since he believed at the time that extensive repairs on a creek adjoining a portion of the tract he retained might be necessary and that the cost of these repairs might wipe out his profit on the 1957 sale.

To counter this defense, the Government introduced the following signed statement made by petitioner during the Treasury investigation of his tax return:

'I did not report the 1957 sale in our joint income tax return for 1957 because I was burdened with a number of financial obligations and did not feel I could raise the money to pay any tax due. It was my intention to report all sales in a future year and pay the tax due. I knew that I should have reported the 1957 sale, but my wife did not know that it should have been reported. It was not my intention to evade the payment of our proper taxes and I intended to pay any additional taxes due when I was financially able to do so.'

At the conclusion of the trial, petitioner requested that the jury be instructed that it could acquit him of the charged offense of willfully attempting to evade or defeat taxes in violation of § 7201, but still convict him of either or both of the asserted lesser-included offenses of willfully filing a fraudulent or false return, in violation of § 7207,² or willfully failing to pay his taxes at the time required by law, in violation of § 7203. ³ Section 7201 is a felony providing for a maximum fine of $10,000 and imprisonment for five years. Both §§ 7203 and 7207 are misdemeanors with maximum prison sentences of one year under each section, and maximum fines of $10,000 under § 7203 and $1,000 under § 7207.

The requested instructions were denied.⁴ Petitioner was found guilty by the jury of violating § 7201, and was sentenced by the court to pay a fine of $2,000 and to serve 15 months' imprisonment. The conviction was upheld by the Court of Appeals. 334 F.2d 287. We granted certiorari to consider the applicability of the lesser-included offense doctrine to these federal tax statutes. 379 U.S. 886, 85 S.Ct. 159, 13 L.Ed.2d 92.

I.

We are faced with the threshold question as to whether or not § 7207, which proscribes the willful filing with a Treasury official of any known false or fraudulent 'return,' applies to the filing of an income tax return.⁵ If § 7207 does not apply to income tax returns, it is obvious that the defendant was not here entitled to a lesser-included offense charge based on that section.

This Court held in Achilli v. United States, 353 U.S. 373, 77 S.Ct. 995, 1 L.Ed.2d 918 that § 7207's statutory predecessor, § 3616(a) of the Internal Revenue Code of 1939, which made it a misdemeanor for any person to deliver to the Collector of Revenue 'any false or fraudulent list, return, account, or statement, with intent to defeat or evade the valuation, enumeration, or assessment intended to be made * * *' (emphasis added), despite its broad language, was not intended by Congress to apply to income tax returns.

There were two major bases of this Court's conclusion in Achilli that § 3616(a) did not apply to such returns. First, unlike other criminal provisions clearly applicable to income taxes which appeared in the income tax chapter of the 1939 Code and were specifically designed to punish evasion of that tax, § 3616(a) was placed among the Code's 'General Administrative Provisions' and did not specifically refer to income taxes. Second, § 3616(a) required that the false or fraudulent return be filed 'with intent to defeat or evade the valuation, enumeration, or assessment intended to be made.' This provision, as the Court had already held in Berra v. United States, 351 U.S. 131, 76 S.Ct. 685, 100 L.Ed. 1013, if applied to income tax returns would have made § 3616(a) completely co-extensive with the predecessor of § 7201 where the attempt to evade income taxes was accomplished by filing a fraudulent income tax return. It was clear that the predecessor of § 7201 applied to this method of attempting to evade income taxes and the Court was unwilling to presume that Congress intended to enact both felony and misdemeanor provisions which completely overlap in this important area.

Both of these bases of decision were removed by the 1954 Code. Unlike their predecessors in the 1939 Code, §§ 7201, 7203, and 7207, together with other sections clearly applicable to income tax violations, were all placed in the same section (Part I of Chapter 75) of the 1954 Code. Congress specifically stated that it placed all these provisions in the same part of the Code because it wished them to apply to taxes generally, including income taxes. See S.Rep.No.1622, 83d Cong., 2d Sess., 147; H.R.Rep- .No.1337, 83d Cong., 2d Sess., 108. In contrast, Part II of Chapter 75 contains provisions applicable only to specified taxes, none of which include income taxes.

Further, Congress, in enacting § 7207 did not re-enact § 3616(a)'s requirement that the false or fraudulent return be made with 'intent to defeat or evade' the tax due. Thus the second basis for the Court's conclusion in Achilli that § 3616(a) did not apply to income taxes was removed. See Berra v. United States, supra, 351 U.S. at 134, n. 5, 76 S.Ct. at 688. Finally, in providing that the false or fraudulent return be made 'willfully,' § 7207 was conformed to the language contained in the other misdemeanor provisions clearly applicable to income taxes. See, e.g., § 7203.

We conclude, therefore, that § 7207 applies to income tax violations. Since there is no doubt that §§ 7201 and 7203 also apply to income tax violations, with obvious overlapping among them, there can be no doubt that the lesser-included offense doctrine applies to these statutes in an appropriate case. See Spies v. United States, 317 U.S. 492, 495, 63 S.Ct. 364, 366, 87 L.Ed. 418; Berra v. United States, supra.

II.

The basic principles controlling whether or not a lesser-included offense charge should be given in a particular case have been settled by this Court. Rule 31(c) of the Federal Rules of Criminal Procedure provides in relevant part, that the 'defendant may be found guilty of an offense necessarily included in the offense charged.' Thus, '(i)n a case where some of the elements of the crime charged themselves constitute a lesser crime, the defendant, if the evidence justifie(s) it * * * (is) entitled to an instruction which would permit a finding of guilt of the lesser offense.' Berra v. United States, supra, at 134, 76 S.Ct. at 688. See Stevenson v. United States, 162 U.S. 313, 16 S.Ct. 839, 40 L.Ed. 980. But a lesser-offense charge is not proper where, on the evidence presented, the factual issues to be resolved by the jury are the same as to both the lesser and greater offenses. Berra v. United States, supra; Sparf v. United States, 156 U.S. 51, 63—64, 15 S.Ct. 273, 277—278, 39 L.Ed. 343. In other words, the lesser offense must be included within but not, on the facts of the case, be completely encompassed by the greater. A lesser-included offense instruction is only proper where the charged greater offense requires the jury to find a disputed factual element which is not required for conviction of the lesser-included offense. Berra v. United States, supra; Sparf v. United States, supra, 156 U.S. at 63—64, 15 S.Ct. at 277—278.⁶ We now apply the principles declared in these cases to the instant case.

III.

The offense here charged was a violation of § 7201, which proscribes willfully attempting in any manner to evade or defeat any tax imposed by the Internal Revenue Code. As this Court has recognized, this felony provision is 'the capstone of a system of sanctions which singly or in combination were calculated to induce prompt and forthright fulfillment of every duty under the income tax law and to provide a penalty suitable to every degree of delinquency.' Spies v. United States, supra, 317 U.S. at 497, 63 S.Ct. at 367. As such a capstone, § 7201 necessarily includes among its elements actions which, if isolated from the others, constitute lesser offenses in this hierarchical system of sanctions. Therefore, if on the facts of a given case there are disputed issues of fact which would enable the jury rationally to find that, although all the elements of § 7201 have not been proved, all the elements of one or more lesser offenses have been, it is clear that the defendant is entitled to a lesser-included offense charge as to such lesser offenses.

As has been held by this Court, the elements of § 7201 are will-fulness; the existence of a tax deficiency, Lawn v....