Walker v. United States

Decision Date09 March 1957
Docket NumberNo. 16211.,16211.
Citation240 F.2d 601
PartiesDee Brown WALKER and Ann G. Walker, Appellants, v. UNITED STATES of America, Appellee.
CourtU.S. Court of Appeals — Fifth Circuit

Dee Brown Walker, Dallas, Tex., for appellants.

Louise Foster, Atty., Dept. of Justice, Washington, D. C., Charles K. Rice, Asst. Atty. Gen., Lee A. Jackson, Atty., Dept. of Justice, Washington, D. C., John C. Ford, Asst. U. S. Atty., Dallas, Tex., Karl Schmeidler, Atty., Dept. of Justice, Washington, D. C., Heard L. Floore, U. S. Atty., Ft. Worth, Tex., John C. Ford, Asst. U. S. Atty., Dallas, Tex.

Warde H. Erwin, Portland, Or., Amicus Curiae.

Before CAMERON, JONES and BROWN, Circuit Judges.

PER CURIAM.

The question presented by this appeal is whether the statute1 providing for additions to tax, where a taxpayer fails through wilful neglect to make and file a declaration of estimated tax, is constitutional. The additional tax was assessed against appellants and they paid the sum of $203.77, filing claim for refund and subsequently this suit, on the ground that the statute was unconstitutional. The Court below denied recovery and appellants prosecute this appeal. The facts were stipulated,2 and the Court below, being "of the opinion that the law and the facts are with the defendant and against the plaintiffs," denied recovery. Appellants argue that the additional tax is basically unconstitutional3 as violative of the Fifth Amendment and as offending against the constitutional separation of powers between the executive and judicial departments. They cite no case to sustain their position, but content themselves with a general argument that it is not just and right to permit the Government to assess or to collect, through administrative action, the additional tax provided for. The complaint is leveled entirely against that portion of § 294 which provides additions to the tax in event of failure to file the declaration.

The position of the Government in reply may be stated by quoting what we said with reference to its attitude in Abney v. Campbell, 5 Cir., 1953, 206 F.2d 836, 838: "* * * appellee urges upon us: that appellants are but seeking to refresh old straw; that, however appealing but for those decisions their arguments and contentions might have been, appellants, in putting them forward now, are running a completely covered track; that either expressly or by implication every question raised and every argument put forward by them has been already decided against them; and that we should treat the questions argued, as already foreclosed against them."

We found that position sustained by appellee in that case; and so do we here. Appellants do not attack directly the statutory requirement that estimates be filed; and it is difficult to perceive any sound reason why Congress should not have possessed the power to lay this duty upon taxpayers as a reasonable constituent of the mechanics of ascertaining the amount of taxes to be assessed.

The exhaustive opinion of the Supreme Court in Brushaber v. Union Pacific R. Co., 1915, 240 U.S. 1, 36 S.Ct. 236, 60 L. Ed. 493,4 establishes beyond doubt the all-embracing character of the taxing authority possessed by Congress along with a like latitude in selecting modes of exercising that power.5 Responding to the attack there made, — being not unlike the basis of the attack here, — that the provision of the Act requiring the corporation without compensation to account for and pay at the source taxes claimed, not against the corporation, but against its bondholders, violated the Fifth Amendment, the Court said: "So far as the due process clause of the 5th Amendment is relied upon, it suffices to say that there is no basis for such reliance, since it is equally well settled that such clause is not a limitation upon the taxing power conferred upon Congress by the Constitution; in other words, that the Constitution does not conflict with itself by conferring, upon the one hand, a taxing power, and taking the same power away, on the other, by the limitations of the due process clause * * *." 240 U.S. at page 24, 36 S.Ct. at page 244.

The broad discretion given Congress in establishing procedures by which its tax exactions may be made effective was further removed from the realm of doubt by the Supreme Court decision in Steward Machine Co. v. Davis, 1937, 301 U.S. 548, 57 S.Ct. 883, 81 L.Ed. 1279.6 Based upon the teachings of that case and the one decided simultaneously with it, Helvering v. Davis, 1937, 301 U.S. 619, 672, 57 S.Ct. 904, 81 L.Ed. 1307, this Court approved7 the provisions of the 1950 amendment to the Federal Insurance Contributions Act requiring employers of domestic help8 to hold back a percentage of the employee's earnings and, having contributed a like amount, to remit it to the Collector of Internal Revenue. And we have also upheld against constitutional attack the "tax on self-employment income"9 in Cain v. United States, 1954, 211 F.2d 375, certiorari denied 347 U.S. 1013, 74 S.Ct. 868, 98 L.Ed. 1136. And we assumed to be valid the penalty provisions here under attack in our decision of Stephan v. Commissioner, 5 Cir., 1952, 197 F.2d 712.

The case of Helvering, Commissioner v. Mitchell,10 is a complete answer to the argument that additional taxes by way of civil penalties or sanctions may not be imposed administratively. There, the Court held that the statutory imposition of a fraud penalty11 was entirely civil in nature and collection thereof was not affected by a judgment of acquittal in a criminal offense involving the same acts. "That Congress provided a distinctly civil procedure for the collection of the additional 50 per centum indicates clearly that it intended a civil, not a criminal, sanction. * * * Thus the determination of the facts upon which liability is based may be by an administrative agency instead of a jury, * * *." 303 U. S. at page 402, 58 S.Ct. at page 634.

Being of the opinion that the questions raised by appellants have, by these cases, been decided against them, the judgment of the Court below is

Affirmed.

1 § 294(d) (1) (A) of the Internal Revenue Code of 1939, 26 U.S.C.A. § 294(d) (1) (A):

"In case of a failure to make and file a declaration of estimated tax within the time prescribed, unless such failure is shown to the satisfaction of the Commissioner to be due to reasonable cause and not to willful neglect, there shall be added to the tax 5 per centum of each installment due but unpaid, and in addition, with respect to each such installment due but unpaid, one per centum of the unpaid amount thereof for each month (except the first) or fraction thereof during which such amount remains unpaid. In no event shall the aggregate addition to the tax under this subparagraph with respect to any installment due but unpaid, exceed 10 per...

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    ...by Article 1, § 8, and the Sixteenth Amendment of the Constitution. Erwin v. Granquist, 9 Cir., 1958, 253 F.2d 26; Walker v. United States, 5 Cir., 240 F.2d 601, certiorari denied, 1957, 354 U.S. 939, 77 S.Ct. 1402, 1 L.Ed.2d Petitioner next contends that imposition of concurrent penalties ......
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