UNITED STATES v. HABIG
Legal provision: Internal Revenue Code
Argument of Harris Weinstein
Chief Justice Earl Warren: Number 107, United States, Appellant, versus Arnold Habig, et al.
Mr. Harris Weinstein: Mr. Chief Justice and may it please the Court.
This case is here on an appeal from an order of the United States District Court for the Southern District of Indiana, dismissing two counts of a seven-count indictment brought under the revenue laws, dismissing on grounds of expiration of the statute of limitations.
The question here is on what date did the six-year statute of limitations apply to these two counts begin to run?
The choices are two; was it the date when the returns were in fact filed after the statutory deadline but during a period of extension granted by the Commissioner?
Or did the limitations period begin to run on the earlier date when the statutory deadline came?
The case arose in this manner.
It involves the tax returns -- these two counts involved the tax returns of two corporations, the Gordonsville Company and the Kimball Company.
Each was reporting its income on a fiscal year basis, reporting for the year ending with February so that the return due to be filed in 1960 related to the taxable year ending February 29, 1960.
Under the statute, those two corporate returns were due to be filed on May 15, 1960.
Instead of filing at that time, the two corporations asked for and obtained a three-month extension of time for filing until August 15, 1960.
Then on August 12 of that year, the Kimball return was filed.
Three days later on the extended deadline, August 15th, the Gordonsville return was filed.
The indictment was brought in on the sixth anniversary of the filing of the Kimball return on August 12, 1966.
If the statute began to run when the return was filed, the indictment relating to these two returns was timely, otherwise, it wasn't.
The indictment in seven counts has seven counts.
Each one relating to a corporate return filed on behalf of one of five corporations.
In Count 4, the one that relates to Gordonsville, it charges that the appellees attempted to evade and defeat tax due from Gordonsville by filing a false and fraudulent returns.
Count 6, the other one that was dismissed, relates to the Kimball return filed on August 1960.
It charges that the appellees falsely and fraudulently overstated Kimball's gross receipts in that return.
Justice Abe Fortas: Are there a lot of cases that present this pinpoint question?
Mr. Harris Weinstein: In terms of when the statute begins to run, Mr. Justice Fortas?
Justice Abe Fortas: Yes.
Mr. Harris Weinstein: Under the tax code sections, I'm aware of a handful and I'm only aware of three in addition to this case that we think are pertinent -- I beg your pardon, four.
One is the Hull case in the Fifth Circuit which is against us.
The others are the Doelker case and Alper case, I believe in the District Court --
Justice Abe Fortas: I know that but I meant that there are a lot of pending indictments which raised this question.
Mr. Harris Weinstein: Our information of the importance of this as I recall is that there, I believe, we're told that approximately a dozen cases a year arise where the return was filed during extended period of time and the indictment is brought and after the sixth anniversary of the statutory due date.
Justice Abe Fortas: Because you would assume that the United States would somehow rather be able to spur the fact curiously and not so as to eliminate this question of six years in which to bring these actions.
Mr. Harris Weinstein: Well, of course, the prosecution could be brought within five years and nine months.
Justice Abe Fortas: Right here?
Mr. Harris Weinstein: If that were the statute, I imagine, many more of them would be brought within five years and nine months.
Of course, this case though isn't as simple as the ordinary one might be.
I don't know the underlying facts and the record was never developed to show them in detail before these counts were dismissed.
But it does involve seven tax returns, all filed in this August, corporations that the record doesn't show the relationship of them but the appellee Habig was apparently present of all five and the other appellee had some connection with the preparation of the tax returns.
And I think, the records of all kinds of tax cases indicate the reasons why Congress thought that some extended period was necessary to investigate tax fraud.
Justice Abe Fortas: Well, no I'm not raising that obviously since the promoting the fact, the operation of the democratic principle would never do anything until the last possible moment and that it has created this problem.
Mr. Harris Weinstein: I won't speak in defense of that principle.
I'd rather rely on the statutory language, if I may, and the first statute that we point to in this case is Section 6531 of the Internal Revenue Code, which establishes the basic six-year period of limitations in this kind of case.
And towards the beginning of this provision, it says that the period of limitation shall be six years in classes of crimes that are covered by these two counts and the context makes clear that the six years is the six years next after the commission of the offense.
The other part of the statute of 6531 as an issue here is the very last sentence and it reads “for the purpose of determining the periods of limitation on criminal prosecutions, the rules of Section 6513 should be applicable.”
And the precise and narrow question here is.
What are these rules of Section 6513?
Do any of them apply to bar the prosecution in this case?
Section 6513 itself states a variety of rules for creating deemed times or artificial times of filing returns or payment of tax to determine when in the civil context and other connected sections on that part of the code when a suit for refund must -- a claim for refund must be filed or a suit filed in the Tax Court for redertermination.
The only part of Section 6513 that is invoked here is the first part, 6513(a).
The Government's contention, I think, is simple as that the first two words in the title of the subsection resolve the case and that everything else in the case is consistent with and confirms that view.
Those two words are ‘early return'.
The entire title of this subsection (a) is ‘Early Return or Advance Payment of Tax'.
There are three sentences in this Section.
The first one and the second one are very similar, except that the first one deals with advance filings, which is the early return in the title.
The second one deals with advance payments or the advance payment of tax in the title.
The first -- now, the first sentence says, for the purposes of Section 6511, which deals with claims for refund and limits on refunds and credits, any return filed before the last day prescribed for the filing thereof shall be considered as filed on such last day.
The second sentence is very similar, again referring to other sections in this vicinity of the code relating to limits on credits and the like.
It says, for purposes of Section 6511(b) (2) and (c) in 6512, payment of any portion of the tax made before the last day prescribed for the payment of the tax shall be considered made on such last day.
Both of these sentences have the same operative phrase, “before the last day prescribed”; and the first sentence “last day prescribed for filing” and the second “for payment”.
Now, in the abstract, viewing these two sentences alone, this phrase “the last day prescribed” can have several meanings because deadlines under the tax code are prescribed in several ways.
It could mean the day prescribed by statute as in the case of income tax returns, prescribed by regulations as in the case of certain excised taxes.
It could mean deadlines for payment of tax prescribed by elections that the taxpayer can make such as under certain state tax provisions or could mean the last day prescribed by extensions given by the Commissioner under his discretionary authority.
This function of the third sentence, in our view, the third and last sentence of this section is to define and to delimit this phrase, “the last day prescribed” that occurs in each of the first two sentences.
The full text of that very sentence is for purposes of this subsection.
The last day prescribed for filing the return or paying the tax shall be determined without regard to any extension of time granted the taxpayer and without regard to any election to pay the tax in installments.
Now, as the Government has read the statute and as the Government has urged the courts to construe it, the purpose and the only purpose of this last sentence is to eliminate two of the four possible meanings of the phrase “the last day prescribed” that appears in the first two sentences.
So that with this third sentence, the first two sentences mean that an early return is only that filed before the last day prescribed by statute or regulations.
It does not define as an early return, one filed before the last day prescribed by this in extension of time.
It does not -- it takes outside the word “advance payment of tax,” a payment made after the statutory or regulation deadline based on the taxpayer's election to pay in installments.
So it means that this section prescribes rules only for returns filed, payments made before deadlines prescribed by statute or regulation.
As we point out in our brief, the legislative history supports this view.
The committee reports, when this language was first inserted in ‘39 Code and ‘42, the committee report on Section 6513(a) when it was continued in the 1954 Code, both made clear that this is what the Congress had in mind.
Justice John M. Harlan: What's the operative statute under that construction given the power if the Commissioner denies the statute to the Congress?
Mr. Harris Weinstein: The practical effect, Mr. Justice --
Justice John M. Harlan: This case?
Mr. Harris Weinstein: Mr. Justice Harlan, the practical effect is that for the great mass of us who file our tax returns sometime between January 1st and April 15th, it gives the Government a uniform expiration date six years from that April 15th and it has a similar effect in the other areas of tax law.
What this -- our reading of this third sentence, thus, it say that those people who file after April 15th count their six years from the day they actually filed.
And this -- in terms of the great group of taxpayers, this works advantageous for both sides; it gives taxpayers counsel a uniformed deadline to work against in filing claims refund or suing on the Tax Court and it gives the Commissioner's people a uniformed deadline to work against in auditing most tax returns for a given year.
Justice John M. Harlan: Because the fact of the matter of extension to the section under the rule?
Mr. Harris Weinstein: Yes, so I can't cite you the statistics but I'm confident that they are relatively rare.
Now, we don't understand the appellees to disagree with this reading of the statute for civil purposes.
They never concede that it's correct for civil purposes but they don't dispute it and they suggest that it may be correct for civil purposes.
But their position is that it has a somewhat different meaning in criminal cases.
Justice Abe Fortas: What effect would you give to the last paragraph of 6531 quoted in your brief on page 3 that is where it says, “For purposes of determining the page of limitation on criminal prosecutions, the rules of Section 6513 should be applicable”?
Mr. Harris Weinstein: Justice Fortas, I think, perhaps the best way to answer that is to refer to the case of, I believe, the United States against Schettz in earlier case in the same District Court that this Court thought compelled the result have reached.
In a similar case, I believe, United States against Black I think in the District of Missouri.
These were cases, I don't remember the precise days but essentially this is what happened.
Allegedly, false returns were filed in January when they were doing April and that the indictment was brought six years later but after January or in February or March or April.
But before the sixth anniversary of the April 15th statutory deadline and the courts ruled on those cases and of course, the Government urged them to that the Government's -- the effect of this last sentence was to give the Government a little more than six years.
It was whenever the taxpayer filed his tax return plus the amount of time between that day and the statutory deadline of April 15 or whatever it might have been in the particular in this case.
And this is a reading that --
Justice Abe Fortas: Yes, but doesn't that then mean that the third sentence of 6513(a) has no meaning whatever.
Mr. Harris Weinstein: It means --
Justice Abe Fortas: Unless you give that third sentence the --
Mr. Harris Weinstein: I think it has this meaning, Justice Fortas in the criminal context.
In this case, one of the returns, I believe the Kimball return, was filed on August 12, 1960 where the extension of time, as I recall, went to August 15.
Because of that third sentence, the extension of time to August 15th had to be ignored.
If the indictment had been brought in on August 14th that would have been too late, whereas if in the absence of this third sentence, indictment could have been brought in at anytime up to August 15, 1966.
Justice Abe Fortas: I have this difficulty of fitting that into the language?
I don't say we can do that on the basis of the language here.
Mr. Harris Weinstein: Well, if I -- perhaps, if we took this example, assume that you have the extension of time to August 15?
It's a discretionary extension of time.
It's not a statutory deadline because it's a corporation the Commissioner has -- there are restrictions on his discretion to extend the time but it's still an extension.
That's not fully a matter of right.
The function of this last sentence, as we read it, is to define the phrase, “the last day prescribed”.
Our contention is that this sentence in itself is not a distinct rule of Section 6513.
That it defines the phrase, “the last day prescribed” found in the first two sentences.
Justice Abe Fortas: Well, I followed you when you are making that argument but the fact of the matter is that the statute of -- to pay the limitation begins at the date of the filing of the return, does it?
Mr. Harris Weinstein: Yes.
Justice Abe Fortas: That's your general rule?
Mr. Harris Weinstein: Yes, sir.
Justice Abe Fortas: Now -- and the 6531 in the criminal section says that you determine time by reference to 6513.
If you look at 6513, 6513 purports to describe the date for legal purposes and would be considered the date when the return was filed, is that right?
Mr. Harris Weinstein: Yes, sir.
Justice Abe Fortas: And it says -- you know the third sentence of it says that the date on which a return will be filed will be considered without regard to any extension of time granted and the fact that it's preceded by the phrase “for purposes of this subsection” and it seemed to me they help you at all.
Mr. Harris Weinstein: Well --
Justice Abe Fortas: Because for purposes of this subsection, clearly, is not limited to early return or advance payment of tax despite of studying, otherwise, there's been no purpose in that third sentence.
Mr. Harris Weinstein: Justice Fortas, I think there are two points you suggested in our -- I think our answers to them are independent and we don't necessarily lose on one because we lose on the other.
You've indicated that you disagree with our reading of this phrase “for the purposes of this subsection”.
Justice Abe Fortas: Well --
Mr. Harris Weinstein: Now, if Court --
Justice Abe Fortas: -- I'm trying -- I'm telling you what my problem is.
Mr. Harris Weinstein: Okay.
Well, this -- we understand this subsection to be incorporated in total in Section 6531.
We don't understand each sentence to be separately incorporated.
We assume that when 6531 talks of the rules of Section 6513 that means that the rules are those that are otherwise established by 6513 read by itself for its original purpose.
And now -- the only rules they state, in our view, apply only when a return is filed or the tax paid before the last day prescribed.
Because of the ambiguity of the word/phrase “the last day prescribed”, we read this last sentence as defined.
But let's assume that that's not the correct reading of that third sentence and I'd like to address myself to the consequences of it because I think that it brings into focus some of the difficulties with the District Courts ruling here.
If you eliminate this phrase “for purposes of this subsection”, all this third sentence says as in filing returns is concerned.
The last day prescribed for filing the return shall be determined without regard to any extension of time.
Now, how does that apply to this case to determine that the commission of the offense was earlier than the date on which the return was filed?
All this says is that the last day prescribed for filing shall be determined without regard to any extension.
The day prescribed for filing is in no way an element of proof in the offense charged in these two counts of the indictment.
The fact to be proved is that a false and fraudulent return was filed.
Until that return is filed, there's no offense.
No offense has been committed.
No prosecution could be brought.
The -- the logic of transposing these words into a general rule applicable to this case would be to say that these offenses were committed on May 15, 1960.
But any -- no conviction could have been brought under any set of facts existing on May 15 at least under the indictment word such as this one.
Now, I also think this brings to mind the way this rule has developed and I'd like to point to its origins, which are in two District Court cases involving a different charge, the charge of failure to file a return at all.
If you were dealing with that particular charge and if you excise for present purposes that first part of the statute, then you would have a rule that on its face could be applied to that criminal charge of failure to file because for failure to file, you must prove as an essential element the date prescribed for filing.
But the way the rule would be applied, as we see it, has an illogic that suggests that isn't what Congress meant.
Take an example of one of these cases, which I think is the Alper case in the District of New Jersey.
Here, a return was filed and then before the statutory deadline.
I beg your pardon.
No return was filed before the statutory deadline.
An extension of time was granted.
At the end of the extended time, still no return was filed and the case itself involved the pleading problem.
The -- and the question before the District Court was the offense of failing to file committed on the date that the return should have been filed under the statute or the later date under the extended time.
Now, the Court held, and we think erroneously, that the offense was committed at the time the return should have been filed under the statute.
And the reason that we think that's erroneous is because of this example and this is why we don't think that the statute can be read in the way you suggest, Justice Fortas.
Suppose a tax return is due on April 15th and instead of filing, the taxpayer asked and gets an extension to June 15th.
And on June 15th, he files his return and there's nothing wrong with it.
Under the reading of the court below, he could still be charged with the failure to file because he had not filed his return on April 15th when it was due under the statute without regard to any extension and we suggest that this is a simply not a logical reading of congressional intent unless there's a very specific language defining as a crime the failure to file in the presence of a duly granted the extension.
Justice Abe Fortas: Well, I don't -- that's not a very realistic illustration, is it?
Mr. Harris Weinstein: I'm sorry sir.
Justice Abe Fortas: That's a realistic illustration, is it?
Mr. Harris Weinstein: Well, it's a realistic in the sense that this is the contention that's been made.
It's the holding the Court has reached and it is a progenitor of the decision here if you trace these cases from their beginning to their end.
Language taken out of context in cases such as that has been relied on by the courts here and this -- one might not expect that contention but it has been made by defendants in defense, asserting that they should have been charged earlier than they were.
Justice John M. Harlan: What's the legislative history of the case?
Mr. Harris Weinstein: The legislative history on the criminal provision itself tracks the statute.
The legislative history on 6513(a) makes it clear that it was speaking of early returns and these committee reports are quoted.
One -- there's one in 1942 and one in 1954, I believe, and they're set out to pages 10 and 11 of our brief.
The first committee report when the language was first drafted has this sentence, “This provision,” speaking of the predecessor 6513(a), “this provision does not apply to taxpayers for given the benefit for an extension of time in which to file their returns and file the return before the last day of the extended period.”
I think that the appellees recognized it to reach their result.
They need a rather different reading for criminal prosecutions than you have in civil cases.
They suggest to somewhat different analysis than the courts have used.
They rely, instead of going just the third sentence, they say that the combined effect of the statute is to say that returns are to be deemed file on a statutory due date no matter when they're filed.
We suggest that this reading requires the word “before” be excised from the first two sentences.
They would read the sentence as though any return filed other than on the last day prescribed shall be deemed filed on that date.
And for these reasons, we suggest that the result below is not consistent with the statutory language and should be reversed.
Chief Justice Earl Warren: Mr. Ponder?
Argument of Lester M. Ponder
Mr. Lester M. Ponder: Mr. Chief Justice, may it please the Court.
First, I would like to restate the question as appellee sees the question before the Court.
Whether the offenses were committed on the due dates for filing prescribed by statute without regard to extensions of time for filing or on the dates the returns were actually filed.
It is the position of the appellees that the offenses were committed and thus, the periods of limitation begun to run on the due dates for filing prescribed by statute without regard to extensions of time for filing as held by the District Court.
Justice John M. Harlan: It is -- this is an indictment which calls on the filing of false income tax return.
Mr. Lester M. Ponder: Your Honor, these two counts involved two separate charges.
The first charge is that when Your Honor has just mentioned.
The other count is 7206(4) which is for assisting or aiding or bidding in the preparation of a false return.
Justice Byron R. White: So the offense you say is -- the offense is committed before the return has ever filed or before it's ever prepared?
Mr. Lester M. Ponder: That's correct, Your Honor.
We say that under the rule laid down by Congress in the statute --
Justice Byron R. White: Why would the Congress laid down a rule like that?
That's kind of silly, isn't it to say the offense is committed before it's ever committed?
Mr. Lester M. Ponder: Mr. Justice White, we say this is a statutory plan, first, and I think we all would agree on that, both sides that is, then we say that Congress can fix the date for the --
Justice Byron R. White: Five grounds of count, I just wonder why?
Mr. Lester M. Ponder: We -- why?
We think because Congress felt that there should be a policy of repose, as this Court has held in the Scharton case.
We feel that Congress also intended a uniform rule to apply.
And as I will develop, the uniform rule is accepted by the parties except in this one situation, that is, that the various possibilities, early returns.
As counsel has pointed out, the Government accepts the fact that the statutory due date applies there and that that often develops a result in a longer period than six years being permitted for the prosecution of the offense.
If no return is filed, no return.
The statutory due date, it is agreed by the parties --
Justice Byron R. White: So at file --
Mr. Lester M. Ponder: -- used the date excuse me, if it is filed on the due date itself, April 15, that would be, of course, the six-year.
Then this one situation where the extension is granted, we believe that Congress in the statute 6531, incorporating by reference the rules, and I want to get to that, the rules not 6513(a) but the rules of 6513.
We believe that Congress intended to set a one uniform date that everybody would know under the policy reposed for statutory grant is the fix date.
Justice John M. Harlan: Another way of putting your point, if I understand it is, that for the purpose of the statute on limitations, a return which is filed after the prescribed date within an extended period, relates back to the prescribed date, is that it?
Mr. Lester M. Ponder: Yes, Mr. Justice Harlan, that's our position, that it is deemed to be filed on the statutory due date as we think the statute says without regard to extensions granted.
Justice Byron R. White: And if in the unlikely event, successive extensions went beyond the limitations period where you could file a false return of impunity?
Mr. Lester M. Ponder: We think not.
We think if the extensions went, you mean additional of 60 days, 90 days or --
Justice Byron R. White: Yes.
Mr. Lester M. Ponder: Well, that the time for the six-year running would relate to -- would be the date to expire the statute for that return to have been filed, had it been filed on time without an extension granted.
Chief Justice Earl Warren: When could the grand jury first indict him?
Mr. Lester M. Ponder: After -- at anytime after, of course, obviously the offense was committed under our position on the statutory due date for purposes of fixing the period of limitations.
Chief Justice Earl Warren: No, that's what --
Mr. Lester M. Ponder: Your question is, the grand jury, of course, could not indict obviously until a false return had been presented to the grand jury, I would say.
Chief Justice Earl Warren: It couldn't be filed until after you had filed the false return.
Mr. Lester M. Ponder: I think that's correct.
For the period of limitations, we say as to when that indictment can be returned, which is our only question here.
The six years runs from the judge to do that but of course, on the indictment, you're correct, Mr. Chief Justice.
I mean in that feeling, that it would be not until the return was filed.
Chief Justice Earl Warren: Yes.
Mr. Lester M. Ponder: But I might say by the same token where no return is filed falsely, fraudulently, the six-year period there.
Chief Justice Earl Warren: That's another offense, is that it?
Mr. Lester M. Ponder: That's another offense from the statutory due date.
Chief Justice Earl Warren: But it could -- it could indict him then or when, from the final day if he had no extension?
Mr. Lester M. Ponder: From the statutory due date?
Chief Justice Earl Warren: Yes.
Mr. Lester M. Ponder: In any event, we say regardless of the extension and that's what these lower court cases as counsel has point out say the Alper case, involved the man who got an extension and strangely enough then didn't file at all.
You see falsely failed to file but those cases hoped that the running of the six-year period is only from the statutory due date.
For example, April 15 in the normal case of an individual on a calendar year basis.
Well, as --
Justice Abe Fortas: What's the rule -- what's the rule Mr. Ponder, if you know several purposes?
Suppose a tax return is filed and payment made before the statutory date for filing and the taxpayer later brings a suit for refund, is he entitled to interest on that, isn't he?
Mr. Lester M. Ponder: Yes, he would be entitled to interest and that would --
Justice Abe Fortas: And then from what date?
Mr. Lester M. Ponder: From that would be, I believe, on interest from date of payment.
Justice Abe Fortas: From the date of payment?
Mr. Lester M. Ponder: That's right.
But you see, for limitation purposes, he wouldn't have to bring -- filed his refund claim even though he'd file his return early until running from April 15.
But as I would like to point out, I'm coming to that portion of argument, we believe that the mistake of the Government's interpretation or one mistake at least is interpreting this provision in the criminal section and that's 6531, exactly the way they would interpret it, right or wrong solely as a civil statute.
And that is, I say, is a point a want to come to it.
Chief Justice Earl Warren: May I -- may I ask --
Mr. Lester M. Ponder: Yes, sir.
Chief Justice Earl Warren: -- you this.
Suppose a man got no extension at all and filed no return for five years and 11 months and he then became concerned for fear that he would be prosecuted for not filing it then.
So he filed a return then.
What would the statute limitations be on this particular crime with which this man is charged, one month?
Mr. Lester M. Ponder: We say it would be one month.
We say that it would relate back to the original date.
However, Your Honor, he would be subject to being indicted as we understand the code for a failure to file on time.
Chief Justice Earl Warren: But that's another crime.
Mr. Lester M. Ponder: That's another offense.
Then it's another offense but --
Chief Justice Earl Warren: But this crime -- this particular crime for this particular crime, his statute limitations would then be one month although --
Mr. Lester M. Ponder: We say it to be one month.
Chief Justice Earl Warren: -- he never could have been prosecuted under this statute before.
Mr. Lester M. Ponder: That's correct, Your Honor.
That's our position.
Chief Justice Earl Warren: And we did it on the last day, he never could be prosecuted.
Mr. Lester M. Ponder: Right.
I might say this, as Your Honor would perceive, its likelihood of waiting such a long period and then filing --
Chief Justice Earl Warren: I know it seems in this case --
Mr. Lester M. Ponder: But we say that would be -- that would be the result.
However, and not to labor it, there are many indictments as well known for failure to file on time.
That was fraudulently failing to file it on the due date.
It can be indicted of course one year later, two years later, three years later or up to the six years?
So I say that those indictments are returned in situations where no return was filed on time even though there could be a delinquent return filed several years later.
But the failure to file -- and perhaps a correct return filed delinquent two, three or four years later.
But the offense was failure to file a timely return with fraudulent intent.
In other words that you do not cure the fraudulent intent for failure to file by filing a correct return delinquent.
Justice Byron R. White: But what's the statute limitation for failure to file a return?
Mr. Lester M. Ponder: Six years from the due date, which we say is the rule in every situation and we believe --
Justice Abe Fortas: What if --
Mr. Lester M. Ponder: -- the Congress intended to establish a uniform rule.
Justice Abe Fortas: -- if a taxpayer did not get any extension of time, he would not get any assistance from the third sentence of 6513, would he?
Mr. Lester M. Ponder: We say that the rule would be the same whether he got -- yes, Your Honor, whether he got an extension or didn't get an extension.
Whether he filed late, is that without regard to statures --
Justice Abe Fortas: What is the basis of that?
What's the basis of that argument?
Mr. Lester M. Ponder: Well, we think that stems from the basic position that the offense was committed on the filing due date and --
Justice Abe Fortas: That is an offense of filing a -- of not filing at all?
In fact -- but suppose the offense for filing a fraudulent return, taxpayer did not get an extension of time from the bureau, from the Internal Revenue Service, then in the fifth year, he files a fraudulent return and then the offense of filing of fraudulent return that the period of limitations would not relate back, would it?
Mr. Lester M. Ponder: Yes, sir.
We say that it puts taxpayers who do not get extensions and file late of the same --
Justice Abe Fortas: Well, where do you get that?
That's why I don't --
Mr. Lester M. Ponder: No, because we read that -- we read --
Justice Abe Fortas: That certainly doesn't could follow from third sentence of 6513(a).
Mr. Lester M. Ponder: We read that, Your Honor, that --
Justice Abe Fortas: Does it follow from the third sentence?
Mr. Lester M. Ponder: We believe -- we believe it does without regard to any extension of time granted the taxpayer then as we --
Justice Abe Fortas: I'm saying he didn't get any extension of time.
Mr. Lester M. Ponder: So, we say that that doesn't -- the one who gets an extension is in the same footing under that provision as the one who didn't.
Justice Abe Fortas: Oh.
Mr. Lester M. Ponder: That we think that puts him on the very same footing.
Now, as I've pointed out, we believe that the scope of the application of the rules of Section 6513 must be determined by their meaning in their Section 6531 criminal context.
On the other hand, the Government's approach is to examine Section 6513 and more particularly Section 6513(a) independent of Section 6531.
And, further, the Government's approach is to interpret Section 6513(a) entirely in its civil context for which, of course, Section 6513 was drafted and enacted.
But now, we say, 6513 being incorporated by reference in the Section 6531 a criminal prosecution statute, we say, we submit that the appellant has misread its interpretation by applying the civil context entirely and omitting any interpretation that involves its criminal context that goes by this incorporation by reference.
These rules, we think, take on a new concern, namely, “determining the periods of limitation on criminal prosecutions”.
Hence, we think, any of the limitations imposed on these rules of Section 6513 in their civil meaning, which are not in accord with these purposes of Section 6531 must be disregarded.
Further, appellees urged that the rules -- that's the language -- rules of Section 6513 were intended to provide uniformity in fixing the period on limitation on criminal tax prosecution.
We believe that a reading of Section 6513 in its entirety now not 6513(a) alone because 6531 doesn't say 6513(a).
It says the rules of 6513.
We believe that that shows an intention by Congress to provide a uniform rule for determining the crucial question without regard to any extension of time granted.
Now, appellees urged that this provision in Section 6531 was new in the 1954 Revenue Code.
Therefore, up until that time, there would have been no dispute on this point as I understand the law that the Government's position would have been correct at time a return is filed, the date of it starts the statute of limitations running.
But Congress did something different when it enacted the ‘54 Code on criminal prosecutions by adding this provision this very last provision that's been quoted so often in 6531.
And we believe that thereby, the Congress intended 6513 to be read as it says, rules control the interpretation of criminal prosecutions.
Now, when Congress -- we believe Your Honors, when Congress has intended the result pressed by the Government here, it has directly said so.
For example, in subsection (a) of Section 6501 of the Internal Revenue Code, which sets forth the general rule of limitations on assessment and collections, it is provided that taxes “shall be assessed within three years after the return was filed whether or not such return was filed on or after or after the date prescribed”.
Hence, only when the Congress has clearly and expressly said for such rule as it did in 6501(a) should the construction urged by the Government be adopted that this is a criminal case, it is crucial in resolving the question here since the rules of Section 6513 are here part of a limitation statute for a statutory crime.
They are to be liberally interpreted in favor of repose as said in the Scharton case in 1932.
This means, we believe, that for the purposes of the rules of Section 6513 in their civil context that the purposes should be disregarded to the extent they are not in conformity with the criminal limitation purposes of 6531 and the general policy are reposed governing statutory crimes.
In support of our interpretation also, we would like to emphasize that it is not just the word “Section 6513” or “Section 6513(a)” with its varying civil associations and ramifications which is incorporated in the Section 6531.
It is instead, as Congress used the word, its rules that are so incorporated.
We believe that clearly, Congress advisedly used the phrase “rules of Section 6513” rather than simply saying Section 6513 or it could have said, as appellate contends, just 6513(a).
Because if we read all of that section, we believe that the interpretation will show that it is a broader concept than the narrow civil interpretation could be by picking sentence apart.
Now, we believe that the rules of this section relevant to this appeal are two.
First, the rule that is several times set forth in Section 6513, in (b) and (c) and not only in (a), that in certain circumstances, returns are deemed filed and certain payments made on the due date for filing or payment prescribed by statute.
Second, the rule, which is in the last sentence of subsection (a), which states that extensions of time are to be disregarded in determining the due date prescribed by a statute”.
This rule, we believe, puts persons charged with tax crime with respect to returns for which the extensions of time were granted on the same footing for purposes only of determining periods on limitation as those --
Justice Byron R. White: Well, Mr. Ponder --
Mr. Lester M. Ponder: Yes, sir.
Justice Byron R. White: -- I take it that the basic rule that you're dealing with is 6531 which sets the statute limitation?
Mr. Lester M. Ponder: That's correct, Your Honor.
Justice Byron R. White: It's either three or six years I the date of the commission of the offense.
Mr. Lester M. Ponder: You're right.
Justice Byron R. White: So your position does require us to interpret 6531 to mean that the offense is committed in your case on the date set for the filing of the return without regard for when it was ever filed?
Mr. Lester M. Ponder: That's correct, Your Honor.
Justice Byron R. White: And we are asked to say that the offense was committed at this earlier time solely by reference to the last sentence of 6513.
Mr. Lester M. Ponder: We don't say solely by reference, Your Honor.
That's where we disagree --
Justice Byron R. White: Because this is an awfully backhand way of saying that the offense will be deemed committed on the day set for filing the return.
Mr. Lester M. Ponder: Your Honor, your question perhaps illustrates one phase of this problem and that is the drafting of a civil branch on a criminal tree.
In other words, in 6531, we have the criminal tree, as you've said the three years or the six years punishment -- I mean period depending on the offense.
Then when Congress says, but we incorporate by reference the rules, the rules now whatever that interpretation should be into Sections 6531 and 6513 was enacted, both its predecessor in the ‘39 Code and in ‘54 Code for civil purposes.
I say we're now in drafting that on the criminal tree.
And we think that that has to be read as I've said in this interpretation and not in the solely civil.
Justice Byron R. White: But in any event, -- but in any event, we have to say the offense -- in that effect the offense was committed on a certain earlier date?
Mr. Lester M. Ponder: Correct, Your Honor.
Now, let me say this.
The Government has no difficulty in saying the deemed filed rule is the offense committed date for early returns.
They say that's what 6513 says and we agree.
We say abridged both ways is the difference between us.
They have no -- I say, no difficulty in criminal instruction.
Do you know the return is filed January 2nd, Your Honor?
The six-year period, the offense is not committed under the Government's position and we would agree until April 15 which is three-and-a-half months later.
Justice John M. Harlan: It was a little easier to think that way than to adopt it.
Mr. Lester M. Ponder: Your Honor, we believe that that's what the Congress intended of course, to make again a uniform date.
And we all know it's difficult to adopt as we strive constantly to interpret some of the statutory provisions and each time they are fragmented into a different due date or different effective date, we think that Congress just didn't intend that and when it intended it, it said so.
It has said it many other times.
I only cite one instance.
It can say so and it knows how to.
So, we think that when the Government argues on brief for example, that our position extends the statute of limitations, it doesn't extend it that's making the question.
The statute is six years but as Your Honors has said, Mr. White -- Justice White, six years from what date just as six years on an early return or six years where no return?
We believe that that --
Justice Byron R. White: No, but at least Congress said expressly that the cases of early returns, it shall be deemed to be filed on the last day.
Mr. Lester M. Ponder: That it went on and said but disregards extensions.
We believe the Congress incorporated the entire section and not only (a) but the others that all seem we think point to a uniform prescribed due date.
Justice Byron R. White: Well, what -- what is your understanding on the Government's argument as to the meaning of the last sentence of 6513?
What meaning do you think the Government gives to that?
Mr. Lester M. Ponder: Well, from the Government's argument, I would feel that they're saying that for purposes of the civil context entirely and reading it for purposes of this subsection.
I think it could be subject to that interpretation, for that civil purpose only and I think it also could be argued the other way.
I think it has -- it could be argued the other way.
I do want though to point out, before my time expires, one thing on legislative history.
Now, they're just -- there is no legislative history here that has any bearing on this question despite the statement of the appellant.
The reference by the appellant to the 1942 legislative history is not relevant here.
That was with respect to the predecessor of Section 6513 solely in its civil context, 12 years before this provision in question was put into Section 6531.
So Congress couldn't have had any meaning in mind with respect to the criminal prosecution period of limitations, 12 years before it enacted the very Section 6531, that we're here concerned with primarily, that is how long does the statute run.
There was no reference back.
There was no such provision or any incorporation by reference until 1954.
Secondly, of course, we think that that language in the congressional reports in the ‘42 Amendment dealt solely with its civil context again and could have had no bearing on the criminal.
And it has to be, we think, examined in the light of the criminal provision.
Now, we also would like to point out that again, back to as when is the offense committed, which of course is a crucial question or the crucial question.
The this offense is not -- as I said, statutory.
Therefore, the date and the way of committing it is not an innately human act but is a statutorily defined act, of course.
Therefore, we think, it is the most reasonable interpretation to say that the statutory due date deemed filed which admittedly and no one disputes it, applies at early returns, and would likewise apply to late returns.
We believe that the Government here is thus urging a dual standard result: the statutory filing date for returns filed early and the actual physical filing date for returns filed late.
And if the Congress had intended such a result, we believe, it would have said so.
On the other hand, appellees urged a single stand to prove, namely: that the period of limitations run from the statutory due date for filing regardless of whether the return was filed early, late or on the due date itself.
One prescribed date.
And we believe that when the Congress changed the applicable statutory provisions in 1954, it intended this single standard rule result.
In other words, we feel, that the appellant is reading Section 6531 as follows, the applicable provision.
We think he is reading it this way for the purpose of determining the periods of limitation when on criminal prosecutions with respect to early returns the rules of Section 6513 shall be applicable.
Now, Congress could have said so and it has said so in other sections of the code.
And we believe that it had an intended to say so here, it would have done it in plain, unmistakable light.
Thank you very much.
Chief Justice Earl Warren: Alright.
Mr. Weinstein, I think you have few moments if you wish it.
Rebuttal of Harris Weinstein
Mr. Harris Weinstein: Yes, if I may briefly make two points, Mr. Chief Justice.
First, in terms of what the offense is charged here are, they both go to the filing of false returns.
Section -- Count 4 of the indictment speaks of an attempt to evade and defeat tax by filing a false return.
Count 6, brought under another section of the statute speaks of, I believe, procuring the preparation and presentation of a false return.
The -- and presentation, of course, I assume is equivalent with filing a false return.
The other point is we do not suggest that 6513(a) for any purpose defines when the offense is committed.
It's a towing provision and nothing else.
It's a provision -- for example, in the case of the early return, under the appellees' reading, if the return were filed on January 15, no crime would be committed until April 15 and a prosecution brought in February or March wouldn't be possible.
We suggest that this is just another illogic in the reading.
When the -- when the crime is committed, when the offense is committed, it's determined by when the returned is filed.
And the sole effect of 6513 just as, say sections of the law, relating to the defendants out of the jurisdiction tows the running of the statute.
It is not define when the crime is committed.
Justice Byron R. White: Could you just say once again what do you think the point of the last sentence is in 6513?
Mr. Harris Weinstein: Solely --
Justice Byron R. White: And you're reading the statute?
Mr. Harris Weinstein: Solely to define the phrase “the last day prescribed” that appears in each of the first two sentences and to eliminate two of the four possible meanings from that phrase which in turn defines what is meant by “early return” or advanced payment.
And our submission is that that is all it means in its civil context.
It can't be no more or no less in its criminal context.
Chief Justice Earl Warren: Very well.