UNITED STATES v. BISHOP
Legal provision: Internal Revenue Code
Argument of Richard B. Stone
Chief Justice Warren E. Burger: We’ll hear arguments next in 71-1698, United States against Bishop.
Mr. Richard B. Stone: Thank you Mr. Chief Justice and may it please the Court.
This is a criminal tax case which comes here on a writ of certiorari to the United State Court of appeals for the Ninth Circuit.
The respondent in this case was indicted in the Eastern District of California on the charge of willfully filing income tax returns which he did not believe to be true as to every material matter, an offense punishable as a felony under Section 7206 (1) of the Internal Revenue Code.
The elements of the offense defined in Section 7206 (1) are that the defendant willfully makes and subscribes a document, that the document be verified under the penalty of perjury and that the defendant does not believe the document to be true and correct as to every material matter.
The evidence introduced at respondent’s trial showed that the respondent was a practicing attorney who owned a walnut ranch which was managed by his step mother.
During the three years in issue, 1963 to 1965 inclusive, respondent sent his step mother weekly checks which she deposited in a bank account for purposes of covering the operating expenses of respondent’s ranch.
Though there was evidence of several different types of improper deductions claimed by respondent on his tax return, the crux of the offense charged against respondent was that he took deductions twice for these operating expenses of the ranch.
What he did was, he deducted both the amounts which he sent to his stepmother and in addition, the amounts paid by her out of those very same funds to cover the ranch’s expenses.
Now, respondent’s defense at trial and the really only matter essentially in dispute in the transcript to this case focused primarily on his claim that he had no knowledge that the deductions were false and consequently, that he did not have the requisite intent, whatever that is and we shall discuss that at great length, necessary to support a conviction under 7206 (1) which as I indicated requires that the defendant commit the prohibited act willfully.
In addition however, the respondent requested that the jury be instructed that it could find him innocent of the felony set forth in 7206 (1), but guilty of what respondent argued was the lesser included offense of delivering to the revenue service a document known to be false or fraudulent which is punishable as a misdemeanor under Section 7207 of the code, which respondent argued requires a lesser degree of willfulness than does the felony charged.
The trial judge refused respondent’s request to charge to the effect that the jury could find him guilty of the lesser included misdemeanor and respondent was indeed found guilty as charged of the felony.
The Court of Appeals for the Ninth Circuit reversed and held that respondent was entitled to the lesser included offense charge for which reason it did not reach other issues raised on appeal by respondent, and it is from this determination of the Court Of Appeals for the Ninth Circuit requiring a retrial with a lesser included offense charge that the government has sought certiorari in this case.
Justice Harry A. Blackmun: Mr. Stone, just as a matter of curiosity, how do you explain the heavier penalty under 7206 (1), a felony charge, for mere absence of belief in the truth with by then as compared to the penalty for actual knowledge of falsity under 7207 made a misdemeanor?
Mr. Richard B. Stone: I think that is a very important question in this case Mr. Justice Blackmun to which I think the answer is quite simple.
It is certainly is an anomaly at first glance with respect to that.
The answer I think is that 7206, the felony covers only documents which are signed by the taxpayer, by the defendant under penalty of perjury, where as the misdemeanor offense refers simply to any document including for example a work sheet handed to a revenue agent and of course of an audit or --
Justice Harry A. Blackmun: Or state income tax return that he said here it is and --
Mr. Richard B. Stone: Well, an income tax return, if properly filed, and signed under penalty of perjury.
There is an overlap between the two offenses insofar as the misdemeanor also applies to documents signed under penalty of perjury but I think it is quite clear that more severe -- the distinction with respect severity of penalty is attributable to the fact that one section refers exclusively to documents signed under penalty of perjury and that is a reflection of a historical concept that a document so signed represents a more serious representation and probably in itself a more greater consciousness of affect of the filing of the document than thus simply handing for example a worksheet to a revenue agent.
Justice Harry A. Blackmun: Although it’s been that way a long time?
Mr. Richard B. Stone: Yes.
Justice William J. Brennan: Although I gather the prosecution could be only for a misdemeanor in the case of the signed document as well?
Mr. Richard B. Stone: That is right, that is right, it could be.
There is an overlapping element and which I think we are forced to conclude leaves a certain amount of prosecutorial discretion.
Justice William J. Brennan: We have any information about what the practice is?
Mr. Richard B. Stone: Yeah, the practice is ordinarily I am told with respect to income tax returns to prosecute for the felony, but that is -- there is the discretion exercised and what you would expect to be the factors playing into such a discretion or use.
Justice William J. Brennan: And I take it that with the discretion as exercised by the individual U.S. Attorney?
Mr. Richard B. Stone: By the individual US Attorney presumably in consultation with the fraud Section of the tax division and the Internal Revenue Service.
Let me point out that the discretion is actually not quite as the prosecutorial discretion involved in this overlap of offenses.
It's not quite as great as it seems to be, because there is no minimum penalty set forth in the felony provision, and there is of course somewhat higher maximum penalty both with respect to imprisonment and to fine, but there is no minimum penalty so that sentencing judge really is left with the great bulk of the discretion to determine what punishment to impose and in this case for example, at least the prison sentence was well below the maximum for a misdemeanor.
Justice William J. Brennan: But I gather other consequences there are other choices --
Mr. Richard B. Stone: Certainly.
Justice Byron R. White: -- between felony and misdemeanor besides the prison sentence?
Mr. Richard B. Stone: Certainly, yes, that is right.
Well, to return to the matter of lesser included offense, Rule 31 (c) of the Federal Rules of Criminal Procedure provides that the defendant maybe found guilty of an offense “necessarily included in the offense charged.”
Now, either the prosecution or the defendant may request that a charge of lesser included offense be given.
The prosecution may want the lesser included offense charged for the rather obvious reason that it may think that the jury could find the evidence insufficient to support the greater offense charged, but sufficient to support a lesser included offense.
The defendant’s reasons for wanting the charge of somewhat more subtle and complex, although I think and as a practical matter readily apparent, one might think that the defendant would reason that if the jury were to find him innocent of the greater offense, it would to his, the defendant’s advantage not to leave the jury with a lesser alternative ground for conviction, but in practice, it appears that in many cases, the defendants feel that it works to their advantage for the Court to give the jury a range of offenses varying in severity of which the defendant maybe convicted and I suppose quite frankly, the underlying assumption of that is that the jury may for reasons not entirely related to factual determinations that it is supposed to make in the case, conclude that it would prefer to see the defendant punished with a lesser offense which is not really properly within the jury’s domain.
Let me state that --
Justice Potter Stewart: Which is what?
Mr. Richard B. Stone: It’s not really entirely, analytically, but what the function of the jury is supposed to be --
Justice Potter Stewart: Not analytically but there has been a good deal of comment over the years but that is precisely the function of a jury, isn’t it?
Mr. Richard B. Stone: Well, I don’t—
Justice Potter Stewart: Or at least that this is a precise aspect of the basic function of a jury?
Mr. Richard B. Stone: Well, there maybe opinion to that effect Mr. Justice Stewart, but I think all the law on lesser included offense and with this, I think that the respondent does not anywhere disagree nor did the court below disagree, the lesser included offense doctrine is very precisely designed to avoid presenting the jury with a situation in which it has to and makes a choice on a non factual determination.
Let me state at the outset that though it is not entirely clear whether the government and respondent are in complete agreement as to every aspect of the general contours of the lesser included offense doctrine and I shall refer to a possible difference of opinion later on, with respect to the key issue which this case presents, I think it is quite fair to say that the government and respondent are indeed in agreement as to the general contours of a lesser included offense doctrine and disagree only as to the applicability of that doctrine to the specific felony and misdemeanor offenses set forth in Sections 7206 and 7207.
Both parties agree that if on the basis of the undisputed facts in this case, the jury could not find the defendant guilty of the lesser offense without also finding him guilty of the greater offense; the lesser included offense doctrine is inapplicable.
In other words, the doctrine does not apply for the purpose of giving the jury which in fact finds the defendant guilty of both offenses, discretion to and or a verdict only on the misdemeanor, that is not what the lesser included offense doctrine.
It's about regardless of what maybe argued should be the jury’s function in other context.
Where the lesser included offense doctrine does apply, however, is where the jury on the basis of the evidence might reasonably find the defendant not guilty of the greater offense, but guilty of the lesser offense.
Consequently in this case, there must be a disputed factual matter which if resolved by the jury in a certain way could render the defendant innocent of the Section 7206 felony, but guilty of the Section 7207 misdemeanor.
Now, it is undisputed here that the allegedly fraudulent documents were made and subscribed by the defendant under penalty of perjury, so that that basic distinction in these two statutes is not part of the factual, underlying factual dispute of this case.
What respondent does argue and this is the key problem in the case is that Section 7206 uses the word willfully in a sense different from the way that that word is used in Section 7207.
That the standard of willfulness necessary to support conviction of the felony is greater than that necessary to support conviction of the misdemeanor and consequently, that the jury could reasonably find that the defendant was innocent of the felony, but guilty of the misdemeanor on a lower standard willfulness.
So that his position depends essentially upon reading the word “willfully” in Section 7206 to imply a higher standard of culpability, if you will, a more evil motive in that same word implies in the next Section 7207.
And in spite of a usual presumption that the same word would not be used differently in two consecutive sections of the code defining very closely related offenses in a different manner, there is some superficial appeal to this argument as I have stated earlier for indeed, it may appear strange at first glance that these two Sections punish closely related offenses in a different manner, unless there is a higher degree of culpability in some way necessary to support a more severely punished offense, that is the felony.
And as I said, I think it’s perfectly clear that what that distinction is based upon is a historical distinction with some validity I think in terms of reality between fraudulent submission of a document under penalty of -- signed under penalty of perjury and simply a document which is not signed which is handed over to an official with the government in administrative capacity.
Now, having dealt with the reason why this immediate anomaly is really only superficial, let me turn to what I suggest is really the overwhelming reason and the overwhelming way in which respondent’s argument that willfully in Section 7207 means something less than it does in Section 7206 is plainly contradicted by the language of these two statutory provisions.
Section 7206, the felony statute requires that the defendant willfully file a document which “he does not believe to be true and correct as to every material manner.”
Section 7207, the misdemeanor statute requires that the defendant willfully file a document “known by him to be fraudulent or false as to any material matter.”
It is difficult to understand on what basis the Court below could have concluded and respondent can argue here in this Court that a statute which hinges liability on a finding merely that defendant did not believe the documents to be true could imply a greater degree of willfulness than does a statute which hinges liability on a finding that the defendant knew in fact that the documents were false and fraudulent.
Indeed, if either of these Sections implies a higher standard of willfulness or evil motive, it must be the misdemeanor statute which requires knowledge that the documents at issue are false.
Now, respondent argues in his brief without explaining the basis of his argument that these two formulations of the defendant’s state of mind are basically the same thing, i.e. that not believing the documents to be true and knowing them to be false are really not meant to imply meaningful distinction, and I think there is a rather significant irony to his arguing this because he contends on the one hand that two very differently worded phrases implying to the average reader quite a different meaning and I think meaningful in many criminal statutory contexts, that these two very differently worded phrases used in connection with closely related offenses in consecutive statutory sections are intended to mean the same thing.
While on the other hand, he argues that the word “willfully” also used in an identical manner, the same word used identically in these two provisions means something different in each of these two provisions and I think that that’s a rather strained version of statutory interpretation.
Justice Potter Stewart: Well, he does have the Court of Appeals going for him?
Mr. Richard B. Stone: He has the Court of Appeals going for him Mr. Justice Stewart in what I think is a just an explicable ground which is essentially that misdemeanor us per se --
Justice Potter Stewart: Willfully and misdemeanor makes something that --
Mr. Richard B. Stone: Willfully and misdemeanor means something different from willfully in the context of felonies, and I think that the decisions of this Court make it perfectly clear that though willfully, the word willfully may mean different things in different, the context of different factual --
Justice Potter Stewart: That it’s not a misdemeanor felony to that account?
Mr. Richard B. Stone: Its certainly not, that difference is certainly not based on some arbitrary distinction between felonies and misdemeanors and as I read the opinion of the Ninth Circuit that is virtually all that it says and quite conclusively in support of its holding.
Furthermore, apart from the fact that if there is any distinction at all between the uses of the word “willfully” in these two Sections, the higher standard is really under misdemeanor which acquires knowledge of falsity.
Let’s look at what respondent says is the substantive meaning of willfully and the misdemeanor charge.
He claims that the standard of willfulness necessary to support a conviction of the misdemeanor is satisfied in finding that the defendant acted capriciously or with a careless disregard and that it is not necessary “that the defendant formed the specific evil purpose of misleading the government,” this is the language of his requested charge and language basically adopted by the Court of Appeals.
It is I suppose somewhat paradoxical for the government to be in the position of arguing for a higher standard of culpability than does the defendant even with respect to a charge that has not been brought against this particular defendant, but frankly, we simply cannot square a standard of careless or capricious behavior and a lack of purpose to mislead the government with that requirement in Section 7207, that the defendant willfully submit documents which he knows to be false.
Justice William H. Rehnquist: Mr. Stone, I understand the respondent contends that another paradox is that the government on other occasions has urged much the same construction of the misdemeanor statute as the respondent now urges?
Mr. Richard B. Stone: Mr. Justice Rehnquist, the government has -- it is not clear that the government has ever urged in any tax misdemeanor statute a standard of mere carelessness or capriciousness and we deal with that in the reply brief in some detail when we replied ti his brief -- to his opposition to our petition, but in any event, the only statute which he even claims that we have ever applied a standard of carelessness or capriciousness to and the only misdemeanor tax statute is Section 7203, which deals with willful failure to file required documents, a return of filed documents, and an omission, a willful omission of a required act may involve a different and lower standard of evil intent or willfulness than does submission of a known fraudulent document.
So that really, we are not trying to apply across the board in any context a universal standard of what the word “willfully” means.
That depends in each instance upon an analysis of the factual background that the statute is directed towards.
Indeed, this Court has specifically rejected the argument that the misdemeanor set forth in section 7207 can be committed merely by carelessness and without conscious knowledge of the wrongfulness of the defendant’s act.
In the sense, Sansone case at 380 U.S., the defendant who was tried for the felony charge of willfully attempting to evade taxes which is defined in Section 7201 and he requested there as he or a lesser included offense charge to the effect that he could be convicted if it were found that he did not have the requisite intent for the felony of willfully attempting to evade taxes.
You could still --
Justice Thurgood Marshall: But sadly with two felony statutes?
Mr. Richard B. Stone: One felony and two misdemeanors I think Mr. Justice Marshall.
Justice Thurgood Marshall: But it was two felony that I know wasn’t it?
Mr. Richard B. Stone: I think the only felony involved was 7201.
There were two misdemeanors, I think 7203, the failure to file was also involved, but I think what he had asked for in Sansone was a charge that instead of the felony, he could be charged with either of two misdemeanors, but in any event, I don’t think that’s important for our purposes here because the key issue in the Sansone is that the court denied him a lesser included offense charge and stated quite specifically that at least with respect to the standard of willfulness that the standard of willfulness in both the felony 7201 and the very misdemeanor at issue here required some sort of willful knowledge and evil intent and it's quite, the court quite specifically rejected there any notion that Section 7207 can be satisfied by a mere showing of carelessness or capriciousness.
Furthermore, I think that the Sansone opinion which was really not dealt with by the Ninth Circuit in a meaningful way precludes the Ninth Circuit’s across the board holding that the standard of willfulness in tax misdemeanors is necessarily less than it is for tax felonies because Sansone said that the standard of willfulness with respect that tax misdemeanor, the one at issue here and the tax felony at issue there, were indeed exactly the same.
Finally, we make an alternative argument that is related in several respects to our contention that the misdemeanor in Section 7207 does not import a lesser degree of willfulness than does the offense set forth in 7206 but which focuses on the applicability generally of the lesser included offense doctrine itself.
This is a slightly different argument though based upon many of the same underlying reasons.
At common laws, we point out in our brief, the lesser included offense doctrine was restricted to situations in which the misdemeanor was entirely included in the statute, that is in which there was no element necessary to sustain a conviction of the lesser offense which was not necessary in addition to sustained conviction of the greater offense.
This strict version of the lesser included offense doctrine appears to have been incorporated in the federal rules of criminal procedure for Rule 31 (c) requires that the defendant maybe found guilty of an offense necessarily included in the offense charged.
Now, there maybe in some jurisdictions have allowed slight deviation from that rule and respondent implies in his brief that he feels that some of the Circuit Courts have implied by way of dicta that there maybe situations in which the federal courts could allow a lesser included offense charge even though that could conceivably be circumstances in which the defendant could be found guilty of the greater offense without being guilty of the lesser offense.
And I don’t think we have to get into the precise contours of the lesser included offense doctrine.
I think whatever justification there maybe for slightly more liberal application of that of this doctrine, it should not be applicable here.
For even if contrary to our contention, the Court were to find that the word “willfully” in Section 7206 means something more than it does in Section 7207, the misdemeanor under Section 7207 would still not be a lesser included offense within the felony under Section 7206 because knowledge of falsity is a key element of the misdemeanor, but is not an element of the felony.
Even if willfulness has no relationship by some strange court to the states of mind that are defined in these very statutes, it cannot be denied on the language of the statute that there is an element, a key element under misdemeanor, an element which was in actual dispute in this case presents the respondent’s defense rested almost entirely upon his assertion with respect to his state of mind, there is a key element of the misdemeanor which is not necessary to support the felony and consequently under even a slightly more liberal reading than is traditional and then is implied by the federal rules of a lesser included defense doctrine, this offense, this misdemeanor is not a lesser included offense within the broader scope of this felony because there is a key element to it, knowledge of falsity that is not necessary to support the felony.
Justice Potter Stewart: How about the, did you rely on the Berra Case?
Mr. Richard B. Stone: The Berra case.
Justice Potter Stewart: B E R R A, I guess it’s pronounced Berra, in which apparently the same elements were eventually needed.
He could’ve been charged under the misdemeanor or the felony, but he was charged under the felony and the Court in an opinion by Justice Harlan said that the Court was not required to charge him on the lesser offense even though they apparently covered exactly the same thing.
Mr. Richard B. Stone: Well, Mr. Justice Stewart, that’s the point --
Justice Potter Stewart: Whether the same appear in much longer that --
Mr. Richard B. Stone: That is the point here, but there is a rather strong dissenting opinion in that case.
Justice Potter Stewart: Yes, I know but all two justices is trying to --
Mr. Richard B. Stone: Justice Black and Douglas I think dissented in that case on the ground that they feel that a statute is ought not to be interpreted if possible to render the prosecution with any degree of discretion to choose between which offense when the underlying commissions are identical.
Justice Potter Stewart: I suppose boiled down and analyzed, this simply upheld prosecutorial discretion didn’t it, the Barre case?
Mr. Richard B. Stone: Yes it did, it did.
Justice Potter Stewart: Although it’s not put in quite for those terms?
Mr. Richard B. Stone: That is right and that was the ground, but that was the ground that the dissent put it on, but I don’t think that the holding in that case and the majority opinion in an any way contradicts our --
Justice Potter Stewart: If anything, it helps you.
Mr. Richard B. Stone: It helps you, yes.
It helps us, yes, and it certainly does not contradict our assertion that and really, I don’t think this in contention, I don’t respondent basis is argument at all upon --
Justice Potter Stewart: Attacking that.
Mr. Richard B. Stone: -- general attack of the lesser included offense doctrine.
If the two offenses, if it is obvious that the two offenses have to be identically determined, then there is, it is perfectly clear that the lesser included offense doctrine is not applicable and what Justices Black and Douglas resented in that case in their dissent was that statutes are not to be interpreted to overlap to too great an extent because it is improper for the prosecutor to have excessive discretion that is ordinarily the domain of the judge.
Chief Justice Warren E. Burger: In the Sansone, didn’t the opinion of Justice Goldberg indicate that there was an important judicial policy not to give the jury too much choice on the selection of the crime and therefore the penalty?
Mr. Richard B. Stone: That is right.
What the Sansone case specifically said was that the domain of the jury was only to choose between offenses on the basis of determining the factual background that would support one offense to the other but not to find that the defendant was guilty of both offenses and then to go ahead and choose which one to find him guilty of, that is precisely what’s Sansone said.
Chief Justice Warren E. Burger: And that would permit the jury to be picking the sentence in that matter?
Mr. Richard B. Stone: That’s right.
That would permit the jury to invade the domain that is everyone agrees it’s proper for the judge and in some circumstances, it's proper within limited bounds for the prosecution.
I would like Mr. Chief Justice to reserve the small amount of time I have left for rebuttal.
Chief Justice Warren E. Burger: Very well, Mr. Johnston?
Argument of J. Richard Johnston
Mr. J. Richard Johnston: Mr. Chief Justice and may it please the Court.
I’d like to refer first to the matter of the Barre which was just mentioned.
Now, that case was one which held in fact Section 3616 (a) which is the predecessor Section to the misdemeanor section that we’re concerned with here, namely 7207, was in fact coextensive with a felony Section, but in the following year of 1957, this Court decided the Achilli case in which it then held a 3616 (a) was not applicable to income tax returns at all and it was not until the code was revised in 1954 and the substance of 3616 (a) then came back into the income tax Sections in the form of 7207 with which we’re concerned today that that Section again became applicable to income tax returns.
And part of a holding in the Sansone case says that 7207 does apply to income tax returns.
What I should like to do with Court’s permission is to deal first and rather briefly with two of the points that counsel has made and then address myself to what I really consider to be the heart of the problem which is presented here.
Both in the government’s brief and in the argument today, the government has argued that the instructions that we requested in which we’re not given by the trial court were improper because they stated a standard of willfulness in connection with 7207, a misdemeanor offense that really amounts to nothing more than negligence.
Our answer to that is really in two parts I suppose.
The first is that I want to make it quite clear that I do not argue to this Court but that is a proper standard of willfulness under 7207 or under any criminal statute.
It’s the standard that had been adapted by the Ninth Circuit in which our trial took place and in framing proposed instructions for the trial judge, my aim necessarily was to propose instructions that would meet the law as it had been held in the Ninth Circuit and I was successful at least to that extent.
Our position is, however, that the question is raised at this stage of the proceeding, is not whether the instructions that we requested correctly stated the law, but whether the instructions that were actually given by the trial judge correctly stated the law.
We argue in our brief that under the rules and under the decided cases, we’re not required to propose instructions to the trial court.
Our position is taken if make timely objection to the instruction that are given or to the omission of instructions that we think should be given.
If we fairly and correctly state the ground for the objection, our success or failure later on should not depend upon whether the instructions that we then drafted and proposed to the trial judge meet the task that this Court may finally determine to be correct.
This we think is true under rule 30 of the Rules of Criminal Procedure.
We’ve cited in our brief also the case of United States versus English and an excerpt from volume eight of Moore’s federal practice.
So that my position here today is not that the standard of negligence or something that approaches negligence as it has been formulated and applied in the Ninth Circuit, is necessarily a correct standard of willfulness under this misdemeanor Section or under any misdemeanor Section.
Our position is simply that the word “willfully” as used in the two Sections of which we’re concerned in this case, namely 7206 and 7207 has a different meaning in those two Sections and our argument is that it means something less in 7207, a misdemeanor Section, than it means in 7206, the felony Section.
And in capsule form, our argument is that if we're correct in that contention, then we were entitled to the lesser included offense instruction and was error on the part of the trial court not to give such an instruction.
Chief Justice Warren E. Burger: But now, that argument, the argument that the same word might have different meanings, it has a lot of force in statutes that are either unrelated or separated, either in subject matter or either the number of pages and the time of the enactment, but when they’re in two successive paragraphs, isn’t that a little bit more difficult burden?
Mr. J. Richard Johnston: Perhaps to all Mr. Chief Justice but this --
Chief Justice Warren E. Burger: This Court -- most subjects at the same time are they not when the draftsmen are working on it?
Mr. J. Richard Johnston: They’re not necessarily thinking I believe that the word has identical meaning in the two sections and I would suggest that this Court in the Spies case, however it is pronounced, in 1943 focused on length, referring back to the older case of Murdock in which the Court in its opinion had a long paragraph to the effect that the word “willfully” is a word of many meanings and as listed a variety of meanings that maybe given to that word.
These are both tax cases, these are both criminal tax prosecutions.
And in the Spies case is a matter of fact, the Court suggested that the word might have different meanings with respect to two portions of the very same Section.
That Section at that time was 145 (a) under the 1939 code under the present 1954 code that becomes 7203 and the Court said that it might mean, the Court would assume that perhaps the word meant something more when connected with a willful failure to pay than when used in connection with only a willful failure to file a return.
So that I think in a general sense at least, there is a good deal of authority in the decisions of this Court for the proposition first that the word “willfully” does have different meanings, that it does not invariably mean the same thing and that it may indeed have different meanings when used in different Sections relating to criminal tax offenses.
Justice Thurgood Marshall: What’s inconsistent with Congress having said the way you willfully file a paper which you don’t swear to, it’s a misdemeanor and when you willfully file a paper which you swear to, that’s a felony.
Mr. J. Richard Johnston: Well, I don’t say that is necessarily inconsistent Mr. Justice.
I didn’t think so --
Justice Thurgood Marshall: What do you think “willfully” means in the misdemeanor Section?
Mr. J. Richard Johnston: My own position --
Justice Thurgood Marshall: You said it did, you’re not using the negligence now, are you?
Mr. J. Richard Johnston: No, I agree with --
Justice Thurgood Marshall: Once you have the negligence then what do you have?
Mr. J. Richard Johnston: I agree with the government that the word “willfully” when used in any criminal Section should mean at least intentionally and deliberately.
This I think is a kind of minimum meaning for the word willfully.
Let me suggest that the word which we said in our brief that there are three rather commonly or frequently accepted meanings of the word and perhaps four.
The lowest level of culpability would be the Ninth Circuit definition of willfully in misdemeanor cases.
The definition is given in the Ninth Circuit opinion in this case where they say it may mean no more than without reasonable cause or capriciously or with careless disregard of ones obligations or whether one has the right so to add, that is a very low level of culpability.
The next level up the scale I should think would be a level which would include at least intentional and deliberate action, and as I have pointed out previously, I make no argument for the Ninth Circuit level but I think that the word might very well be held to mean intentionally or deliberately under 7207 and then under the felony Section 7206, the Court might hold as many Courts have held, many Circuit Courts that there is an added requirement in the felony Section, not only must the act be done intentionally and deliberately, but it must be done with a bad purpose or an evil motive, some additional state of mind, some additional intent that super impose.
Justice Potter Stewart: Right.
Justice Thurgood Marshall: Like taking an oath?
Mr. J. Richard Johnston: Well, perhaps Mr. Justice.
Justice Thurgood Marshall: Well, isn’t that the difference between the two Section?
Mr. J. Richard Johnston: The fact is that in our factual situation where we’re talking about income tax returns and in any case where we’re talking about tax returns, the other portions of the law and regulations require that the returns be made under penalty of perjury.
Justice Thurgood Marshall: Well, that’s what I said.
Mr. J. Richard Johnston: And the declaration stated right on the return --
Justice Thurgood Marshall: But there is – here isn't the difference between the two Sections?
Mr. J. Richard Johnston: But in the case where we’re talking about income tax --
Justice Thurgood Marshall: Willfully file is, my first question was the difference between willfully file in a piece of paper that does purport to be an oath and willfully filing on a piece of paper which isn’t oath.
Willfully would mean the same in both statutes and yet Congress could make a distinction between the two.
Mr. J. Richard Johnston: Mr. Justice, I think it could mean the same, but my argument to the Court is that it should not be construed by this Court to mean exactly --
Justice Thurgood Marshall: Then you don’t think Congress did make that distinction?
Mr. J. Richard Johnston: I think the Court now has the job of deciding what Congress’ intent was and if I may quote from the Court’s statement in the Achilli case which I think is most appropriate here, this Court said in the Achilli case in 1957, “Our duty is give coherence to what Congress has done within the bounds imposed by a fair reading of legislation.”
So here, we have a group of Sections that fall in the same portion of the Internal Revenue Code.
The Sections that we’re concerned is today are two of those Sections.
There are others that precede and follow.
My argument to the Court is that in connection with the filing of any kind of a tax return which is required by other provisions of law to be filed or to be made under penalties of perjury so that, that distinction doesn't apply when we are talking about any tax return.
It does not make much sense and it does not result in a rational construction and interrelation of these Sections to conclude that we have two sections there in which at least with respect to tax returns prohibit precisely the same offense and yet --
Justice Thurgood Marshall: Well I understood that the second to misdemeanor was limited to tax returns, it was any tax information you might give?
Mr. J. Richard Johnston: That is correct, that is correct Mr. Justice.
Justice Thurgood Marshall: Well, that doesn’t require an oath.
Mr. J. Richard Johnston: No sir, but the case that we’re concerned with involve tax returns and tax returns are required to be made under penalty of perjury and this Court has held that 7207 applies to the filing of income tax returns so that my argument to the Court is that we do not achieve the kind of coherence that the Court seeks to give to acts of Congress.
If we arrive at a conclusion that we have two Sections which at least with respect to income tax returns prohibit precisely the same act and in the one case, the act is punishable as a felony by imprisonment for not more than three years and a fine of not more than $5000, and in the other case, punishable only as a misdemeanor for the maximum punishment of one year or $1000.
If those two Sections are to be given any kind of rational coherence as part of a total system of sanctions of which this Court has spoken in the past, that it seems to me that it is very reasonable to argue that the difference must be that the requirement of willfulness in the misdemeanor Section is something less than what is required in the felony Section.
And if this Court arrives at that conclusion regardless of how the term is to be defined for the two purposes, if it means something less in the misdemeanor Section than it means in the felony Section, then my argument is that Mr. Bishop was entitled to a jury instruction on the subject of lesser included offense.
Justice William H. Rehnquist: Mr. Johnston, just as matter of English usage, I take it willfully is an adverb and what does it modify under your construction of the two statutes other than the verbs deliver or disclose in 7207 or make and subscribe in 7206?
Mr. J. Richard Johnston: Well Mr. Justice, I think those are the verbs that it modifies or describes.
In 7206, it’s in terms of any person who willfully makes and subscribes any return in so forth.
Willfully describes or modifies, I take it making and subscribing.
Justice William H. Rehnquist: So the variations in the definition of willfully that you adverted to go to the state of mind with which one performs this act?
Mr. J. Richard Johnston: Precisely.
I think when we talk about willfulness we are talking only about state a mind.
We’re talking about intent.
We’re talking about some degree of specific intent as distinguished from some lesser kind of intent and that is the whole question I think, how this word “willfully” is to be defined as a description of someone’s state of mind at the time they performed an act.
Justice William H. Rehnquist: But then under the Ninth Circuits construction, a person who carelessly or inadvertently delivered a return would be guilty which really doesn’t make much sense at all if he didn’t actually intend to deliver the thing.
Mr. J. Richard Johnston: I hope I have made it clear, I have some difficulty with that position also Mr. Justice, but I would point out that 7207, the misdemeanor Section by its language applies only to returns, documents and so on known by him to be fraudulent or false so that there is a requirement of knowledge that the document is false which is part of that Section.
And the word “willfully” then, I take it, describes the state of mind of the, or the additional state of mind perhaps of the taxpayer when he files his return.
The requirement of knowledge is in that Section regardless of the meaning of the word willfully.
Justice William H. Rehnquist: Well then, doesn’t willfully almost boil down to whether or not the act of delivery is required to be intentional or not?
Mr. J. Richard Johnston: Well, I think that is the question and my suggestion is that perhaps any definition in terms of intentional action is a proper definition of the term in this misdemeanor Section.
There is another word that might be suggested which I think the Courts have not used particularly, but one might define the term somehow in terms of recklessness or recklessly doing something.
Justice William H. Rehnquist: But reckless means not actually intending, but grossly heedless of the consequences or something like that, doesn’t it?
Mr. J. Richard Johnston: Perhaps it’s only a kind of gross negligence.
We get degrees of meaning there.
Justice William H. Rehnquist: I can see how you can describe someone driving recklessly, but I have great difficulty in seeing how you can describe somebody as recklessly delivering or disclosing something to the secretary knowing it to be false?
Mr. J. Richard Johnston: Well, let me suggest a possible factual situation which might indeed have been the situation here.
A person prepares a tax return using in part information that someone else has worked up, that was the situation here.
Mr. Bishop used lists of itemized expenditures and then the total of that list was put into the return as a deduction for farm expense.
Conceptually, his state of mind may have been that although he did not check through the list and he testified that he did not and he did not go through and identify each item which was in the list, he might have well had some reason to suspect that there were items in that list that were not properly deductible and yet without checking it out, without determining whether the list contained only deductible items, he nevertheless put the total amount into return and took the deduction.
Justice William H. Rehnquist: But that would go to his knowledge of falsity, not to the intentional character of his actual filing of the document, wouldn’t it?
Mr. J. Richard Johnston: Well, Mr. Justice, when I use the term recklessly, I mean perhaps that he proceeded without taking some further steps to satisfy himself of the accuracy or inaccuracy of the return which perhaps he should have taken.
To me, that is a kind of recklessness.
Maybe it’s not a very good word but I suggested as a possible one at least.
A reference has been made to the Sansone case.
I’ve difficulty to some of these cases, and I’m never quite sure how these gentlemen pronounced their own names.
The Sansone case is one which of course the Court must consider and obviously, it posses some problems for us.
Sansone was a case where the, in the first place where the taxpayer was charged under 7201, which is a felony Section, the Section that used to be used mostly I think attempted evasion, a willful attempt to evade or defeat tax or the payment thereof.
That is not the Section that we are concerned with here so that there is at least that basis of distinction, the felony Section that we are dealing here, the 7206.
In that case, the taxpayer requested instructions to the jury that they might find him guilty of a lesser included offense under either 7203 on the basis of a failure to file, a willful failure to file which is a misdemeanor or 7207 which is the misdemeanor Section that we’re concerned with here, namely filing of false return.
The strict holding of the case, oh, let me state another fact.
Prior to the trial apparently when the taxpayer was being examined by the agents, he had explained that he had capital gain on some sales of land that he knew he knew he had to gain and that he deliberately did not include the gain in his returns because, I am going to start again.
At the trial, this was his explanation, that he had the gain, that he deliberately omitted it from the returns because he thought that he didn’t have the money to pay the tax and he intended at a later date to report the gain and pay the tax.
That was one explanation.
Another explanation he had made was that he anticipated some expenses in connection with a creek that bothered the property he had sold and it was his thought that those expenses might very well offset the gain on the sale so that he would wind up without any gain.
And the precise holding of the Sansone case as I understand it, is simply that the explanation that he intended to report the gain and pay the tax at a future date would not vitiate willfulness and this is the Court’s term under any of the three Sections.
The Court said “That’s not a defense.
That does not negative willfulness under any of the three, 7201, 7203, or 7207.”
Now, the Court in an opinion written by Mr. Justice Goldberg went on to make a statement which I think is strictly dictum, but which quite frankly gives us some difficulty in which Mr. Goldberg apparently assumed that the meaning of willfulness was the same in each of these three Sections and also that the meaning of willfulness was to be equated simply with knowledge.
This is done without any discussion of the argument, the kind of argument or the issue that we raise in this case, There is nothing in the opinion to suggest that this issue that we now raise was ever briefed or fully considered by the Court in the Sansone case beyond what’s in the opinion, I don’t know for a fact what happened, but that language is troublesome.
And I think at least the apparent assumption that the word “willfully” meant simply knowledge is contrary to a great deal of other law in this area where the word “willfully” at least in the felony Sections has been held to involve not only knowledge or deliberate action, intentional action, but also this additional state of mind which involves a bad purpose or an evil motive and I think that the, it is quite apparent that the law on this point badly needs to be clarified.
Justice Potter Stewart: Do you think it can be clarified much beyond what was said in that case several years ago at Spies or Spies, like you, I don’t know how this people really pronounce the names?
Mr. J. Richard Johnston: I think it badly needs to be clarified Mr. Justice.
Justice Potter Stewart: Well, the point is, willfulness, that means variety of different things depending on its content, isn’t it?
Is that all you can say, isn’t it?
Mr. J. Richard Johnston: But here Mr. Justice, we have the precise question as to what it means in these two particular Sections and I think at least, it has to be clarified to what extent.
We feel that the Spies case helps us because in Spies, the Court held that it would not reasonably conclude that the commission of a misdemeanor or failure to file plus the misdemeanor of failure to pay together without anything more constituted a felony of willful attempt to evade a defeat.
And the Court went on then to speak not in terms of the meaning of willful, but in terms of the meaning a willful attempt and I emphasize the word “attempt” because the real holding of the Spies case is that in addition to a willful failure to file and a willful failure to pay, both of which are misdemeanors, there must be some further acts, some affirmative act which meets the Court’s definition of a willful attempt.
In most of the cases that we have, that willful attempt consists in filing a false tax return, that is the act.
Justice Potter Stewart: Sometimes willful can just mean purposeful or not accidental and other times it imports, it’s been mens rea and it really, it always depends on the context?
Mr. J. Richard Johnston: I think that is correct Mr. Justice and of course our argument to the Court is that it means different things and the misdemeanor as it means in the felony Section and that only by giving it a different meaning, the Court really rationalized these Sections.
Justice Potter Stewart: Well, how about Barre?
There was a misdemeanor statute and a felony statute that everybody seem to agree covered exactly the same thing.
Mr. J. Richard Johnston: That was the Court’s holding.
Justice William H. Rehnquist: That is right.
Mr. J. Richard Johnston: And for that reason, the Court said in that case the taxpayer was not entitled, to a lesser included offense instruction, but then the next year in Achilli, this Court held that the misdemeanor Section that was involved there, 616 (a) under the 1939 code, actually did not apply to income tax violations and that ruling was explained in Sansone on the ground in part that this Court would not presume that Congress would enact two Sections covering the same area, one of which is a felony and one of which is a misdemeanor and it was subsequent to Achilli then that, that section was re-enacted in 7207 in the 1954 code and although one might have suspected at that point that it started or forgotten Section that somehow Congress really wasn’t focusing on it, it’s important to know I think that the section was subsequently amended by Congress in 1963, 7207 was amended by adding the entire second half of what now appears in that Section, it was subsequently amended still further by a further amendment to that portion of the Section.
So, it’s definitely there.
It's definitely part of some kind of a total system of sanctions.
Justice Potter Stewart: That was the section involved in Achilli?
Mr. J. Richard Johnston: It is the successor to the Section involved in Achilli.
Justice Potter Stewart: Yes.
Mr. J. Richard Johnston: It was changed by removing the language about attempt to evade or defeat which had originally appeared in 3616 (a), so that was taken out and then the Section was moved in to the income tax sections were it now is in the code and in Sansone, this Court held that it applied to income tax cases.
So there is no question about its applicability and the only question then is if both of these Sections prohibit the filing of false returns and make criminal offenses of the filing of false returns, does the word willfully have an identical meaning in both Sections.
And if it does not, if it means something less than the misdemeanor that it means in the felony, then we say, we were entitled to have the instruction and the Ninth Circuit should be affirmed regardless of whether this Court agrees with the particular definition of the Ninth Circuit as given to the word generally in tax misdemeanor Sections.
Chief Justice Warren E. Burger: Thank you Mr. Johnston, you have a few minutes left Mr. Stone.
Rebuttal of Richard B. Stone
Mr. Richard B. Stone: Thank you Mr. Chief Justice.
I have nothing especially new to say except that to sum up.
It seems to me if there is, I have perceived in the course of respondent’s counsel’s argument an underlying dissatisfaction with the material involved in this case.
It is that which I had anticipated and it centers on the rather unsatisfactory and illusory meaning of the word “willful” in the context of all these criminal tax statutes and it becomes especially difficult to pinpoint precisely what Congress meant by the word willful when we deal as we do here with two statutory provisions that define the basic state of mind required to commit the offense entirely apart from using the word willfully.
One of these statutes defines the basic state of mind involved in the commission of the offense in terms of lack of belief that the knowledge contain that the document is true.
The other defines that state of mind in terms of a knowledge or falsity of the underlying information.
I think that the likelihood is that the word willfully is probably close to superfluous in both of this statutes since the underlying state of mind is defined, but the Court needn’t reach the metaphysical possibilities of what willfully can mean precisely in each of these contexts.
It is sufficient for purposes of this argument to observe that the basic state of mind necessary to support the misdemeanor is a more serious culpable standard, knowledge or falsity, then is the state of mind necessary to support the felony.
And I’ve yet to perceive either from respondent’s presentation or from the Court of Appeals any possible way of holding that lack of belief can be a greater culpable standard in itself and imply greater degree of willfulness than can the knowledge of falsity.
I perceived in Mr. Justice Rehnquist’s questions if I’m not mistaken, some possible attempt to focus the word “willfully” not on that state of mind as described in the statute, but on the very act of delivery or act of making and subscribing itself and I cannot understand what might be involved in a distinction of that nature.
I suppose it is perfectly clear with or without the word “willfully” that these statutes do not apply unless the defendant signed the document consciously, voluntarily and without coercion or that he submitted and filed the documents with a similar voluntary state.
But I would submit the basic state of mind and intent reflected in these statutes is in the lack of belief, of truth required by the felony offense and the knowledge of falsity required by the misdemeanor offense and that it cannot be said that the felony in that case requires a greater degree of willfulness than the misdemeanor.
Chief Justice Warren E. Burger: Thank you gentlemen.
The case is submitted.