GARNER v. UNITED STATES
Legal provision: Self-Incrimination
Argument of Burton Marks
Chief Justice Warren E. Burger: We will here arguments next in 74-100 Garner against the United States.
Mr. Marks, you may proceed whenever you are ready.
Mr. Burton Marks: Mr. Chief Justice and may it please the Court.
In this case, Mr. Garner submitted some income tax returns for the year 1965, 1966, and 1967 in which he stated certain information which turned out to be highly incriminating to him in a trial which involved some activities, allegedly engaged in 1968.
In 1965, he stated his occupation as required by the tax return to be a professional gambler.
In 1966 and 1967, he stated he was a horseman, but his wagering income was or his total was stated to be as a result of wagering income.
Chief Justice Warren E. Burger: Would he have complied with statute if he had inserted in the year in question, term self-employed speculator?
Mr. Burton Marks: Probably not.
Would -- it would depend because one of the interesting propositions with respect to income tax reporting is when you define what you are or where your income came from, you also define the consequences of what types of deductions you can use.
Therefore, if Mr. Garner had denied he was speculating on this, he defined himself as a self-employed bank robber, he may have been able to take depreciation for his get-away car, whereas if he is a gambler, the only thing that he could take is a deduction against wins would be losses.
Chief Justice Warren E. Burger: How about tips?
The tips he raises, would that not be on your theory, would that not be --?
Mr. Burton Marks: Payment for tips?
Justice Thurgood Marshall: Yes.
Mr. Burton Marks: Perhaps, it might be.
That would be within the scope of his business.
Chief Justice Warren E. Burger: Could he -- could he have answered the question or declined to respond on Fifth Amendment grounds?
Mr. Burton Marks: As to his occupation, I do not know.
Chief Justice Warren E. Burger: Has not the Treasury Department ruled on that?
Mr. Burton Marks: They did with respect to Mr. Garner at least --
Chief Justice Warren E. Burger: No previously?
Mr. Burton Marks: Pardon me.
Prior to that?
Chief Justice Warren E. Burger: No, previously?
Mr. Burton Marks: I really do not know whether they did or not.
I really cannot answer that question.
It seems that we are in between and I have some -- some thoughts on that situation.
The case that we have here appears to be in a sense, right in the middle of what you would call, it is a Sullivan versus Marchetti type of case that is to say or Byers if you please because Byers is a more recent type of case.
The question really seems to be, could Mr. Garner assert his privilege against self-incrimination at the time he was prosecuted or did he have to do it at the time that he was filling out his income tax return.
The majority of the Ninth Circuit seemed to indicate in -- in my opinion or rather simplistic fashion that he had to do it at the time he filled out his return, even though he may or may not have known at the time he filled it out that the -- that the answers were incriminating or might be incriminating.
According to Judge Wallace of the Ninth Circuit, only Mr. Garner would know whether his answers were incriminating at the time he answered the question.
Well, being a gambler is not an incriminating answer.
Being a person who makes his wages through gambling or makes his income through gambling is not incriminating.
It became incriminating when Mr. Garner’s income tax returns were presented to the court and to the jury and certain inferences were raised and argued by the prosecutor that these were incriminating circumstances.
That is --
Justice William H. Rehnquist: I do not know that I follow you there Mr. Marks.
If it was a link in the chain of causation at the time that the chain of inferences that would lead to the judgment that a crime had been committed, at the time the prosecutor was arguing it to the jury, would it not have been the same at the time he filed the return?
Mr. Burton Marks: Well, he had not even committed the crime.
It is like being pregnant or the concept of being pregnant.
Mr. Garner would have to have known in 1965 that he was thinking, if he was thinking of committing a wagering violation in 1968.
Justice William H. Rehnquist: Well, but then how was the fact that he admitted to being a wager in 1965 incriminating on the charge that he was -- did in 1968?
Mr. Burton Marks: Well, that was one of the arguments and one of the objections that was raised and there is a footnote in our petition and in our brief, that there is a subsidiary question that was just glossed over and that is how are these returns admissible in any case?
They are admissions --
Justice William H. Rehnquist: (Voice overlap) the Fifth Amendment?
Mr. Burton Marks: Correct, but we also because Haines, Grosso, and Marchetti had just come out, the question of the Fifth Amendment privilege as being applicable to the tax returns was very vital and that was an objection that was raised and that was what the Ninth Circuit finally landed on, that is the important question which is here.
Chief Justice Warren E. Burger: What if the prosecution?
Mr. Burton Marks: I beg your pardon, sir.
Chief Justice Warren E. Burger: What if the prosecution, instead of putting in the tax returns to establish the fact that he was a gambler, had brought in three bartenders who said over the same period of time that he had bought drinks on the house on many occasions because he was -- made a big killing on the races and he was the best professional gambler in whatever state he was operating?
Mr. Burton Marks: I still think it would have been irrelevant unless (Voice Overlap).
Chief Justice Warren E. Burger: Would it be admissible?
Mr. Burton Marks: Would it be admissible?
Chief Justice Warren E. Burger: Yes as establishing his occupation?
Mr. Burton Marks: Not unless it was exactly at the time in which he was alleged to have committed the crime and he said to the public at large, I am a professional gambler and that is my business.
Chief Justice Warren E. Burger: My question assumed that it was covering the same period?
Mr. Burton Marks: Then it would be admissible as admission against his interest?
Chief Justice Warren E. Burger: Yes, well, but how do you distinguish that from his answering and making the same statement on his tax return?
Mr. Burton Marks: Because --
Chief Justice Warren E. Burger: When -- unless you can demonstrate that he was absolutely required to put the truth of the matter in the tax return?
Mr. Burton Marks: Well, the -- the regulations and the statute require that he put in truthful information and this Court in Max (Ph) versus U.S. said, he better put in truthful information or he cannot assert the privilege under any circumstances.
Chief Justice Warren E. Burger: What about my previous question to you.
I mean, self-employed speculator?
Mr. Burton Marks: Well, if he had done it --
Chief Justice Warren E. Burger: Or refusal to answer on Fifth Amendment grounds right in the return itself?
Mr. Burton Marks: Well, the return would not be admissible because it would not have any evidentially value I assume or based on other ground that I forget the case, you could not use the person’s assertion of the privilege against him as an inference of guilt which is a different subject altogether, but I perceive in our case and this is why a very interesting proposition, in Sullivan, this Court said many years ago, you cannot take the privilege against the whole tax return.
In Marchetti where the Court said and I use certain quotes; “where there is an area permeated with criminal statutes where it is obviously incriminating, then the person can assert the Fifth Amendment privilege at the earliest opportunity, I mean, at the opportunity where it is being prosecuted to -- at trial.
That was the specific holding of Marchetti, no question about it, asserted at trial.
Now, here we have an intermediate situation, but I submit that it is really no different.
Garner is no different from Marchetti because the unconstitutionality of the statute, if you please or the unconstitutionality, the permeation of criminal, criminality comes not from the face of the statute which is fair, but either from its application by the government which admittedly uses tax returns for any purpose at once in a tax case or a non-tax case.
In the appendix and in the government regulations, the Internal Revenue is 26 CFR which is cited in the quote, that is all the government attorney has to do.
The youngest U.S. Attorney, Assistant US Attorney has to do is write a letter to the department -- the Internal Revenue Service and say, I want a copy of the -- of the tax return of Mr. Garner and it is necessary, that is the only word he has to use, it is necessary for my investigation and he gets it.
Now, the proposition is that the government and the government says in their brief, if you deprive us of our right to go into a person’s confidential tax returns, you are hampering government investigation and what it means simply is that the minute Mr. Garner becomes a subject of investigation according to the governor's -- government’s theory, he becomes a suspect for any type of criminal activity and he is fair game for complete government investigation and complete going into his tax returns, and therefore, the government, by writing a letter can circumvent the Fourth Amendment and the requirements of Boyd versus the U.S.
They send the letter and they say, we want the income tax return then they have the income tax return and under Calandra just recently decided, throw it into the Grand Jury and the Grand Jury has this information that they can use.
Mr. Garner cannot object.
How does -- why does not the government have to show probable cause to get a copy of Mr. Garner’s tax return and if he does need probable cause, then are not the regulations promulgated by the government equally unconstitutional on their face, that is to say, they do not -- they -- they are not in compliance with the Fourth Amendment and the government attorney in this case should never have been permitted to get the tax returns in the first place in a non-tax related case.
And there is where the evil comes and that is why this is a type case not a Sullivan case and that is the reason why Mr. Garner can only object at the time when he is faced with the evidence which was presented against him at trial because he never had a chance to object to the use of the evidence before.
He would never know that the government, the U.S. Attorney, the FBI and if you read the -- the regulations of the treasury, you would be astounded that how many people have access to your tax returns and if you recall, Mr. Garner testified and that is also in the record.
He got up in his defense and that is the only testimony he gave, he thought his tax returns were confidential.
And I would wager that if you -- you took a prior to some of the publicity that has been coming out in recent months, but if you had taken a poll sometime before of the citizenry of this country, they would have assumed that they had a sort of a pack with the government.
If they report truthfully and honestly what -- what they have done, the government is going to withhold that information and it is confidential and nobody else has a right to see it.
If they defraud the government in their tax return then that is their problem. Then the government has a right to go to the tax returns to detect the fraud, but otherwise, they do not.
Now, it seems to me that when you get this type of government activity which turns a -- an innocent tax return fair on its face into the subject of constant investigation, in other words, the -- the person investigated, whether or not he has been accused or not accused is merely a subject of investigation and his tax returns are available to the investigators through the U.S. Attorney’s office and this Court is aware of the task force that have the -- for instance the drug, person suspected of drug activities, they have the Internal Revenue Service working with them so the IRS gets in and they convene a Grand Jury specially for the purpose of subpoenaing evidence that they otherwise could not get.
They use it for investigatory purposes and then they turn the information over to the -- to the law enforcement officials by virtue of this Grand Jury.
They have the tax people, they have the drug people, they have the -- the Department of Justice, all working as a team and this is under some philosophies on appropriate method of investigating what is happening, but to me, it is discriminatory enforcement.
It is equal all over again, but it is hidden.
It is a fair statute.
Everybody has to report.
Everybody has to state the information truthfully, but the government has to be fair also.
They cannot take a series of regulations and under the guise of law enforcement or what they would like to have take a statute, internal revenue statutes and turn them into investigatory tools through purported regulations which on their face are violative of the constitutional guarantees of privacy.
The government has the right to know certain information, but the citizen has the right to privacy.
Chief Justice Warren E. Burger: Is there a constitutional guarantee of the privacy of income tax returns or is it a statutory provision?
Mr. Burton Marks: I believe that the -- the constitutional guarantee is there in the Ninth and Tenth Amendments.
It is the right to privacy, the right not to disclose anything to the government.
If you are compelled to disclose it, then there is this constitutional and I call it a sort of a social pact, if the government says we want information from you, you must give it to us, the citizen has the right to expect that the government will not use that information against the citizen unless the citizen has defrauded or violated the pact with the government and produced untruthful information.
Justice William H. Rehnquist: How do you explain Grand Juries under that theory?
Mr. Burton Marks: Well frankly, I -- I have -- grand juries I would -- could accept Calandra except for the fact that they are controlled by the United States Attorney’s Office.
Justice William H. Rehnquist: Well, but the -- the fact of the matter is there are cases over a long period of time that said that government has a right to everybody’s testimony.
There is no pact whatever that if you tell the truth to the Grand Jury, you will not be indicted.
If -- your truthful testimony reveals that you have committed a crime?
Mr. Burton Marks: Yes, but there is this one protection that the citizen has to raise the privilege against self-incrimination.
Justice William H. Rehnquist: And that is what you acclaimed here is about (Voice Overlap)?
Mr. Burton Marks: Right, and in this case, Congress has said in effect or it seems to be the Congress said in effect and also so has the Internal Revenue Service that you must answer every question on the return and you must answer truthfully and as in Garner’s case when he did in fact assert his privilege against self-incrimination, the Internal Revenue Service sent back a letter and said your returns are incomplete.
So by definition, we will not let you file the return and you become a felon.
And that is the vice where you allow the government not only to -- to be the judge, but the -- the jury and all those things as to when the privilege can be asserted, that is where the -- the majority is wrong in the Ninth Circuit.
Garner is not the judge of what is privileged or not privileged, neither is the government.
What is privileged or not privileged is judged by what the use of the material is at the time it is being trying to be used in a court at the time it is incriminatory.
In the broader aspects, as I say I believe that the way the government is acting, the way it is administering an otherwise fair statute, a reporting statute indicates that it is making criminal statutes and using the internal revenue reporting system as a method of enforcing criminal statutes or investigating criminal violations, something which Congress never intended to be about to do and something which at least in the process in which it is being done to write a letter and say I want this person’s information without having an affidavit in support of probable cause to show that there is reason.
It is just like king's warrant is broad.
I want to see what he put on his income tax report because maybe I will find something incriminating because this agent told me that he did something and so when we look at the tax returns, that is what the government says in page 25 of their brief.
If you let this person assert his privilege against self-incrimination or if you let them assert it at the time of trial, all this great investigation that we are now allowed under our own regulations will go down the tubes.
We cannot use it because we sure need it because Gee wiz we sure need it.
Justice Potter Stewart: But really all that is in here is the admissibility in evidence at the trial of the tax return, is it not?
Mr. Burton Marks: Actually that is all what we are really talking about and if Marchetti --
Justice Potter Stewart: If tax returns could be used for investigation is another subject in other day, is it not?
Mr. Burton Marks: Yes, but how do they get then into the courtroom?
There is the (Voice Overlap) question.
Justice Potter Stewart: What is involved here is the admissibility in evidence at this trial or the tax returns itself, is it not?
Mr. Burton Marks: That is the -- the specific question here and the question of whether or not I could have objected it.
Justice Potter Stewart: And I do not think, why do you need to take on the question of the use of tax returns in preliminary investigation by government agency?
Mr. Burton Marks: Because --
Justice Potter Stewart: That is not involved in this case is it?
Mr. Burton Marks: Oh! It is, because if you are -- if you are going to take the Sullivan-Bayer’s approach that there was nothing incriminating at the time he made the statement then you -- and there is nothing involved in the -- in a permeated criminal statute then Garner never had a right to raise the Fifth Amendment objection at the time of trial.
And say if you look at the way the statutes are used, you -- you get a discriminatory enforcement so that they are unfair as applied rather than unfair --
Justice Potter Stewart: Well, as I said, you correct me if am wrong, but I thought you said that I was correct in my understanding that what it is involved in this case is the admissibility in evidence that this person at your client’s trial of his previous tax returns?
Mr. Burton Marks: That is right but –
Justice Potter Stewart: So why is there involved here any of the questions that you have talked about involving the confidentiality of the person's tax returns?
Mr. Burton Marks: Because the majority said he could not raise his Fifth Amendment privilege at trial.
He had to raise it at the time he filled out his reports.
Justice Potter Stewart: And that is the issue, whether or not he was too late, when at trial, he objected to the admissibility of the tax return, that is the issue, is it not?
Mr. Burton Marks: And I am analogizing this to Marchetti in the sense that the statute and the way that the income tax reporting statute is being used is discriminatory, therefore, unconstitutional, therefore, the Fifth Amendment applies as well as it did in Marchetti because you are permeated with government use of -- unlawful use of the statute.
May I reserve some time for rebuttal?
Justice Lewis F. Powell: Mr. Marks before you sit down, before you reach the ultimate question that Mr. Justice Stewart was posting, do you not have a threshold question that is critical in this case as to whether or not the responses in the return that can send you were compelled in a Fifth Amendment sense?
As I read Sullivan, they were not compelled.
I take it you take a different view, but I would like to hear you discuss that.
If they were not compelled, that comes pretty close to answer -- answering the question put to you by Mr. Justice Stewart?
Mr. Burton Marks: They were compelled.
Justice Lewis F. Powell: But why in light of -- in light of what Sullivan said?
Mr. Burton Marks: Well, Sullivan, again I have to say, Sullivan was in 1925.
Justice Lewis F. Powell: Right.
Mr. Burton Marks: Alright.
We do not know what questions were raised at the time Sullivan was involved.
We do not know where they had distinctions between gambling income, non-gambling income, what the tax consequences were if Mr. Garner were to -- whether or not he really even had to state his occupation.
I do not know in 1925, I was not around.
The point is that –
Justice Potter Stewart: That was the form and his question asking (Voice Overlap) you do not know?
Mr. Burton Marks: That is right.
It turns out that Mr. Garner was compelled to answer each and every question because each and every question was determined by the government, the Internal Revenue Service to have some bearing on the computation of tax.
He has to answer them and he has to answer him truthfully.
It is compelled.
There are some cases that say, you cannot even -- Sullivan just dealt with the entire return.
Mr. Garner never refused to answer the return.
Marchetti refused to file the entire return so you have something right in the middle here and that is, I say that Mr. Garner was compelled.
And we have evidence that he was compelled because when he attempted to assert his privilege in filing a partial return, the Internal Revenue Service said it is no good and if you do not file a complete return, you are going to be prosecuted for a felony, that seems to me to be a compulsion.
Chief Justice Warren E. Burger: I understood you to say that in two earlier returns he gave some different answer, did I misunderstand you?
Mr. Burton Marks: That is right.
In the first -- 1965, he said my return -- my profession is wagering, professional gambler.
In 1966 and 1967, he said a horseman, but his -- when they asked him the source of his income in 1966 and 1967, he said wagering income income and Mr. Ulman, the trial attorney used that in his argument which is at page 58 of the appendix to prove to the jury that he was engaged in the business of betting and wagering to -- and to establish if you will an element of the offense from the mouth of Mr. Garner from prior years.
May I reserve the time?
Chief Justice Warren E. Burger: Very well.
Argument of Jones
Mr. Jones: Mr. Chief Justice and may it please the Court.
The principal issue in this case and the only issue that I am likely to have time to discuss at any length is the issue to which Mr. Marks has addressed to all of his attention, that is whether a taxpayer has a Fifth Amendment privilege to exclude from evidence in a subsequent non-tax criminal proceeding his prior federal income returns.
For analytical purposes in this case, we have subdivided this principal issue into two separate questions.
First of these is to in what circumstances if any the disclosures on a taxpayer’s income tax return maybe said to be compelled within the meaning of the Fifth Amendment.
And the second question is to what extent if any does the Fifth Amendment require the imposition of used immunity with respect to disclosures that have in fact been compelled under the federal income tax laws.
I will address each of these questions in turn, but with major emphasis on our contention that testimony or compulsion was lacking in the circumstances of this case.
Before I take up these questions however, I would like to at least allude briefly to the significance of this case to the administration of the tax and non-tax criminal laws.
Our underlying concern in this case is that if this Court were to hold in accordance with petitioner’s arguments here that a taxpayer’s disclosure is on his return are entitled to automatic use immunity, then in any non-tax criminal proceeding, a prosecutor would be subjected to the heavy burden of disproving taint in any case in which he had an occasion to review the defendant’s tax returns and those might well be a fairly large number of cases.
As we explained in our brief at greater length, pages 22 to 27, there are many situations in which a prosecutor may have occasion to review a defendant’s tax return.
The easiest ones were envision as the case where taxpayer’s returns have been forwarded to the U.S. Attorney by the Internal Revenue Service with a request that the defendant be prosecuted for tax crimes.
If a defendant has also been under investigation for non-tax offenses, the non-tax proceedings will then be subjected to inquiries obtained to turn whether any of the evidence has been derived from the taxpayer’s returns.
And there may be many other situations in which there are incidental exchanges of information between the Internal Revenue Service and Department of Justice which may give rise to claims obtained if there were was an automatic used immunity.
Now, Mr. Justice Stewart, I think suggested that that issue was not really involved in this case because what we are concerned about is the possibility of an application of the “fruits” doctrine whereas all that is at issue here is the question of the admissibility of the tax returns themselves.
But looking into the future, we might find it difficult if there were automatic used immunity as to the returns to distinguish cases like Counselman against Hitchcock and Kastigar which do require immunity from uses -- from indirect as well as direct use of the compelled disclosures.
These underlying considerations practicality or as I say spelled out in our brief and I will not enlarge it further upon them here, but I think that they are important considerations that should play a significant role in the Court’s analysis of this case.
Justice Potter Stewart: Is the availability of a person’s tax returns to agencies other than the Internal Revenue Bureau, all covered specifically and authorized by statute or is it a matter of regulation or just an inter agency understanding and agreements?
Mr. Jones: Under the internal revenue code, the President must authorize and has done so through regulations.
The use of tax returns outside the Internal Revenue Service.
And we cite in our brief the pertinent regulations that permit the Department of Justice to have access to the returns in connection.
Justice Potter Stewart: (Inaudible)
Mr. Jones: I am now looking at the index and we cite those regulations apparently on pages 25 and 36 of our brief.
Justice Thurgood Marshall: Is it true that the petitioner says that anybody in the U.S. Attorney’s office can get it?
Mr. Jones: The regulation provides that the Department of Justice and the United States Attorney’s have the right to inspect the taxpayers' return “for necessary in the performance of official duty,” so that they do have access within the limits of that regulation.
Justice Thurgood Marshall: And how many employees are there in the U.S. Attorney’s offices all over the country, in the thousands, is it not?
Mr. Jones: Well, I cannot answer that Mr. Justice Marshall.
Justice Thurgood Marshall: (Inaudible)
Mr. Jones: I would guess so.
Justice Thurgood Marshall: And any of them can get my tax return about the same as --?
Mr. Jones: Well, I would not think so Mr. Justice Marshall.
I think that this anticipates that it would only be the United States Attorney or perhaps an Assistant United States Attorney with his authorization.
That is what the lawyers would have access.
That is correct, if the United States Attorney authorized it.
I am not sure how?
Justice Thurgood Marshall: It says that anybody can do it?
Mr. Jones: No Mr. Justice Marshall, if -- we do not quote full text of the regulation here, but we do say that the United States Attorneys by regulation have the right to inspect the return.
I think that they would have to authorize a request from an Assistant United States Attorney.
That is my understanding at any rate.
Justice Thurgood Marshall: Well, again an Assistant U.S. Attorney subpoena anybody and issue subpoena on anybody without approval of the U.S. Attorney, certainly he does it everyday?
Mr. Jones: That may well be, I am not sure what bearing that has on the construction of this regulation and I am not sure just what the exact terms of the regulation are.
Justice Thurgood Marshall: (Inaudible)
Mr. Jones: That is correct, but there is broad access for purposes of investigation of criminal activities.
With these general thoughts in the background, I will turn now to the discussion of the question of testimonial compulsion.
And in approaching this question that is helpful at the outset to describe with some clarity the legal setting in which a taxpayer completes and files his internal -- his income tax return.
The taxing statutes require that the taxpayer provide all the information requested on the return and a taxpayer must, subject to penalties for perjury, attest by his signature that the answers on his return are accurate and complete.
And a willful failure to file a complete return subjects the taxpayer to prosecution for a misdemeanor under Section 7203 of the Internal Revenue Code.
Now, petitioner and the dissenters in the Court of Appeals perceive the statutory scheme as exerting testimonial compulsion upon the taxpayer to incriminate itself.
They reasoned that any refusal by the taxpayer to complete his returns on Fifth Amendment grounds would subject him to prosecution for failure to file a return under Section 7203 and that threat of prosecution would be sufficient to induce a taxpayer to forgo a valid claim of privilege and thereby to compel self-incrimination.
Now, we believe that this conclusion reached by the petitioner and the dissenters below is based upon a fundamentally mistaken understanding of the scope of Section 7203 and an equally mistaken understanding of the pertinent constitutional principles that apply here.
Section 7203 punishes only a willful failure to file0 and the concept of willfulness is crucial in this case.
Under this Court’s decision in United States against Bishop, a taxpayer cannot be convicted of a willful failure to file unless his failure represents a voluntary and intentional violation of a known legal duty.
And a taxpayer who believes that his privilege against self-incrimination justifies his refusal to provide an answer on a federal income tax return cannot be shown to have violated a known legal duty within the meaning of that phrase in the Bishop case because such a taxpayer by hypothesis has a good faith belief that his statutory duty to provide information has been constitutionally excused.
Justice Potter Stewart: Now Mr. Jones, how do you reconcile what you are telling us now with the experience that this taxpayer had with respect to this 1973 return?
Mr. Jones: Well, I do not think it is very difficult to reconcile that.
What happened was that he filed a return asserting broad claims of privilege and his service --
Justice Potter Stewart: With an explanatory letter?
Mr. Jones: With an explanatory letter.
The service determined that that was not a completed return as required.
At that point, I will leap ahead in my argument here to spell out at some length what procedures were available to the secretary and what this letter represents.
If a taxpayer asserts a claim of privilege on a return, it is incumbent upon the service to secure the information necessary to complete the return and to determine the amount of tax due.
And it does this first through informal mechanisms by sending the taxpayer letters such as it was sent to the petitioner here.
Justice Potter Stewart: (inaudible) with the criminal prosecution --
Mr. Jones: Well, I do not think it is fair to say it was threatening him with prosecution, but pointing out that a failure to provide might subject him as indeed it might if his claim of privilege was invalid and in bad faith to a criminal prosecution.
If the taxpayer continued to assert his claim of privilege in informal conferences, the Internal Revenue Service if it determined that the privilege was not available could issue to him administrative summons requesting that he furnish the information.
And if a taxpayer continued to assert his privilege as a basis for refusing to comply with the summons, the service will then be required to seek enforcement of the summons in a District Court.
And at that point, the taxpayer would have -- would be entitled to an adjudication of his claim of privilege.
If the District Court recognized the claim of privilege, determined it to be valid, well then it would refuse enforcement of the summons.
At that point, the service would in order to secure the information have to award the taxpayer immunity under 18 U.S.C. 6004 and with the award of immunity of course, the taxpayer could be ordered to provide the information sought in the summons.
On the other hand, if the District Court determined that the claim of privilege was not valid, it could order enforcement of the summons without an accompanying ground of immunity.
But in either case, the taxpayer is subjected to compulsion only at the time the summons is ordered enforced and not before.
And the petitioner in this case, never asserted this claim of privilege, he never invoked his administrative process, a fortiori he was not compelled to disclose information within the meaning of the Fifth Amendment or go back to the processes that would operate if the service determined that the taxpayer’s claims of privilege were in bad faith.
At that time, if it secured out of good information on its own to determine the taxpayer’s liability or that there was sufficient information from which it can conclude that the claim of privilege was invalid and they are all by the way in many cases involving invalid claims of privilege by taxpayers who wish to assert such a claim of privilege as a basis for not filing a return at all.
Now, the service could then bring a prosecution, but as I pointed out, that prosecution could be successful only if it was established not only that the taxpayers claim of privilege was invalid, but also that the taxpayer knew that it was invalid and that he was making it in bad faith merely as a means of avoiding payment of his federal income tax liability.
In other words, the sanctions imposed by the threat of a prosecution under Section 7203 places no burden on the exercise of a valid claim of privilege or even upon a claim privilege of the taxpayer erroneously believes to be valid.
And therefore, Section 7203, the enforcement mechanism in the code, does not coerce the taxpayer into foregoing a claim that he believes to be valid.
It does not compel a taxpayer to incriminate himself.
We think that this analysis is buttressed by this Court’s prior decisions under the Fifth Amendment.
In particular, the situation of a taxpayer completing his return maybe fairly analogized to that of a witness in a civil proceeding.
Both the taxpayer and the witness are confronted with authoritative directives to furnish information.
I have already outlined the directives that are addressed to the taxpayer and those that are addressed to the witness are very similar.
Often, the witness will be -- having summoned by legal process to appear and give testimony and at the time of giving testimony, he is required to affirm, subject to the penalties for perjury that he will tell the whole truth and if necessary, the judge will instruct him that he has a duty to provide evidence and that his refusal to do so may subject him to the punishment of contempt.
In other words, the judge may, like the service in the case of the petitioner, threaten the witness with the possibility of punishment if the information is not forthcoming.
The circumstances therefore, faced by a taxpayer and a witness are not identical, certainly closely comparable.
We believe that the same constitutional rule should apply in each case.
The rule for witnesses is clear.
This Court has held and reaffirmed in a number of cases, most recently in United States against Kordel that self-incriminatory testimony given by a witness in an ordinary civil proceeding may be used against him in a subsequent criminal trial.
The reason for this rule or the basis for this rule is set forth and explained by the Court and in the case called United States against Monia, and I think that is the pronunciation of it, M-O-N-I-A and we quote from that opinion on page 15 and I would like to repeat it because it bears directly upon are case as well.
Unknown Speaker: Your brief, 15 (Inaudible)?
Mr. Jones: Page 15 of our brief.
I am just quoting from the court’s decision in the Monia case where the court stated the amendment speaks of compulsion.
It does not preclude a witness from testifying voluntarily in matters which may incriminate him.
If therefore, he desires the protection of the privilege, he must claim it or he will not be considered to have been compelled within the meaning of the amendment and that is our contention here.
The taxpayer does not assert his privilege.
He does not claim his privilege.
He cannot be considered to who have been compelled at the time of completing of filing his return.
Unknown Speaker: (Inaudible)
Mr. Jones: That is right.
We do not discuss this case at all in terms of waiver, but merely in terms of the absence of testimonial compulsion which I think is the way this Court has analyzed analogous cases in the past.
Precisely the same consideration should govern this case as well as the case of the witness in the ordinary civil proceeding.
Although a taxpayer is under some official pressure to complete and file this tax return, pressure such as the letter that you have mentioned Mr. Justice Stewart, just as a witness is subject to some official pressure to testify.
The crucial point in each case is that the pressure is not such as would override or nullify a valid, timely asserted claim of privilege.
In neither situation is the sanction oppose upon the taxpayer or the witness for asserting a valid claim of privilege.
Thus in neither situation can answers furnished without any claim of privilege be treated as having been compelled within the meeting of the Fifth Amendment.
And this conclusion we think is further supported by contrasting this situation with those in which this Court has found testimonial compulsion in the past.and perhaps the most pertinent example is the case of the Garrity against New Jersey.
In that case, a police officer was informed that -- was requested to testify in an inquiry into alleged traffic ticket fixing and he was informed that if he refused to testify that he would be removed from his office.
And under this threat, the policeman did testify and in doing so he incriminated himself.
The incriminatory disclosures were then introduced in evidence against him in a subsequent criminal proceeding arising out of the inquiry.
This Court determined that those disclosures were not admissible against the policeman in his trial, reasoning that the policeman’s desire to remain silent had been overborne by the threat of a severe economic sanction placed upon the very exercise of a valid claim of privilege.
In other words, in that case if the policeman in Garrity had claimed his privilege, he still would have been subject to the sanction of removal from office.
In this case, if the petitioner had claimed this privilege, he would have been subject to no such sanction.
Even if his claim of privilege I might add and reiterate was invalid so long as he in good faith believed it to be a valid one.
Accordingly, unlike Garrity, we believe that the policeman in this case, excuse me, the taxpayer in this case, the petitioner was not subject to any compulsion to incriminate himself.
Before going on to the second question that I have raised, I would like to further point out that even if in this case, this line of reasoning was rejected and it was concluded that the directives addressed to a taxpayer at the time that he completes and files his return, do represent testimonial compulsion.
There is no compulsion upon the petitioner in this case to incriminate himself.
As we explained in footnote 13 of our brief on page 23, the disclosures made by the petitioner on his tax returns as Mr. Marks has conceded here were not incriminating when made and the privilege against self-incrimination only protects against the compelled disclosure of self-incriminatory information.
It does not protect against the compelled disclosure of information that is not incriminating, but that only becomes incriminating because of the subsequent criminal activities of the witness so that in this case, even if it were found that in that testimonial compulsion is present, there was no testimonial compulsion to incriminate in this case.
I would also mention that the kinds of disclosures that were made here were not such as we have shown in our brief that I think is at pages 42 to 45 --
Unknown Speaker: But speaking now of the answers, there are other answers he could have given in previous year?
Mr. Jones: That is right.
Unknown Speaker: But those were not?
Mr. Jones: Those answers did not themselves constitute the admission of any criminality nor did they form a link in a chain of evidence with regard to any crime that we know of as of the date that the tax returns were completed.
The conspiracy for which the petitioner was prosecuted for his participation in it began in May of 1968.
His last tax return that was introduced in this trial was filed in April of 1968 for the preceding year of 1967 so that there were no self-incriminatory disclosures made on this taxpayer’s return whether or not he was subject to testimonial compulsion.
Justice Potter Stewart: This taxpayer was a resident of Nevada, was he?
Mr. Jones: I do not know whether he was a resident of Nevada at that time.
Justice Potter Stewart: 1973?
Mr. Jones: However, he now is a resident of Nevada.
Justice Potter Stewart: Would it not be incriminating in certain states to show professionalism?
Your occupation was professional gambler?
Mr. Jones: Well, I do not think so Mr. Justice Stewart.
I believe at the time this taxpayer resided in California -- his tax returns are in the appendix.
Yes, in the case that at the time his returns were filed he was a resident of California, but I do not believe that under California law it would be illegal to be a gambler if you are gambling activities in fact were taking place in Nevada or indeed, there may well be gambling activities in California they can be engaged in.
At any rate, there is no allegation here by petitioner that those answers were incriminating when made and indeed as I indicated earlier, Mr. Marks has conceded that they were not in fact incriminating.
Unknown Speaker: I notice your footnote speaks not of incriminating when made, but having a potential (Inaudible) is there a difference?
Mr. Jones: Well, I would --
Unknown Speaker: What you are saying is even if the taxpayers be committed to invoke the privilege for the first time at trial, he should be required to establish not only of the previous disclosure, he now has a potential for incrimination, but also that it had that potential when made?
Mr. Jones: Well, by that I think we meant that potential for incrimination means that the taxpayer does not have to -- that any person asserting a claim of privilege does not have to show actual incrimination, but only the potential of incrimination, if his answer provided and all we meant to say was that situation at the time of filing the return has to be the same as the time of subsequent use.
I turn now to the second question that I undertook to address at the beginning of this argument which is to what extent, if any, the Fifth Amendment requires the imposition of use immunity with respect to disclosures that have in fact been compelled under the Federal Income Tax Laws.
Time does not permit a full discussion of this issue and I can do a little more than outline the arguments that we set forth at some length at pages 27 to 41 of our brief.
But we suggest there that in the context of the neutral self-reporting requirements of the Federal Income Tax Laws, the Fifth Amendment requires the imposition of use immunity only with respect to those compelled disclosures that constitute or that entail a substantial risk of prosecution and that the only disclosures on a tax return that entail such a risk are those involve a direct admission of criminality when made.
Relevantly obnoxious disclosures that the petitioner made on his tax returns in this case clearly do not need that test.
These disclosures that he was a gambler, that he made money as a gambler were not admissions of criminality as such.
Now, our suggestion along these lines, draws in large part from this Court’s decision in California against Byers, in which it was held that a driver involved in an accident could be compelled under state hit and run statute to make certain disclosures and that those disclosures could be used against the driver in a subsequent criminal proceeding arising out of the accident.
Although there was no opinion for the Court in that case, both the plurality opinion and the concurring opinion of Mr. Justice Harlan evidence a concern that self-reporting requirements that further a legitimate, non-prosecutorial government purpose might be substantially hindered or frustrated by assertions of privilege based upon a mere possibility as contrasted with a substantial probability of incrimination.
We think that that concern is also appropriate here.
Under the standard of incrimination applicable in the criminal context, under the so called Hoffman Test, propounded by this Court in the United States against Hoffman, a refusal to comply with a request for information or a refusal to testify may be based upon even a very attenuated risk of incrimination.
We fear that widespread refusals to answer questions on tax returns based upon that relatively permissive Hoffman Standard of incrimination could seriously disrupt the administration of the taxing laws.
Now, if as I have spelled out in the earlier part of my argument, the procedure to be invoked is one of administrative summons and the determination of the validity of claims of privilege, the administration of the taxing laws could be seriously disrupted by fraudulent, invalid claims of privilege that require a lengthy administrative and judicial hearing before the information necessary is finally secured.
If on the other hand, a higher standard of incrimination is required in the self-reporting context that we are considering here, then it would be clear what questions on the return might entail a substantial risk of prosecution and those which would not and we suggest in our brief that the only questions on a taxpayers return that are likely, the answers to which are likely to entail a substantial risk of prosecution are those that relate to the source of miscellaneous income or possibly occupational though that seem somewhat unlikely.
We feel that permitting the invocation of the Fifth Amendment privilege only on the basis of the higher standard of incrimination that we suggest would afford a substantial measure of protection to all individual taxpayers while at the same time not significantly impairing the government’s ability to secure and use the information needs in raising the revenue.
Unknown Speaker: It never gets to this between (Inaudible)?
Mr. Jones: If you agree that there is no compelled disclosure here, there is no need to consider what would be the appropriate result of in fact(Voice Overlap)disclosures.
Unknown Speaker: Disclosures were though self-incrimination at the time the disclosure was made?
Mr. Jones: Or as we also point out in our brief if it is determined that error, if any, were harmless here, I have not addressed that issue, but pages, I think 42 to 45 --
Justice Potter Stewart: You did address the first two questions?
Mr. Jones: That is correct.
Justice Potter Stewart: We would not need to decide (Voice Overlap) on either one of them, you would not get to your --
Mr. Jones: That is correct Mr. Justice Stewart.
Justice Byron R. White: (Inaudible) the harmless air question first?
Mr. Jones: That would of course be a way of avoiding the necessity of a constitutional decision in this case.
Chief Justice Warren E. Burger: We will resume there after lunch.[Lunch Break]
Mr. Jones you have time left.
Mr. Jones: Mr. Chief Justice, I have completed my presentation of the government’s arguments in this case, but if the Court has any further questions, I would be happy to try to respond to them.
Justice Potter Stewart: Did the Court of Appeals address your point of (Inaudible)?
Mr. Jones: No, it did not.
Not so far, as I can tell it.
In that event, I simply ask the Court that judgment below be affirmed.
Chief Justice Warren E. Burger: Mr. Marks you still got time.
Rebuttal of Burton Marks
Mr. Burton Marks: Thank you Mr. Chief Justice.
First of all, I would like to point out that the government I think wants too much.
The government not only wants full use of the information in the income tax return, but it also wants this Court to hold that there could be no assertion of privilege perhaps except as to the source.
I would like point out to -- to point out to the court the dangers inherent in that type of approach where we have today --
Justice Potter Stewart: (Inaudible)
Mr. Burton Marks: Alright, I will pass it.
Justice Potter Stewart: Is it, I mean, whatever they will come out, that is not issue, but maybe some other day?
Mr. Burton Marks: Right.
I think the question of testimonial compulsion is a false issue because in my opinion, testimonial compulsion occurs when its testimony, when it is being used as evidence.
In this case, statements of Garner were being introduced at trial as testimony or admissions against him and whether you want to call it the testimonial compulsion because he testified or did not testify, I think is begging the issue.
These are statements that he made.
Statements that were compelled and they are not testimony.
They were just statements.
They were admissions against interest which perhaps were not when they made them, but they certainly turn out to be when the government wanted to use them against his interest.
Now the case cited by counsel --
Unknown Speaker: (Inaudible)
Mr. Burton Marks: The compulsion was applied in the first instance by the statute, in the second instance when they were used or attempted to be introduced to trial.
Unknown Speaker: Assuming there was no compulsion with respect to the tax return, assume that legally, he was not compelled then, let us just assume that --
Mr. Burton Marks: That he made --
Unknown Speaker: Do you say there was still compulsion within the meaning of Fifth Amendment by the government offering them against his will to trial?
Mr. Burton Marks: Yes, but under a different theory.
I think at that point you get into this privacy right because he supplied this information to the government as testified to him under the assumption that what he supplied to them was confidential and will not be disclosed, will not be used against him.
Justice Potter Stewart: Otherwise, you run into the Monia case or the Kordel case.
Mr. Burton Marks: Well, Kordel is different because in Kordel, the civil proceedings were right at the same time, the criminal proceedings were and Kordel if he was not smart enough to know that he could assert his privilege against self-incrimination during the criminal -- civil proceeding when he was having criminal proceedings against him, then that is his tough luck.
Here, Garner did not have anything against him.
Unknown Speaker: (Inaudible)
Mr. Burton Marks: [Laughter]I would not say it, but I think he was.
Justice Potter Stewart: But Monia stands -- Monia stands the same proposition even more clearly perhaps in Kordel and a witness testifies as a third party witness and does not tie in his constitutional right against compulsory self-incrimination.
That testimony can later be used against him at his criminal trial?
Mr. Burton Marks: Well, to whatever extent you want to rely on Monia, I believe that it is wrong where the question of waiver may or may not be involved.
That is the reason that the government is avoiding the question of waiver because it has to be knowing, you have to know when you want to assert something.
Justice William H. Rehnquist: But Monia does not -- Monia says that if you do not claim your privileges, it is wrong?
Mr. Burton Marks: It is wrong.
Justice Byron R. White: But the government's position does not rest in waiver?
Mr. Burton Marks: That is right.
Justice Byron R. White: No compulsion at the end of first place?
Mr. Burton Marks: The government refused to discuss the waiver question because if you get into knowing waivers --
Justice Byron R. White: It is involved?
Mr. Burton Marks: It is involved because a person cannot have a privilege --
Justice Byron R. White: Probably you do not need to get to waiver if there is no compulsion?
Mr. Burton Marks: If a person has a privilege against self-incrimination --
Justice Potter Stewart: There is no such privilege.
If the privilege against compulsory self-incrimination?
Mr. Burton Marks: But if he does not know that he is incriminating himself and then at a later point it turns out that he was, he has a right to assert his privilege.
That is my opinion.
Justice Potter Stewart: That is in Monia, I guess.
Mr. Burton Marks: No, it is not.
Chief Justice Warren E. Burger: Thank you gentlemen.
The case is submitted.
You have any thing?
Rebuttal of Jones
Mr. Jones: Yes, I do Mr. Chief Justice.
In response to Mr. Justice White’s question, I just wanted to point out that in the original panel opinion case, the dissenting judge, Judge Wallace did raise the question of harmless error, but so far as I can tell the majority and the panel did not reach it, and neither did the court --
Justice Potter Stewart: Ir was all withdrawn on the rehearing?
Mr. Jones: On rehearing in fact the only issue considered was --
Justice Potter Stewart: The original claims were all withdrawn?
Mr. Jones: That is correct.