Source: https://openjurist.org/348/us/419
Timestamp: 2019-04-18 15:19:10+00:00

Document:
Argued Feb. 3, 4, 1955.
An information was filed in the Municipal Court of the District of Columbia charging the petitioner with violation of 26 U.S.C. § 3290, 26 U.S.C.A. § 3290, in that he engaged in the business of accepting wagers without paying the occupational tax imposed by that section. The Municipal Court sustained a motion to dismiss the information. The Municipal Court of Appeals for the District reversed, 100 A.2d 40, and the Circuit Court of Appeals affirmed the Municipal Court of Appeals. 94 U.S.App.D.C. 205, 214 F.2d 853. We granted certiorari. 348 U.S. 810, 75 S.Ct. 60.
'Payment of tax—(a) Condition precedent to doing business.
We held in Kahriger that this statute was a constitutional exercise of the taxing power and was not a penalty under the guise of a tax. 345 U.S. at pages 24—32, 73 S.Ct. at pages 511—515. It is argued that that case involved wagering in a State, where such activity is not a violation of federal law, that the instant case arises in the District of Columbia, where wagering is by federal law a crime, D.C.Code, 1951, § 22—1501 et seq., and that this statute as applied to petitioner in the District of Columbia is a penalty in the guise of a tax. The short answer to this argument is that this Court has long held that the Federal Government may tax what it also forbids. United States v. Stafoff, 260 U.S. 477, 43 S.Ct. 197, 67 L.Ed. 358.
Petitioner maintains that the taxes imposed are retrospective in application. It is argued that he must be liable for the tax under subchapter A in the sense that he must have already wagered before he is required to take out the occupational tax, and that to require him to do so compels admission that he has gambled. We do not so read the statute. The Act does not mean one must first have made a wager as defined in subchapter A and therefore incurred liability to pay the tax levied therein before liability for the occupational tax attaches. The Act is wholly prospective and by its terms did not become applicable until November 1, 1951, more than ten days after its enactment on October 20, 1951. See compiler's note to 26 U.S.C. § 3285, 26 U.S.C.A. § 3285. The statute simply designates a class that is liable to pay the ten percent tax when a wager or wagers are made. Payment of the $50 tax here under consideration is a registration fee that must be paid before engaging in the business of wagering.
We said in Kahriger, supra, 345 U.S. at pages 32—33, 73 S.Ct. at page 515: 'Under the registration provisions of the wagering tax, appellee is not compelled to confess to acts already committed, he is merely informed by the statute that in order to engage in the business of wagering in the future he must fulfill certain conditions.' The condition here important was that petitioner must first pay the $50 tax, but that did not give him any license to engage in an unlawful business. License Tax Cases, 5 Wall. 462, 471, 18 L.Ed. 497. It only warned that if he proposed to carry on this particular business he must pay the tax.
And, finally, the petitioner argues that to require him to pay the tax and exhibit the stamp in his place of business, as required by 26 U.S.C. § 3293 of the Act, 26 U.S.C.A. § 3293, is to furnish probable cause for the issuance of a search warrant. This is just another facet of the Fifth Amendment argument, but the ready answer is that the petitioner has no stamp. If he does not purchase a stamp even though he wagers, which is this case, it is difficult to see how such failure would give probable cause for the issuance of a search warrant. His complaint is that if he had one he might get in trouble. Since petitioner is without a stamp, he is not in a position to raise the question as to what might happen to him if he had one.
United States v. Kahriger, 345 U.S. 22, 73 S.Ct. 510, 97 L.Ed. 754, put a most restrictive interpretation on the Fifth Amendment's provision against compelling persons to confess facts which will help government take away their liberty. But this case reduces the Fifth Amendment's protection still more. Kahriger had to confess only to state law violations to save himself from going to jail for violating the federal registration law. This was one of the arguments relied on by the Government to persuade this Court to sustain the federal law as applied to Kahriger.1 But the petitioner here, in order to be permitted to pay the $50 tax, must file a written confession with the District of Columbia Internal Revenue Collector revealing that, in violation of federal law, he is at the moment he registers 'engaged in the business of accepting wagers.'2 He must also tell where he carries on the illegal business, the names and addresses of those who receive wagers for him and of those for whom he receives wagers.3 For engaging in this wagering business, which registration would compel petitioner to confess, he could be convicted of felony, fined $1,000, imprisoned three years, or both.4 And for conspiring with his employers or employees to promote a lottery even in the future, which compulsory registration is designed to reveal, petitioner could be punished by a fine of $10,000, imprisonment for five years, or both.5 Thus in order to pay the tax, petitioner would be compelled to supply evidence useful and maybe sufficient to convict him of felonies for which he could be incarcerated for years. If this would not violate the Fifth Amendment's privilege against self-incrimination, it is hard to think of anything that would. Cf. Blau v. United States, 340 U.S. 159, 71 S.Ct. 223, 95 L.Ed. 170, and cases cited.
The D.C.Code, 1951, § 22—1501 makes promotion of lotteries a crime. The definition of lotteries here includes the definition of wagers in the registration law. 65 Stat. 529, 26 U.S.C. § 3285, 26 U.S.C.A. § 3285.

References: § 3290
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 § 3285
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 § 3293
 § 3293
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 § 22
 § 3285
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