Source: https://www.legalcrystal.com/case/102100/grosso-vs-united-states
Timestamp: 2019-04-25 14:27:38+00:00

Document:
Petitioner was convicted for failure to pay the excise tax on wagering and the occupational tax imposed, respectively, by 26 U.S.C. §§ 4401 and 4411 and for conspiracy to defraud the Government by evading payment of both taxes. In addition to the general statutory and regulatory requirements described in Marchetti v. United States, ante, p. 390 U. S. 39 , those liable for payment of the excise tax must submit monthly to the tax authorities on a special form, to accompany payment, detailed information concerning their wagering activities which the tax authorities make available to prosecuting officers. The Court of Appeals affirmed, rejecting petitioner's contention that the charges relating to the excise tax violated his Fifth Amendment rights against self-incrimination. Petitioner has not made a similar contention concerning his conviction on charges involving the special occupational tax.
1. The wagering excise tax provisions, which, like the provisions involved in Marchetti v. United States, supra, were directed almost exclusively to individuals inherently suspect of criminal activities, violated petitioner's privilege against self-incrimination secured by the Fifth Amendment. Ibid. Pp. 390 U. S. 64 -69.
2. The "required records" doctrine of Shapiro v. United States, 335 U. S. 1 , cannot appropriately be applied here. Marchetti v. United States, supra. Pp. 390 U. S. 67 -69.
3. Restrictions upon the use by prosecuting authorities of information obtained as a consequence of payment of the wagering excise tax would be inappropriate where this Court has held it improper to impose similar restrictions with respect to "an integral part" of the same system. Ibid. P. 390 U. S. 69 .
4. Since petitioner did not waive the privilege against self-incrimination with regard to the charges involving the occupational tax and reversal by the lower courts of his conviction thereon would be inevitable in the light of this case and Marchetti, the judgment of conviction in its entirety is reversed by this Court. Pp. 390 U. S. 71 -72.
that payment of the excise tax would have required him to incriminate himself, that he therefore may not properly be prosecuted for willful failure to pay the tax or for conspiracy to evade its payment, and that conduct of the trial court after submission of the case to the jury denied him a fair trial. We granted certiorari, 385 U.S. 810, and the case was argued with Marchetti v. United States, decided today, ante, p. 390 U. S. 39 . [ Footnote 1 ] For reasons which follow, we reverse.
The statutory scheme by which wagering is taxed is described in Marchetti, supra. Two additional observations are, however, required in order to assess fully the hazards of self-incrimination created by the wagering excise tax. First, those liable for payment of that tax are required to submit each month Internal Revenue Service Form 730. Treas.Reg. § 44.6011(a)-1(a). The return is expressly designed for the use only of those engaged in the wagering business; its submission, and the replies demanded by each of its questions, evidence in the most direct fashion the fact of the taxpayer's wagering activities. Although failures to pay the excise tax and to file a return are separately punishable under 26 U.S.C. § 723, the two obligations must be considered inseparable for purposes of measuring the hazards of self-incrimination which might stem from payment of the excise tax. Nothing in the pertinent statutes or regulations contemplates payment of the tax without submission of the return, [ Footnote 2 ] and we are informed by the United States that, if the return does not accompany the tax payment, "the money is not accepted." Brief for the United States on Reargument 39, n. 35. We must conclude that here, as in Albertson, the validity under the Constitution of criminal prosecutions for willful failure to pay the excise tax may properly be determined only after assessment of the hazards of incrimination which would result from "literal and full compliance" with all the statutory requirements. 382 U.S. at 382 U. S. 78 .
Second, although there is no statutory instruction, as there is for the occupational tax, that state and local prosecuting officers be provided listings of those who have paid the excise tax, neither has Congress imposed explicit restrictions upon the use of information obtained as a consequence of payment of the tax. Moreover, it appears that the Revenue Service, evidently acting under the authority of certain general statutory provisions, [ Footnote 3 ] has undertaken to tender this information to interested prosecuting authorities. [ Footnote 4 ] We can only conclude that those liable for payment of the excise tax reasonably may expect that information obtainable from its payment, or from submission of Form 730, will ultimately be proffered to state and federal prosecuting officers.
would readily incriminate him, and which he may reasonably expect would be provided to prosecuting authorities. These hazards of incrimination can only be characterized as "real and appreciable." Reg. v. Boyes, supra, at 330; Brown v. Walker, supra, at 161 U. S. 599 -600. Moreover, unlike the income tax return at issue in United States v. Sullivan, 274 U. S. 259 , petitioner's submission of an excise tax payment, and his replies to the questions on the attendant return, would directly and unavoidably have served to incriminate him; his claim of privilege as to the entire tax payment procedure was therefore neither "extreme" nor "extravagant." Compare id. at 274 U. S. 263 .
We are thus obliged to inquire whether petitioner is otherwise foreclosed from asserting the constitutional privilege. For reasons indicated in Marchetti, supra, we have found nothing in United States v. Kahriger, 345 U. S. 22 , or Lewis v. United States, 348 U. S. 419 , which now warrants the exclusion of this situation from the privilege's protection. [ Footnote 5 ] It need only be added that the requirements associated with the excise tax are directed wholly to past and present wagering activities; they lack even the illusory prospectivity which characterizes the special occupational tax and registration requirements.
Here, as in Marchetti, the statutory obligations are directed almost exclusively to individuals inherently suspect of criminal activities. The principal interest of the United States must be assumed to be the collection of revenue, and not the prosecution of gamblers, United States v. Calamaro, 354 U. S. 351 , 354 U. S. 358 ; but we cannot ignore either the characteristics of the activities about which information is sought or the composition of the group to which the inquiries are made. These collateral circumstances, in combination with Congress' apparent wish that any information obtained as a consequence of the wagering taxes be made available to prosecuting authorities, readily suffice to distinguish these requirements from those at issue in Shapiro. Moreover, the information demanded here lacks every characteristic of a public document. No doubt it is desired by the United States, but we have concluded, for reasons indicated in Marchetti, that this alone does not render information "public," and thus does not deprive it of constitutional protection.
records essentially similar to those required to be preserved by the regulations in Shapiro. The difficulties with this argument are two. First, it is scarcely plain that the records required here are "of the same kind [the taxpayer] has customarily kept." 335 U.S. at 335 U. S. 5 , n. 3. Second, and more important, there are, as we have indicated, other points of significant dissimilarity between this situation and that in Shapiro. We have concluded that, in combination, these points of difference preclude any appropriate application to these circumstances of the "required records" doctrine.
Finally, as in Marchetti, we have been urged by the United States to permit continued enforcement of the wagering excise tax requirements by imposing restrictions upon the use by state and federal authorities of information obtained as a consequence of payment of the tax. We recognize that § 6107 ( see Marchetti, supra at 390 U. S. 59 , n. 15) is not, by its terms, applicable to the excise tax, and that there is no similar statutory obligation that the Commissioner provide prosecutors with listings of those who have paid the excise tax. Nonetheless, it would be inappropriate to impose such restrictions upon one portion of a statutory system, when we have concluded that it would be improper, for reasons discussed in Marchetti, to do so upon "an integral part" [ Footnote 6 ] of the same system. We therefore decline to impose the restrictions urged by the United States.
on allegations that petitioner had conspired to evade payment both of the excise tax and of the occupational tax. Petitioner has consistently contended that the constitutional privilege should have prevented his conviction on the conspiracy count, evidently on the basis that, insofar as it is founded on his failure to pay the excise tax, this count raises questions identical with those presented by the substantive counts for failure to pay that tax. We agree, and conclude that a taxpayer may not be convicted of conspiracy to evade payment of the tax, if the constitutional privilege would properly prevent his conviction for willful failure to pay it. Cf. Marchetti v. United States, supra at 390 U. S. 60 -61.
order to obviate further and entirely unnecessary proceedings below. [ Footnote 10 ] Cf. Yates v. United States, supra.
"(1) What relevance, if any, has the required records doctrine, Shapiro v. United States, 335 U. S. 1 , to the validity under the Fifth Amendment of the obligation to pay the wagering excise tax imposed by 26 U.S.C. § 4401? (2) Is satisfaction of an obligation to pay a wagering excise tax imposed by 26 U.S.C. § 4401 conditioned upon the filing of a return required under 26 U.S.C. § 6011 and pertinent regulations? If it is not, what information, if any, must accompany the payment of a wagering excise tax obligation in order to extinguish the taxpayer's liability for that obligation?"
I join the opinions of the Court in these cases. I write only to emphasize why, in my view, nothing we decide or say today in any wise impairs or modifies United States v. Sullivan, 274 U. S. 259 , and Shapiro v. United States, 335 U. S. 1 .
The privilege against self-incrimination does not bar the Government from establishing every program or scheme featured by provisions designed to secure information from citizens to accomplish proper legislative purposes. Congress is assuredly empowered to construct a statutory scheme which either is general enough to avoid conflict with the privilege, or which assures the necessary confidentiality or immunity to overcome the privilege. See Adams v. Maryland, 347 U. S. 179 ; Regina v. United States, 364 U. S. 507 . True, some of the values protected by the self-incrimination guaranty may well be affected to an extent by any enforced system of information gathering based upon individual participation, see Murphy v. Waterfront Commission, 378 U. S. 52 , 378 U. S. 55 , but it is clear that the scope of the privilege does not coincide with the complex of values it helps to protect.
Despite the impact upon the inviolability of the human personality, and upon our belief in an adversary system of criminal justice in which the Government must produce the evidence against an accused through its own independent labors, the prosecution is allowed to obtain and use evidence offered by the accused "in the unfettered exercise of his own will," Malloy v. Hogan, 378 U. S. 1 , 378 U. S. 8 , and evidence which although compelled is generally speaking not "testimonial," Schmerber v. California, 384 U. S. 757 , 384 U. S. 761 . Moreover, by the simple expedient of granting appropriate immunity, the Government is able to surmount entirely the self-incrimination barrier, despite the value of privacy that provision is intended to protect.
United States v. Sullivan, supra, makes clear that an individual is not exempted, by the fact that he may be privileged to refuse to answer some questions, from a requirement, "directed at the public at large," of filing an income tax return exclusively containing questions "neutral on their face." Albertson v. SACB, 382 U. S. 70 , 382 U. S. 79 . Shapiro v. United States, supra, involved a similar situation; it involved a recordkeeping requirement pursuant to a neutral governmental system of price regulation.
Id. at 382 U. S. 79 .
The cases before us present a statutory system condemned by Albertson. The wagering excise tax, the occupational tax, and the registration requirement are only parts of an interrelated statutory system for taxing illegal wagers. Whatever else Congress may have meant to achieve, an obvious purpose of this statutory system clearly was to coerce evidence from persons engaged in illegal activities for use in their prosecution. See United States v. Kahriger, 345 U. S. 22 , 345 U. S. 37 (Frankfurter, J., dissenting).
If we were writing upon a clean slate, I would agree with the conclusion reached by THE CHIEF JUSTICE in these cases. [ Footnote 2/1 ] For I am convinced that the Fifth Amendment's privilege against compulsory self-incrimination was originally meant to do no more than confer a testimonial privilege upon a witness in a judicial proceeding. [ Footnote 2/2 ] But the Court long ago lost sight of that original meaning.
In the absence of a fundamental reexamination of our decisions, the most relevant recent one being Albertson v. SACB, 382 U. S. 70 , I am compelled to join the opinions and judgments of the Court.
And in Haynes v. United States, post, p. 390 U. S. 85 .
repeatedly recognized that "a tax is not any the less a tax because it has a regulatory effect." Sonzinsky v. United States, 300 U. S. 506 , 300 U. S. 513 (1937). See also License Tax Cases, 5 Wall. 462 (1867).
tax purpose. The congressional intent to assist law enforcement should not be the excuse for frustrating the revenue purpose of the statutes before the Court. Regardless of legislative intent, this Court has in the past refused "to formulate a rule of constitutional law broader than is required." Garner v. Louisiana, 368 U. S. 157 , 368 U. S. 163 (1961); cf. Kennedy v. Mendoza-Martinez, 372 U. S. 144 , 372 U. S. 186 , n. 43 (1963). This principle should prevail in this case, where the Act has the wholesome objective of devising workable procedures to assure that gamblers will pay the same taxes on their profits as other citizens are compelled to pay.
Court has consistently upheld the validity of such registration requirements, without regard to the legality of the activity being taxed. United States v. Sanchez, 340 U. S. 42 (1950) (26 U.S.C. § 4753), Sonzinsky v. United States, 300 U. S. 506 (1937) (26 U.S.C. § 5841); Niro v. United States, 276 U. S. 332 (1928) (26 U.S.C. § 4722). The implications of the Court's decisions today also extend beyond the tax statutes. For example, the statute requiring narcotics addicts and violators to register whenever they enter or leave the country, 18 U.S.C. § 1407, can now be expected to come under attack. My concern that such registration requirements will now come under attack is not imaginary. This very day the Court, adhering to its decisions in Marchetti and Grosso, declares unconstitutional in Haynes v. United States, post, p. 390 U. S. 85 , 26 U.S.C [ Footnote 3/8 ] The impact of that decision on the efforts of Congress to enact much-needed federal gun control laws is not consistent with national safety. In my view, the Court has failed to take account of these relevant implications in the very broad holdings of today's decisions.
I recognize that Albertson was decided on Fifth Amendment grounds, without reaching the petitioners' First Amendment claims. 382 U.S. at 382 U. S. 73 -74 and n. 6. However, in applying the Albertson holding to the facts of these cases, it cannot be overlooked that the registration requirement in Albertson was directed at the petitioners' organizational affiliations, which were arguably protected by the First Amendment. See United States v. Robel, 389 U. S. 258 (1967). There is no such First Amendment issue lurking in the cases decided today. The operative fact upon which the registration requirement of § 4412 depends is an individual's status as a gambler.
The Court points out in Grosso v. United States that the disclosure requirements of § 6107 do not extend to the excise tax provisions of § 4401. But, by administrative practice, the identity of those who pay the excise tax on wagers is made known to state prosecuting officials. Ante at 390 U. S. 66 .
The petition for a writ of certiorari in Haynes was filed on March 11, 1967, almost a year after this Court granted a writ of certiorari in Costello v. United States (the companion case to Marchetti ). In granting the writ, the Court stipulated as the sole question in Costello whether Kahriger and Lewis should be overruled. 383 U.S. 942. There can be little doubt that the Court's specification of the question for argument in Costello prompted the Fifth Amendment challenge in Haynes.

References: v. 
 v. 
 v. 
 v. 
 v. 
 § 44
 § 723
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 6107
 v. 
 v. 
 v. 
 § 4401
 § 4401
 § 6011
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 4753
 v. 
 § 5841
 v. 
 § 4722
 § 1407
 v. 
 v. 
 § 4412
 v. 
 § 6107
 § 4401
 v.