Court Opinion

ID: 9450224
Source: CourtListenerOpinion
Date Created: 2023-08-04 16:38:57.582458+00
Date Added: 2024-06-11T17:32:12.175911
License: Public Domain

SCHNACKENBERG, Circuit Judge
(dissenting).
The record in this case compels me, although reluctantly, to dissent.
The jury found the defendant not guilty under count I, which charged him with willfully and knowingly failing to pay the tax on wagers, in violation of 26 U.S.C.A. § 7203. However, the jury found defendant guilty, under count II, of willfully and knowingly failing to register and file a return, in violation of the same section.
I find no evidence in the record of willfulness in defendant’s failure to register and file a return. While it was his duty to do so and we can, momentarily, indulge' in the aphorism that everyone is presumed to know the law, yet the act, in its definition of the offense says, “willfully fails to * * * make such return”. (Italics supplied.)
Here thex-e is a total absence of evidence of willfulness. Pollitz, an internal x-evenue agent who testified for the gov*303ernment, said that, when he arrested defendant, “He [defendant] was asked if he had a wagering tax stamp.” and defendant “replied he doesn’t know. ‘I don’t know what you are talking about.’ ”
A significant thing about this record is that there is no evidence that defendant did know what the agent was talking about. Certainly this case lacks any proof showing that defendant knew there was a federal law requiring him to make a return. This becomes abundantly clear when we compare the facts in this case with those in our recent decisions in United States v. Durant, 7 Cir., 324 F.2d 859 (1963), and United States v. Keig, 7 Cir., 334 F.2d 823 (1964). In each of these cases the defendant unsuccessfully contended that his violation of the revenue laws had not been willful. In both Durant and Keig, however, the evidence clearly showed facts which we held supported the charge of willfulness. In Durant, for instance, we pointed out, at 862 of 324 F.2d, that prior to the years involved in the indictment, a revenue agent discussed with defendant the practice of taking corporate tax deductions for personal expenditures and said this practice was improper; also, defendant himself testified that another agent had discussed with him about personal items that the corporation had paid for and that he had read and signed a protest against the latter agent’s ruling, prepared by his lawyers. At 863, we said:
“As an abstract proposition, we would agree that no amount of laxity in and of itself constitutes willfulness. However, in the ease at bar, we believe that the district court properly recognized the additional factors revealed by the records, tending to prove a willful intent: (a) defendant knew the corporation was paying his expenses, (b) the payments were not considered loans by the parties, (c) defendant knew the corporate payments were income to him; and therefore properly found that defendant willfully failed to include them in his returns.
******
“Whether defendant willfully attempted to defeat and evade taxes in this ease presented a question for the trier of the facts. There was substantial evidence before the court to support the result which it reached. * * *”
In Keig, defendant was charged with willful failure to make income tax returns in violation of 26 U.S.C.A. § 7203.
In this court government counsel has furnished us with the recent en banc opinion of the Fifth Circuit in Edwards v. United States, 334 F.2d 360. There two defendants were convicted of violating 26 U.S.C.A. § 7203 by willfully failing to register for and pay a gambling tax. The majority opinion, from which three judges dissented, points out that
“ * * * since the evidence conclusively establishes that the defendants failed both to register for and to pay the tax, the test of willfulness is met. * * * ”1
and stated:
“In the instant case there is no direct proof that the defendants knew of the duties imposed by the federal gambling tax statute — they neither admitted nor denied such knowledge, * * *.’ 2
In Edwards there was affirmative evidence that defendant Frank Edwards was arrested for a bolita offense in 1949, when he rented a house from someone else, used it to carry out his gambling operation, accepting packages at night, hiding a can containing lottery paraphernalia, carrying under his shirt paper sacks left for him in the mail box. The *304court commented, “This long experience in the lottery business and concealment of operations is enough under the Ingram case to allow the jury to infer that Frank Edwards was aware of the wagering tax.”
In the case at bar there is no evidence of stealth or any earmarks of violation of the law which might be indicative, if present, of the knowledge by defendant that he was engaged in violation of a federal law.

. In the ease at bar the jury by its verdict found defendant not guilty on the count I charge that defendant failed to pay the tax.

. In the case at bar there is implicit denial of knowledge of the gambling tax statute in the only evidence bearing on this subject, which is that at the time of his arrest, defendant stated that “he doesn’t know. ‘I don’t know what you are talking about’