Court Opinion

ID: 8202355
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:38:18.414202+00
Date Added: 2024-06-11T16:40:58.437182
License: Public Domain

SHIRLEY S. ABRAHAMSON, J.
(dissenting). The majority opinion reverses the Wisconsin Tax Commission's decision without justification and contrary to the established law and facts. I dissent.
Each year (except one) for more than a decade, Urban Van Susteren filed his state income tax return late and at times filed only after persistent prodding from the Revenue Department. In 1983, a jury convicted him of willfully failing to file tax returns for the years 1979-82, the years in issue in this case. The Commission then found by clear and convincing evidence that Van Susteren intended to defeat the income tax assessment in violation of sec. 71.11(6)(b), Stats. 1983-84, and McKinnon v. Department of Taxation, 261 Wis. 564, 53 N.W.2d 169 (1952). Van Susteren was obligated to pay an additional $3,545.75.
In McKinnon, the court interpreted the statutory phrase "intent to defeat." The state must prove that the defendant intended to thwart the income tax system for each of the years in question, not that the defendant failed to pay taxes or intended to defraud the state of revenue. The McKinnon court stated:
The word 'defeat' is not so confined in its meaning as to apply only to a complete accomplishment on the part of the taxpayer to escape his lawful responsibility. Such interpretation would make useless important processes of the law in taxation matters. Under the circumstances present in this case, the attempt to prevent the successful operation of a lawful tax system by disregarding the responsibility *608placed upon the taxpayer brings his acts within the meaning ascribed to the word by the board of tax appeals and the circuit court. 261 Wis. at 568. (Emphasis supplied.)
The Wisconsin Tax Appeals Commission has frequently and consistently applied the McKinnon decision to numerous taxpayers for nearly forty years.1
The Wisconsin income tax is based upon the principle of self-assessment. The income tax system works as long as taxpayers report the amount and nature of their income honestly and timely. Unless taxpayers file returns in a timely fashion, the Revenue Department cannot be certain to collect taxes and cannot determine the accuracy of payments. Taxpayers do not discharge their legal responsibilities by waiting for the state to discover that no return was filed. The Wisconsin income tax system would be impossible to administer if taxpayers could file returns whenever it suited their convenience, paying only, as Van Susteren did, interest for *609failing to pay taxes on time and a $5 penalty for filing late, and the state had to bear the increased administrative costs of pursuing each person individually to obtain compliance with the statutory filing requirements. McKinnon v. Wisconsin Dept. Taxation, 3 WBTA 384 (1948). The civil penalty provided in sec. 71.11(6) serves as a safeguard to protect the state's revenue and to reimburse the state in part for the expenses and losses resulting from the taxpayer's failure to live up to his responsibilities.
The Commission, the fact-finder in this case, could not look into Van Susteren's mind to discover his intent, and it did not have to accept Van Susteren's explanation of his intent. The Commission had to determine Van Susteren's intent from all the evidence and all the circumstances surrounding the failure to file.
A reviewing court does not determine the taxpayer's intent. A court examines the Commission's finding of intent (a finding of fact) to determine if it is supported by substantial evidence. Section 227.57(6), Stats. 1983-84.2
*610I conclude that the Commission's finding of intent is supported by substantial evidence and should be affirmed. The Commission could reasonably infer from the evidence that Van Susteren knew the consequences of a taxpayer's repeatedly filing returns late and filing returns only after the Revenue Department expended resources to prod taxpayer to file. The consequences are clear: the thwarting (defeating) of the self-assessment processes of the tax law and the successful operation of the state income tax system. The Commission could further reasonably find that Van Susteren intended the natural, probable and usual consequences of his conduct. The Commission's finding of intent is thus "a legitimate, logical inference from undisputed facts." McKinnon, supra, 261 Wis. at 568.
While the majority opinion concludes that this case and the McKinnon case can be distinguished, I believe that the facts in the two cases are substantially similar.
In McKinnon and in the case at bar, both taxpayers failed to file their returns timely for many years. Both taxpayers received extensions to file for at least some years. Neither taxpayer made an effort to hide his income. No fraud or duplicity was involved in either case. In both cases, the respective taxpayer could offer no substantial excuse for failure to file returns in a timely manner other than preoccupation with work. Both taxpayers had a long history of late filing and filed their returns and paid their taxes in full only after the Department of Revenue intervened: McKinnon faced a *611"doomage" fee; Van Susteren faced criminal charges. In both cases the taxpayer was a lawyer; in this case the taxpayer was also a judge.
The only distinction Van Susteren and the majority opinion draw between this case and the McKinnon case is that McKinnon's period of delinquency for filing some of the returns was longer than Van Susteren's. The McKinnon court expressly rejected the argument that a short period of delay will not support a finding of intent under the statute. McKinnon, supra, 261 Wis. at 568-69. The McKinnon court concluded that the finding of intent under the statute was to be deduced from the taxpayer's entire course of conduct of late filing.
Because there is no significant distinction between the two cases, I conclude that the majority opinion has overruled McKinnon sub silentio and has rendered sec. 71.11(6)(b), Stats. 1983-84, now numbered sec. 71.83(l)(b), Stats. 1987-88, ineffective as a tool against chronically late filers. If the Department of Revenue is to have an effective tool against taxpayers who intentionally and repeatedly file their tax returns late and only after the Department expends state funds to push them into filing, the legislature must act. I therefore call this case to the attention of the Revisor of Statutes and the Law Revision Committee. Sections 13.83(1) (c)l, 13.93 (2) (d), Stats. 1987-88.
The majority opinion fails to apply the legal standards this court set forth nearly forty years ago. I dissent.
I am authorized to state that Justice Donald W. Steinmetz and Justice William A. Bablitch join in this dissent.

 See, e.g., Micheli v. Wisc. Dept. of Taxation, 5 WBTA 110 (1963); Howard v. Wisc. Dept. of Taxation, 5 WBTA 128 (1963); Christiansen v. Wisc. Dept. of Taxation, 5 WBTA 176 (1964); Morgan v. Wisc. Dept. of Taxation, 5 WBTA 180 (1964); Roggensack v. Wisc. Dept. of Taxation, 5 WBTA 185 (1964); La Conte v. Wisc. Dept. of Taxation, 5 WBTA 188 (1964); Cretton v. Wisc. Dept. of Taxation, 6 WBTA 1 (1965); Sellinger v. Wisc. Dept. of Taxation, 6 WBTA 39 (1965); Tesnow et al. v. Wisc. Dept. of Taxation, 6 WBTA 57 (1965); Bastis v. Wisc. Dept. of Rev., 7 WTAC 127 (1968); Lauer v. Wisc. Dept. of Rev., 8 WTAC 3 (1969); Sharp v. Wisc. Dept. of Rev., 8 WTAC 126 (1970); Dock v. Wisc. Dept. of Rev., 8 WTAC 20 (1970); Wheeler v. Wisc. Dept. of Rev., 9 WTAC 99 (1972); Klug v. Wisc. Dept. of Rev., 9 WTAC 177 (1972); Lewis v. Wisc. Dept. of Rev., 9 WTAC 320 (1973); Blask v. Wisc. Dept. of Rev., Docket No. 1-10, CCH ¶ 202-438 (August 21, 1984); Zamecnik v. Wisc. Dept. of Rev. Docket No. 1-10913, CCH ¶ 202-142 (November 1, 1985).

 Section 227.57(6), Stats. 1983-84, provides:
If the agency's action depends upon any fact found by the agency in a contested case proceeding, the court shall not substitute its judgement for that of the agency as to the weight of the evidence on any disputed finding of fact. The court shall, however, set aside agency action or remand the case to the agency if it finds that the agency's action depends on any finding of fact that is not supported by substantial evidence in the record.
Section 227.57(6) limits a court's review of the Commission's decision in this case to determining whether the Commission's findings of fact are supported by substantial evidence. According to an extensive body of case law, "substantial evidence" means evidence that a reasonable person could accept to support the finding of the agency. See, e.g., Sanitary Transfer & Landfill, Inc. v. DNR, 85 Wis. 2d 1, 14-15, 270 N.W.2d 144 (1978); Madison *610Gas and Electric v. Public Service Comm., 109 Wis. 2d 127, 133, 325 N.W.2d 339 (1982).
The Commission expressly stated that its finding of Van Susteren's intent was supported by clear and convincing evidence. Platon v. Dept. of Taxation, 264 Wis. 254, 258, 59 N.W.2d 712 (1953).