Court Opinion

ID: 9424508
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:11:48.085041+00
Date Added: 2024-06-11T17:22:50.673025
License: Public Domain

Mr. Justice Brennan,
with whom Mr. Justice Marshall joins, concurring in the judgment.
Three years ago we held that the federal wagering tax statutes, 26 U. S. C. § 4401 et seq., subjected those to whom they applied to such a real and substantial danger of self-incrimination that those statutes could “not be employed to punish criminally those persons who have defended a failure to comply with their requirements with a proper assertion of the privilege against self-incrimination.” Marchetti v. United States, 390 U. S. 39, 42 (1968); Grosso v. United States, 390 U. S. 62 (1968). This case presents the question what, if any, use the Government is entitled to make of wagering excise tax returns, filed pursuant to the statutory scheme, in a prosecution for income tax evasion. Since I believe the Fifth Amendment does not prevent the use of such returns to show a likely source of unreported income in a criminal prosecution for income tax evasion, I concur in the judgment of the Court.1
*703I
The relevant facts may be briefly stated. As required by statute, petitioner from 1956 through 1960 filed monthly wagering excise tax returns showing his name, address, and the gross amount of wagers accepted by him during the month in question.2 He was subsequently indicted for willfully attempting to evade payment of his income taxes for those years. 26 U. S. C. § 7201. At trial, the Government used the wagering tax returns to show that the gross amount of wagers reported, less the expenses of petitioner’s business as reported on his annual income tax returns, was greater than the profits from gambling reported on those same annual returns. The Court of Appeals affirmed over petitioner’s claim that the returns were inflammatory, prejudicial, and irrelevant. 345 F. 2d 499 (CA7 1965). After our decisions in Marchetti v. United States, supra, and Grosso v. United States, supra, petitioner filed an application for postconviction relief on the ground that use of the wagering tax returns was barred by the Fifth Amendment. The application was denied by the District Court in an unreported opinion, and the denial was affirmed by the Court of Appeals. 411 F. 2d 504 (CA7 1969).
II
At first glance, petitioner’s argument appears compellingly simple. Since the information required of him under the federal wagering tax statutes presented a real and substantial danger of subjecting him to criminal prosecution for his gambling activities, the Government *704lacked the power to compel the information absent a waiver of his Fifth Amendment privilege unless it provided the necessary immunity from prosecution. Marchetti v. United States, 390 U. S. 39 (1968); Grosso v. United States, 390 U. S. 62 (1968); Heike v. United States, 227 U. S. 131, 143-144 (1913); Counselman v. Hitchcock, 142 U. S. 547, 584-586 (1892). Since petitioner filed the wagering tax returns under threat of criminal prosecution for failure to do so, 26 U. S. C. § 7203, and since he never knowingly waived his Fifth Amendment privilege, see Grosso v. United States, supra, at 70-71, he is entitled to the immunity required by the Fifth Amendment. Adams v. Maryland, 347 U. S. 179, 181 (1954). Therefore, petitioner argues, the Government was foreclosed from using the information provided by him on the wagering tax returns against him in a criminal prosecution for evasion of the income tax.
But in Marchetti and Grosso, we dealt with the question whether, in light of possible uses of testimonial evidence sought to be compelled over a claim of privilege, the Fifth Amendment allows the individual concerned to withhold the evidence without penalty. In the present case, however, we deal with the scope of immunity required when the privilege is claimed and the evidence is nevertheless compelled. This distinction, in my view critical, is overlooked by petitioner. Where testimony has been refused, adjudication of necessity must take place in something of a vacuum. Although an individual may not “draw a conjurer’s circle around the whole matter” by refusing to provide any explanation why the information sought might be incriminating, United States v. Sullivan, 274 U. S. 259, 264 (1927), he need not provide the incriminating evidence in order to demonstrate that the privilege was validly invoked, Hoffman v. United States, 341 U. S. 479, 486 (1951). In such circumstance, sanctions may be applied for re*705fusal to testify only if it is “ ‘'perfectly clear, from a careful consideration of all the circumstances in the case . . . that the answer[s] cannot possibly have [a] tendency’ to incriminate.” Id., at 488, quoting Temple v. Commonwealth, 75 Va. 892, 898 (1881) (emphasis in original).
But where the individual has succumbed to compulsion and provided the information sought, finer analytical tools may be employed. “A factual record showing, for example, the substance of the individual’s compelled testimony, the way that testimony was subsequently used by the prosecutor, and the crime for which the individual was ultimately prosecuted, provides important considerations to anchor and inform the constitutional judgment.” Piccirillo v. New York, 400 U. S. 548, 558 (1971) (Brennan, J., dissenting). Thus, even when the privilege against self-incrimination permits an individual to refuse to answer questions asked by the Government, if false answers are given the individual may be prosecuted for making false statements. United States v. Knox, 396 U. S. 77, 80-83 (1969).
The flaw in petitioner’s argument lies in its misunderstanding of Marchetti and Grosso as applied to a situation where testimonial evidence has been compelled over a claim of privilege. For we did not, in those cases, cast any doubt upon the power of the United States to impose taxes on unlawful, as well as on lawful activities. 390 U. S., at 44; see United States v. Sullivan, 274 U. S., at 263. Nor did we suggest that the Fifth Amendment would make it impossible for Congress to construct an enforceable statutory scheme for reporting by individuals of their illicit gains. See 390 U. S., at 72 (Brennan, J., concurring). Rather, we noted that “[t]he laws of every State, except Nevada, include broad prohibitions against gambling, wagering, and associated activities,” and that even Nevada imposed *706“criminal penalties upon lotteries and certain other wagering activities taxable under [the federal] statutes.” Id., at 44-46. We noted that federal statutes prohibit the use of the mails and of interstate commerce for many activities ancillary to wagering.3 Id., at 44. On that basis we concluded that “throughout the United States, wagering is 'an area permeated with criminal statutes/ and those engaged in wagering are a group ‘inherently suspect of criminal activities.' Albertson v. SACB, 382 U. S. 70, 79.” Marchetti, 390 U. S., at 47. Accordingly, registration and payment of the occupational tax, or the filing of a wagering excise tax return that the Government required as a prerequisite to payment of the excise tax,4 would subject the individual concerned to “ ‘real and appreciable/ and not merely ‘imaginary and unsubstantial/ hazards of self-incrimination.” Id., at 48; Grosso, 390 U. S., at 64-67. Since we found the “required records” doctrine of Shapiro v. United States, 335 U. S. 1 (1948), inapplicable to the statutory requirement that a gambler admit his present or future involvement in gambling activity, Marchetti, 390 U. S., at 55-57; Grosso, 390 U. S., at 67-69, we held that the privilege against self-incrimination was available to the petitioners as a defense to prosecution for failure to register for, report, or pay the federal wagering taxes.5
*707Had the present case arisen in the context of a federal investigation designed simply to uncover evidence of criminal activity, we would need to go no further.6 In such a situation, petitioner would be entitled to “absolute immunity . . . from prosecution [under federal laws] for any transaction revealed in that testimony.” Piccirillo v. New York, 400 U. S., at 562 (Brennan, J., dissenting); Counselman v. Hitchcock, 142 U. S., at 584-586. But although we recognized in Marchetti that “Congress intended information obtained as a consequence of registration and payment of the [gambling] occupational tax to be provided to interested prosecuting authorities,” Marchetti, 390 U. S., at 58-59,7 we nevertheless concluded that the “United States’ principal interest is evidently the collection of revenue, and not the punishment of gamblers.” Id., at 57; see United States v. Calamaro, 354 U. S. 351, 358 (1957).
This dual purpose is significant here. For while the Government may not undertake the prosecution of crime by inquiring of individuals what criminal acts they have lately planned or committed, it may surround a taxing or regulatory scheme with reporting requirements de*708signed to insure compliance with the scheme. See Marchetti, 390 U. S., at 44, 60; Grosso, 390 U. S., at 72-74 (concurring opinion). In the latter situation, the privilege may not be claimed if the danger of incrimination is only that the information required may show a violation of the taxing or regulatory scheme. Thus in Shapiro v. United States, 335 U. S. 1 (1948), we upheld a conviction based upon records of sales provided under compulsion of a regulation under the Emergency Price Control Act, 56 Stat. 23. The privilege had been claimed on the basis that the records would (as they did) provide evidence of a violation of the Act. We rejected the claim, reasoning that the Government has power to compel “ ‘suitable information of transactions which are the appropriate subjects of governmental regulation and the enforcement of restrictions validly established.’ ” Id., at 33.8 And in United States v. Sullivan, 274 U. S. 259 (1927), we rejected a claim that the privilege against self-incrimination allowed an individual whose income was earned in crime to file no form of income tax return whatsoever. Although dubious, we noted the possibility that the privilege could be claimed to excuse reporting the amount of income earned because that alone would disclose the criminal activities that had produced the income. Id., at 263-264. But neither in Sullivan nor in any other of our cases is there the slightest suggestion that an individual may refuse to disclose the income he has earned solely because such disclosure will indicate a failure to pay the taxes imposed on that income.
Of course, the Government may not insulate inquiries designed to produce incriminating information merely by *709labeling the inquiry a necessary incident of a regulatory scheme. Where the essence of a statutory scheme is to forbid a given class of activities, it may not be enforced by requiring individuals to report their violations. See Marchetti, supra; Haynes v. United States, 390 U. S. 85 (1968); Albertson v. SACB, 382 U. S. 70 (1965). But where the statutory scheme is not designed to forbid certain acts, but only to require that they be done in a certain way, the Government may enforce its requirements by a compulsory scheme of reporting, directed at all who engage in those activities, and not on its face designed simply to elicit incriminating information. Shapiro v. United States, supra; see Albertson v. SACB, supra, at 77-80.
Viewed in this light, then, Marchetti and Grosso are the outgrowth of two principles inapplicable to the problem at hand. The first is that when a given class of activities is, in the main, made criminal by either state or federal law, an individual may not be compelled to disclose whether he engages in activities within the class unless his disclosure is compensated by the requisite grant of immunity.9 Marchetti, supra; Haynes v. United States, supra; Albertson v. SACB, supra. The second is that such individuals may likewise not be compelled, absent sufficient immunity, to disclose the details of their activities within such a suspect class: for if the mere admission of engaging in any of a class of activities is sufficiently likely to lead to criminal prosecution that the privilege against self-incrimination may be invoked, *710admission of the details of these activities is a fortiori likely to lead to incrimination. Grosso, supra.
Neither of these principles, however, controls the case at hand. The relevant class of activities “permeated with criminal statutes,” Albertson v. SACB, 382 U. S., at 79, is the class of activities related to gambling. But this case does not involve a prosecution for gambling or related activities. It involves a prosecution for income tax evasion, by use of information compelled pursuant to a scheme requiring all those who engage in the business of accepting wagers10 to report their income twice. For the reasons discussed above, the Government may validly enforce the tax laws by a scheme of required reports, directed at all persons engaging in certain types of activity, and requiring them to report the amount of their income so that the Government may insure that the requisite taxes have been paid. If such a reporting requirement raises a substantial danger of incrimination under state or federal statutes making criminal the activity that is being taxed, an individual may, of course, assert the privilege against self-incrimination and refuse to disclose the information sought. We so held in Marchetti and Grosso. And if the information has been compelled over a claim of privilege, application of those cases requires that the individual be protected against the use of that information in state prosecutions under the statutes making criminal the taxed activity, and to complete immunity from prosecution under federal statutes of like kind. Piccirillo v. New York, 400 U. S., at 561-574 (Brennan, J., dissenting); Adams v. Maryland, 347 U. S., at 181; Counselman v. Hitchcock, 142 U. S., at 584-586; cf. Murphy v. Waterfront Comm’n, 378 U. S. 52, 79, and n. 18 (1964). He is, in short, entitled to the protection *711required by the Fifth Amendment. But here the Government was entitled to demand the information that petitioner supplied&emdash;his gross income from wagering&emdash;in order to enforce the tax laws. Petitioner was entitled to claim the privilege only because of the possibility of prosecution under state or federal gambling laws. No such prosecution is involved here. “Once the reason for the privilege ceases, the privilege ceases.” Ullmann v. United States, 350 U. S. 422, 439 (1956). Since the United States was entitled to demand the information at issue here for the purpose to which it was eventually put, the danger that petitioner’s disclosures might also have been impermissibly used does not prevent their present, legitimate use even though the danger of impermissible use would justify refusal to provide the information at all.11
III
Finally, our decisions in both Marchetti and Grosso not to attempt to salvage the statutory scheme by imposing *712use restrictions do not require that, once evidence has actually been compelled, we refuse to protect a valid governmental interest by restricting use of that evidence any more than is required by the Fifth Amendment. For although we recognized in Marchetti that “the imposition of use-restrictions would directly preclude effectuation of a significant element of Congress’ purposes in adopting the wagering taxes,” 390 U. S., at 59, the primary basis for our refusal to impose such restrictions was that “the imposition of such restrictions would necessarily oblige state prosecuting authorities to establish in each case that their evidence was untainted by any connection with information obtained as a consequence of the wagering taxes; the federal requirements would thus be protected only at the cost of hampering, perhaps seriously, enforcement of state prohibitions against gambling.” Ibid.12 Since a balance between effective state enforcement of gambling laws and the interests of the federal treasury was one to be struck by Congress, and not this Court, we declined to impose the proposed restrictions. Id., at 59-60. And in Grosso, we merely noted that 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’ of the same system.” 390 U. S., at 69. Once again, however, different considerations apply when the question is not whether information may be compelled but rather to what uses compelled information may be put. Once the return has *713been filed, prosecution under state gambling laws can take place only if the State can demonstrate that its evidence is not tainted by information derived from the incriminatory aspects of the return. Since disclosure once made may never be completely undone, this burden must be borne by the State regardless of what additional restrictions are imposed upon use of the return. Accordingly, the considerations that led us to decline the imposition of use restrictions for the future in Marchetti and Grosso are not compelling in situations where the incriminating information has already been disclosed. Petitioner is therefore entitled to the immunity required by the Fifth Amendment, and to no more. Since I believe the Amendment is no bar to the use to which his wagering tax returns were put, I concur in the judgment of the Court.

 This view of the case makes it unnecessary for me to decide whether petitioner’s conviction should be examined without regard *703to the standards embodied in Marchetti and Grosso. The balance of this opinion is written on the assumption that Marchetti and Grosso are applicable.

 See 26 U. S. C. §6011 (a); Treas. Reg. §44.6011 (a)-l (a), 26 CFR §44.6011 (a) — 1 (a).

 See 18 U. S. C. § 1084 (interstate transmission of wagering information), §§ 1301-1304 (conduct of lotteries by mails or broadcasting) , § 1952 (interstate travel in aid of, inter alia, gambling), § 1953 (interstate transportation of wagering paraphernalia).

 We were informed by the United States in Grosso that the wagering excise tax would not be accepted unless accompanied by the required return. 390 U. S., at 65.

 In addition, we declined in both Marchetti and Grosso the Government’s invitation to salvage the statutory scheme by imposing use restrictions on the information required. Marchetti, 390 U. S., at 58-60; Grosso, 390 U. S., at 69. The relevance of this to the issue before us is discussed infra, at 711-713. For the moment *707it is sufficient to note that even the imposition of use restrictions could not have saved the convictions at issue in those cases, for the petitioners obviously had no way of knowing, when they failed to register and file the required forms, that use restrictions might be imposed. See Murphy v. Waterfront Comm’n, 378 U. S. 52, 79-80 (1964); Reina v. United States, 364 U. S. 507, 514-515 (1960).

 See n. 1, supra.

 In Grosso, we remarked that “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,” and that the Revenue Service in fact disseminated such information to “interested prosecuting authorities.” Grosso, 390 U. S., at 66.

 The regulation upheld in Shapiro required only the keeping of records, and not their reporting; the information there was compelled pursuant to an administrative subpoena. But as we noted in Mar-chetti, this situation is constitutionally indistinguishable from a simple reporting requirement. 390 U. S., at 56 n. 14.

 Since the statutory scheme in Marchetti and Grosso provided no immunity whatsoever, and since those cases arose in the context of an attempt by the Government to punish individuals for failure to disclose the information requested, we had no occasion there to determine the precise scope of the immunity that would be required to displace the privilege.

 The few exceptions to this requirement are noted in Marchetti, 390 U. S., at 42.

 The filing of a wagering tax return (or registration as a prospective gambler) necessarily involves an admission that one has engaged in, or intends to engage in gambling. Since gambling and related activities are very likely to be criminal under state or federal law, the Government lacks power to compel such an admission absent the requisite grant of immunity. This was the question involved in Marchetti and Grosso. But what is relevant to the present case is not whether petitioner was involved in criminal activity, but whether he paid the taxes imposed on his income. I have indicated above why I believe that the Government may enforce an otherwise unobjectionable scheme designed to insure that individuals report the amount of their income in order to enforce the tax laws. It therefore follows that the registration and reporting requirements of the federal wagering tax statutes could properly be enforced under a statute granting those who complied with the requirements immunity from prosecution under federal statutes that outlaw gambling and related activities, and protection against the use of information contained in the returns in aid of prosecution under state or federal laws making such activities criminal.

 That this was the primary basis for our refusal is evidenced by our recognition that the “United States' principal interest is evidently the coEection of revenue, and not the punishment of gamblers.” 390 U. S., at 57. Absent the necessity for balancing state and federal interests, we would surely not have crippled the primary purpose of the statutes because a secondary purpose was necessarily disabled.