Marchetti v. United States – Oral Reargument – October 10, 1967

Media for Marchetti v. United States

Audio Transcription for Oral Argument – January 17, 1967 in Marchetti v. United States
Audio Transcription for Oral Argument – January 18, 1967 in Marchetti v. United States

Audio Transcription for Oral Reargument – October 10, 1967 in Marchetti v. United States

Earl Warren:

Number 2, James Marhcetti, Petitioner, v. United States.

Mr. Zeldes.

Jacob D. Zeldes:

I understand the Solicitor General passed a Preliminary Motion Your Honor.

Earl Warren:

Very well —

Harris Weinstein:

Mr. Chief justice —

Earl Warren:

— let the motion be made.

Harris Weinstein:

Mr. Chief Justice, may it please the Court.

I’m Harris Weinstein.

Earl Warren:

Would you speak a little louder.

Harris Weinstein:

I’m Harris Weinstein with Mr. Zeldes’ permission, I would like to move that the court admit Mr. Francis Speedy Jr. for the purpose of arguing on behalf of the Government in this case and in the following case Grosso against United States.

Earl Warren:

Motion is granted.

Mr. Zeldes

Jacob D. Zeldes:

Mr. Chief Justice, may it please the Court.

This case comes before the court for the second time with additional questions having been propounded by the court last term after argument.

Considering the responses of the Government to those questions and setting to one side some of the finer refinements of the issues in the case.

The central crucial issue In this case is whether this petitioner can be fined thousand dollars and sent to prison for a year for failing to answer the following questions in connection with the wagering tax laws.

Among those questions are; are you engaged in business of accepting wagers on your own account and do you receive wagers for or on behalf of other person or persons.

To put the wagering tax laws in context and to understand the group upon which this laws call for such responses, I thought it might be appropriate to consider seven groups in the general gambling community.

In the first group, if Your Honors please, might be the sweepstakes operators such as the New Hampshire Sweepstakes.

In the second circumstance, set of circumstances might be the Casino operators of Las Vegas of which we are all familiar with, the Posh Casinos and the games of roulette, craps, Stud Poker, Black Jack, Bingo, what have you?

In the third group, we could place the parimutuel operators at the large race tracks throughout the eastern sea board.

And then in another group what I call the fourth group might be the Bingo group, numerous small games of this quality throughout the country.

In the fifth group we could have Church lotteries and raffles and in the sixth group, the friendly pool on the world series in the office of a large law firm or any other office which is so common throughout the country.

The seventh and last group might include the bookmaker and the pool selling operator and it is that seventh group only if this Court please, upon which the wagering tax laws operate.

I think if there’s one though I’d like to leave with the court today, it would that I would like to dispel the notion that gambling is gradually becoming legalized.

In Las Vegas we have legalized gambling and we have sweepstakes and we have bingo, we have various forms of gambling that’s generally becoming a neutral activity.

Hugo L. Black:

Becoming a what?

Jacob D. Zeldes:

A neutral non-criminal activity mixed with the — neutral used in the sense of the Albertson case, if Your Honor please.

I think that’s the notion that I would like to dispel because this case operates and the taxes imposed by this case operate only on the seventh group that I mentioned, the illegal — essentially on the seventh group I mentioned, the illegal bookmaker activity.

The Act by special definition excludes the sweepstakes and also excludes parimutuel betting and it also excludes the gambling casinos of Las Vegas not specifically but that type of gambling activity by the manner in which way during is defined in the Act.

Jacob D. Zeldes:

If you’re dealing with an activity where the contestants play in the presence of each other and all the winners are determined in the presence of each other such as roulette, or craps at one the casinos, that activity is specifically defined out of the way during tax laws.

So I think then we have a situation clearly within this Courts pronouncement in the Albertson case that where — have a tax directed to a group which is primarily involved in criminal activity and which is inherently criminal.

I think the notion that I would like to dispel is that its not.

As I said before, it’s not an activity where there’s mostly illegal activity and that we can’t let the states bin this label of illegality to this conduct so as to thwart the revenues.

Now, of course we would consider the group upon which the tax works.

It’s important and necessary to consider how the tax actually functions.

Under the leading Section of the Act which is more directly involved in the next case that Professor Rightful discussed, there’s a 10% tax on wagers as I’ve defined it to you.

Then, there must be a $50 stamp purchased under Section 4411 and in conjunction with that stamp a detailed questionnaire must be filed with the Internal Revenue Service.

As I started to point out a moment ago that questionnaire is in Form 11-C which is annexed to my supplemental brief.

It asked for the taxpayer’s full name, all aliases, business address, residence address, the name of all of the taxpayer’s principals, the name of all the taxpayers’ employees.

And it requires that this information must be filed at the time the $50 wagering tax stamp is purchased.

A collateral section in the Act makes it mandatory for the person engaged in this activity to keep track, keep a record of every single wage that he makes and then Section 4423 of the code makes it clear that this records which have been kept by every wager can be inspected at the desire of the Internal Revenue Commissioner.

Rounding up the statutory scheme, Your Honors please, there are provisions which say specifically that payment of this tax does not excuse the taxpayer from any violation of state law or federal law and it also specifically provides that the petitioner in this case, if we would have bought the tax, would have had under the mandatory provisions of the Act, his name and address listed publicly and available for state prosecutor.

I think it’s interesting to note that Congress specifically put in that Section.

I’m speaking of Section 6107 of the Act.

That for a certain some state prosecutors can have some certified copies of this information that’s been filed in connection with the wagering tax laws.

In addition to that, once the stamp has been purchased, the taxpayer must display it prominently on his premises and in conjunction with that point, I think it is important to note that if he forgets in a non-willful manner to display this there’s also a punishment even if it’s just negligence.

With this group that I mentioned upon whom the tax works and the what and wherefore of the tax explained, it seems that once it is recognized the nature of the underlying gambling activity in this country, that the self-incriminatory aspects of the tax as applied are fairly obvious.

Gambling of course and this is conceded by the Government is illegal every place in the United States except in Nevada, with exceptions to the specific things that I’ve mentioned most of which are excluded from operation of the way during tax laws and since this issue was originally resolved some fifteen years ago in the Kahriger case over dissent and the Lewis case also over dissent.

The Federal Government has gotten into the picture considerably more.

I have set forth in our supplemental brief a list of the various federal laws at page 7 that the United States now comes in — come into play on behalf of the United States although there — some of these weren’t effect at the time the court first considered the wagering tax laws.

There have been additional statutes added.

So considering first the group that I’ve referred to and then considering the how of the act, how it operates and the nature of the activity, it seems to me that we can rely with some confidence on this Courts pronounced, unanimous announcement on the Albertson case that when the activity is essentially permeated, the criminal conduct, there is a purpose by which the self-incrimination clause can be utilized.

And I think Malloy also comes into the picture at this point because Malloy versus Hogan decided after Kahriger and after Lewis established also that the test to use is whether or not it can possibly result in crim — in incrimination.

And I think if you measure the framework, measure the context, I think the opposite result follows that in the context of this Act there cannot be anything but incrimination by the payment of the wagering tax law — stamp.

After the case was here last term, the court as I mentioned set it down for reargument and directed counsel to brief two additional questions which I’ll discuss in just a moment.

I should perhaps point out that the Fifth Amendment argument upon which we rely today was considered and rejected by the District Court without opinion.

The District Court ruling was prior to this Court’s decision in Albertson versus Subversive Activities Control Board.

The Court of Appeals in an opinion written by Judge Friendly of the Second Circuit considered the issue prior to the rendition of the Albertson case and Albertson came down I think about fourteen days after the Second Circuit acted and we promptly move for reargument.

In that motion for reargument the response of Judge Friendly was that Albertson very well may lead this Court to reconsider its rulings in Kahriger and Lewis but it felt that any change in the situation should come from this Court and not from the lower court.

Jacob D. Zeldes:

Subsequent to that this Court granted certiorari in a companion case entitled the United States versus Costello.

Costello died before the matter was heard and certiorari was granted in the present case, in the Marchetti case.

In this connection I should perhaps point out what its pointed out in the briefs that we are here on the Costello record but that Costello and Marchetti were codefendants in the District Court and that the record was similar and there’s no factual dispute on the record, it’s purely a matter of the Fifth Amendment applied to the wagering tax laws.

As to the two additional questions, if Your Honors please, which was propounded by the court last term, one is whether or not the required records doctrine of Shapiro as any application to this case and the other, if Your Honors please, is whether or not the registration requirement of Section 4412 which is related to Form 11-C that I quoted before can be met without — I’m sorry, whether the tax provision of 4411 can be met without the registration provision being complied with.

(Inaudible)

Jacob D. Zeldes:

It was directed in my case also if Your Honor please and the Government originally had concede that it — that they could not be isolated in our case and they had modified their position in Grosso to say this comment, it also cannot be paid without compliance with the registration in the Grosso case.

As to the required records doctrine and as to the additional question concerning the payment, if the Court please, the Government and petitioner essentially in agreement.

I think perhaps the best summary of the Government’s position is contained in the original brief at page 25.

The Government stated there is no need for the court presently to consider any possible relationship between the privilege against self-incrimination and the so-called required records doctrine in Shapiro versus United States.

No such issue is involved on the facts of this case.

The Government reaffirmed that in their brief on reargument although they had a slight modification and attempted to draw some support from what I might call the spirit of Shapiro rather than Shapiro itself as to justifying this Courts earlier decision in Kahriger and Lewis.

On the second point, here again the parties are in complete accord.

The Government concedes forthrightly that the tax, the $50 stamp cannot be purchased without registering, without giving the name and address of your business, without giving the names and address of all your employees or your principals, and without an effect confessing to whether or you’re engaged in the business of gambling, either for yourself or in behalf of someone else.

I think this point was clearly called for by the decisions of the lower court particularly the Third Circuit decision where a taxpayer had attempted to pay the tax and not register and that was held in his case not to be a defense.

Moreover, the registration provisions specifically provide that in Section 4412 that the registration shall be made and there are correlative regulations issued by the Commissioner of the Treasury Department which this Court — support that.

Here again, if Your Honors please, I think we’re clearly within — what the court said in the Albertson case, there is nothing here which permits less than literal and full compliance with the registration requirements and the form that is required to register.

The Government, although admitting as I have said that the registration must be completed repeatedly characterizes this information which I’ve just discussed has minimal, I’m not so particularly with the label minimal or maximal but I think that as a label in this context considering the nature of the underlying activity involved, this can hardly be considered minimal.

In Connecticut for example, it is a violation of our law to frequent a place which has the reputation for being a gambling hall.

There are many, many statutes where the information contained in this registration would be a virtual confession to violation of state law and perhaps it’s substantially to a conviction of federal law.

Hugo L. Black:

Did the Government deny that?

Jacob D. Zeldes:

I don’t think the Government denies it, if Your Honor please, I think the Government’s position is — well, we have to have some information to collect the tax and it has to bend.

We have to have this information, how can you collect the tax, how can you collect the tax if you don’t know where the taxpayer lives, if you don’t what this business is, that type of thing.

I should point out, if Your Honor please, the Government argues in their opening brief and I think this is important in connection with their repeated assertions if they’re only looking for minimal information in this case.

The Government points out in their opening brief disclosures often highly detailed and this is page 13 of their opening brief, are required under federal law of those who chose — choose to engage in many occupations and then they list 15 U.S.C. involving disclosures from the Investment bankers and then they list disclosures required of radio stations and then they list disclosures from air carriers, then they list disclosures from motor carriers, then they list disclosures from lobbyist and there they list — and then they also list disclosures from stockyard dealers, market agencies and officers and employees of labor union.

But if Your Honor please, and I think this is where Albertson play such a big role.

To test to measure those disclosures, not give the label minimal or maximal against the underlying activity to which they relay.

Where in Connecticut, I’m sorry, where in this country is it to be an illegal to be an investment adviser?

Where is it a crime to run a radio station?

Where is it a crime to run an airplane?

Where is it a crime to run a labor union?

Jacob D. Zeldes:

Where is it a crime to run a motor truck?

It seems to me that that question which the court so emphasized in Albertson dispels the notion of minimum disclosure that the Government urges in this case.

In fact, in the examples that they’ve cite in their brief that I’ve just referred to there is no suggestion of illegality.

But in our case, in the case before the court today the entire area is permeated in the criminal activity as the term is used in the Albertson case.

Earl Warren:

How about people doing in a — in narcotics, they’re required to register?

Jacob D. Zeldes:

Yes Your Honor and although narcotics tax has been upheld by this Court as — you know Mr. Chief Justice, on the basis of the taxing power per se it has not been reviewed against Fifth Amendment problems and I noticed — I think its particularly significant that the Government didn’t cite the Marijuana Tax of the Narcotics Tax when they were requiring disclosures.

So —

Earl Warren:

What is the real distinction between the two, between the non — the requirement for registration in selling narcotics, dealing in narcotics and the gambling?

Jacob D. Zeldes:

The situation requiring narcotics is very close in principle to the gambling situation I would concede.

The possession of narcotics is essentially illegal throughout the United States.

And it would depend I think precisely on the nature of the disclosures required by the various Acts to what extent they are.

They very well may not be able to withstand the constitutional scrutiny that is required by Fifth Amendment examination that we urge here in light of Albertson.

That question has never been answered by the court to my knowledge although as I’ve said before they have been upheld on the basis in the taxing power but they were definitely upheld in the area of the Tenth Amendment whether or not the Narcotics and Marijuana Acts infringe on the powers of the state.

Earl Warren:

Well, is it your position then that if the information required was more limited here than it is that the registration would be illegal?

Jacob D. Zeldes:

In the marijuana situation?

Earl Warren:

No.No, I mean in the gambling.

Jacob D. Zeldes:

Well, we say this if Your Honor please, we take two positions on that.

We say that that at first and the Government concede is the information must be supplied that the Government concedes.

Now if you’re opposing a new statute which could be affected so as no information is required that would tend to incriminate then we say that doesn’t run or follow the Fifth Amendment.

I think one thing that might be worth emphasizing at this point in response to you, Mr. Chief Justice, is the limited scope of the grant of certiorari in this very case.

I presented to the court in my petition for certiorari a Tenth Amendment argument and I think that you can argue forcefully as some of the dissenters did in Kahriger that the Congress was merely attempting to regulate state activity here.

But I’m setting that to one side, I don’t ask this Court to rely on that argument at all.

I realized that the only issue before the court is whether or not there can be compliance with this tax without running the risk of violating the Fifth Amendment.

And the way that tax is now framed, if Your Honors please, I think that the answer is clear under Albertson that violation of the Fifth Amendment cannot be avoided.

Now if we say, can Congress in any way tax this activity so it doesn’t violate the Fifth Amendment, I say yes.

The Congress hasn’t elected to do that at this stage, if they very well might, if we prevail in this case.

That Congress might grant immunity as they’ve done in some many, many instances and as a catalogue in some of the briefs in the companion case.

Or if there could conceivably be a way that could be fashioned for the anonymous payment of this tax then perhaps it could be paid without violating the Fifth Amendment but I think under the present structure, by the mere fact for example, that if I buy a stamp I must display it publicly on my premises or face a penalty even if I negligently fail to do it and non-willfully.

I think under these circumstances there can be no compliance with the statute without violating the Fifth Amendment and that’s the basis of our claim and I think where we have most of the quarrel with the Government.

The Government says to us you really saying you can tax gambling.

Jacob D. Zeldes:

And our response to that, Mr. Chief Justice, is that’s not our position.

If the Congress wants to tax gambling, it may or may not have power, that question is not before the court right now.

I’m sure that 1951 when this was passed, Congress felt it didn’t have the power to reach gambling because of the scope of interstate commerce.

They may now feel that they can directly outlaw gambling.

I don’t know.

But the point I want to emphasize is we are not maintaining that this cannot be taxed as the Government says.

We would concede arguendo for the purposes of this scope of this grant of certiorari that this activity can be taxed.

But what can’t happen is what was summarized so nicely in the (Inaudible) Journal comment that came out after this case was argued last term.

What can happen is this tax cannot be administered so as to violate petitioner’s privilege against self-incrimination.

All of it?

Earl Warren:

Alright, but may I ask you this question, if conceivably the Congress can pass some kind of a taxing act of this kind, what elements that it cannot put into the Act are in this Act?

Jacob D. Zeldes:

The elements of this Act, they are bad, (Inaudible) —

Earl Warren:

(Inaudible)

Jacob D. Zeldes:

Is that your question Mr. Chief Justice?

Earl Warren:

Fine.

Jacob D. Zeldes:

I think that can be answered most clearly by referring to Form 11-C.

I think every single question on this form which the Government now admits must be paid is bad.

They want the name and address of the business.

Earl Warren:

Yes.

Jacob D. Zeldes:

They want the name and address of your principals, who you’re working for.

They want the name and address of all your employees and there’s a supplemental regulation the Government issued.

If you change any of those employees you must run to the Internal Revenue Commission within ten days and give the name and address of the new employees.

They want to know whether or not you are engaged in a business of accepting wagers for yourself.

They want to know whether or not you are accepting it for somebody else.

On top of the form and leaving the form to one side and assuming arguendo that it could be — the tax could be purchased without the form which is not the case as the Government concede.

The mere purchase and mandatory exhibiting of the stamp is violative of the privilege we maintain.

That’s the second bad aspect and perhaps the third that —

Earl Warren:

How is that different from the liquor statutes which require — and they keep a certificate in their place of business, stating who the owner is and so forth?

Jacob D. Zeldes:

I think the —

Earl Warren:

And that they pay the tax.

Jacob D. Zeldes:

I think the key basis for distinction lies again in the Albertson case, Your Honor, where you must — the court must examine whether or not the inquiry is directed against an area permeated with criminal activity.

Earl Warren:

As in liquor?

Jacob D. Zeldes:

No, Your Honor.

It’s highly regulated but it’s not essentially an illegal activity.

Earl Warren:

Well, but the only people if that would — that registration act on liquor would injure would be those who were engaged illegally.

Jacob D. Zeldes:

Well —

Earl Warren:

And there we get plenty of cases here of illegal sale of liquor and manufacture of liquor and that —

Jacob D. Zeldes:

Yes Your Honor.

Earl Warren:

I suppose that is more prevalent, I suppose that’s the — that moonshining is more prevalent than gambling is.

Jacob D. Zeldes:

I’m not too sure in response to that but I think the important distinction, Your Honor is — can be seen more readily but —

Earl Warren:

(Inaudible)

Jacob D. Zeldes:

— the important distinction I think and you’ve seen readily by comparing Albertson to Sullivan.

Sullivan holds that even though you’ve made your money illegally, you have to pay income tax and maybe you can take the Fifth Amendment to an individual question where did the illegal bookie get his money on his income tax form and perhaps when the essential activity is neutralized in Sullivan and I think essentially the liquor industry is a legal industry or neutral within the meaning of Sullivan-Albertson distinction.

Then I think the claim can be made that we fall within the Albertson rationale that when it’s permeated with criminal conduct, there’s no obligation to file and pay the tax and register because you cannot conceivably can — no one can comply with it without incriminating himself.

Now, I think that brings up a point I think that is important, if Your Honors please.

Earl Warren:

May I — before you get to that, may I ask you just one question.

If this only require that they register and pay the tax and keep a — keep the stamp tax into the — to the — the stamp in evidence in their place of business with no other information, would that be bad in your case?

Jacob D. Zeldes:

Yes, I think it would, Your Honor.

Earl Warren:

Now what would the bad parts — it would be?

Jacob D. Zeldes:

There would be stamp under the law has to be publicly displayed —

Earl Warren:

Yes.

Jacob D. Zeldes:

— that would be — if I had a stamp in my place of business in the City of Bridgeport hanging in my window or hanging where it can be readily seen —

Earl Warren:

Yes.

Jacob D. Zeldes:

— it’s virtually a confession, if Your Honor please, that I’m violating the gaming laws of the State of Connecticut.

Earl Warren:

Well, that — take that element down and how about the rest of it?

Jacob D. Zeldes:

I say, if Your Honor please, if we get to the point where the Government concedes the income tax situation is where this tax can be paid anonymously.

Earl Warren:

Anonymously?

Jacob D. Zeldes:

Yes, Your Honor, I think that that’s the very important distinction in the cases.

For example, the Governments brief at page 22 in their opening brief in the Costello case.

We recognized that there is a clear distinction between the matters involved here, registration and filing of a wagering tax return and the filing of an income tax return at issue in Sullivan.

Jacob D. Zeldes:

This is so because the income tax return permits reporting of income without specific identification of source.

Earl Warren:

Yes, but that isn’t — that is the same, to tax anonymously.

Jacob D. Zeldes:

No, Your Honor, that — but —

Earl Warren:

They —

Jacob D. Zeldes:

Without source identification the anonymous situation comes in not to frequently in the laws but not that I think is an analogous situation is the Federal Governments tax on real estate conveyances.

If I have closing of property in Bridgeport, I send my secretary to the post office.

She buys stamps from the post office at a rate of a dollar, ten a thousand for the value of the property closed.

No one asked her name.

No one asked anything.

She comes back and the stamps are signed by me at the closing and put on the deed and that’s the end of it.

I think that there is a clash here that the Government must realize and that it must accommodate the payment of the tax so as not to infringe the privilege.

Perhaps the easiest way would be to grant immunity that the Congress has elected to do in its — in many respects decided the opposite.

It’s asked that they be publicly displayed.

Abe Fortas:

Mr. Zeldes, the Internal Revenue Code requires certain electives be kept by the taxpayer.

Now, would your theory go to the point of signing that such requirements cannot constitutionally be applied insofar as the revenue component of an income tax return reflect the proceeds of gambling.

Jacob D. Zeldes:

Yes, Your Honor, if understand your correct — question correctly Mr. Justice Fortas, is whether or not someone like petitioner could pay his income tax on his alleged illegal activity without disclosing where he got his money.

Abe Fortas:

Yes but then I’m asking you whether — then you’ve got to keep records, the —

Jacob D. Zeldes:

Yes.

Abe Fortas:

— the Internal Revenue Code requires you to keep records of your —

Jacob D. Zeldes:

I’m —

Abe Fortas:

— to your — to the sums that you report on the income tax return, is that right?

Jacob D. Zeldes:

Yes, sir.

Abe Fortas:

Now, is it your position that those requirements are unconstitutional insofar as they require the disclosure that certain sums were obtained from gambling?

Jacob D. Zeldes:

Insofar as it requires —

Abe Fortas:

This is record keeping there —

Jacob D. Zeldes:

— a disclosure, yes Your Honor.

I think that’s — that specific provision which you’re referring to is —

Byron R. White:

Well then how can you —

Jacob D. Zeldes:

— 600 —

Byron R. White:

How can you say that Shapiro is in the — is irrelevant with the paid stamp?

Jacob D. Zeldes:

Well, Shapiro is distinguished by all the parties, Mr. Justice White.

Byron R. White:

Well, what if — that’s hardly the kind of —

Jacob D. Zeldes:

No and I thought perhaps I could summarize the issues.

Byron R. White:

Oh, you go ahead, I’m sorry to interrupt your answering to Fortas, keep going then.

Jacob D. Zeldes:

I did have one other point to make there.

I think that that issue that required records provision of the income tax law which this Court is not giving definitive attention to yet and which has drawn a mixed response from the lower courts in which the Government has not pressed review here is somewhat different because as I read that provision, it says you must keep those records.

Now, the next step may be and would obviously be from a point of law — point of view of tax enforcement that you must keep them because someday we’re going to want to look at it.

When that someday comes, we may have a condition that’s akin to Shapiro but right now the only question is whether or not you have to be compelled under Section 6001 to keep those records.

I think that if the time comes when the Government says you must produce those record that you can claim the Fifth Amendment —

Byron R. White:

Well, Shapiro said that those — said that you could make and keep the records, you can also subpoena them and make the taxpayer produce them.

Not just come in and inspect them but produce them.

Jacob D. Zeldes:

Yes, Mr. Justice —

Byron R. White:

And that they may be used in a criminal prosecution.

Jacob D. Zeldes:

That is correct.

Byron R. White:

Now, do you say that’s a wholly different situation, wholly irrelevant to this case where instead of having them keep them or produce they say in advance file.

File this information.

Don’t just keep it and make the subpoena that we are subpoenaing it in advance.

You keep it now, file it now.

And you say that’s a wholly different situation with Shapiro —

Jacob D. Zeldes:

That is —

Byron R. White:

Shapiro is irrelevant?

Jacob D. Zeldes:

Well, that is the income tax situation posed by Mr. Justice Fortas.

I think that the situation why Shapiro doesn’t apply here can — Shapiro can be distinguished within the limits set up in Shapiro itself.

Shapiro holds as — you suggested Mr. Justice White that in the context of the OPA Regulations, certain records which would ordinarily be kept anyway which is not the situation of the course in the gambling tax situation.

Certain records which can ordinarily be kept anyway can be subpoenaed and used against him in a criminal prosecution.

I think, if you please that —

Byron R. White:

You mean you — the gamblers don’t keep records of their employees or —

Jacob D. Zeldes:

They are not — the records that are ordinarily kept in the regular course of business.

Abe Fortas:

What I’m really trying to get to Mr. Zeldes is, number one, you’re your theory carry us to the point where we would have to anticipate the invalidation if we accepted your theory would that anticipate the invalidation on constitutional grounds.

The requirement that records be kept and made available on demand in connection with income, ordinary income tax insofar as those records related to the proceeds of gambling?

Abe Fortas:

That’s point one.

Did I make that clear?

Jacob D. Zeldes:

Yes.

Abe Fortas:

Now, and point two, if your answer is “no” that your theory does not carry to the point of invalidation as I previously — as I tried to delineate it then what are the exact elements in the present situation which in your mind are constitutionally offensive and which distinguish the present situation from the situation that would be presented in connection to ordinary income tax payments.

Jacob D. Zeldes:

Yes.

Abe Fortas:

That’s what I’m trying to get at in my question.

Jacob D. Zeldes:

I think I understand your question Mr. Justice Fortas and my response is as follows: I do not believe that acceptance of our position here requires the invalidation of the hypothetical situation which you posed in connection with the maintaining of records in connection with the income tax.

And I think and I go back again, I think that it relates to the total context.

Income, the constant generation of income in this country is essentially a neutral non-criminal activity.

One person, perhaps the petitioner in this case may participate in certain illegal activity and he may have a right to claim his individual privilege against self adminis — self-incrimination at the appropriate time.

But it does not require the invalidation of the record keeping provision directed to the country at large.

But in our particular case, that Congress has singled out almost exclusively not even all kinds of gambling because they have let out the church gambling.

They’ve let out the Las Vegas gambling, almost exclusively, illegal gambling.

And I say almost exclusively because the tax does apply to the Las Vegas bookie and it does apply to the Las Vegas policy operator.

But because of the peculiar regulations, some of which I referred to in my brief, they’re pretty much an insignificant aspect to the matter.

In Las Vegas for example, a bookmaker can’t be in a casino.

Bookmaking must be isolated from the general gambling activity under the Nevada regulations.A bookmaker in Nevada must pass the federal tax to the customer and that’s permissible with the federal regulation.

But if a non-Nevada bookmaker passes the tax along, he must give the name and address of his customer to the Internal Revenue Service.

Well, when that occurs in any one of the other fifty states besides Nevada that immediately places the customer in jeopardy of violating the law.

Such is not the case in Nevada because it’s legal to bet with Nevada bookmakers.

So I think the central core of the case rest pretty much with that distinction, if Your Honor please, and I think the peculiar wording in the grant of certiorari in this case indicates that distinction because the question is not just, should Kahriger and Lewis be overturned but should Kahriger and Lewis be overturned in the light of Albertson.

And Albertson with its continuing comments on the Sullivan case, the income tax situation that Mr. Justice Holmes points out that distinction.

Now I think —

Earl Warren:

In your opinion, is there any constitutional difference between this kind of registration and tax and that of the Machine Gun Registration Law?

Jacob D. Zeldes:

Well, if Your Honor please, there are many refinements in the Firearms Registration Act which will be argued immediately following these two cases.

Earl Warren:

Yes, I know that but I just wondered if —

Jacob D. Zeldes:

I would agree —

Earl Warren:

— we would have to go as far in the case like that as you want us to go here?

Is there any constitutional difference between requiring those who sell machine guns to register their tax from this case?

Jacob D. Zeldes:

Here again I think it depends on the underlying activity in the regulations requiring the keeping of guns in the various states.

Jacob D. Zeldes:

I think that our position is very similar to the Circuit Court opinion in the Russell case where the Circuit Court struck down one provision of the Firearm Registration Act and which The government has not — apparently the Government has acquiesced in and I think therefore that that is the aspect that is closely akin to the Wagering Tax Law.

Earl Warren:

Alright, we’ll recess now.

Jacob D. Zeldes:

Thank you Mr. Chief Justice.

During the luncheon recess, one of the persons in the spectator’s session of the court inquired of me and perhaps this is an emotional approach to this case that bears a moments comment, I pay my taxes why shouldn’t your petitioner pay his taxes.

And I think I should just take one moment to emphasize what this case does not involve.

It does not involve the income tax.

It does not involve a gamblers duty to pay tax on income he makes in wagering or in conducting wagering activities.

The Government concedes this in its brief in the session that I’ve pointed out to before.

I think and I believe I have responded to Mr. Justice Fortas’ inquiry just before the recess and I think there is one statement in the Government’s brief that perhaps summarize this, it’s an example, summarizes where we feel they’re taking us to somewhat faulty approach to this case.

It’s actually filed in the Government’s Grosso brief at page fifteen, these are companion cases and the Government asked this Court, is a person free to assert the privilege to justify a failure to pay a tax on his residential property or to file a property tax return calling for his address?

Suppose that a local grand jury is investigating prostitution.

A person believed to own and reside in a house suspected of being (Inaudible) is summoned and asked to give his address.

In that setting he may be privileged not to answer.

We assume he would not however be privileged to refuse to pay property taxes on the house if he were the owner even though such payment might identify him with the suspected activities at the house as surely as what his admission of ownership to the grand jury.

And with that question I think we can agree.

But the point I want to emphasize is, is that hypothetical that the Government poses is not this case.

To make the Government’s hypothetical our case, substitute the general property tax in their example and say that the State of Connecticut or any other state or all of the states for that matter imposeda specific property tax on houses used for prostitution.

Then I think you have the situation that we’re faced with today.

(Inaudible)

Jacob D. Zeldes:

There would either be a claim of the privilege, Your Honor, Mr. Justice White, or just a plain non-completion of it, as I point —

(Inaudible)

Jacob D. Zeldes:

Yes Your Honor.

You’re changing the actual situation we’d be in.

(Inaudible)

Jacob D. Zeldes:

Yes.

(Inaudible)

Jacob D. Zeldes:

Yes.

(Inaudible)

Jacob D. Zeldes:

I would not say that the law was unconstitutional in the same manner as it is here.

I would say it violated the Sullivan doctrine.

(Inaudible)

Jacob D. Zeldes:

Yes.

(Inaudible)

Jacob D. Zeldes:

Yes, if they would not honor the privilege of the self-incrimination that was advanced.But perhaps I should point what the Government admits in their —

(Inaudible)

Jacob D. Zeldes:

I’m sorry Mr. Chief —

(Inaudible)

Jacob D. Zeldes:

That’s what they say about the wagering tax Your Honor.

But they admit in the income tax situation at page 22 of their brief that no source must be given.

A gambler, my client if he wanted to, assuming arguendo, he made a hundred thousand dollars in illegal activity.

He goes to Internal Revenue and says I made a hundred thousand dollars, here is your tax.I don’t claim any deductions.

I don’t claim any special exemptions.

I don’t want to disclose anything to you.

The Government concedes that’s proper.

That’s the big distinction.

This is so because the income tax return permits reporting of income without specific identification of source.

That’s the brief of the United States, not my brief, so that’s a very important distinction that I would like to emphasize, Mr.–

(Inaudible)

Jacob D. Zeldes:

Well, I don’t want to get into a question’s semantics but what I feel in that context is as if it’s a tax law that applies across the board reaching neutral activity within the meaning of Albertson then the privilege may be claimed in that specific question.

But it doesn’t invalidate the whole structure as we claim the situation arises here because of the fact that nobody can comply with this tax without incriminating himself.

Earl Warren:

How about the Stockbrokers Licensing Acts if there we have in the Federal Government and all over the country to as applied to a bucket shop that is not registered?

Jacob D. Zeldes:

Well, I think, Your Honor please, and I’m glad Mr. Chief Justice that that came up because I remember last term you referred to a bucket shop and I think my response wasn’t very precise.

I think this, the situation that you hypothecate where you have a law making — relating to all securities dealers is one thing.

But if you have a statute that says all bucket shop operators must pay a special tax then you’re very close to the wagering tax scheme.

Under my brief research on the subject, I think every state outlaws bucket shops.

I know in Mr. Justice Holmes’ famous case, Ballman versus Fagan, which I perhaps should have put in my brief and didn’t.

The question involved a — the use of the privilege via bucket shop operator and Mr. Justice Holmes upheld the privilege.

They said someone who is a bucket shop operator could reasonably fear incrimination.

This was an oral question before a grand jury I believe.

And he upheld the privilege in that bucket shop context.

Jacob D. Zeldes:

If the two that — actually —

Earl Warren:

Well, that’s a real question — different thing, isn’t it?

Jacob D. Zeldes:

Pardon?

Earl Warren:

Claiming that privilege on the witness stand?

Jacob D. Zeldes:

It is an accepted thing but we maintained, if Your Honor please, that since Albertson that distinction has been displaced.

Albertson said point blank that we draw no constitutional significance to an oral claim of it in the witness stand or a documentary registration requirement such as an issue in Albertson.

So I think that although there was an earlier discussion in some of the courts’ earlier cases that now has gone by the board.

But I think that the example that you mentioned if we can just take a moment to give two faces of that example, underlines the importance of our position and what we think is the Governments’ faulty position.

Of course the United States can tax security dealers across the board and it doesn’t invalidate the requirement for bucket shop operator to pay.

Of course they can tax income and a gambler must pay his income tax.

But when they zero in and say all bucket shop operators must pay a tax, all bookies must pay a tax.

They have so geared the tax structure under their purported power to tax so as to compel a confession to crime.

We do not challenge the Governments’ right to tax.

We do challenge their right to effectuate the tax so as to compel a confession to criminal activity almost universally recognized this criminal activity.

Abe Fortas:

But Mr. Zeldes, I think maybe you have to — your position has to take another (Inaudible) than that because all other taxpayers for example would have to file out a schedule but the showing of sources of income, but your position is that somebody engaged in illegal activity would not have to do that because of the Fifth Amendment, is that correct?

Jacob D. Zeldes:

Well, no Your Honor, not exactly correct.

My position on that precise point is that the Government concedes and I was quoting before from their brief at page —

Abe Fortas:

I don’t want to know that.

Now, let’s don’t get into that.

What’s your theory?

What is your theory — Kahriger?

Jacob D. Zeldes:

Our theory is this, the income tax structure is so set up that they don’t — that the taxpayer can avoid disclosing source.

He doesn’t have to specifically claim that privilege.

Abe Fortas:

Oh, you missed me —

Jacob D. Zeldes:

If he wants to rely on the exemption, if he wants to say that I paid employee A to be my runner in a bookie operation, he wants to take that as an exemption.

He may have to —

Abe Fortas:

As I understood Mr. Justice Whites’ question to you was this, if you are — the taxpayer is required to fill out a schedule showing the source of income, would you claim that person engaged in illegal gambling would not have to do so?

Jacob D. Zeldes:

We would claim, if Your Honor please, that that situation is controlled by Sullivan and —

Abe Fortas:

Right.

Jacob D. Zeldes:

— on the form they refused — could — or the taxpayer could — say put them in their privilege.

Abe Fortas:

Alright, that’s what I’m getting into.

So that’s something — that’s a privilege that he has by reason of the Fifth Amendment which the — presumably a person engaged in legal income producing activities does not have.

Alright, now let’s sit on that, are you with me?

Jacob D. Zeldes:

Yes, Your Honor.

Abe Fortas:

Alright.

Now the second thing which I tried to get at in my question to you is this, the — how about the record keeping requirement of the tax laws.

Tax laws require certain records be kept, don’t they?

Jacob D. Zeldes:

Yes, Your Honor.

Abe Fortas:

As in your position, does your theory in this case take you to the point of saying that a person engaged in illegal gambling does not have to keep those records?

Jacob D. Zeldes:

No, Your Honor.

Abe Fortas:

He has to keep the records, is that what you’re saying?

Jacob D. Zeldes:

It’s our position that this — our position in this case does not take us to that issue.

Abe Fortas:

You said — well, —

Jacob D. Zeldes:

Because —

Abe Fortas:

That’s illogical?

Jacob D. Zeldes:

No, I feel that it doesn’t because in that particular case the requirement at that stage doesn’t incriminate remotely because —

Abe Fortas:

Alright, now we’d go to — now —

Jacob D. Zeldes:

— they’re saying keep your records in the drawer.

Abe Fortas:

So you have to keep the records, now we go to the next question and that is whether upon demand they had — pursuant to the law by an internal revenue agent that he’d be allowed to examine that particular record, does the person who’s engaged in illegal gambling have a constitutional right, say Fifth Amendment, I won’t show it to you.

Jacob D. Zeldes:

I believe he does, if Your Honor please.

Abe Fortas:

That’s what I’ve been trying to get from you.

So you —

Jacob D. Zeldes:

I believe that is our position.

Abe Fortas:

You do say that — you do impeach Shapiro, don’t you?

Jacob D. Zeldes:

If Shapiro was read that broadly which the Government does not asked the court to do.

If Shapiro means that if Congress says any record that we say you must keep is non-privileged, then we get a Shapiro issue and I would respectfully request that the court overturn Shapiro.

I don’t think that the court has to read Shapiro that broadly.

I don’t think the Government wants the court to read Shapiro that broadly.

Abe Fortas:

Well, how do you read Shapiro?

Jacob D. Zeldes:

We read Shapiro as not elevating to the issue of this case for the following reasons.

Jacob D. Zeldes:

In Shapiro, and I think this is an important one in view of the limited scope of certiorari in connection with Albertson.

In Shapiro, the regulations involved were directed I believe to prove in the wholesale producers.

There was not a zeroing in on an area permeated with criminal activity, as Mr. Justice Brennan’s word in Albertson and his decent to the Communist party case.

And I think that — Your Honor’s situation that you posed Mr. Justice Fortas is that when they make my client bring the records in if he kept them and they order him to produce them, we’re back to the Sullivan situation where the taxpayer may have an individual claim.

But that as I think is important to emphasize is not the case here.

Abe Fortas:

Well, did you really mean to say that if we read Shapiro the way that you style as broadly that means that you lose this case?

You didn’t mean to say that, did you?

Jacob D. Zeldes:

No, Your Honor, I didn’t speak that.

But I was directing not to this case but to your hypothetical.

You’re hypothetical is that —

Abe Fortas:

Now, which goes beyond your case —

Jacob D. Zeldes:

Yes.

Abe Fortas:

— perhaps I misunderstood you but I thought that was a slip of the tongue.

Jacob D. Zeldes:

I’m sorry, I didn’t mean that because we have the other very important distinction that the Government relies upon.

It’s set out in our brief and Professor Wrights’ brief in the next case and that distinction is this, that here we’re dealing with registering and openly confessing.

We’re not dealing with records kept and later produced — I thought —

Abe Fortas:

That’s —

Jacob D. Zeldes:

— you’re hypothetical was the other situation.

Abe Fortas:

That’s right but it — and it does go beyond your present case.

Jacob D. Zeldes:

I say in the context of your hypothetical, if this Court should determine that Shapiro means that any record required by the Congress to be kept is non-privileged then I would respectfully request that Shapiro cannot withstand the later theory of the Fifth Amendment case.

Abe Fortas:

It cannot withstand the thrust of your theory in this case, is that what you’re saying?

Jacob D. Zeldes:

Well, I don’t have to get to that point in this case.

Only in your hypothetical —

Abe Fortas:

Alright.

Jacob D. Zeldes:

— do I have to get to that.

Abe Fortas:

Now if I —

Jacob D. Zeldes:

If I make myself clear —

Abe Fortas:

Alright.

But if —

Hugo L. Black:

May I ask you if the Government anywhere forthrightly argues that the Fifth Amendment should be construed for the reason, no person shall be compelled to be a witness against himself except in crimes that involves the payment of taxes?

Jacob D. Zeldes:

I think, Your Honor, that that is to a large measure the Governments’ position.

Hugo L. Black:

Do they argue that?

Jacob D. Zeldes:

They’ve argued it under a slogan called their Accommodation Theory.

In other words, the minimal encroachment on the privilege must accommodate the need for information in order to enforce the tax laws.

We think that’s — theory is not sound for reasons (Inaudible).

Hugo L. Black:

So that’s a — in other words, if a need to collect taxes means that the Fifth Amendment doesn’t mean what it says when it says that no person should be compelled to be a witness against himself.

Jacob D. Zeldes:

The — I believe that’s our position.

They say that the Fifth Amendment has to give way when we need the data to collect the tax.

I’d like if I may —

Hugo L. Black:

Just a little strange to worry about Miranda (Inaudible) if that’s cleared.

Jacob D. Zeldes:

Yes, Your Honor.

Earl Warren:

You may have five minutes extra to rebut because your time is practically up now Mr.–

Jacob D. Zeldes:

Alright.

I would like to say that (Voice Overlap) —

Earl Warren:

Yes you may have.

Jacob D. Zeldes:

Thank you very much Mr. Chief Justice.

Earl Warren:

Mr. Beytagh.

Francis X. Beytagh, Jr.:

Mr. Chief Justice, and may it please the Court.

One of the points made by Mr. Zeldes that I’d like to address myself to first is that his position doesn’t impinge upon the Congressional power to tax at all.

I think that’s fallacious.

He suggests several things.

He says, one, Congress can still tax but what it can’t do is require the disclosure of information that might be used against a particular person charged with the payment of the tax.

And he says that, “Well, Congress might enact an immunity statute.”

What seems to me that you — we get to that only if there is a Fifth Amendment problem and you would have to say that Congress at least can’t tax the way it has taxed.

He says also that, “Well, you can pay the tax anonymously.”

Our position is that a tax that has to be paid in such a strange and unique manner in which the taxpayer doesn’t identify himself, give his address just isn’t administrable as a practical matter.

Both Mr. Zeldes and Professor Wright say over and over again that there’s no problem here with Sullivan.

We agree that Sullivan is distinguishable, it’s different, the court pointed out in Albertson a rationale in which Sullivan differed there.

But it’s not quite all that easy in our view.

It seems to me that if we talk about the Fifth Amendment as protecting a person for many link or lead that could be used against him and it’s very difficult to conclude that a taxpayer filing an income tax return in which he refuses to disclose the source on the grounds of the Fifth Amendment hasn’t provided some link or some lead.

Francis X. Beytagh, Jr.:

Now the court has been willing to accept Sullivan rationale.

It did so in Albertson.

We think that that distinction is of sound — but that raises all the problems that Mr. Justice Fortas and Mr. Justice White have been talking about.

And it raises in our mind the question of whether the position put forward here in effect, the tax — Congress can’t tax in the way it has is of sound.

One of the things that was thrown out here was the point that the wageing tax only operates on essentially illegal activity is except in Nevada.

Well, the Senate Committee Report explains why bingo games and parimutuel betting and whatever are excluded.

It seems to me it’s pretty sensible.

They say that the committee has excluded the above types of gambling not because of any belief but they are not suitable subjects for taxation.

However, the method of taxation provided while particularly appropriate to bookmaking and the policy operations does not appear readily adoptable to these other forms of gambling.

And then with respect to parimutuel wagering they say it doesn’t apply there because such wagering is presently subject to substantial state and in some instances local taxation.

And to superimpose a federal tax upon these transactions would only serve to maintain the existing advantage which bookmakers enjoy over parimutuel betting by reason of their immunity on parimutuel taxes.

So it seems to us that the question really is whether Congress can put an excise tax on gamblers.

We have taken the position throughout that Congress can do so.

We think that Kahriger and Lewis provide a sensible accommodation.

And the word accommodation as it seems to me is the one to be shy away from.

It’s the term the court used in Murphy, said that the rule that they adopted there was one that would accommodate state and the federal interest.

It seems to me that that’s been the consistent approach of at least the majority of this Court.

The Fifth Amendment is consistently accommodated with other powers that exist in the constitution.

It does not exist in the abstract, it exist in the same constitution that has the power to tax and power to do other thing.

Hugo L. Black:

But it says that Congress shall not be (Inaudible)?

Fifth Amendment, doesn’t say that?

Doesn’t it say that no person shall be compelled to be a witness against himself, how can you accommodate that, a way — in the way you do that — the feeling, the amendment to that (Inaudible)?

Francis X. Beytagh, Jr.:

Well, I don’t think you accommodated a way, Your Honor.

Hugo L. Black:

You just make it unenforceable.

Francis X. Beytagh, Jr.:

I don’t you make it unenforceable.

If you read it against the background of the other —

Hugo L. Black:

You’re used of the statement when a man is compelled by the Government to make the conviction of a crime.

Francis X. Beytagh, Jr.:

Well, that is one way to look at it.

Hugo L. Black:

Is that accommodate —

Francis X. Beytagh, Jr.:

One of our suggestions is that the court adopts the rule that would prevent that.

Francis X. Beytagh, Jr.:

A restriction on the —

Hugo L. Black:

And can the court repeal the Fifth Amendment?

Francis X. Beytagh, Jr.:

No, I don’t think that would repeal the Fifth Amendment at all.

Hugo L. Black:

It just makes it unenforceable.

Francis X. Beytagh, Jr.:

I don’t think it makes it unenforceable.

It protects the individual against the harm that the Fifth Amendment is designed to protect him against.

That is —

Hugo L. Black:

I thought it was designed to protect him from being a witness against himself.

Francis X. Beytagh, Jr.:

Well I don’t think he can be a witness against himself, Your Honor if what he is compelled to disclose can’t be used against him.

Hugo L. Black:

Well, that’d be, if you grant immunity, you mean?

Francis X. Beytagh, Jr.:

Well, if you adopt the rule —

Hugo L. Black:

There is no immunity here, isn’t it?

Francis X. Beytagh, Jr.:

If you adopt the rule similar to the rule adopted in the Murphy case by this Court which is a prohibition on the use of this information that is compelled of the individual in any subsequent prosecution.

Hugo L. Black:

Well, that would be a thing for Congress to do, isn’t it?

Francis X. Beytagh, Jr.:

Well, it —

Hugo L. Black:

If it’s done?

Francis X. Beytagh, Jr.:

It could have been a thing for Congress to do in the Murphy situation.

But the court didn’t do that, Your Honor.

The Court stated that it was adopting an exclusionary rule which would protect the individual against any incriminatory use.

And —

Hugo L. Black:

So, do I understand then that what all the Government is asking is that we provide that a man should be granted immunity from any prosecution before he is compelled to answer this question.

Francis X. Beytagh, Jr.:

No, I don’t exactly understand that the thrust of the question that all that the —

Hugo L. Black:

Well, the thrust of the question is, I’m asking, do you — if you want to do it in that way, you provide — are you asking us to provide the rules which — to the effect any man who makes one of this tax returns, they’ll be exempt from prosecution?

Francis X. Beytagh, Jr.:

No, it’s not an exemption from prosecution, that’s not the rule —

Hugo L. Black:

Immunity from prosecution?

Francis X. Beytagh, Jr.:

No, not from prosecution, Your Honor, from use of the information which is compelled or its fruits as a link or lead or whatever.

Hugo L. Black:

It doesn’t make a difference about the length of the lead, does it?

That passes out the window under the present argument because here the man compelled to give evidence against himself, that he has committed a crime.

Francis X. Beytagh, Jr.:

But that doesn’t —

Hugo L. Black:

So it’s not a question of a lien?

Francis X. Beytagh, Jr.:

No, that doesn’t speak to the question of whether and how he can later be prosecuted for the substantive offense.

He may or he may not be able to depending upon how this information is used.

It can’t be introduced under this rationale against him in a subsequent prosecution.

Potter Stewart:

Well, don’t you go a little further than that Mr. Beytagh, I thought the Government’s position was as in Murphy that in this instances where you do get this information but subsequently he is prosecuted for gambling whether by state or under some federal Law.

The prosecution whether it’s a state or the Federal Government has the burden of establishing that the evidence used, could be the same evidence, I take it was derived from an independent source.

That is independent of any information that he disclosed.

Francis X. Beytagh, Jr.:

Yes, it seems to me that’s an essential aspect of Murphy and that is part of the alternative approach that we suggest here.

Byron R. White:

Now do you suggest the — that only as an alternative.

Francis X. Beytagh, Jr.:

Yes Your Honor.

Byron R. White:

So what about Mr. Justice Blacks’ question on without the alternative?

Francis X. Beytagh, Jr.:

Well, the other approach that we suggest is essentially Kahriger and Lewis as far as we can determine what they stand for and what they speak for.

Kahriger and Lewis have been regarded by many as being grounded on the consideration that the registration requirement involved in both those cases was simply prospective in operation.

Well, it is perspective in a sense but we don’t rely on that because we don’t think that that’s principle basis on which those decisions were grounded.

Particularly in the Lewis case, the court developed the approached which said that there is simply no compulsion here operative in the Fifth Amendment sense.

And there isn’t any because a person considering entering into gambling has a free choice, clear choice as to whether he can or not.

When he does make the decision to, he should be regarded as having assumed the tax conditions that Federal Government attaches to that.

It seems to us that that’s a sensible rationale but we realized that the court wouldn’t have taken these cases to reconsider Kahriger and Lewis in light of Albertson.

Had a thought that rationale was completely sound and subject to some scrutiny.

And we suggest therefore that if in light of Albertson and if in light of the courts concern with this problem, it should feel that rationale is no longer a viable one then that the alternative we suggest should be adopted.

It seems to me that the — we have to take a look at Albertson because that’s really what we are reconsidering these cases in light of.

Albertson is — the Court is of course aware was a Communist party registration case.

There the registration requirement operated on people who had already been found by the Subversive Activities Control Board to be subject to registration.

There the registration —

Potter Stewart:

Didn’t the order in the Albertson — wasn’t the order directed to identified individuals?

Francis X. Beytagh, Jr.:

Yes.

Potter Stewart:

About whom the Government already had a great deal of incriminating information, is that true?

Francis X. Beytagh, Jr.:

Yes, that was one argument —

Potter Stewart:

And that the — and the argument that the Government made, as I remember, one of the arguments was if it wasn’t self-incriminating in that case because of the — well, for these people to register would not add a bit to the knowledge of the Government already have, isn’t — were that correct?

Francis X. Beytagh, Jr.:

Yes, Your Honor.

The court found that the — they agrees with the Government’s information or lack thereof was not a pertinent —

Potter Stewart:

Well, this case, would it be true, if this case is a fortiori from Albertson.

Here, the Government did not have any knowledge and does not have any knowledge about professional gamblers presumably until they are required to come in and identify themselves, turn themselves in, is that true?

It’s a fortiori from Albertson.

Francis X. Beytagh, Jr.:

Well, I don’t know if it’s a fortiori —

Potter Stewart:

At least in that area, in that respect?

Francis X. Beytagh, Jr.:

In that respect, perhaps.

Potter Stewart:

Or am I mistaken?

Francis X. Beytagh, Jr.:

— but it seems to us that the — underlying Albertson are some very broad and some difficult implications and they don’t just involve wagering, they involve taxation generally.

They involve regulation by Government generally.

The whole concept of self-reporting and disclosure permeates our tax and our regulatory system.

And if we are going to get to the position where the Fifth Amendment excuses anyone might feel that he should not comply because it might incriminate him.

Then serious implications are raised with this whole program.

Now, there are regulatory statutes in which there is very little illegal activity and in which it would be difficult for one to conclude that how could he possibly involve — be involved in a crime.

Without speaking to the — that question directly, it seems to me that there are other regulatory statutes in which some people do engage in activity lawfully and some people don’t.

Now, Albertson spoke about the problem of the individual determining for himself without determination by a tribunal that he was authorized to claim the privilege.

That’s the same problem that’s presented with respect to the application of Albertson, its other context.

Nobody would know whether these people really had a privilege claim or not.

The problem of course is one that it seems to us can be resolved at least in the alternative via restriction on the incriminatory use.

The alternative it seems to me in operating tax and regulatory programs is just an undesirable one.

And the alternative is that nobody would be compelled or required to disclose anything.

The Government would have to go out and get this information from people by agents and investigations.

I think that’s crazy.

It seems to me that we have developed a system here in which people do have to come forward and say things to the Government and they have to do that because that’s the way to run the — these programs.

Now whatever implications Albertson has in that regard it seems to us are serious and important.

I wold like to speak for a moment on the problem of the Sullivan case.

Now we agree that the income tax situation is different.

Mr. Zeldes pointed out on a number of occasions that we inserted in our brief a statement that no specific identification or source was required with respect to the income tax.

And that’s right but as I pointed out, it seems to us quite —

Byron R. White:

You mean on — my individual income tax return if I have a — I’m operating a business, I don’t have to come out and get (Inaudible) or whatever it is, that just didn’t — I could just ignore whenever I sit down (Inaudible)?

Francis X. Beytagh, Jr.:

No, I’m talking about the individual income tax (Voice Overlap) —

Byron R. White:

So am I.

Francis X. Beytagh, Jr.:

And the point that —

Byron R. White:

Anybody who is running an individual business where he doesn’t have to — well, he has income, and doesn’t have to take depreciations, in fact (Inaudible)?

Francis X. Beytagh, Jr.:

Well, the problem —

Byron R. White:

(Inaudible) schedule, sooner or later he’s going to have to get around to — pretty well join this kind of a business is that — he’s going to deduct his expenses, pretty well, its — he’s going to have to show that isn’t true.

And he can just forget the — filling out that schedule?

Francis X. Beytagh, Jr.:

Well, I don’t know in practice what these people do, they say — they tell us that they’re —

Byron R. White:

What do you mean what people — do you say you don’t have to show the source of your income in your income returns, is that right not?

Francis X. Beytagh, Jr.:

My understanding of what is done with the present practice is —

Byron R. White:

You mean I don’t have to show where — who my employer is?

Francis X. Beytagh, Jr.:

A — the Sullivan rationale as we understand —

Byron R. White:

Well, they have to given this information, and I don’t know why they even send you the return.

First question, who is your employer?

Francis X. Beytagh, Jr.:

My understanding is that what is done when the employer is one that — generally I think these people are probably self-employed but where the employer is —

Byron R. White:

I know, we’re not — (Inaudible) people, we’re talking about anybody?

Francis X. Beytagh, Jr.:

Well, I take it that if disclosure of your employer would be incriminating then you would not disclose your employer.

You just couldn’t disclose it, period.

Francis X. Beytagh, Jr.:

Well, I take it that you’re still required to disclose the income and to pay tax on it.

Hugo L. Black:

Well, what would you say on your return?

Francis X. Beytagh, Jr.:

Say other miscellaneous or I think most of the people that are in that situation make up some name or have some name that they used income.

That isn’t incriminating to show us that — as the source.

Hugo L. Black:

Did they make false statements?

Francis X. Beytagh, Jr.:

I don’t think it’s a false statement.

You know, if they’re little more sophisticated.

Earl Warren:

It is if you — to give a wrong name on your return, isn’t it, isn’t that a false statement?

Francis X. Beytagh, Jr.:

No I don’t think — I wasn’t implying that if it’s a wrong name, it — its company A, if Company A is really a company, but they don’t disclose what business company A is in.

But Sullivan didn’t hold that the — that you could take the position — didn’t have to hold anything in the crime.

Francis X. Beytagh, Jr.:

It didn’t get to that, it’s been read —

Byron R. White:

Didn’t get to that —

Francis X. Beytagh, Jr.:

It’s been read subsequently as —

I suppose, expressly we don’t get to the question whether or what should have been withheld?

Francis X. Beytagh, Jr.:

That precise — that’s right.

The precise question in Sullivan is whether you could fail to file a return at all.

(Inaudible)

Francis X. Beytagh, Jr.:

It seems to me that some of the language in Sullivan is I pointed out is pertinent here.

Sullivan says that the non-taxpayer there cannot simply draw a circle around his activities and prevent the Government from inquiring at all into the — respect to the enforcement of the tax problem by not filing return at all.

It seems to me that Albertson recognize this distinction.

In Albertson the court said to one of the claim or privilege not asserted at the time the return is due would make the taxpayer, rather than a tribunal (Inaudible) as to claim.

I would like to turn for a few moments to the alternative rationale that we discussed.

It has been suggested that the matter of conferring immunity from use is appropriate for Congressional and Judicial determination.

But it seems to me that the same thing could be said about the problem that existed in Murphy.

The court in Murphy could simply have said that there is a problem here now that the Fifth Amendment applies both to the states and in to Federal Government and that these individuals can’t be compelled to answer.

If on the other hand Congress chooses to do so, it can enact a statute which would protect them from any incriminating use of this information in a federal prosecution.

Now the court could have done that but it didn’t do that.

The court adopted what’s essentially an exclusionary rule that the court has clearly the power to do.

It’s done it in other circumstances and we suggest that this would be an appropriate thing to do here.

(Inaudible)

Francis X. Beytagh, Jr.:

That what must be disclosed?

The fact of registration?

(Inaudible)

Francis X. Beytagh, Jr.:

Well, one point that I wanted to make with respect to 6107 despite the implication of Mr. Zeldes’ argument, 6107 was not enacted along with the wagering tax, it antedates it considerably.

We have taken the position in our brief that the — should the Congress — should the court feel that — to use restriction approach should be taken here, the Internal Revenue Service will seek amendment of 6107 to have it no longer related to the wagering tax provision.

6107 relates to all special taxes not just the wagering tax.

It seems to us that under the Fifth Amendment so long as the information that the Government obtains from anyone is confined to use in the aid of collecting taxes that no self-incrimination problem arises.

The guy is required to devolve certain information to the Government.

He does so.

It’s used to enforce and collect taxes, no self-incrimination.

Hugo L. Black:

Why?

Have you been compelled there to commit a crime?

How do say that, I mean (Inaudible)?

Francis X. Beytagh, Jr.:

Well, he cannot be harmed with respect to these disclosures unless and until the information is used to assist and convict —

Hugo L. Black:

But in light of (Inaudible) that’s right but is that the standard of the Fifth Amendment?

Francis X. Beytagh, Jr.:

Well, it’s not just possible that he might if a Murphy type of rule is adopted —

Hugo L. Black:

Oh, you are saying that if you have got that (Inaudible) —

Francis X. Beytagh, Jr.:

Yes, Your Honor.

It seems to us that as the court pointed out in Murphy that the problem of focusing either on the time of attempted compulsion or the time of attempted use of incriminatory information is no longer a pertinent one.

And it seems to us that Murphy took that into account.

Now, Murphy said, we hold the Constitutional Rule provision but a state witness may not be compelled to give testimony which may be incriminating under federal law unless the compelled testimony and its fruits cannot be used in any manner by federal officials in connection with a criminal prosecution against him.

Hugo L. Black:

We conclude that in order to implement this rule and accommodate the interest of the State and Federal Governments, the Federal Government must be prohibited to make any such use of compelled testimony and its fruits.

There are other cases in which the court has referred to the restriction on use, in the Blue case the court said even if we assume the Government did in — did acquire incriminating evidence in violation of the Fifth Amendment, Blue would at most be entitled to suppress the evidence and its fruits if they were sought to be used against him at trial.

There’s a similar statement in Adams versus Maryland.

It seems to us that that they sought a rule if the court feels that Kahriger and Lewis are not consistent.

Fifth Amendment as presently understood would provide a sensible accommodation not only in these cases but in the other cases in which Albertson may have some difficulty in the future implications.

Your alternative is if this (Inaudible) Congress can’t put an excise tax on gambling unless it immunizes these gamblers from any possible incrimination.

And I don’t know why in the face of Murphy it’s not appropriate for the court to adopt or use the restriction rule.

We developed at length that seems to us that that — that is a sound and a sensible position.

I would like for a few moments, since this is on reargument to discuss the questions that the court posed and asked to have dscussed in our briefs and oral argument.

We take the position as Mr. Zeldes has pointed out that in our view the Shapiro case is not of direct relevance here.

As we read and understand Shapiro it relates to the so-called required records doctrine.

A requirement that certain records be maintained and kept and be available for inspection by the Government.

And we think that’s a different situation from one in which the Government requires and individual to affirmatively come forth and make reports or returns to the Government.

It seems to us that Shapiro has it is evolved over the years as understood and to mean in the context in which it arose.

The court pointed out in Shapiro that the regulation there involved records that were customarily and regularly kept.

It seems to us that that’s an appropriate improper view of Shapiro.

The alternative of saying that Shapiro is applicable any time the Government requires anything to be filed with the — it seems to us, the lack of any sensible limitations.

We therefore don’t argue that, is that reliable?

Now there is a potential Shapiro problem with respect to the wagering tax as we point out, there’s a Section of the wagering tax statute, Section 4403 that provides for the keeping of daily records of the wagering activity.

That statute is not involved in this case.

Now the courts below in this or in the Grosso case considered 4403 and petitioners were not charged with failing to keep such records nor were any records of either of the petitioners along those lines and produced against them.

There may be an appropriate case in which this question comes out in which the application of Shapiro is involved.

Hugo L. Black:

It’s not this case and it seems to us that there’s no need presently to get to that.

The other question involves the inquiry as to what sort of information must be provided accompanying payment of the excise tax in the Grosso case and order to affect registration and the correlative payment of special occupational tax in the Marchetti case.

We take the position that the forms that are prescribed for use, Form 11-C as to registration, Form 730 is the excise tax must be completed and filed along with payment and registration.

It seems to us that in order for a tax scheme to operate in a sensible way, certain information has to be obtained by the Government.

The business of an anonymous payment, it seems to us not to be a feasible one.

Now, underlying the problem here, Mr. Zeldes didn’t speak to it directly.

Mr. Justice Stewart referred to it.

The problem is that almost anything you require someone to do, if you require him to put his name down on the thing, they are going to claim that that’s enough.

Mr. Chief Justice you tried to develop this this morning.

It seems to me that’s the answer.

If the root — the answer is, well no we can’t even be required to put our name on the form because if we put our name on the form they may come about knowledge of us that they wouldn’t have otherwise.

Well, I don’t know how else you administer a tax scheme.

Our position is that if we can at least have the people that are required to pay the tax identify them then the tax scheme is not workable or feasible.

Therefore that’s the reason why we take the position we do as to the second set of inquiries that the court has posed.

Several other points were raised during prior argument that I’d like to mention, it seems to me that the question is posed as to the applicability of Shapiro in the income tax context is a difficult one.

I don’t think it’s raised here either.

I think its proper if the court considers the implications of Fifth Amendment decisions in the East cases, in subsequent case that are going to come along.

We tried to develop in our reargument brief to point that the — despite the claims that you don’t have to worry about Sullivan and not to worry about the income tax.

In a term or two, if Kahriger and Lewis are not followed, these cases are going to be out there.

Now, one answer is well, deal with them when they come.

It seems to us that Albertson and its reading of the Fifth Amendment opens up this whole array of problems.

With respect to Mr. Justice Fortas’ inquiry about Shapiro and the records that are required to be kept, I think I would give substantially the same answers as Mr. Zeldes’ gave.

It may be that as to certain people that are required to keep records incident to the income tax laws, they would have a privilege but its quite clear then either that Shapiro doesn’t stand for its brought a proposition to some people, I think it does or if the court in taking that position would be effectively restricting in limiting Shapiro.

Now, we don’t rely on Shapiro affirmatively here but we do point out that the court was faced with a similar problem in that case.

I know it’s an old case.

But the problem there was that the Government had a program that required people to keep certain things as records.

The question was whether those records had the kind of character that they could be used by the Government in a prosecution.

And the court concluded that they could, concluded that they could because those records had certain public aspects.

Now, as I have said previously it seems to us that one way to consider Shapiro in light of the background of that case is that the records of the court there was talking about are those records that are ordinarily and customarily kept.

But I don’t know that the answers the problem that Mr. Justice Fortas read.

Hugo L. Black:

It seems to me that most taxpayers keep certain records whether the activity they engaged in is lawful or unlawful.

And the problem of course that you’re faced with then is whether Shapiro provides that these kinds of records regardless of the framework of the activity are within or without the privilege.

It seems to us that rather than anticipate an answer to that the better course is to keep in mind these difficulties in resolving the problem here because there isn’t or there isn’t any need to resolve it.

They are — they’re in the background and they’re going to present themselves eventually.

Byron R. White:

But you would — I suppose, that — since the Government relies so heavily on (Inaudible), it wants to put Shapiro aside, you would not want to use restriction if the District Court (Inaudible) into this case would apply to the situations so that Shapiro would apply.

Well, Shapiro of course permitted the use of a criminal prosecution.

Furthermore, it’s permitted it after — an answer to his subpoena afforded to taxpyer himself with this directive.

Francis X. Beytagh, Jr.:

Well, what we’re talking about here is the use restriction approach as to reports and returns that are affirmatively filed.

It seems to me it maybe a different question as to whether the same sort of approach is either required or desirable.

Byron R. White:

Well, what is that (Inaudible)?

Francis X. Beytagh, Jr.:

Because it seems to me that what Shapiro deals with and it may are things that are ordinarily and regularly maintained by people that have because of their relationship to the governmental program, certain aspects that — to make them suitable to governmental or public scrutiny.

Byron R. White:

I thought that Shapiro would have at least talks about records that the law required them to keep?

Francis X. Beytagh, Jr.:

It does talk about that.

Byron R. White:

Well, if you would say that they were also, but they wouldn’t apply to records that — that Shapiro wouldn’t apply unless the records since the law required them to keep also their records which they normally (Inaudible) kept.

Francis X. Beytagh, Jr.:

Well, I don’t think that those are exactly all the categories there are.

It seems to me the question may be whether — not whether the particular law required a certain record or whether the kind of record required was such that it ordinarily be kept.

And there were the cases that fall into the side of that kind of (Inaudible).

Byron R. White:

Would you think Shapiro would permit or recover the situation under the income tax or the taxpayer reveals some income because he showed the source of it if the law requires them to keep records showing his income and the Internal Revenue Service then asked him to produce the records verifying this amount of income.

Francis X. Beytagh, Jr.:

Well, I said that my answer to that question is essentially the same as Mr. Zeldes’ gave that it seems to me that if that problem is posed, its difficult —

Byron R. White:

Yes, but I wanted — do you think Shapiro would cover that situation and permit the Government to get the record to use them against — in on a criminal prosecution?

Francis X. Beytagh, Jr.:

It seems to me that Shapiro would apply to those records so long as we can assume that the taxpayer ordinarily would keep certain kind of records anyhow of that type in conjunction with this — his activity whatever they may be.

Byron R. White:

And you think Shapiro would permit the Government to subpoena them and to use them against him in a criminal prosecution?

Francis X. Beytagh, Jr.:

Well, the difficulty that you posed is this, that if that’s so, does Sullivan make sense?

Byron R. White:

Well, I know but (Inaudible)?

Francis X. Beytagh, Jr.:

Right because it seems to me then you’d have a serious question as to whether the rationale of Sullivan that the taxpayer doesn’t incriminate himself because he can fail to disclose the source if that source is illegal may be something of a track cause he does that and then Shapiro is thrown out.

And I don’t know what the answer to that is.

It seems to me that as I have said —

William J. Brennan, Jr.:

Let’s assume for the moment that Shapiro would permit that?

Do you think that such a holding has any relevance whatsoever to the situation where the Government says, “Now look, we don’t want to go to all the bother having to subpoena these records.

We want you to file month by month exactly what we could come after to get them with a subpoena.”

Francis X. Beytagh, Jr.:

I think that that’s — that is a different situation in Shapiro because you’re requiring people then to come forward and do things they otherwise would not do.

Byron R. White:

Well, you are with the subpoena but should Shapiro permit it?

Francis X. Beytagh, Jr.:

But Shapiro relate it to records that presumably were already in existence and maintained.

Byron R. White:

What?

It doesn’t mean the same thing if the — that the fellow does keep records showing his income like the law requires them to do it.

And the Government says, “Now, produce it.”

Francis X. Beytagh, Jr.:

Well, I think there’s a difference between requiring somebody to come forward and to fill these things out than maintain records.

William J. Brennan, Jr.:

May be I’m wondering if — so you’re approach or use restriction idea, as a practical matter, do you suppose any prosecution would succeed with — if on the basis of the use restriction, the stamp tax affirmed, it was sustained, now — I’m just wondering if that stamp or whatever that thing is, has to be posted on the premises, doesn’t it?

Francis X. Beytagh, Jr.:

Any prosecution for gambling could be sustained.

William J. Brennan, Jr.:

I just wonder if it could if — the burden on the state or the Federal Government’s case might be would be to show that it came about its evidence by some independent source and its basic attack by compliance with the stamp tax requirement, the defendant has posted this thing for all the world to see.

Francis X. Beytagh, Jr.:

Well, it seems to me that it depends upon how the particular prosecuting authorities come about their information if they go into the guy’s —

William J. Brennan, Jr.:

Well, that — my question — I’m just wondering how successful any prosecuting authority would be in sustaining his burden to the show that it came about this information from an independent source and faces the fact that there’s the stamp, I am a gambler, placed it right on the front door.

Francis X. Beytagh, Jr.:

Well, I think as a practical matter, gambling prosecutions would continue as before.

That doesn’t say too much of course, but —

William J. Brennan, Jr.:

Well, I’m wondering if they’d succeed in prosecution, that’s my point.

Francis X. Beytagh, Jr.:

Well, if you think that after adoption of this kind of rule, gamblers will suddenly rush in and they’ll all register and they all pay the tax which would be very nice —

William J. Brennan, Jr.:

Very nice to Federal Government.

Francis X. Beytagh, Jr.:

With Federal Government.

William J. Brennan, Jr.:

Now I wonder what the state authorities then under the necessity if they want to prosecute him for gambling and showing that they came about their information from independent source.

I wonder what they would, how nice they would think it would.

Francis X. Beytagh, Jr.:

Well, I don’t think that those difficulties are going to be that great because our understanding is that the information that it is obtained as a result as compliance is not a terribly important factor as to whether a state —

William J. Brennan, Jr.:

Well, it says, “I am a gambler.”

Francis X. Beytagh, Jr.:

Well, that’s —

William J. Brennan, Jr.:

I can’t imagine that there’d be anything more important there, would it?

Francis X. Beytagh, Jr.:

Yes.

But the question would be whether but before that it seems to me that the question be whether but before that the state would have known about the gun and the problem generally isn’t whether they know about them or not, whether they have the — were with all the prosecutors.

William J. Brennan, Jr.:

Mr. Betagh, going back to your income tax question (Inaudible), the schedule C in Form 1040 the — relating to (Inaudible) of business passed or sold proprietors with, first questions, is principle business activity, business name, business location so on and so forth, that — you’re suggesting that taxpayers may just disregard this and go ahead?

Francis X. Beytagh, Jr.:

Oh, I think it depends on the particular circumstances if the name of the business itself would be —

Byron R. White:

Oh, so the taxpayer could — just right across this — I claim the Fifth Amendment is not filed here.

Do you concede that?

Byron R. White:

Are you — is that your position?

Is that — you can think that’s what the (Inaudible)?

Is there any provision in the law to that respect?

Francis X. Beytagh, Jr.:

No, there isn’t —

Byron R. White:

Or is there any regulation to that effect?

Francis X. Beytagh, Jr.:

No, there is —

Byron R. White:

It’s just your reading of Sullivan?

Francis X. Beytagh, Jr.:

That’s our reading of Sullivan.

Byron R. White:

Yes.

Francis X. Beytagh, Jr.:

And Sullivan as interpreted in Albertson.

Byron R. White:

Where in a case (Inaudible)?

Francis X. Beytagh, Jr.:

I don’t know of any here.

Abe Fortas:

May I ask you this question, could the Federal Government force a gambler to respond to the following question?

Are engaged in the business of accepting wagers on your own account?

Or would he be able to defend the Fifth Amendment grounds?

Francis X. Beytagh, Jr.:

In what context would that question be —

Abe Fortas:

There is no context.

Francis X. Beytagh, Jr.:

Pardon?

Abe Fortas:

There was no context.

The Government adopts the statute that says, “All people have to respond, say yes or no.”

And Mr. Marchetti refuses to respond on the defense on the grounds of the Fifth Amendment, would Mr. Marchetti — could Mr. Marchetti be convicted under a federal prosecution?

Francis X. Beytagh, Jr.:

Well, it’s difficult to answer that question without knowing the context in which —

Abe Fortas:

I’m giving you a context, the Government passes a law and it says, “Every person in the United States, (Inaudible) the first day of November, perhaps a good day, has to file a statement answering this question, are you or are you not — are you engaged in the business of accepting wagers on your own account?

And Mr. Marchetti doesn’t file, the Government prosecutes him and his defense is the Fifth Amendment?

Is that a sound constitutional defense?

That’s — the kind of a question.

Francis X. Beytagh, Jr.:

I think it would be because if it —

Abe Fortas:

Well, then why isn’t your Form 11-C subject to a Fifth Amendment affirmative because I’ve read to you that if you know —

Francis X. Beytagh, Jr.:

That’s right.

Abe Fortas:

— the critical question that’s maintained on Form 11-C and I further understand from your brief that you concede that the Form 11-C has to be filled out on the — first in pages of gambling tax.

Francis X. Beytagh, Jr.:

Because Form 11-C is a form that’s required to be completed and filed in conjunction with the payment of a tax.

Abe Fortas:

Well, yes but you’re telling me that you can’t force a man to answer this question.

Now, why can’t you force a man as in the question on Form 11-C?

Francis X. Beytagh, Jr.:

Well, it’d be —

Abe Fortas:

There’s not magic in that form number, is there to overwrite the Fifth Amendment?

Francis X. Beytagh, Jr.:

No, but in your hypothetical it seems to me all that Congress would doing would be attempting to set up a system whereby they obtained incriminating information about people.

Abe Fortas:

Well, then what you’re saying is that if you can couple this to tax, to couple this unconstitutional inquiry, would the assessment and collection of a tax, could that — probably it’s a collision with the Fifth Amendment?

Francis X. Beytagh, Jr.:

We don’t say that it aviates the collision.

We acknowledge that there is a collision.

We suggest the —

Potter Stewart:

So accommodating —

Francis X. Beytagh, Jr.:

— several ways of resolving that.

Abe Fortas:

What you’re saying — are you saying you have to accommodate it and against the Fifth Amendment, is that right?

And you come out with the result against the Fifth Amendment —

Francis X. Beytagh, Jr.:

Yes.

Abe Fortas:

— instead of waive the Fifth Amendment, is that it?

Francis X. Beytagh, Jr.:

I don’t want to waive the Fifth Amendment.

Potter Stewart:

You want to accommodate it, that’s your word, isn’t it?

Francis X. Beytagh, Jr.:

That’s right.

That was the Court’s wording.

Potter Stewart:

Right, I thought —

(Inaudible)

You don’t argue (Inaudible)?

Francis X. Beytagh, Jr.:

No, I don’t think that in this day and age there is —

(Inaudible)

Francis X. Beytagh, Jr.:

That’s right.

(Inaudible)

Francis X. Beytagh, Jr.:

Just for few moments, I’d like to talk about the dispositions in this case.

It seems to us that if the Kahriger and Lewis rationale, the non-compulsion voluntary choice rationale is accepted that the affirmance is as dictated here.

And we recognized however that more difficult problems presented if the court should adopt the Murphy type exclusionary rule approach.

Francis X. Beytagh, Jr.:

We recognized that in Murphy the court reversed the civil content convictions there on the ground that the individual should be given another opportunity to testify.

We think however that our circumstances here are different.

And that they do not necessarily warrant a remand or reversal if a use restriction approach was adopted.

The petitioners in these cases knew about Kahriger and Lewis.

That they knew that the statute had been upheld as a constitutional exercise of the tax posed.

It seems to us that a further holding that a statute is valid doesn’t justify there activity or their conduct on failing to pay the tax or register.

Now, a situation such as in the James case, it seems to us is a different one.

In James there was clear authority to the contrary prior to the court’s decision.

Here we don’t have that kind of situation.

Indeed, the petitioner Marchetti in one question admitted that he knew about the wagering tax law but he said that nobody buys the stamps and the he pays enough already.

Petitioner Grosso in the next case, his defense was that he had gotten out of the wagering business when the wagering tax laws were enacted.

He didn’t want to mess around with feds so he got out.

Well, that defense was rejected by the jury.

So both of these petitioners knew what the law was and what the law required and they didn’t comply with.

It seems to us that under those circumstances they were properly convicted and if the court adopts either of the rationales the Government suggests, their conviction should be affirmed.

Earl Warren:

You may close your argument Mr. Zeldes.

Jacob D. Zeldes:

Thank you Mr. Chief Justice.

I would just like to comment very briefly on the Government’s position.

I didn’t comment in my opening remarks on the use restriction alternative suggestion that the Government makes and I won’t dwell on it in depth now.

I had set out fairly and comprehensively in all of our briefs.

But I would like to make one mention of the comment of Mr. Justice Harlan regarding Section 6107.

I think that’s very informative on the Government’s alternative argument because the Government admits in effect that that Section stands in the way of their alternative argument that they argued to the court, well, until we can get the Internal Revenue Service to get Congress to amend that we’ll sort of ignore it.

They can of course represent that they’ll ignore a law of Congress but they’ll — it’s very malleable on the Government’s position and I think that the point that was raised in regard to Section 6107 demonstrate to some extent the inability of the use of the use restriction alternative argument that the Government advanced.

The Government also made reference to fear of conjure circle which is the word used by Mr. Justice Holmes in the Sullivan case.

And I think as its reliance on that is based primarily on the statement Mr. Beytagh made immediately before that if I’ve heard him correctly.

He said, “No one will really know if you had a proper privilege or not.”

But that certainly is no problem in this area like in Albertson where the area is so saturated with criminal conduct.

My only other remark before closing cause perhaps I thought I might shed a little bit of light on the situation that Mr. Justice White was talking about.

As I understand the situation I think there’s no question if the income tax can be paid so as not to identify its source but and this very important for the large volume of voluntary compliance and the large amount of legal activity in this country in the income tax context.

If taxpayer wants any deductions or if the taxpayer wants any exemptions, if he has eployees there must be disclosures regarding that.

Jacob D. Zeldes:

But if an illegal — if a person involved in illegal activity pays the tax on his gross income and claims nothing, as I understand the procedure and as the Government concedes this can be done anonymously.

Potter Stewart:

There — wouldn’t that be putting on of an unconstitutional burden (Inaudible) privilege to make the waiver in order to claim the deductions, a very serious problem to the California (Inaudible) comment.

Jacob D. Zeldes:

The (Inaudible)versus California?

Potter Stewart:

(Inaudible)

Jacob D. Zeldes:

That might Your Honor.

It’s on the periphery —

Potter Stewart:

(Inaudible)

Jacob D. Zeldes:

— of this area.

But the —

Potter Stewart:

Not this case.

But I (Voice Overlap) —

Jacob D. Zeldes:

It’s not this case and I mentioned this to show that —

Potter Stewart:

I don’t know how — I don’t know elsewhere you can rely on the points you just made.

Jacob D. Zeldes:

Well, as the latter and perhaps too strongly that because it’s conceded by United States in this particular case.

But I think —

Potter Stewart:

But it has to waive a constitutional privilege in order to get statutory induction?

Jacob D. Zeldes:

I think that’s the way it will —

Potter Stewart:

That’s putting it firmly on —

Jacob D. Zeldes:

But I think the important point that this all — guy’s home is that when United States wants money and that’s what they really want, there are ways that which they can collect their money without making the privilege vendor accommodate.

And for all these reasons and for the reasons I advanced in the briefs, I would respectfully request that this Court reverse the judgments of the court below.