Sansone v. United States

PETITIONER:Sansone
RESPONDENT:United States
LOCATION:United States Post Office and Courthouse

DOCKET NO.: 365
DECIDED BY: Warren Court (1962-1965)
LOWER COURT: United States Court of Appeals for the Eighth Circuit

CITATION: 380 US 343 (1965)
ARGUED: Mar 10, 1965
DECIDED: Mar 29, 1965

Facts of the case

Question

Audio Transcription for Oral Argument – March 10, 1965 in Sansone v. United States

Earl Warren:

Number 365 Michael C. Sansone Petitioner v. United States.

Mr. Solicitor General.

Archibald Cox:

Mr. Chief Justice, I am on the admission of Mr. Paul Bender of the district of the Columbia Bar, the purpose of arguing the case just to call on behalf of the United States.

Earl Warren:

Mr. Bender, you may be admitted for that purpose.

Mr. Silverstein.

Merle L. Silverstein:

Mr. Chief Justice, may it please the court.

This appeal involves a criminal prosecution for the felony of income tax evasion.

But the court below, the petitioner was indicted in two counts for the years 1956 and 1957.

He was acquitted as to the 1956 count but convicted as to the 1957 count.

The district court then assessed punishment as 15 months imprisonment and a $2000 fine.

Now the sole question presented here on this appeal is whether or not the jury should have been given lesser offence instructions.

This would have given them the alternative of convicting the defendant on a misdemeanor under Section 7203 of the Internal Revenue Code which is the Section which makes it a misdemeanor to willfully fail to pay a tax when do and also the failure to give the jury a lesser offense instruction under rule — under Section 7207 of the Internal Revenue Code which makes a misdemeanor for any person willfully to file a false return.

These instructions were both specifically requested by the defense below and they were refused by the district court, that action was affirmed by the Eighth Circuit Certiorari of course was sought and granted.

We feel of course that in order to consider this question, there should be some fearful consideration to the facts involved in the case.

In this particular instance, the omitted income which was the basis of the indictment involved only a single capital gain transaction in each of the two years in question.

Briefly in March of 1956, the tax payer purchased a large track of land for $20,000.

He merely sold a small piece of that track for $22,500.

Then the following year, he sold another small piece of a large track for $27,000.

Neither of these two transactions were reported on his 1956 and 1957 returns.

Now none of these facts were disputed at the trial.

That was freely conceded by the defense that these sales were made and that these sales were not reported on either return.

But the sole issue that was contested at the trial below was that of the tax payer’s intent.

The only evidence the government had to prove intent was a statement which the tax payer gave to a special agent of the intelligence unit in May of 1960 about two years after the 1957 return had been filed.

In this statement the tax payer admitted all of the facts and questions that the income — that the sales were, that they were not put in his return and that he intentionally omitted them from his return and then the statement concludes in regards to the 1957 return with this, I knew I should have reported the 1957 sale but my wife did not know that it should have been reported.

It was not my intention to evade the payment of our proper taxes and I intended to pay any additional taxes due when I was financially able to do so.

This was the –-

(Inaudible)

Merle L. Silverstein:

It was a joint return but only –-

(Inaudible)

Merle L. Silverstein:

She was not indicted.

Merle L. Silverstein:

Now the record is absolutely devoid of any other evidence of intent.

As a matter of fact, as even the Eighth Circuit conceded in its opinion, all of the other evidence showed just the opposite, it showed a lack of any intent to evade and a complete absence of any of the badges of fraud.

Some of the items which the Eighth Circuit highlighted were for example, there was no attempt made in these real estate transactions to use straw parties of false names.

The defendant dealt in his own name at all times.

Secondly, the payments for these transactions were always by check, Mr. Sansone took checks in his own name endorsed them and deposited them in his own regular bank account.

Thirdly, the proper documentary stamps were fixed to the deeds, properly and truthfully showing the purchase prices which were paid which Mr. Sansone received for these properties.

Fourth, all deeds were properly recorded giving notice to the entire world and fifthly, there was no consistent pattern of under-reporting of income.

Outside of these two isolated transactions Mr. Sansone’s returns had been correct in all details.

Now this was the government’s case.

The defense revolved chiefly around the testimony of the petitioner himself and as I say he admitted that he made these sales and did not put them in his return, the reason he gave was that he anticipated huge capital expenditures on this property.

He told the jury and this was corroborated by expert testimony from an architect, from an engineer and from the mayor of the city in which the property was located.

But he told the court and the jury that there was a stream running through his property called fish pack creek and this creek was creating a serious health and safety hazards that it was constantly over-flowing with sewage and all sorts of other things and that they had told Mr. Sansone that he must fix this creek immediately after the State Highway Commission of Missouri had resolved its problems in connection with the adjacent street.

Mr. Sansone had estimates that the minimum cost for fixing his creek would be $40,000 but he couldn’t start and he couldn’t get a final estimate until the adjacent highway of course, had been altered in accordance with the plans of the Missouri Highway Commission and so based on these facts the defendant below testified that he honestly believed that he did not have to report any capital gain until he had ascertained what these additional costs were going to be and then he could compute based on these two sales made whether or not he had a gain to report or not.

Now it was considered by everybody and of course we here conceded this was not a proper evaluation of the tax law by the defendant.

It was a mistake, it was conceded at the trial that it was a mistake, but it was the defense of the trial below that this was an honest mistake that, whereas the tax payer did intentionally omit these things from his return, did intentionally fail to make these capital gain reports in his return.

It was not — it did not arise out of any tax evasion motive.

It arose strictly out of his mistaken interpretation of my client.

What was the deficiency in the payment?

Merle L. Silverstein:

It would have amounted I believe to about $4000 dollars to the year $5000 to the year in question because of the capital gain there were — as a matter of fact Mr. Justice Harlan there was considerable controversy of the trial and the experts from the government had difficulty in deciding which formulae should we use for ascertaining the basis for the little piece that he sold off, should we use the front footage or the area or the allocation of cost never really came out in black and white.

Potter Stewart:

He did at the trial — petitioner did but deny making the statement to the agent to which you —

Merle L. Silverstein:

That is correct.

Potter Stewart:

That he never made it at all?

Merle L. Silverstein:

No, he said that — he admitted that he signed the statement, but he said the statement weren’t — was not his words, it was his statement that was–

Potter Stewart:

Didn’t reflect what he had actually —

Merle L. Silverstein:

Right, it was a statement that was drawn up by the agent that he signed because he was told that we’ll exculpate his wife and he was concerned.

Potter Stewart:

I think that was his motivation to exculpate.

Merle L. Silverstein:

Right and he also said that he was assured that this was only an initial step and he would have a chance to discuss the whole thing at the appellant level later on.

But he did repudiate the confession; there is no question about that.

Earl Warren:

We saw that, that it was conceded the trial and it was a mistake, did the government concede that it was a mistake —

Merle L. Silverstein:

No Your Honor, no the government of course did not concede that —

Earl Warren:

You mean he stated that that was mistake.

Merle L. Silverstein:

It was conceded by the — it was conceded by the defense that that he did not — that his interpretation of a law was a mistake, in other words the defense admitted that the defendant was wrong in that return — in not making his returns.

The government did not concede it was a result of mistake of course their contention was a result of fraud.

Now based on these facts the lesser offense instructions under 7203 and 7207 were offered and refused by the trial court.

William J. Brennan, Jr.:

May I ask, was that the only issue, really at the trial or his motivation in doing this?

Honesty is —

Merle L. Silverstein:

His intent was the only issue that is correct.

William J. Brennan, Jr.:

Whether it was willfully or mistakenly, but honestly done at that point.

Merle L. Silverstein:

I think that it was virtually conceded the trial that it was willful not accidental, but the question was whether or not it was done with an intent to defeat and abate taxes, that was the issue.

I think at the outset, that we ought to consider, please the court briefly the general rules which govern lesser included offense instructions under Rule 31 (c) of the Federal Rules.

Now the solicitor concedes in his brief that in connection with criminal prosecutions generally, although for some unknown reason not income tax prosecutions that a lesser offense instruction is required if two criteria are met, first of all the lesser offense for which you’re seeking the instruction must be included in the greater offence which is charged and secondly, the evidence must justify the lesser offence that is to say there must be some substantial conflict concerning the aggravating elements and we use aggravating element of course, to mean that element which when added to the lesser offence escalates it to the greater offence.

Now the Solicitor concedes this that this should apply generally to criminal prosecutions.

If for some reason unsupported by the authorities, the solicitor apparently takes the very bold position that this should not apply to income tax prosecutions.

He argues in his brief that when the government makes a charge of a felony under Section 7201 which is the tax evasion statute, when they make the charge and when they make their prima facie proof at the trial that then they are entitled to go to the jury on Section 7201 only and nothing less.

In other words as we take it the government is simply saying that rule 31 (c) for some reason doesn’t apply to income tax prosecutions and to the jury and an income tax evasion case should never have the alternative of perhaps disbelieving part of the government’s prima facie proof, believing some of it, but perhaps disbelieving some of it and finding the defendant guilty of one of one of the lesser included misdemeanors instead of the felony.

They offer no authority for this position except to say that it is consistent with the prosecutorial policy of the Department of Justice to treat all alleged evasion cases as 7201 felonies only and apparently the department does not consider 7203 and 7207 as available statutes under which to prosecute, if they have any evidence whatsoever of a possible evasion.

Now it appears that the department is seeking to get this court’s blessings to their prosecutorial policy and are asking this court to hold that once they charge under 7201 a tax evasion and once they make prima facie proof then that’s it, there is no such thing as lesser offenses and they’re entitled to a conviction and to go the jury under 7201 and nothing less.

Well, we simply can’t see any justification in logic, precedent, legislative history or what have you to uphold this position by the government.

Rule 31 (c) as far as we can tell is a codification and reiteration of the common law and it was intended to apply to all criminal prosecutions.

Apparently, there is some move afoot in the solicitor’s office to set income tax evasion cases apart from other prosecutions.

I happened to be in the courtroom yesterday and heard the argument in the Jabon case where the solicitor argued that complaints are different for income tax evasions.

They should have different requirement than complaints another criminal prosecutions.

Now in this case, they’re urging a different rule in regard to lesser included offenses.

Potter Stewart:

Mr. Silverstein, its your theory that Silverstein or Silverstine?

Merle L. Silverstein:

Silverstein.

Potter Stewart:

It’s your theory that the jury constructed the way you say should have been instructed could have found the petitioner guilty of both 7203 and 7207?

Merle L. Silverstein:

It is conceivable that they could have your honor.

Potter Stewart:

So you don’t graduate these in three steps.

Do you?

Merle L. Silverstein:

No, sir.

Merle L. Silverstein:

No sir.

7203 and 7207 cover two different acts.

Potter Stewart:

Separate acts.

Merle L. Silverstein:

We contend they are both lesser-included in the 7201 felony and it could have been conceivable for the jury to find him guilty of both misdemeanors and not guilty.

Potter Stewart:

If you were right, you would concede at least as you now see that the jury could have found it 7203 and 7207.

Byron R. White:

On this indictment?

Merle L. Silverstein:

That’s correct, Your Honor.

Now, we simply contend that income tax evasion should be different from no other criminal prosecutions and if a tax evasion charge necessarily includes lesser offences as this court held it does include in the Spies case specifically held that it included lesser offences.

They should be treated no differently than any other federal crime and rule 31C should be held to apply.

Now, to this extent, we agree with the solicitor that once a jury has convicted a defendant of income tax evasion, of income tax evasion and there and have rejected of course any lesser offences, then section 7201 is the only statute which should apply and prescribe the penalties.

We are making no content that there is an overlap and that a tax evasion conviction should be governed by some misdemeanor statute to the overlap that was suggested to the court in Achilli’s case, we are not making that contention.

If the jury makes a finding of guilty, of tax evasion and they have rejected any possibility of lesser offences, then of course 7201 is the only section we should apply and we should prescribe the penalty.

But, we say just as in any other law, this does not preclude the possibility of there being lesser offences and does not preclude the necessity for when the evidence indicates it for instructions on those lesser offences to be given.

Now, in regards to this specific instruction was the first one that was requested was under 7207.

This as I noted before is a provision which makes it a misdemeanor to willfully file a false tax return.

It does not require any intent to defeat or evade tax as it merely requires that the false return be willfully filed.

Significantly, a statutory predecessor which was 3616 A of the 1939 code did require an intent to defeat and evade.

But, when the court was rewritten in 1954 code and substituted section 7207 replaced 3616 A and it simply requires willfully filing a false return to constitute the misdemeanors.

It specifically eliminated the phrase dealing with the intent to evade.

The eight circuits in affirming this case simply followed its previous holding in Manko v United States, that section 7207 does not apply to income tax returns.

Now, the solicitor general has had two opportunities to support this opinion, in its brief opposing certiorari and in the brief on the merits in this case.

In both instances, the solicitor has failed to do this.

He has failed to support the Eight Circuit opinion or to do anything to attempt to justify it.

We take his silence to mean that the solicitor and the government concede that section 7207 does in fact apply to income tax returns as well as other returns.

Potter Stewart:

Let me ask you, excuse me for interrupting, I don’t need answer now but under your theory if the jury has been instructed — about these other two sections but they have found the petitioner guilty of all three.

Merle L. Silverstein:

No, I don’t.

Potter Stewart:

These three, each one of the three involves a separate, different ingredients.

Merle L. Silverstein:

We only requested lesser instructions on 7203 and 7207.

Potter Stewart:

I suppose the instructions which you requested which I am not looking at now would have told the jury that if they found him them guilty of 7203 and 7207, they could not find him guilty of 7201 or —

Merle L. Silverstein:

That’s correct.

Potter Stewart:

Or maybe otherwise if they didn’t find guilty of 7201.

Merle L. Silverstein:

(Voice Overlap) — the instruction essentially said for example on 7207 if you find that the defendant willfully files the false return.

But if you find that he did not have the intent to defeat or evade then you will find him guilty of a lesser offence under 7207.

Potter Stewart:

But why now that I have interrupted you, why I couldn’t even have been found guilty for all three, each one involves separate.

Merle L. Silverstein:

What is the third – what is the third?

Potter Stewart:

7207, 7203, 7201.

Merle L. Silverstein:

Well of course, there would be a question of Double Jeopardy, I would suppose, so because some of the elements that are, for example, some of the elements that are necessary to 7207 are necessary elements to 7201.

Earl Warren:

Sounds some but not all.

Merle L. Silverstein:

Right, you add a couple of elements to 7207, then you have 7201.

It’s no different than in the murder case, if you have a first-degree murder case, you normally instruct that second-degree murder too.

If you don’t have deliberation, it’s second-degree murder, if you have deliberation, it’s first-degree murder, but they couldn’t be found guilty in both.

Potter Stewart:

Now, that’s true and if – if that’s the right analogy but in narcotics offences, for example, from the same — we often get three or four separate convictions for possession, for sale, for purchase.

Merle L. Silverstein:

Except –-

Potter Stewart:

Although I can really —

William J. Brennan, Jr.:

Mr. Justice, because each one of them are somewhat different ingredients –

Potter Stewart:

(Inaudible)

Merle L. Silverstein:

If they involve different ingredients that’s correct, but, for example, in this indictment 7201, one of the essential prerequisites of a felony charge as this court held in Spies was some affirmative act showing a willful intent to evade taxes.

Now, that thing, that affirmative act in this case was the filing of a false return.

So the filing of a false return, a misdemeanor itself was also a portion of the larger charge, so they could not find him guilty of both.

It would, in my opinion be included as Double Jeopardy.

And anyway, we feel and I think the solicitor will probably agree in view of his prior admissions and I believe in his petition opposed in his brief opposing certiorari in the Dillon case, they conceded that 7207 does apply to income tax returns and I feel this coupled with their silence as to the Eight Circuit position leaves no alternative but that they must concede that it does apply to income tax returns.

And this is not an issue at this time.

And what the government does contend here is that in the instant case, the evidence did not justify giving a lesser-included offense instruction.

In other words, there was no conflict as to this aggravating element.

And in urging this particular point, the government uses a very interesting play on words, particularly the word willfulness.

The government’s claims that the elements of the Section 7201 felony are first a tax deficiency, secondly, some affirmative acts constituting an attempted evasion, and thirdly, willfulness, three elements, and the government points out that the elements of these 7207 misdemeanor are two-fold, one, the filing of a false return, which is the same as the affirmative act in the felony, and secondly, willfulness.

So the government concludes that willfulness is required in both the felony and the misdemeanor and willfulness is not the aggravating element which can escalate the misdemeanor to the felony, and the government claims that the tax deficiency is the thing that escalates the misdemeanor to the felony.

Now that’s the aggravating element between 7207 and 7201.

And of course what this argument neatly assumes is the word willfulness, they assume that the word willfulness means the same thing in both statutes and nothing could be further from the truth, because as this court held in Spies case unequivocally and of course, as this language of the statute clearly expresses the term as willfulness as used in these two sections mean something completely different.

The term willfulness as used in the felony means one thing a specific intent to defeat or evade taxes.

Merle L. Silverstein:

Nothing less than that will suffice, and this court so held in the Spies case and reaffirmed in Holland versus United States and I think this is virtually beyond dispute, but in regard to Section 7207, the misdemeanor, the term willfulness simply means voluntarily, purposely, not accidentally.

In other words, as it was pointed out in speech, willfulness means different things depending on the context in which it is used and you just have to look at the statute in this case to find out which is which.

So in this instance, for a felony, you must have an intent to defeat or evade.

Nothing less will suffice for the misdemeanor of course you only have to have willfulness and so far as it pertains to be voluntary and not accidental character of filing a false return.

Byron R. White:

Well this — what was charged here was filing a false return with it?

Merle L. Silverstein:

Right.

Byron R. White:

But the lesser included defense you speak of would require knowingly — knowingly –

Merle L. Silverstein:

Willfully filling a false return between statute.

Byron R. White:

But which — the lesser included defense of filing a false return, what is that 7207?

Merle L. Silverstein:

That’s correct.

Byron R. White:

A 7207 requires when you file the false return that you know it’s false.

Merle L. Silverstein:

Well that’s correct.

Byron R. White:

Now it cannot ever be held to the anything less than intending your evade –

Merle L. Silverstein:

Well we think it unquestionably can.

A man can–

Byron R. White:

If a jury -– if a jury would find that you knowingly file a false return, is that — wouldn’t it necessarily also find an intentional evade?

Merle L. Silverstein:

No.

Byron R. White:

How are those different?

Merle L. Silverstein:

Well –-

Byron R. White:

When you know — when you know the form you have made out to sign, it’s false and you file it.

Now that is — how is that different from intending to evade?

Merle L. Silverstein:

An indent to evade or an intent to defeat involves a specific intent to cheat the government on a permanent basis.

In other words –-

Byron R. White:

Well I understand that but how is that different from– passing and returning those false.

Merle L. Silverstein:

A person can file a false return just as it defend and they did in this case —

Byron R. White:

Overstating his income presented.

Merle L. Silverstein:

Well that would be an example, that would be correct, but I’m saying in this instance the defendant so in testimony, if filed a false return, he knew he should have reported the fact of the sale even if there wasn’t any capital gain.

He knew that the fact of the sale should have been reported on his return and he did not report it on his return.

He thought that he could wait until his anticipated expenses–

Byron R. White:

Do you say the intent to evade means if you intend never to pay and if you’re going to away with him?

Merle L. Silverstein:

You intend to right, you intend never to pay — you intend.

Byron R. White:

It is never enough of an intent for 7201 just not to pay this year.

Merle L. Silverstein:

That is correct we and the language of the statute – the attempt to defeat and evade, there is a specific language of statutes used and —

Byron R. White:

So I can never -– I can never be guilty of a felony as long as I show that I attended to pay my tax sometime.

Merle L. Silverstein:

If you could convince a jury I would say —

Byron R. White:

That’s my point.

Merle L. Silverstein:

That’s correct.

Byron R. White:

That’s my very point.

Merle L. Silverstein:

That’s correct.

Byron R. White:

Would you really convince a jury that you didn’t have an intent to evade if you knowingly filed a false return.

Merle L. Silverstein:

This is a jury question.

This was my great question.

This is a jury question and this is all we wanted was to have this issue submitted to the jury.

Did this man intend to defeat or evade or did he just intend as he states in his confession that the government used, that he merely intended to put it off to a subsequent year.

If it’s a just a same as the larceny, the famous larceny of the motor vehicle case as that.

The defendant gets on the stand and says I didn’t intend to keep the car, I was only going out joy way.

So under that type of testimony, you have it issued that he intend to steal it, was the intent to permanently deprive the owner or was the just an unlawful use of a motor vehicle.

It does create a jury question which the jury — we feel the defendants entitled had the jury instructed on.

So we feel that this question of willfulness to please the court is unquestionably the distinction, one of the distinctions between the felony and the misdemeanor.

And that if the willfulness amounts to an intent to defeat or evade then the crime which has been committed is a felony.

If the willfulness amounts to anything less than that, anything less than an intent to defeat and evade, then the only thing that the defendant has committed is a misdemeanor.

And in the instant case you just have to look at the confession itself, the thing that government relied on to prove intent in which he said I did not report it on my return, I did not intend to evade my taxes, I intended to pay them in a subsequent year.

You have to look no further than that to find out that the evidence in this very case, literally cried out for the lesser-included offense instructions which we here sought.

Earl Warren:

Mr. Bender.

Paul Bender:

Mr. Chief Justice, May it please the court.

At the outset I would like to – now ordering this exception which I think the petitioner has about our argument, we do not argue that the lesser-included offense doctrine has no application to income tax offence but that’s not our position and it has never been our position.

The lesser included offence doctrine, we submit, is fully applicable to income tax offences in a proper case but we also agree as petitioner stated that these two misdemeanor offences involved in this case, section 7207 or 7203 are potentially applicable to income tax violations. The issue in the case as we see it, is whether this is a proper case for lesser included offence instructions, we submit that it is not a proper case but we do not take issue with the general proposition that lesser offence instructions are proper in income tax cases.

They are in proper cases.

They are not in this case because of the fact that lesser offence instructions are only proper under long course of decisions, going back at least to 1891, when there is some factual issue distinguishing the greater and the lesser offence that is where the jury could as petitioner in his brief case concedes, whether jury could rationally acquit the defendant of the greater offence but convict him of the lesser.

If that’s true then we concede that in this case there should have been a lesser included defense instruction on any misdemeanor as to which that was true.

Paul Bender:

We do submit that that was not true in this case because under the evidence in this case it was rationally the impossible for jury to acquit the defendant of the felony charge while they convicted him of either one of the misdemeanors.

Now I -–

(Inaudible)

Paul Bender:

Yes Mr. Justice, that I think is the crucial difference between us brought out by Mr. Justice White’s question at the end of the argument.

Petitioner seems to say that you do not violate section 7201, if you have some intention at the time you file a false return to pay at a later time, that is a man willfully, fraudulently understates his income.

In this case, he understated his income by more than $20000, willfully, fraudulently understates his income on a return and submits the return — we say and the cases hold, that when he does that, that is the completed offence of the income tax evasion, there is nothing ease to show.

Petitioner seems to say that it’s a defense in a case like that if he can convince the jury, that in his mind, it was the intention some time in the future, 5 years, 10 years, he doesn’t say how long in the future.

Some time in the future to make this good, I am not quite sure what petitioner argues would make this fraud good whether he would go back and reopen the 57 return, file an amended return same 5 years ago, I defrauded the government.

Now I wish to come clean and say that I withheld $20,000 income whether its that or whether he would simply add the income to later year, I don’t think it to be the latter because that would clearly be innovation of the assessment of the tax on the 57 return.

In any case, we say that’s clearly wrong, you do not show a defense to a prosecution for evasion by showing that you intended to pay in a later year.

If that were true for example, suppose 5 years after the filling of the fraudulent return, the taxpayer changes his mind and decides, well, he is gotten away with the 5 years, he now intends never to pay, when has he committed evasion at any time certainly on petitioner’s theory, he didn’t commit evasion when he filed a return because at that time he intended that somewhere it would come in the future pay.

I don’t think, he would convince and commit the offensive evasion when he changed his intention because he would at that time commit no overt act and the law I think is clear that in order to commit evasion, you have to commit it overt act.

Another problem which would be raised aside from the problem of cheating the government, another problem which would be raised, it would be a problem of how the statutory limitations would apply to that theory but the statute in this offence is six years.

Suppose, for 6 years the taxpayer keeps in mind, this vague intention to pay, at the end of 6 years he changes his mind, he no longer ever intendeds to pay, the statute at run on the over act, the statute runs from the time of the overt act, we would never be able to prosecute.

We submit that it is simply impossible to read the statute for those reasons and on the plain face of the statute which –-

(Inaudible)

Paul Bender:

Yes.

(Inaudible)

Paul Bender:

There are such cases that fairly rare.

(Inaudible)

Paul Bender:

Not at all Mr. Justice, we concede that there are appropriate cases.

(Inaudible)

William J. Brennan, Jr.:

I hear that he knew this –- this was false — would that make any difference?

Paul Bender:

Well, that was the issue in this case –-

William J. Brennan, Jr.:

That he knew it was false?

Paul Bender:

But surely the whole issue at trial was whether he knew that he was filing a false return.

He stated at trial that he honestly —

William J. Brennan, Jr.:

It’s been argued here, I think he has been arguing about it, whether he might have known it was false but he might have intended to pay some.

Paul Bender:

Well, that is an issue which petitioner has injected into this case.

Only in this court I have been arguing the case on the assumption that that issue is before the court, I don’t think it is —

William J. Brennan, Jr.:

I gather that your argument though would cover every case, not just this case but every case, where the indictment charges, a vocal attempt to evade and defeat by failing to pay.

Paul Bender:

No, there might be cases where the indictment charges that —

William J. Brennan, Jr.:

If the words evade and defeat, were not here then I gather your argument would allow the lesser instruction.

Paul Bender:

We’ll we would allow the lesser included offense instructions even in some cases where the indictment charge is an intent to evade and defeat for it —

William J. Brennan, Jr.:

Any example?

Paul Bender:

Well, for example suppose that the indictment charges and the proof — the proof is in some — suppose there are two false statements alleged in the return, one is a statement with regard to the source of the income, the other is the statement with regard to the amount of the income.

We charge that the statement with regard to amount was false and that of course was an attempt to evade.

Suppose the proof raises some question as to whether or not the statement with regard to amount is true but it’s fairly clear from the proof that the statement with regard to source is false.

In a case like that, a lesser-included offense instructions on 7207 without proper (voice overlap)

William J. Brennan, Jr.:

Without the failure proof on evasion.

Paul Bender:

That there would might be a failure proof of evasion but there wouldn’t be a failure proof on a false material statement, for example, the statement as to the source of the income, so you could have an improper case in an instruction under 7207, you could also have an improper case instruction under 7203, for example the indictment might charge you –

Potter Stewart:

Just before you leave this comes quite a surprise to me that the government itself could prosecute a person that he fully paid his taxes, fully reported all his income, but said that some that came from the X company instead of the when it actually came from the Y company, you mean to say to send a person to prison for that?

Paul Bender:

Well –-

Potter Stewart:

He fully reported all his income, he paid all his taxes off — [voice overlap]

Paul Bender:

It’s a false section 7207.

Potter Stewart:

What’s the government care?

Paul Bender:

But the source of the income is [voice overlap]

Potter Stewart:

What’s in the liability (Voice Overlap)

Paul Bender:

Well in checking return and in checking on with other tax payers who have taken improper deductions or have reported their income properly, it’s important to know that the source of the income is.

Potter Stewart:

Well it may be important administratively but do — is that a criminal violation?

[voice overlap] my wages.

Paul Bender:

Like for example take the case Mr. Justice where a man in a black market, illegal operation, where he is paying too much for materials and he is selling at over-ceiling price deliberately under-states both his deductions and his incomes, so it all washed that alright, and he is not understating his income but he deliberately falsifies the total amount of his gross income and falsifies the total amount of his deductions —

William J. Brennan, Jr.:

Different case but I [voice overlap]

So it– so it may be–

Potter Stewart:

In case you gave an answer to my brother Douglas that means that I say – that do get the— that the person could be criminally liable and reports all his income, pays all the tax on it, merely because he said that some came from dividends from General Motors when actually it was an US steel.

Paul Bender:

Well he would be liable not only, I think, under 7207 but also under provision of the criminal court for making a false statement to the government

Potter Stewart:

Material, is that material?

Paul Bender:

Well I think it has two reasons.

Potter Stewart:

Government is raising revenue – rising —

Paul Bender:

For the reasons I gave, I think the source of revenue is material in the tax scheme because we do check — as between tax payers to make sure that their returns jive and if he misstates the source, it messes up that entire scheme.

Paul Bender:

We do not [voice overlap]

Potter Stewart:

Maybe a little administrative inconvenience but I may – I will tell you that.

Paul Bender:

As a matter of fact, we have not authorized prosecutions under 7207 because these cases are so rare, I think they are potentially applicable.

I think 7207 is potentially applicable and 7203 also is — for that reason we submit, the entire question in this case is whether, on facts of this case, that jury could rationally believe that the petitioner was innocent of the 7201 offence and was guilty of either the 7207 offence or the 7203 offence.

Earl Warren:

Then could you this specific case and tell us what factors would have to be added to it in order to make an included offense doctrine?

Paul Bender:

In this case, I can’t see any factors which would have to be added.

If the charged means of evasion is the filing of a false return as in this case, then, I don’t think there would be a way of getting a lesser offense instruction.

It would have to be some other means of evasion alleged aside from the filing of a false return.

It’s our submission that if you do deliberately file a false return, deliberately, fraudulently understating your income, that constitutes an evasion of tax.

So when the offense charged is the filing of the fraudulent return, so long as, excuse me, so long as the — the fraud concerns the amount of the income, as I tried to say before there might be fraud, material fraud in a return which would not concern the amount of the income.

In such a case, if that was one of the charges and if that was part of the proof, then, a lesser-included offense instruction on Section 7207 wouldn’t be proper.

Earl Warren:

But never -– were the amount.

Paul Bender:

Not were the only fraud allege is as to the amount.

If the only fraud allege is as to the amount of the income, then we submit that if he’s guilty at all, he is guilty of the felony and if he’s not guilty of the felony, he is not guilty of the misdemeanors and that simply is because, take this case, if he isn’t guilty of the felony, that means that he didn’t do it willfully and fraudulently and if he didn’t do it willfully and fraudulently then he is not guilty of 7207.

William J. Brennan, Jr.:

Well if the government — decides to prosecute -– let me ask it this way.

When could you convict for a 7207 false filing, knowingly false filing and could not convict for a 7201, knowing false filing?

Paul Bender:

This I think is the same question Mr. Justice Stewart was asking.

The only way, there are two ways I can say.

One is if the falseness does not –-

William J. Brennan, Jr.:

It is up to the government whether they want to convict him for a misdemeanor or a felony for the very same thing?

Paul Bender:

No, it is not, not according to our –- we do not prosecute.

If the falseness concerns the amount of the income, we do not prosecute on the 7207, we only prosecute under the evasion provision.

We deem that to be the intent of the legislature in the 54 Code and in the 39 Code, as reflected in this court’s decisions in the Kelly case.

Potter Stewart:

That wasn’t always true, was it?

Paul Bender:

No, that wasn’t always true, but we feel that it is true now.

Even any doubts that might have been true under 39 Code are cleared up by the plain congressional intension in the 54 Code revision, that all evasions be treated uniformly.

Potter Stewart:

All for all knowing false filings should be –-

Paul Bender:

False filings as to amount of income, false filings which reduce the tax liability.

There may as I suggest Mr. Justice Stewart de-false filings which would not concern the amount of tax liability, which would not the evasions, they would be misdemeanors.

Potter Stewart:

Of course, to your knowledge has an indictment error or has a prosecution error taken place where there was no allegation of any tax deficiency, a criminal prosecution for tax evasion?

Paul Bender:

Not in my knowledge.

Potter Stewart:

Or for any violation of any of these statutes and there’s no allegation at all at any time of that they defendant owed any tax?

Paul Bender:

Not in my knowledge.

There is one other possible way of violating 7207 without violating 7201 and that would be if in — suppose the taxpayer files a false return which understates the amount of income deliberately, at the same time, he also understates deductions which he has but he doesn’t realize that he has the deductions.

The consequence is that there is no tax deficiency.

And we would take the position in that case that he would be violating 7207.

He’s made a material false statement, even though there is no deficiency in that one evasion.

The position of the government is that fraud in a tax return is a very serious thing.

The penalties under 7207 –-

William J. Brennan, Jr.:

I Always thought a fraud that as getting money or other property away from somebody else by false pretences.

That’s not a very artistic definition but that’s basically what it means isn’t it?

Paul Bender:

Well, I suggest that in the – in the tax statutes fraud means more than that.

It means making a deliberate fraudulent false statement.

False statement.

Fraudulent — fraud means not means —

Paul Bender:

Not necessarily.

Potter Stewart:

Cheating somebody -– that’s something for somebody else by -– by decedent, doesn’t it?

Paul Bender:

No, I don’t think it only — one possible meaning, perhaps the common law meaning, but I think a deliberately false statement on a tax return is serious enough matter to the prosecute under misdemeanor.

The penalties under 7201, the –-

Potter Stewart:

But suppose you know there never has been a prosecution.

Paul Bender:

We do not -– we have not prosecuted under 7207.

Potter Stewart:

Is there ever been a prosecution under any criminal statute to your knowledge when there was no allegation at all but the defendant owed any tax?

Paul Bender:

I don’t know of any such prosecution, no.

Now under the — under the facts here as I think I have shown, you cannot have since the understatement, was an understatement of the amount of income.

If that understatement was willful and deliberate, you cannot have that without having the felony of tax evasion and if you don’t have that, if you don’t have a willful understatement of income in this case, you don’t have the misdemeanors of 7207.

Now this argument proceeds on the basis that you’re not entitled, the defendant is not entitled to a lesser offense instruction unless he can show some factual issues differentiating the felony from the misdemeanor.

I state that as something that the petitioner and the government agree on in this case, I would be happy to argue that proposition if the Court feels there is any doubt about it but I would like to proceed the rest of my argument on the basis that, that is the law as to lesser offense instruction.

Hugo L. Black:

And then what is to be given?

That’s all about the privilege saying directive verdict on the (Inaudible)

Paul Bender:

A directive verdict?

Hugo L. Black:

But why?

In other words the evidence by this man, as you said a reason prior he didn’t intended cheat the government and the judge take that issue away from the jury by just refusing to charge him.

Paul Bender:

Well, we say there is no factual issue before the jury in this case which distinguishes 7203 or 7207 from 7201, the facts to show those three offenses in this case are precisely the same.

Hugo L. Black:

Your brief indicates that you did make claim in reference to something that this affidavit get before the jury?

Paul Bender:

Oh Yes!

And there is no question as to –-

Hugo L. Black:

What you said that he told you burden of the number of financial obligations, did not feel he get raised to money to pay any tax due then?

Paul Bender:

But that’s —

Hugo L. Black:

His intent in report all clear for the future.

Paul Bender:

That would not constitute a defense to 7201 prosecution.

Hugo L. Black:

By not constituted defense but by not constituted reason for saying he did not intend to cheat instead evaded taxes.

Paul Bender:

No, that would not.

The same affidavit says that I knew I should have reported the 57 sales.

Now if he knew he should have reported the sale and did not, that constitutes the felony of tax evasion.

Hugo L. Black:

Unless you’re not, but if you’re only charging him with attempting willfully to evade, why wouldn’t that raise an issue in jury’s mind and but I wish to say we – well we don’t think it’s in provision.(Voice Overlap)

Paul Bender:

No, if they believe that, if they believe that statement they would have to believe it, he intended to evade, it’s the evasion as to, Justice Black, not of the payment of the tax but the evasion of the assessment of the tax.

That is a separate offense which is completed as soon as one attempts to evade the assessment of the tax.

Now the tax is assessed on the basis of the tax return, if you file a false tax return which understates your tax liability that is an evasion of the assessment of the tax because the assessment is too low.

Hugo L. Black:

The Congress has for some unaccountable reason, I don’t’ know why, that two statutes here under pay which are very vague effect of what they mean, one of them is a felony.

What is the difference that makes it a felony?

Paul Bender:

The difference it makes it a felony in 7201 is the attempt to evade tax liability -–

Hugo L. Black:

Alright.

Paul Bender:

— that you get away with taxes, you pay less than you should.

Hugo L. Black:

Pay less than you should, but he said he didn’t intend to do that.

Paul Bender:

No he would attempt to evade the assessment of the proper tax liability, he plainly did that, he said he would pay in a later year but that doesn’t negate the fact that he attempted to evade the proper assessment in 1957.

Hugo L. Black:

Well then he attempted to evade paying it at the exact time it was due, is that the charge?

Paul Bender:

No, the charge is the attempt to evade the assessment of the tax at the time it should have been properly assessed.

It should have been properly assessed in 1957.

Hugo L. Black:

(Voice Overlap)

Paul Bender:

The indictment charges him with attempting to evade and defeat taxes, we not the payment of taxes but taxes.

Paul Bender:

The statute clearly distinguishes between two things, one is the attempt to evade and defeat the payment of taxes which we concede he would not have done here if he intended to pay later.

The other is the attempt to evade or defeat any tax, now that means government has always taken the position, that means in this Court has said that means the attempt to evade the assessment of income tax as Lawn against the United States 355 US, states that, that is the offense described by 7201, the attempt to evade the assessment of tax.

Hugo L. Black:

Otherwise Section -– statutes then — whoever just be guilty of a misdemeanors.

Paul Bender:

Of 7207?

Hugo L. Black:

7207 or 7203.

Paul Bender:

7203 is easy, you’re guilty of the misdemeanor of 7203 if you simply omit to file any tax return whatsoever.

Hugo L. Black:

(Inaudible)

Paul Bender:

It doesn’t make the distinction, it charges — the charges that would knowingly attempt to evade and defeat a large part of the income tax.

William J. Brennan, Jr.:

(Inaudible)

Paul Bender:

No, I think it is in the brief Mr. Justice Brennan on page —

William J. Brennan, Jr.:

Where are the indictment charges in it?

Paul Bender:

No, the indictment charges in with willfully and knowingly attempting to evade and defeat a large part of the income tax.

Now, we suggest that charges, the attempt to defeat and evade the assessment of the tax.

Lawn against the United States, holds that is an offense, we believe that, that is an offense, it should be an offense for the reasons I gave you before, because if you define the offense, as only being the attempt to evade the payment of tax that would mean that it would be the offense to the prosecution that the defendant had in his mind the intention to pay sometime in future.

Would that mean that the government would had to prove in every case, would have the burden of proving in every case that the defendant really did not intend to pay it a future time.

Hugo L. Black:

(Voice Overlap) you have some affect to it but I don’t know what it is as I have never known.

Paul Bender:

Well —

Hugo L. Black:

(Voice Overlap) — always intended to leave something to the jury (Voice Overlap)

Paul Bender:

Well, Surely.

Hugo L. Black:

— establishing between the two.

Paul Bender:

Well there is an issue left to the jury in this case and that is whether he did it willfully, whether he knew that he should have reported this income on the return.

Hugo L. Black:

But that’s not the charge.

He knew that he could report it at that time.

Paul Bender:

Well he said, at a trial he did not know that, the trial in this case, the petitioner argued that he thought that he was under no obligation to report this income because of these repairs which he had to make on a creek in land adjoining the land that he sold, that’s a fairly incredible defense when you think of that.

Hugo L. Black:

(Voice Overlap) — but if it is a defense in all, then the jury have the right to pass on.

Paul Bender:

They did have the right to pass on it in this case but precisely what the charges that the jury asked them to pass.

Hugo L. Black:

— the charge was refused.

Paul Bender:

No, no the charge which was actually given to the jury, told them that if they believe the defendant’s story, that he honestly believed he did not have to report this income because of the repairs he might have to make on the adjoining land then they should acquit it.

Hugo L. Black:

On your brief, they said and you showed the request for the instruction, which was refused.

Paul Bender:

That instruction was refused because we submit — that instruction did not put to the jury any factual issue upon which they could have acquitted the defendant of 7201 and convicted him under 7207, the instruction itself Mr. Justice, doesn’t point to any factual issue, it simply says if you find him not guilty of 7201 then you may find him guilty of 7207 or 7203.

Paul Bender:

Instruction however does not point to any fact in this case upon which the jury could have made that distinction and we submit that there is no fact in this case in which the jury could have made that distinction except on the petitioner’s theory that you are not guilty of tax evasion if you intend to pay at a future time and that just isn’t proved.

Byron R. White:

If the —

Paul Bender:

You would be guilty of the misdemeanor.

Hugo L. Black:

Yeah.

Paul Bender:

If petitioner’s theory were correct but petitioner’s theory is not correct.

Hugo L. Black:

But it would be a misdemeanor and it worth a felony or not.

Just to go that far, even taking what he says of that.

Paul Bender:

Well the petitioner in this case was also guilty of the misdemeanor of filing a false return as to the material matter.

There’s no question about that.

Byron R. White:

Well, I ask you what if he didn’t believe, one of the jury didn’t believe that he knew the filing was false, he wouldn’t be guilty in either.

Paul Bender:

And he wouldn’t be guilty of any sir.

Byron R. White:

Well I take it your point is that if the included offense instruction was proper, was justified, what he really should have done is dismiss the case, not send it to the jury at all?

Did he fail to make a return?

Yeah.

Paul Bender:

Well, No that’s too hypothetical I don’t see I mean —

Byron R. White:

That’s why you’re saying, if there is no evidence of the felony, there is no evidence would be —

Paul Bender:

In this case correct.

Byron R. White:

(Voice Overlap)

Paul Bender:

Well, therefore I say that’s true I suppose you’re right and the only way you could have given the included offense instruction here it would be if there was a way rationally not to convict to the felony but thought to convict to the included offenses and that’s just wasn’t possible in this case.

Byron R. White:

We have heard a lot and I don’t know the right Court yet after this — why did Congress – (Inaudible)

Paul Bender:

Why did Congress give him?

The Congressional policy is not entirely clear as to why 7207 is presently in the Court.

Byron R. White:

But – you are just talking about reconcile.

Paul Bender:

Yes and I suggest that how they are reconcilable I think –.

Byron R. White:

To pay that how many —

Paul Bender:

7201 applies where there is an evasion of tax, the assessment of tax and payment of tax.

That applies where there is a willful act which leads to the evasion of the proper tax to be assessed or paid.

7207 applies where there is a fraudulent statement which is material, but which does not lead to the lowering of tax liability.

Yeah.

(Inaudible)

Paul Bender:

As the 7203, the same analysis applies, in this case the a 7203 would only apply under the theory that he has not paid his tax not in this, the only way which he has not paid his tax in this case was to understate his tax liability.

If he did that willfully he committed the felony.

If he didn’t do that willfully he didn’t commit the felony and he also didn’t violate 7203, because 7203 only implies when there is a willful failure to pay the tax.

For those reasons, we submit that under the circumstances of this case, because there is no factual difference between the instructions, because instructions, if the petitioner requested the court to get to the jury, it shows no factual way which the jury could rationally have acquitted the defendant of the felony and convicted him for the misdemeanor.

The instructions were properly refused here.

Earl Warren:

Mr. Silverstein.

Merle L. Silverstein:

Mr. Chief Justice may it please the court.

The trouble with the government’s position in this case, if it please the court is that they equate in an intent to postpone or delay with an intent to defeat or evade.

We can find nothing in the dictionary of the English language or the cases to justify this type of equality.

(Inaudible)

Merle L. Silverstein:

It goes beyond that.

Potter Stewart:

It goes beyond that, they just say 7207 doesn’t apply where the charge is by mistaking the assessment, or that the amount only —

Merle L. Silverstein:

That’s correct.

Potter Stewart:

It’s only rather a misstatement as to the saying the source from which the income comes.

Merle L. Silverstein:

That’s right.

Potter Stewart:

Can we accept that?

Merle L. Silverstein:

Absolutely not.

The reason and the reason in making that statement is that the offence is completed as soon as you put the false return in a mail.

Now we said yes, some offense is completed when you put a false return in the mail, or send it to the government, but what that offense is depends on what your intent was when you put the false return into mail.

Did you have an intent to defeat or evade then you’re a felony.

If you have an intent only to postpone or delay then the most you could be would be a misdemeanor,

Byron R. White:

Just a question when you intend to pay the tax?

When you intend to cheat the government either cheat it this year or next year?

And that depends on whether it is a felony or misdemeanor, if you intend to cheat it next year it’s a felony, intend to cheat it this year it’s a misdemeanor.

Merle L. Silverstein:

If it was intent to postpone or delay I don’t believe there would be an intent to cheat at least on affirmative basis.

Byron R. White:

You mean you would use all kind of — over crossing the same percentage without going to pay to government —

Merle L. Silverstein:

Well I’m not saying we should give him a mail, but he still guilty of a crime Mr. Justice White but the crime is not–

Byron R. White:

I see none.

Merle L. Silverstein:

To have the dignity of felony in that case it’s only misdemeanor.

It’s still a crime unquestionably, but is if there was no intent to permanently cheat the government then the Congress only intends that this should be a misdemeanor —

Byron R. White:

I think the way they ask before and I’ll pay it.

Hugo L. Black:

May I ask you, did you put an reliance on(Inaudible) against United States?

Merle L. Silverstein:

We do Your Honor unquestionably.

Hugo L. Black:

In what ways?

Merle L. Silverstein:

The Spies case in the first place holds that the while the government has conceded the point that tax evasion felony does include lesser offenses, but more important the Spies case holds specifically that the thing that distinguishes the felony from the misdemeanor is the tax evasion intent.

There must be an attempt, there must be some affirmative act which manifests an intent to defeat and evade taxes.

Hugo L. Black:

Be a felony.

Merle L. Silverstein:

Right and this is not necessary for the misdemeanor.

Hugo L. Black:

That it only has to be a willful omission to make a return or offense to that kind.

Merle L. Silverstein:

Or filing some willful meeting intentionally and not accidentally the Spies case holds that to make it a felony the intent must be to defeat and evade the taxes.

Byron R. White:

(Inaudible) — distinguish between the willfulness of 7201 and 7207, that’s just the only way — it’s just the time — it’s just the — whether you intended or not to pay or intend to postpone.

That’s the only way you distinguish that.

Merle L. Silverstein:

In this, on this record Mr. Justice White, on this record, this would be the issue.

I would say that there could be other distinctions in other cases but in this record, based on the petitioner’s testimony below, the issue that should have been submitted to the jury by these Lesser Offence Instructions was — was he has intentions.

Byron R. White:

Do you have ever asked that be on this particular point?

Merle L. Silverstein:

I beg your pardon.

Byron R. White:

Did you ever request that if this submitted on this particular court?

Merle L. Silverstein:

It was.

The instruction was specifically offered under 7203 and 7207, were refused by the Trial Court

Hugo L. Black:

No but they accept the governmental brief —

Merle L. Silverstein:

Instructions were offered.

Byron R. White:

Well, I know, I understand, I understand that it was the point, it was this point raised, this particular distinctions between 7201 and 7207 that you now rely on ever offered in the trial court.

Merle L. Silverstein:

Yeah, you mean in the form of instruction or in the form of evidence —

Byron R. White:

That this was an — that this — it’s just been — that this is a rather recent thought.

Merle L. Silverstein:

Absolutely not, the petitioner’s testimony, his own testimony in the trial was based on this whole theory.

I would say that when the petitioner himself testified below he virtually confessed to 7207 prosecution. He said that he left this thing off his return, and he did it intentionally.

He thought, through a mistake, mistaken interpretation of law, could wait till he his other cost to ascertain the – but he virtually confessed to 7207 violation and but denied of course an intent to defeat or evade.

This is why we think that Lesser Offense Instruction was essential.

Potter Stewart:

Well , Mr. Silverstein, if we are talking about his testimony in the trial, I should think if that have believed he would have been guilty of anything.

Because he said he didn’t think owed and tax at all.

Paul Bender:

He certainly confessed to the misdemeanor because he testified that he knew these sales, I made these sales, this is all true and intentionally let them off of my tax.

Potter Stewart:

Because that he anticipated heavy expenses right be in the light of the —

Merle L. Silverstein:

Right.

Potter Stewart:

(Voice Overlap)

Merle L. Silverstein:

He refutes an intent to defeat or evade, he admits a willfulness in filing a false return.

Potter Stewart:

I didn’t understand it that way.

If you are right — might there not be some problem about indictments, in these cases, an indictment to be good has to inform the defender that what he is charged with, and if any indictment only mentioned 7201 then he had to convict into something else.

You have a problem there, which you –-

Merle L. Silverstein:

I know because Federal rule 31C authorizes this — this rule is not one just made for defendant, it’s made for the government’s preference too.

31C says you can be convicted of the offense charged or of any lesser offence included in the offence charged.

This is nothing new or strange for it’s been in the law for hundreds of years, just the same way.

It’s just like a first degree murder charge.

As any man charged indictment of the first degree murder can always be convicted of second degree murder, man slaughter with the indictment.

That’s always saying here in so far —

Potter Stewart:

But generally speaking it’s good deal of body of law that says you can’t be convicted for something under indictment.

Merle L. Silverstein:

That’s correct, unless it’s included in the offence.Now we — I have not spent any time here because it’s adequately covered in our brief and the government concedes it and that is affected that these two Lesser Offences are unquestionably included in this particular charge.

(Inaudible)

Merle L. Silverstein:

No.

We ask for the lesser included —

(Inaudible)

Merle L. Silverstein:

I don’t know if we would have been entitled to the additional instruction because the court already gave the usual instruction and if you found that he did not intend to defeat or evade, he should acquit.

(Inaudible)

Merle L. Silverstein:

I think we would be entitled to an instruction but it was not duplicitous that if he intended to pay this in a later year, only intended to postpone and delay then he should acquit as to the felony.

I think we would entitled —

(Inaudible)

Merle L. Silverstein:

They made their prima-facie case when they introduced their confession in their evidence, and I would say from then on it’s the matter of the defense to rebut their prima-facie case and negate the intent or the presumption of intent that they proved.

(Inaudible)

Merle L. Silverstein:

That’s right because the burden never switches — that’s true.

But I say, the government met their burden, at least prima-facie, then of course we have the burden of going forward with the evidence charge, we thought it.