Section 1110(a) of the Revenue Act of 1926 sets a general
limitation of three years upon the prosecution of " any of the
various offenses arising under the internal revenue laws . . .
Provided, That for offenses involving the defrauding or
attempting to defraud the United States . . . in any manner, the
period of limitation shall be six years. . . ."
Held:
1. That the six-year limitation is confined to cases in which
fraud is made an ingredient by the statute defining the offense,
and that it does not apply to the offense of willfully attempting
to evade
Page 285 U. S. 519
a tax, Revenue Act, 1926, § 1114(b), though the attempt charged
was by falsely understating taxable income. P.
285 U. S.
520.
2. The "proviso" is really an excepting clause, and therefore to
be narrowly construed. P.
285 U. S.
521.
3. The statute should be liberally interpreted in favor of
repose. P.
285 U. S.
522.
Affirmed.
Appeal from a judgment sustaining a plea of the statute of
limitations, and quashing the indictment.
Page 285 U. S. 520
MR. JUSTICE ROBERTS delivered the opinion of the Court.
The appellee was indicted under § 1114(b) of the Revenue Act of
1926, [
Footnote 1] the charge
being attempts to evade taxes for 1926 and 1927 by falsely
understating taxable income. In bar of the action, he pleaded that
the face of the indictment showed the offenses were committed more
than three years prior to the return of a true bill. The plea was
sustained, and the indictment quashed, on the ground that the
period of limitations is fixed by the first clause of § 1110(a) of
the act, [
Footnote 2] and not,
as the appellant contended, in the proviso thereof. The basis of
this ruling was that the offense defined by use of the words "evade
or defeat" does not involve defrauding, or attempting to defraud,
within the intent of the proviso.
The appellant contends fraud is implicit in the concept of
evading or defeating, and asserts that attempts to obstruct or
defeat the lawful functions of any department of the government
(
Haas v. Henkel, 216 U. S. 462,
216 U. S.
479-480), or to cheat it out of money to which it is
entitled
Page 285 U. S. 521
(
Capone v. United States, 51 F.2d 609, 615) are
attempts to defraud the United States, if accompanied by deceit,
craft, trickery, or other dishonest methods or schemes,
Hammerschmidt v. United States, 265 U.
S. 182,
265 U. S. 188.
Any effort to defeat or evade a tax is said to be tantamount to and
to possess every element of an attempt to defraud the taxing
body.
We are required to ascertain the intent of Congress from the
language used, and to determine what cases the proviso intended to
except from the general statute of limitations applicable to all
offenses against the internal revenue laws. Section 1114(a), makes
willful failure to pay taxes, to make return, to keep necessary
records, or to supply requisite information, a misdemeanor, and §
1114(c) provides that willfully aiding, assisting, procuring,
counseling, or advising preparation or presentation of a false or
fraudulent return, affidavit, claim, or document shall be a felony.
Save for that under consideration, these are the only sections in
the Revenue Act of 1926 defining offenses against the income tax
law. There are, however, numerous statutes expressly making intent
to defraud an element of a specified offense against the revenue
laws. [
Footnote 3] Under these,
an indictment failing to aver that intent would be defective; but,
under § 1114(b), such an averment would be surplusage, for it would
be sufficient to plead and prove a willful attempt to evade or
defeat.
Compare United States v. Noveck, 271 U.
S. 201,
271 U. S.
203.
As said in the
Noveck case, statutes will not be read
as creating crimes or classes of crimes unless clearly so intended,
and obviously we are here concerned with one meant only to fix
periods of limitation. Moreover, the concluding clause of the
section, though denominated a proviso, is an excepting clause, and
therefore to be narrowly
Page 285 U. S. 522
construed.
United States v. McElvain, 272 U.
S. 633,
272 U. S. 639.
And, as the section has to do with statutory crimes, it is to be
liberally interpreted in favor of repose, and ought not to be
extended by construction to embrace so-called frauds not so
denominated by the statutes creating offenses.
United States v.
Hirsch, 100 U. S. 33;
United States v. Rabinowich, 238 U. S.
78,
238 U. S. 87-88;
United States v. Noveck, supra; United States v. McElvain,
supra. The purpose of the proviso is to apply the six-year
period to cases "in which defrauding or an attempt to defraud the
United States is an ingredient under the statute defining the
offense."
United States v. Noveck, supra.
Judgment affirmed.
[
Footnote 1]
U.S.Code, Supp. V, Title 26, § 1266:
"Any . . . person who willfully attempts in any manner to evade
or defeat any tax imposed by this title or the payment thereof,
shall . . . be guilty of a felony. . . ."
[
Footnote 2]
U.S.Code, Supp. V, Title 18, § 585:
"No person shall be prosecuted, tried, or punished for any of
the various offenses arising under the internal revenue laws of the
United States unless the indictment is found or the information
instituted within three years next after the commission of the
offense:
Provided, That for offenses involving the
defrauding or attempting to defraud the United States or any agency
thereof, whether by conspiracy or not, and in any manner, the
period of limitation shall be six years. . . ."
[
Footnote 3]
See U.S.Code, Tit. 26, §§ 261, 306, 316, 555, 667, 775,
843, 1180, 1181, 1184, 1186.