Petitioner was convicted for conspiring to evade payment of the
occupational tax relating to wagers imposed by 26 U.S.C. § 4411,
for evading such payment, and for failing to comply with § 4412,
which requires those liable for the occupational tax to register
annually with the Internal Revenue Service and to supply detailed
information for which a special form is prescribed. Under other
provisions of the interrelated statutory system for taxing wagers,
registrants must "conspicuously" post at their business places or
keep on their persons stamps showing payment of the tax; maintain
daily wagering records, and keep their books open for inspection.
Payment of the occupational taxes is declared not to exempt persons
from federal or state laws which broadly proscribe wagering, and
federal tax authorities are required by § 6107 to furnish
prosecuting officers lists of those who have paid the occupational
tax. Petitioner, whose alleged wagering activities subjected him to
possible state or federal prosecution, contended that the statutory
requirements to register and to pay the occupational tax violated
his privilege against self-incrimination. The Court of Appeals
affirmed, relying on
United States v. Kahriger,
345 U. S. 22, and
Lewis v. United States, 348 U. S. 419,
which held the privilege unavailable in a situation like the one
here involved.
Held:
1. The recognized principle that taxes may be imposed upon
unlawful activities is not at issue here. P.
390 U. S.
44.
2. Petitioner's assertion of his Fifth Amendment privilege
against self-incrimination barred his prosecution for violating the
federal wagering tax statutes. Pp.
390 U. S.
48-61.
(a) All the requirements for registration and payment of the
occupational tax would have had the direct and unmistakable
consequence of incriminating petitioner. Pp.
390 U. S.
48-49.
(b) Petitioner did not waive his constitutional privilege by
failing to assert it when the tax payments were due. Pp. 50-51.
(c)
United States v. Kahriger, supra, Lewis v. United
States, supra, both
pro tanto overruled. Pp.
390 U. S.
50-54.
Page 390 U. S. 40
(d) The premises supporting
Shapiro v. United States,
335 U. S. 1
(
viz., that the records be analogous to public documents
and of a kind which the regulated party has customarily kept, and
that the statutory requirements be essentially regulatory, rather
than aimed at a particular group suspected of criminal activities),
do not apply to the facts of this case, and therefore
Shapiro's "required records" doctrine is not controlling.
Pp.
390 U. S.
55-57.
(e) Permitting continued enforcement of the registration and
occupational tax provisions by imposing restrictions against the
use by prosecuting authorities of information obtained thereunder
might improperly contravene Congress' purpose in adopting the
wagering taxes and impede enforcement of state gambling laws. Pp.
390 U. S.
58-60.
352 F.2d 848, reversed.
MR. JUSTICE HARLAN delivered the opinion of the Court.
Petitioner was convicted in the United States District Court for
the District of Connecticut under two indictments which charged
violations of the federal wagering tax statutes. The first
indictment averred that petitioner and others conspired to evade
payment of the annual occupational tax imposed by 26 U.S.C. § 4411.
The second indictment included two counts: the first
Page 390 U. S. 41
alleged a willful failure to pay the occupational tax, and the
second a willful failure to register, as required by 26 U.S.C. §
4412, before engaging in the business of accepting wagers.
After verdict, petitioner unsuccessfully sought to arrest
judgment, in part on the basis that the statutory obligations to
register and to pay the occupational tax violated his Fifth
Amendment privilege against self-incrimination. The Court of
Appeals for the Second Circuit affirmed, 352 F.2d 848, on the
authority of
United States v. Kahriger, 345 U. S.
22, and
Lewis v. United States, 348 U.
S. 419.
We granted certiorari to reexamine the constitutionality under
the Fifth Amendment of the pertinent provisions of the wagering tax
statutes, and more particularly to consider whether
Kahriger and
Lewis still have vitality. [
Footnote 1] 383 U.S. 942. For reasons
which follow, we have
Page 390 U. S. 42
concluded that these provisions may not be employed to punish
criminally those persons who have defended a failure to comply with
their requirements with a proper assertion of the privilege against
self-incrimination. The judgment below is accordingly reversed.
I
The provisions in issue here are part of an interrelated
statutory system for taxing wagers. The system is broadly as
follows. Section 4401 of Title 26 imposes upon those engaged in the
business of accepting wagers an excise tax of 10% on the gross
amount of all wagers they accept, including the value of chances
purchased in lotteries conducted for profit. Parimutuel wagering
enterprises, coin-operated devices, and state-conducted sweepstakes
are expressly excluded from taxation. 26 U.S.C. § 4402 (1964 ed.,
Supp. II). Section 4411 imposes in addition an occupational tax of
$50 annually, both upon those subject to taxation under § 4401 and
upon those who receive wagers on their behalf.
The taxes are supplemented by ancillary provisions calculated to
assure their collection. In particular, § 4412 requires those
liable for the occupational tax to register each year with the
director of their local internal revenue district. The registrants
must submit Internal Revenue Service Form 11-C, [
Footnote 2] and upon it must provide their
residence and business addresses, must indicate whether they are
engaged in the business of accepting wagers, and must list the
names and addresses of their agents and employees. The statutory
obligations to register
Page 390 U. S. 43
and to pay the occupational tax are essentially inseparable
elements of a single registration procedure; [
Footnote 3] Form 11-C thus constitutes both the
application for registration and the return for the occupational
tax. [
Footnote 4]
In addition, registrants are obliged to post the revenue stamps
which denote payment of the occupational tax "conspicuously" in
their principal places of business, or, if they lack such places,
to keep the stamps on their persons, and to exhibit them upon
demand to any Treasury officer. 26 U.S.C. § 6806(c). They are
required to preserve daily records indicating the gross amount of
the wagers as to which they are liable for taxation, and to permit
inspection of their books of account. 26 U.S.C. §§ 4403, 4423.
Moreover, each principal internal revenue office is instructed to
maintain for public inspection a listing of all who have paid the
occupational tax, and to provide certified copies of the listing
upon request to any state or local prosecuting officer. 26
U.S.C.
Page 390 U. S. 44
§ 6107. Finally, payment of the wagering taxes is declared not
to "exempt any person from any penalty provided by a law of the
United States or of any State for engaging" in any taxable
activity. 26 U.S.C. § 4422.
II
The issue before us is not whether the United States may tax
activities which a State or Congress has declared unlawful. The
Court has repeatedly indicated that the unlawfulness of an activity
does not prevent its taxation, and nothing that follows is intended
to limit or diminish the vitality of those cases.
See, e.g.,
72 U. S. 5
Wall. 462. The issue is, instead, whether the methods employed by
Congress in the federal wagering tax statutes are, in this
situation, consistent with the limitations created by the privilege
against self-incrimination guaranteed by the Fifth Amendment. We
must for this purpose first examine the implications of these
statutory provisions.
Wagering and its ancillary activities are very widely prohibited
under both federal and state law. Federal statutes impose criminal
penalties upon the interstate transmission of wagering information,
18 U.S.C. § 1084; upon interstate and foreign travel or
transportation in aid of racketeering enterprises, defined to
include gambling, 18 U.S.C. § 1952; upon lotteries conducted
through use of the mails or broadcasting, 18 U.S.C. § § 1301-1304,
and upon the interstate transportation of wagering paraphernalia,
18 U.S.C. § 1953.
State and local enactments are more comprehensive. The laws of
every State, except Nevada, include broad prohibitions against
gambling, wagering, and associated activities. [
Footnote 5] Every State forbids, with essentially
minor
Page 390 U. S. 45
and carefully circumscribed exceptions, lotteries. [
Footnote 6] Even Nevada, which permits
many forms of gambling, retains criminal penalties upon lotteries
and certain other wagering
Page 390 U. S. 46
activities taxable under these statutes. Nev.Rev.Stat. §§
293.603, 462.010 462.080, 465.010 (1957).
Connecticut, in which petitioner allegedly conducted his
activities, has adopted a variety of measures for the punishment of
gambling and wagering. It punishes "[a]ny person, whether as
principal, agent or servant, who owns, possesses, keeps, manages,
maintains or occupies" premises employed for purposes of wagering
or pool selling. Conn.Gen.Stat.Rev. § 5295 (1958). It imposes
criminal penalties upon any person who possesses, keeps, or
maintains premises in which policy playing occurs, or lotteries are
conducted, and upon any
Page 390 U. S. 47
person who becomes the custodian of books, property, appliances,
or apparatus employed for wagering. Conn.Gen.Stat.Rev. § 53-298
(1958).
See also §§ 53-273, 53-290, 53-293. It provides
additional penalties for those who conspire to organize or conduct
unlawful wagering activities. Conn.Gen.Stat.Rev. § 5197 (1958).
Every aspect of petitioner's wagering activities thus subjected him
to possible state or federal prosecution. By any standard, in
Connecticut and throughout the United States, wagering is "an area
permeated with criminal statutes," and those engaged in wagering
are a group "inherently suspect of criminal activities."
Albertson v. SACB, 382 U. S. 70,
382 U. S.
79.
Information obtained as a consequence of the federal wagering
tax laws is readily available to assist the efforts of state and
federal authorities to enforce these penalties. Section 6107 of
Title 26 requires the principal internal revenue offices to provide
to prosecuting officers a listing of those who have paid the
occupational tax. Section 6806(c) obliges taxpayers either to post
the revenue stamp "conspicuously" in their principal places of
business, or to keep it on their persons, and to produce it on the
demand of Treasury officers. Evidence of the possession of a
federal wagering tax stamp, or of payment of the wagering taxes,
has often been admitted at trial in state and federal prosecutions
for gambling offenses; [
Footnote
7] such evidence has doubtless proved useful even more
frequently to lead prosecuting authorities to other evidence upon
which convictions have subsequently
Page 390 U. S. 48
been obtained. [
Footnote 8]
Finally, we are obliged to notice that a former Commissioner of
Internal Revenue has acknowledged that the Service "makes
available" to law enforcement agencies the names and addresses of
those who have paid the wagering taxes, and that it is in "full
cooperation" with the efforts of the Attorney General of the United
States to suppress organized gambling. Caplin, The Gambling
Business and Federal Taxes, 8 Crime & Delin. 371, 372, 377.
In these circumstances, it can scarcely be denied that the
obligations to register and to pay the occupational tax created for
petitioner "real and appreciable," and not merely "imaginary and
unsubstantial," hazards of self-incrimination.
Reg. v.
Boyes, 1 B. & S. 311, 330;
Brown v. Walker,
161 U. S. 591,
161 U. S.
599-600;
Rogers v. United States, 340 U.
S. 367,
340 U. S. 374.
Petitioner was confronted by a comprehensive system of federal and
state prohibitions against wagering activities; he was required, on
pain of criminal prosecution, to provide information which he might
reasonably suppose would be available to prosecuting authorities,
and which would surely prove a significant "link in a chain"
[
Footnote 9] of evidence
tending to establish his guilt. [
Footnote 10] Unlike the income tax return
Page 390 U. S. 49
in question in
United States v. Sullivan, 274 U.
S. 259, every portion of these requirements had the
direct and unmistakable consequence of incriminating petitioner;
the application of the constitutional privilege to the entire
registration procedure was, in this instance, neither "extreme" nor
"extravagant."
See id. at
274 U. S. 263.
It would appear to follow that petitioner's assertion of the
privilege as a defense to this prosecution was entirely proper, and
accordingly should have sufficed to prevent his conviction.
Nonetheless, this Court has twice concluded that the privilege
against self-incrimination may not appropriately be asserted by
those in petitioner's circumstances.
United States v. Kahriger,
supra; Lewis v. Unite State, supra. We must therefore consider
whether those cases have continuing force in light of our more
recent decisions. Moreover, we must also consider the relevance of
certain collateral lines of authority; in particular, we must
determine whether either the "required records" doctrine,
Shapiro v. United States, 335 U. S.
1, or restrictions placed upon the use by prosecuting
authorities of information obtained as a consequence of the
wagering taxes,
cf. Murphy v. Waterfront Commission,
378 U. S. 52,
should be utilized to preclude assertion of the constitutional
privilege in this situation. To these questions we turn.
Page 390 U. S. 50
III
The Court's opinion in
Kahriger suggested that a
defendant under indictment for willful failure to register under §
4412 cannot properly challenge the constitutionality under the
Fifth Amendment of the registration requirement. For this point,
the Court relied entirely upon Mr. Justice Holmes' opinion for the
Court in
United States v. Sullivan, supra. The taxpayer in
Sullivan was convicted of willful failure to file an income tax
return, despite his contention that the return would have obliged
him to admit violations of the National Prohibition Act. The Court
affirmed the conviction, and rejected the taxpayer's claim of the
privilege. It concluded that most of the return's questions would
not have compelled the taxpayer to make incriminating disclosures,
and that it would have been "an extreme, if not an extravagant,
application" of the privilege to permit him to draw within it the
entire return. 274 U.S. at
274 U. S. 263.
The Court in
Sullivan was evidently concerned, first,
that the claim before it was an unwarranted extension of the scope
of the privilege, and, second, that to accept a claim of privilege
not asserted at the time the return was due would "make the
taxpayer, rather than a tribunal the final arbiter of the merits of
the claim."
Albertson v. SACB, 382 U. S.
70,
382 U. S. 79.
Neither reason suffices to prevent this petitioner's assertion of
the privilege. The first is, as we have indicated, inapplicable,
and we find the second unpersuasive in this situation. Every
element of these requirements would have served to incriminate
petitioner; to have required him to present his claim to Treasury
officers would have obliged him "to prove guilt to avoid admitting
it."
United States v. Kahriger, supra, at
345 U. S. 34
(concurring opinion). I n these circumstances, we cannot conclude
that his failure
Page 390 U. S. 51
to assert the privilege to Treasury officials at the moment the
tax payments were due irretrievably abandoned his constitutional
protection. Petitioner is under sentence for violation of statutory
requirements which he consistently asserted at and after trial to
be unconstitutional; no more can here be required.
The Court held in
Lewis that the registration and
occupational tax requirements do not infringe the constitutional
privilege, because they do not compel self-incrimination, but
merely impose on the gambler the initial choice of whether he
wishes, at the cost of his constitutional privilege, to commence
wagering activities. The Court reasoned that, even if the required
disclosures might prove incriminating, the gambler need not
register or pay the occupational tax if only he elects to cease, or
never to begin, gambling. There is, the Court said, "no
constitutional right to gamble." 348 U.S. at
348 U. S.
423.
We find this reasoning no longer persuasive. The question is not
whether petitioner holds a "right" to violate state law, but
whether, having done so, he may be compelled to give evidence
against himself. The constitutional privilege was intended to
shield the guilty and imprudent as well as the innocent and
foresighted; if such an inference of antecedent choice were alone
enough to abrogate the privilege's protection, it would be excluded
from the situations in which it has historically been guaranteed,
and withheld from those who most require it. Such inferences,
bottomed on what must ordinarily be a fiction, have precisely the
infirmities which the Court has found in other circumstances in
which implied or uninformed waivers of the privilege have been said
to have occurred.
See, e.g., Carnley v. Cochran,
369 U. S. 506.
Compare Johnson v. Zerbst, 304 U.
S. 458, and
Glasser v. United States,
315 U. S. 60. To
give credence to such "waivers" without the most deliberate
examination of the circumstances surrounding them
Page 390 U. S. 52
would ultimately license widespread erosion of the privilege
through "ingeniously drawn legislation." Morgan, The Privilege
against Self-Incrimination, 34 Minn.L.Rev. 1, 37. We cannot agree
that the constitutional privilege is meaningfully waived merely
because those "inherently suspect of criminal activities" have been
commanded either to cease wagering or to provide information
incriminating to themselves, and have ultimately elected to do
neither.
The Court held in both
Kahriger and
Lewis that
the registration and occupational tax requirements are entirely
prospective in their application, and that the constitutional
privilege, since it offers protection only as to past and present
acts, is accordingly unavailable. This reasoning appears to us
twice deficient: first, it overlooks the hazards here of
incrimination as to past or present acts, and second, it is hinged
upon an excessively narrow view of the scope of the constitutional
privilege.
Substantial hazards of incrimination as to past or present acts
plainly may stem from the requirements to register and to pay the
occupational tax.
See generally McKee, The Fifth Amendment
and the Federal Gambling Tax, 5 Duke B.J. 86. In the first place,
satisfaction of those requirements increases the likelihood that
any past or present gambling offenses will be discovered and
successfully prosecuted. It both centers attention upon the
registrant as a gambler and compels "injurious disclosure[s]"
[
Footnote 11] which may
provide or assist in the collection of evidence admissible in a
prosecution for past or present offenses. These offenses need not
include actual gambling; they might involve only the custody or
transportation of gambling paraphernalia, or other preparations for
future gambling. Further, the acquisition of a federal gambling tax
stamp,
Page 390 U. S. 53
requiring as it does the declaration of a present intent to
commence gambling activities, obliges even a prospective gambler to
accuse himself of conspiracy to violate either state gambling
prohibitions or federal laws forbidding the use of interstate
facilities for gambling purposes.
See, e.g., Acklen v.
State, 196 Tenn. 314,
267
S.W.2d 101.
There is a second, and more fundamental, deficiency in the
reasoning of
Kahriger and
Lewis. Its linchpin is
plainly the premise that the privilege is entirely inapplicable to
prospective acts; for this the Court in
Kahriger could
vouch as authority only a generalization at 8 Wigmore, Evidence §
2259c (3d ed.1940). [
Footnote
12] We see no warrant for so rigorous a constraint upon the
constitutional privilege. History, to be sure, offers no ready
illustrations of the privilege's application to prospective acts,
but the occasions on which such claims might appropriately have
been made must necessarily have been very infrequent. We are, in
any event, bid to view the constitutional commands as "organic
living institutions," whose significance is "vital not formal."
Gompers v. United States, 233 U.
S. 604,
233 U. S.
610.
The central standard for the privilege's application has been
whether the claimant is confronted by substantial and "real," and
not merely trifling or imaginary, hazards of incrimination.
Rogers v. United States, 340 U. S. 367,
340 U. S. 374;
Brown v. Walker, 161 U. S. 591,
161 U. S. 600.
This principle does not permit the rigid chronological distinction
adopted in
Kahriger and
Lewis. We see
Page 390 U. S. 54
no reason to suppose that the force of the constitutional
prohibition is diminished merely because confession of a guilty
purpose precedes the act which it is subsequently employed to
evidence. Yet, if the factual situations in which the privilege may
be claimed were inflexibly defined by a chronological formula, the
policies which the constitutional privilege is intended to serve
could easily be evaded. Moreover, although prospective acts will
doubtless ordinarily involve only speculative and insubstantial
risks of incrimination, this will scarcely always prove true. As we
shall show, it is not true here. We conclude that it is not mere
time to which the law must look, but the substantiality of the
risks of incrimination.
The hazards of incrimination created by §§ 4411 and 4412 as to
future acts are not trifling or imaginary. Prospective registrants
can reasonably expect that registration and payment of the
occupational tax will significantly enhance the likelihood of their
prosecution for future acts, and that it will readily provide
evidence which will facilitate their convictions. Indeed, they can
reasonably fear that registration, and acquisition of a wagering
tax stamp, may serve as decisive evidence that they have, in fact,
subsequently violated state gambling prohibitions.
Compare
Ala.Code, Tit. 14, §§ 302(8)-(10) (1958); Ga.Code Ann. § 26-6413
(Supp. 1967). Insubstantial claims of the privilege as to entirely
prospective acts may certainly be asserted, but such claims are not
here, and they need only be considered when a litigant has the
temerity to pursue them.
We conclude that nothing in the Court's opinions in
Kahriger and
Lewis now suffices to preclude
petitioner's assertion of the constitutional privilege as a defense
to the indictments under which he was convicted. To this extent,
Kahriger and
Lewis are overruled.
Page 390 U. S. 55
IV
We must next consider the relevance in this situation of the
"required records" doctrine,
Shapiro v. United States,
335 U. S. 1. It is
necessary first to summarize briefly the circumstances in
Shapiro. Petitioner, a wholesaler of fruit and produce,
was obliged by a regulation issued under the authority of the
Emergency Price Control Act to keep and "preserve for examination"
various records "of the same kind as he has customarily kept. . .
." Maximum Price Regulation 426, § 14, 8 Fed.Reg. 9546, 9548-9549
(1943). He was subsequently directed by an administrative subpoena
to produce certain of these records before attorneys of the Office
of Price Administration. Petitioner complied, but asserted his
constitutional privilege. In a prosecution for violations of the
Price Control Act, petitioner urged that the records had
facilitated the collection of evidence against him, and claimed
immunity from prosecution under § 202(g) of the Act, 56 Stat. 30.
Petitioner was nonetheless convicted, and his conviction was
affirmed. 159 F.2d 890.
On certiorari, this Court held both that § 202(g) did not confer
immunity upon petitioner and that he could not properly claim the
protection of the privilege as to records which he was required by
administrative regulation to preserve. On the second question, the
Court relied upon the cases which have held that a custodian of
public records may not assert the privilege as to those records,
and reiterated a dictum in
Wilson v. United States,
221 U. S. 361,
221 U. S. 380,
suggesting that
"the privilege which exists as to private papers cannot be
maintained in relation to 'records required by law to be kept in
order that there may be suitable information of transactions which
are the appropriate subjects of governmental regulation and the
enforcement of restrictions validly established.' [
Footnote 13] "
Page 390 U. S. 56
335 U.S. at
335 U. S. 33. The
Court considered that "it cannot be doubted" that the records in
question had "public aspects," and thus held that petitioner, as
their custodian, could not properly assert the privilege as to
them.
Id. at
335 U. S. 34.
We think that neither
Shapiro nor the cases upon which
it relied are applicable here. [
Footnote 14]
Compare generally Note, Required
Information and the Privilege against Self-Incrimination, 65
Col.L.Rev. 681, and McKay, Self-Incrimination and the New Privacy,
167 Sup.Ct.Rev.193, 214-217. Moreover, we find it unnecessary for
present purposes to pursue in detail the question, left unanswered
in
Shapiro, of what "limits . . . the Government cannot
constitutionally exceed in requiring the keeping of records. . . ."
335 U.S. at
335 U. S. 32. It
is enough that there are significant points of difference between
the situations here and in
Shapiro which, in this
instance, preclude, under any formulation, an appropriate
application of the "required records" doctrine.
Each of the three principal elements of the doctrine, as it is
described in
Shapiro, is absent from this situation.
Page 390 U. S. 57
First, petitioner Marchetti was not, by the provisions now at
issue, obliged to keep and preserve records "of the same kind as he
has customarily kept"; he was required simply to provide
information, unrelated to any records which he may have maintained,
about his wagering activities. This requirement is not
significantly different from a demand that he provide oral
testimony.
Compare McKay,
supra, at 221. Second,
whatever "public aspects" there were to the records at issue in
Shapiro, there are none to the information demanded from
Marchetti. The Government's anxiety to obtain information known to
a private individual does not, without more, render that
information public; if it did, no room would remain for the
application of the constitutional privilege. Nor does it stamp
information with a public character that the Government has
formalized its demands in the attire of a statute; if this alone
were sufficient, the constitutional privilege could be entirely
abrogated by any Act of Congress. Third, the requirements at issue
in
Shapiro were imposed in "an essentially noncriminal and
regulatory area of inquiry," while those here are directed to a
"selective group inherently suspect of criminal activities."
Cf. Albertson v. SACB, 382 U. S. 70,
382 U. S. 79.
The United States' principal interest is evidently the collection
of revenue, and not the punishment of gamblers,
see United
States v. Calamaro, 354 U. S. 351,
354 U. S. 358;
but the characteristics of the activities about which information
is sought, and the composition of the groups to which inquiries are
made, readily distinguish this situation from that in
Shapiro. There is no need to explore further the elements
and limitations of
Shapiro and the cases involving public
papers; these points of difference in combination preclude any
appropriate application of those cases to the present one.
Page 390 U. S. 58
V
Finally, we have been urged by the United States to permit
continued enforcement of the registration and occupational tax
provisions, despite the demands of the constitutional privilege, by
shielding the privilege's claimants through the imposition of
restrictions upon the use by federal and state authorities of
information obtained as a consequence of compliance with the
wagering tax requirements. It is suggested that these restrictions
might be similar to those imposed by the Court in
Murphy v.
Waterfront Commission, 378 U. S. 52.
The Constitution, of course, obliges this Court to give full
recognition to the taxing powers and to measures reasonably
incidental to their exercise. But we are equally obliged to give
full effect to the constitutional restrictions which attend the
exercise of those powers. We do not, as we have said, doubt
Congress' power to tax activities which are, wholly or in part,
unlawful. Nor can it be doubted that the privilege against
self-incrimination may not properly be asserted if other protection
is granted which "is so broad as to have the same extent in scope
and effect" as the privilege itself.
Counselman v.
Hitchcock, 142 U. S. 547,
142 U. S. 585.
The Government's suggestion is thus, in principle, an attractive
and apparently practical resolution of the difficult problem before
us.
Compare Mansfield, The
Albertson Case:
Conflict Between the Privilege Against Self-Incrimination and the
Government's Need for Information, 1966 Sup.Ct.Rev. 103, 159,
and McKay,
supra, at 232. Nonetheless, we think
that it would be entirely inappropriate in the circumstances here
for the Court to impose such restrictions.
The terms of the wagering tax system make quite plain that
Congress intended information obtained as a consequence of
registration and payment of the occupational
Page 390 U. S. 59
tax to be provided to interested prosecuting authorities.
See 26 U.S.C. § 6107. [
Footnote 15] This has evidently been the consistent
practice of the Revenue Service. We must therefore assume that the
imposition of use restrictions would directly preclude effectuation
of a significant element of Congress' purposes in adopting the
wagering taxes. [
Footnote
16] Moreover, the imposition of such restrictions would
necessarily oblige state prosecuting authorities to establish in
each case that their evidence was untainted by any connection with
information obtained as a consequence of the wagering taxes;
[
Footnote 17] the federal
requirements would thus be protected only at the cost of hampering,
perhaps seriously, enforcement of state prohibitions against
gambling. We cannot know how Congress would assess the competing
demands of the
Page 390 U. S. 60
federal treasury and of state gambling prohibitions; we are,
however, entirely certain that the Constitution has entrusted to
Congress, and not to this Court, the task of striking an
appropriate balance among such values. [
Footnote 18] We therefore must decide that it would be
improper for the Court to impose restrictions of the kind urged by
the United States.
VI
We are fully cognizant of the importance for the United States'
various fiscal and regulatory functions of timely and accurate
information,
compare Mansfield,
supra, and
Meltzer, Required Records, the McCarran Act, and the Privilege
against Self-Incrimination, 18 U.Chi.L.Rev. 687; but other methods,
entirely consistent with constitutional limitations, exist by which
Congress may obtain such information.
See generally Counselman
v. Hitchcock, supra, at
142 U. S. 585;
compare Murphy v. Waterfront Commission, supra.
Accordingly, nothing we do today will prevent either the taxation
or the regulation by Congress of activities otherwise made unlawful
by state or federal statutes.
Nonetheless, we can only conclude, under the wagering tax system
as presently written, that petitioner properly asserted the
privilege against self-incrimination, and that his assertion should
have provided a complete defense to this prosecution. This defense
should have reached both
Page 390 U. S. 61
the substantive counts for failure to register and to pay the
occupational tax and the count for conspiracy to evade payment of
the tax. We emphasize that we do not hold that these wagering tax
provisions are as such constitutionally impermissible; we hold only
that those who properly assert the constitutional privilege as to
these provisions may not be criminally punished for failure to
comply with their requirements. If, in different circumstances, a
taxpayer is not confronted by substantial hazards of
self-incrimination, or if he is otherwise outside the privilege's
protection, nothing we decide today would shield him from the
various penalties prescribed by the wagering tax statutes.
The judgment of the Court of Appeals is
Reversed.
MR. JUSTICE MARSHALL took no part in the consideration or
decision of this case.
[For concurring opinion of MR. JUSTICE BRENNAN,
see
post, p.
390 U. S.
72.]
[For concurring opinion of MR. JUSTICE STEWART,
see
post, p.
390 U. S.
76.]
[For dissenting opinion of MR. CHIEF JUSTICE WARREN,
see
post, p.
390 U. S.
77.]
[
Footnote 1]
Certiorari was originally granted in
Costello v. United
States, 383 U.S. 942, to consider these issues. Upon
Costello's death, certiorari was granted in the present case. 385
U.S. 1000. Marchetti and Costello, with others, were convicted at
the same trial of identical offenses, arising from the same series
of transactions. Certiorari both here and in
Costello was
limited to the following questions:
"Do not the federal wagering tax statutes here involved violate
the petitioner's privilege against self-incrimination guaranteed by
the Fifth Amendment? Should not this Court, especially in view of
its recent decision in
Albertson v. Subversive Activities
Control Board, 382 U. S. 70 (1965), overrule
United States v. Kahriger, 345 U. S. 22
(1953), and
Lewis v. United States, 348 U. S.
419 (1955)?"
After argument, the case was restored to the calendar and set
for reargument at the 1967 Term. 388 U.S. 903. Counsel were asked
to argue, in addition to the original questions, the following:
"(1) What relevance, if any, has the required records doctrine,
Shapiro v. United States, 335 U. S. 1,
to the validity under the Fifth Amendment of the registration and
special occupational tax requirements of 26 U.S.C. §§ 4411, 4412?
(2) Can an obligation to pay the special occupational tax required
by 26 U.S.C. § 4411 be satisfied without filing the registration
statement provided for by 26 U.S.C. § 4412?"
[
Footnote 2]
A July 1963 revision of Form 11-C modified the form of certain
of its questions. The record does not indicate which version of the
return was available to petitioner at the time of the omissions for
which he was convicted. The minor verbal variations between the two
do not affect the result which we reach today.
[
Footnote 3]
The Treasury Regulations provide that a stamp, evidencing
payment of the occupational tax, may not be issued unless the
taxpayer both submits Form 11-C and tenders the full amount of the
tax. 26 CFR § 44.4901-1(c). Accordingly, the Revenue Service has
refused to accept the $50 tax unless it is accompanied by the
completed registration form, and it has consistently been upheld in
that practice.
See United States v. Whiting, 311 F.2d 191;
United States v. Mungiole, 233 F.2d 204;
Combs v.
Snyder, 101 F.
Supp. 531,
aff'd, 342 U.S. 939. The United States has,
in this case, acknowledged that the registration and occupational
tax provisions are not realistically severable. Brief on Reargument
37-41.
[
Footnote 4]
In his trial testimony in
Grosso v. United States,
decided herewith,
post, p.
390 U. S. 62, W.
Dean Struble, technical advisor to the District Director of
Internal Revenue, Pittsburgh, Pennsylvania, described Form 11-C as
follows:
"A Form 11-C serves two purposes. The first is an application
for registry for a wagering tax stamp. After the application is
properly filed and the tax paid, at that time, the Form 11-C
becomes a special tax return."
Transcript of Record 90.
[
Footnote 5]
The following illustrate the state gambling and wagering
statutes under which one engaged in activities taxable under the
federal provisions at issue here might incur criminal
penalties.Ala.Code, Tit. 14, c. 46 (1958); Alaska Laws, Tit. 65, c.
13 (1949); Ariz.Rev.Stat.Ann. § 13-438 (1956); Ark.Stat.Ann., Tit.
41, c. 20 (1947); Cal.Pen.Code §§ 330-337a (1956);
Colo.Rev.Stat.Ann., c. 40, Art. 10 (1963); Del.Code Ann., Tit. 11,
§§ 665-669 (1953); D.C.Code Ann. §§ 22-1504 to 22-1511 (1967);
Fla.Stat., c. 849 (1965); Ga.Code Ann., c. 26-64 (1953); Hawaii
Rev.Laws, c. 288 (1955); Idaho Code Ann., Tit. 18, c. 38 (1948);
Ill.Rev.Stat., c. 38, Art. 28 (1965); Ind.Ann.Stat., Tit. 10, c. 23
(1956); Iowa Code, c. 726 (1966); Kan.Stat.Ann., c. 21, Art. 15
(1964); Ky.Rev.Stat. § 436.200 (1962); La.Rev.Stat. § 14:90 (1950);
Me.Rev.Stat.Ann., Tit. 17, c. 61 (1964); Md.Ann.Code, Art. 27, §§
237-242 (1957); Mass.Gen.Laws Ann., c. 271 (1959); Mich.Stat.Ann. §
28.533 (1954); Minn.Stat. § 609.755 (1965); Miss.Code Ann. §§
2190-2202 (1942); Mo.Rev.Stat. § 563.350 (1959); Mont.Rev.Codes
Ann., Tit. 94, c. 24 (1947); Neb.Rev.Stat. § 28-941 (1943);
Nev.Rev.Stat. §§ 293.603, 465.010 (1957); N.H.Rev.Stat.Ann., c. 577
(1955); N.J.Rev.Stat., Tit. 2A, c. 112 (1953); N.M.Stat.Ann., c.
40A, Art. 19 (1953); N.Y.Pen.Law, Art. 225 (1967); N.C.Gen.Stat. §§
14-292 to 14-295 (1953); N.D.Cent.Code Ann., c. 12-23 (1959); Ohio
Rev.Code Ann., c. 2915 (1953); Okla.Stat.Ann., Tit. 21, c. 38
(1958); Ore.Rev.Stat. § 167.505 (1965); Pa.Stat.Ann., Tit. 18, §§
4603-4607 (1963); R.I.Gen.Laws Ann., Tit. 11, c.19 (1956); S.C.Code
Ann., Tit. 16, c. 8, Art. 1 (1962); S.D.Code, Tit. 24, c. 24.01
(1939); Tenn.Code Ann., Tit. 39, c. 20 (1955); Tex.Pen.Code Ann.,
c. 6 (1952); Utah Code Ann., Tit. 76, c. 27 (1953); Vt.Stat.Ann.,
Tit. 13, c. 43, subch. 2 (1959); Va.Code Ann., Tit. 18.1, c. 7,
Art. 2 (1950); Wash.Rev.Code, Tit. 9, c. 9.47 (1956); W.Va.Code
Ann., c. 61, Art. 10 (1961); Wis.Stat., c. 945 (1965);
Wyo.Stat.Ann., Tit. 6, c. 9, Art. 2 (1957). These statutes, of
course, vary in their terms and scope, but these variations
scarcely detract from the breadth or prevalence of the penalties
which in combination they create.
[
Footnote 6]
New Hampshire conducts a state sweepstakes, but imposes broad
criminal penalties upon privately operated lotteries.
N.H.Rev.Stat.Ann., c. 577 (1955). The following illustrate the
other state statutes which impose criminal penalties upon lottery
activities which would be taxable under these federal statutes.
Ala.Code, Tit. 14, c. 46 (1958); Alaska Laws § 65-13-1 (1949);
Ariz.Rev.Stat.Ann. § 13-436 (1956); Ark.Stat.Ann. § 41-2024 (1947);
Cal.Pen.Code §§ 319-326 (1956); Colo.Rev.Stat.Ann., c. 40, Art. 16
(1963); Del.Code Ann., Tit. 11, §§ 661-664 (1953); D.C.Code Ann. §
22-1501 (1967); Fla.Stat. § 849.09 (1965); Ga.Code Ann., c. 26-65
(1953); Hawaii Rev.Laws, c. 288 (1955); Idaho Code Ann., Tit. 18,
c. 49 (1948); Ill.Rev.Stat., c. 38, Art. 28 (1965); Ind.Ann.Stat.,
Tit. 10, c. 23 (1956); Iowa Code § 726.8 (1966); Kan.Stat.Ann., c.
21, Art. 15 (1964); Ky.Rev.Stat. § 436.360 (1962); La.Rev.Stat. §
14:90 (1950); Me.Rev.Stat.Ann., Tit. 17, c. 81 (1964); Md.Ann.Code,
Art. 27, § 356 (1957); Mass.Gen.Laws Ann., c. 271 (1959);
Mich.Stat.Ann., §§ 28.604-28.608 (1954); Miss.Code Ann. §§
2270-2279 (1942); Mo.Rev.Stat. § 563.430 (1959); Mont.Rev.Codes
Ann., Tit. 94, c. 30 (1947); Neb.Rev.Stat. § 28-961 (1943);
N.J.Rev.Stat., Tit. 2A, c. 121 (1953); N.M.Stat.Ann., c. 40A, Art.
19 (1953); N.Y.Pen.Law, Art. 225 (1967); N.C.Gen.Stat. §§ 14-289 to
14-291 (1953); N.D.Cent.Code Ann., c. 12-24 (1959); Ohio Rev.Code
Ann., c. 2915 (1953); Okla.Stat.Ann., Tit. 21, c. 41 (1958);
Ore.Rev.Stat. § 167.405 (1965); Pa.Stat.Ann., Tit. 18, §§ 4601-4602
(1963); R.I.Gen.Laws Ann., Tit. 11, c.19 (1956); S.C.Code Ann.,
Tit. 16, c. 8, Art. 1 (1962); S.D.Code, Tit. 24, c. 24.01 (1939);
Tenn.Code Ann. § 39-2017 (1955); Tex.Pen.Code Ann., Art. 654
(1952); Utah Code Ann., Tit. 76, c. 27 (1953); Vt.Stat.Ann., Tit.
13, c. 43, subch. 1 (1959); Va.Code Ann., Tit. 18.1, c. 7, Art. 2
(1950); Wash.Rev.Code, Tit. 9, c. 9.59 (1956); W.Va.Code Ann., c.
61, Art. 10 (1961); Wis.Stat., c 945 (1965); Wyo.Stat.Ann., Tit. 6,
c. 9, Art. 2 (1957).
[
Footnote 7]
See, e.g., Irvine v. California, 347 U.
S. 128;
United States v. Zizzo, 338 F.2d 577;
Commonwealth v. Fiorini, 202 Pa.Super. 88, 195 A.2d 119;
State v. Curry, 92 Ohio App. 1, 109 N.E.2d 298;
State
v. Reinhardt, 229 La. 673,
86 So. 2d
530;
Griggs v. State, 37 Ala.App. 605, 73 So. 2d 382;
McClary v. State, 211 Tenn. 46,
362
S.W.2d 450.
See also State v. Baum, 230 La. 247, 88
So. 2d 209.
[
Footnote 8]
One State has gone a step further to facilitate the enforcement
of its gambling prohibitions through the federal wagering tax.
Illinois requires each holder of a wagering tax stamp to register
with the clerk of the county in which he resides or conducts any
business, and imposes fines and imprisonment upon those who do not.
Ill.Rev.Stat., c. 38, § 28 (1965).
[
Footnote 9]
The metaphor is to be found in the opinions both of Lord Eldon
in
Paxton v. Douglas, 19 Ves.Jr. 225, 227, and of Chief
Justice Marshall in
United States v. Burr, In re Willie,
25 Fed.Cas. 38, 40 (No. 14,692e).
[
Footnote 10]
We must note that some States and municipalities have undertaken
to punish compliance with the federal wagering tax statutes in an
even more direct fashion. Alabama has created a statutory
presumption that possessors of federal wagering tax stamps are in
violation of state law.Ala.Code, Tit. 14, §§ 302(8)-(10) (1958).
Florida adopted a similar statute, Fla.Laws 1953, c. 28057, but it
was subsequently declared unconstitutional by the Florida Supreme
Court.
Jefferson v. Sweat, 76 So.
2d 494. The Supreme Court of Tennessee has upheld an ordinance
adopted by the City of Chattanooga which makes possession of a
federal tax stamp a misdemeanor.
Deitch v. City of
Chattanooga, 195 Tenn. 245,
258
S.W.2d 776.
See, for a similar provision, Rev. Ord.,
Kansas City, Missouri, § 23.110 (1956), and
Kansas City v.
Lee, 414 S.W.2d 251. Georgia has recently provided by statute
that the possession or purchase of a federal wagering tax stamp is
"
prima facie evidence of guilt" of professional gambling.
Ga.Code Ann. § 26-6413 (Supp. 1967).
See, for a similar
rule,
McClary v. State, supra, n 7.
[
Footnote 11]
Hoffman v. United States, 341 U.
S. 479,
341 U. S.
487.
[
Footnote 12]
We presume that the Court referred to the following:
"[T]here is no compulsory self-crimination in a rule of law
which merely requires beforehand a future report on a class of
future acts among which a particular one may or may not in future
be criminal at the choice of the party reporting."
8 Wigmore,
supra, at 349.
But see Morgan,
supra, at 37, and McKay, Self-Incrimination and the New
Privacy, 1967 Sup.Ct.Rev.193, 221.
[
Footnote 13]
The Court, in fact, quoted from the reiteration of the
Wilson dictum included in
Davis v. United States,
328 U. S. 582,
328 U. S.
590.
[
Footnote 14]
The United States has urged that this case is not reached by
Shapiro simply because petitioner was required to submit
reports, and not to maintain records. Insofar as this is intended
to suggest the the crucial issue respecting the applicability of
Shapiro is the method by which information reaches the
Government, we are unable to accept the distinction. We perceive no
meaningful difference between an obligation to maintain records for
inspection and such an obligation supplemented by a requirement
that those records be filed periodically with officers of the
United States. We believe, as the United States itself argued in
Shapiro, that "[r]egulations permit records to be
retained, rather than filed, largely for the convenience of the
persons regulated." Brief for the United States in No. 49, October
Term 1947, at 21, n. 7.
[
Footnote 15]
Section 6107 reads as follows:
"In the principal internal revenue office in each internal
revenue district there shall be kept, for public inspection, an
alphabetical list of the names of all persons who have paid special
taxes under subtitle D or E within such district. Such list shall
be prepared and kept pursuant to regulations prescribed by the
Secretary or his delegate, and shall contain the time, place, and
business for which such special taxes have been paid, and upon
application of any prosecuting officer of any State, county, or
municipality there shall be furnished to him a certified copy
thereof, as of a public record, for which a fee of $1 for each 100
words or fraction thereof in the copy or copies so requested may be
charged."
The special taxes to which the section refers include the
occupational tax imposed by 26 U.S.C. § 4411.
[
Footnote 16]
The requirement now embodied in § 6107 was adopted prior to the
special occupational tax on wagering, but Congress plainly
indicated when it adopted the latter that it understood, and
wished, that state prosecuting authorities would be provided lists
of those who had paid the wagering tax.
See H.R.Rep. No.
586, 82d Cong., 1st Sess., 60; S.Rep. No. 781, 82d Cong., 1st
Sess., 118.
[
Footnote 17]
The Court required such a showing as part of the restrictions
imposed in
Murphy, 378 U.S. at
378 U. S. 79, n.
18. The United States has acknowledged that this would be no less
imperative here. Brief for the United States 24-25.
[
Footnote 18]
It should be emphasized that it would not suffice here simply to
sever § 6107.
See 26 U.S.C. § 7852(a).
Cf. Warren v.
Mayor of Charlestown, 2 Gray 84, 99;
Carter v. Carter Coal
Co., 298 U. S. 238,
298 U. S. 316.
We would be required not merely to strike out words, but to insert
words that are not now in the statute. Here, as in the analogous
circumstances of
United States v. Reese, 92 U. S.
214,
"This would, to some extent, substitute the judicial for the
legislative department of the government. . . . To limit this
statute in the manner now asked for would be to make a new law, not
to enforce an old one. This is no part of our duty."
Id. at
92 U. S.
221.