“willful failure to file” conviction precludes challenge to delinquency and negligence penalties
How later courts described this case
- “willful failure to file” conviction precludes challenge to delinquency and negligence penalties
- concealing information from examining agents
Written by the judges who cited it.
The opinion
WHITAKER, J., concurring: Although the Court reaches the correct result on the particular facts in this case, the majority opinion purports to establish a legal principle for application in other “failure to file” cases. Thus the majority concludes in dictum that “mere failure to file a return, standing alone, is not sufficient” to establish fraud. I fear that this statement, together with the reference to Jones v. Commissioner, 259 F.2d 300 (5th Cir. 1958), revg. 25 T.C. 1100 (1956), and First Trust & Savings Bank of Davenport, Iowa v. United States, 206 F.2d 97 (8th Cir. 1953), may be misleading.
An intentional failure to file a return where one is known to be required must be caused or prompted by one or more facts which we would expect to be placed in the record. In Jones, for example, we looked at all the surrounding circumstances and concluded that fraud was present. The Court of Appeals simply disagreed concluding that the only evidence of fraudulent intent was the failure to file two tax returns. It is misleading, however, to characterize Jones as an example of a “mere” failure to file; rather it is a case where on the record before it, the Fifth Circuit concluded that fraudulent intent was not shown by clear and convincing evidence.
The majority insists that to find fraud, there must be some fact showing fraudulent intent in addition to failure to file. I suggest that it is more accurate to state that in determining whether or not the fraud addition applies we look at the totality of the record, including the inferences which we may draw from circumstantial evidence. The only message that the Court’s dictum should send to parties in future fraud cases is that both respondent and petitioners should make certain that the record contains all available facts relating to the failure to file as well as any other relevant evidence bearing upon the petitioner’s intent. No two cases will be exactly alike and generalizations as to the level of evidence which will persuade the trier of facts to find or to fail to find fraud are simply not useful.
Simpson, Goffe, Chabot, Hamblen, and Gerber, JJ., agree with this concurring opinion.