The government attorney is Kent L. Jones, Esq, Assistant to the Attorney General,
Department of Justice, Washington, D.C.
QUESTION: -- some penalties for failing to file
MR. JONES: There are some penalties, but the
penalties, like taxes, have to be enforced against the
property of the taxpayer, and if the taxpayer is allowed
to exempt all of its property in this fashion, then
there's literally no way that the taxes can be enforced
through civil procedures.
QUESTION: What about criminal procedures? Are
there any criminal procedures for --
MR. JONES: I --
QUESTION: -- failure, continued failure to
MR. JONES: Of course, if you file a return,
then you're not exposing yourself to any criminal
obligations, and if you don't file a return, it would
be -- I'm not familiar with a statute that makes that a
crime by itself. Now, it may be that it's a crime in
connection with some intent to conceal, but just the fact
that you didn't file -- I'm not -- frankly, I'm not --
even though I come before the Court on tax cases, I'm not
an expert on criminal tax matters, but it's my impression
that that would not by itself be a crime.
Now, the Federal tax --
QUESTION: We'd better not let the word get out.
I thought that it was a crime, but I'll check.
MR. JONES: All right, well, I stand --
QUESTION: We'll just keep it among ourselves.
Hard Way: Go to to the website of the Supreme Court, www.supremecourtus.gov, and on their website go to the section listed as "Oral Arguments", click on and go to near the bottom "Argument Transcripts", click on and scroll down to "Argument Sessions January 7-January 16, 2002", about 70% of the way down that list at #7 is the case arguments for 00-1831 United States v. Craft. That case transcript is a PDF file and requires Adobe Acrobat to download. Go to pages 5-6 of the transcript and you will see the above.
The preceding paragraph is interesting, too:
MR. JONES: In this case, the taxpayer is the
husband. The husband was an attorney, and he filed no
return, and when -- there's two ways for this issue to
come up. Either spouse may file either no return, or file
only a separate return. It's only when they file a joint
return that they are jointly and severally liable for the
tax obligation, so if, as in this case, the taxpayer
simply files no return at all, then the obligation is
exclusively that -- the tax obligation is that of the
nonfiler, in this case the husband.
Indeed, Judge Ryan pointed out in his separate
opinion that the decision of this Court, of the court of
appeals is very amenable to abuse, because on this theory
both spouses can earn income, neither of them can file a
return, or they can both file a separate return, and then
they can put all of their real and personal property in a
tenancy by the entirety, including stocks and bonds in
States like Michigan and Maryland, and claim a complete
exemption of all their property from Federal tax