Lapas attēli
PDF
ePub

386

STEVENS, J., dissenting

a greater disadvantage when the taxpayer originally filed no return at all, since at least in the (c)(1) situation the Commissioner can compare the two returns. If the Commissioner can assess a deficiency within three years when no return was previously filed, he can do the same if the original return was fraudulent."

Whatever the correct standard for construing a statute of limitations when it operates against the Government, see ante, at 391-392, surely the presumption ought to be that some limitations period is applicable.

6

"It probably would be all but intolerable, at least Congress has regarded it as ill-advised, to have an income tax system under which there never would come a day of final settlement and which required both the taxpayer and the Government to stand ready forever and a day to produce vouchers, prove events, establish values and recall details of all that goes into an income tax contest. Hence, a statute of limitation is an almost indispensable

The Court attempts to justify its position by reference to § 6501(e) (1)(A), which provides a 6-year limitations period for a taxpayer who nonfraudulently omits more than 25% of his or her gross income, noting that the taxpayer cannot escape this extended period by filing an amended return. Ante, at 395-396. However, this Court has never so held; the majority justifies its position only by assuming its conclusion as to the correct construction of § 6501(e)(1)(A), an issue not before the Court. The Court cites only two old Tax Court decisions neither of which considers the arguments advanced by petitioners here. See Houston v. Commissioner, 38 T. C. 486 (1962); Goldring v. Commissioner, 20 T. C. 79 (1953). Moreover, it is incorrect that the taxpayer who files a fraudulent return is in a better position than the taxpayer who innocently understates his income by more than 25%, since the former is subject to criminal penalties under a 6-year statute of limitations. See 26 U. S. C. § 6531. He is also subject to a 50% penalty. See 26 U. S. C. § 6653(b). Thus, both taxpayers face the same limitations period, though the sanctions faced by the former are much more severe. Finally, the Commissioner is in no position to rely on a disparity of treatment between two separate parts of the statute, §§ 6501(c)(1) and 6501(e)(1)(A), since he is willing to tolerate disparate treatment between (c)(1) and (c)(3), which have the same statutory origin and purpose.

STEVENS, J., dissenting

464 U. S.

element of fairness as well as of practical administration of an income tax policy." Rothensies v. Electric Storage Battery Co., 329 U. S. 296, 301 (1946).

However, under the Commissioner's position, adopted by the Court today, no limitations period will ever apply to the Commissioner's actions, despite petitioners' attempts to provide him with all the information necessary to make a timely assessment.

"Respondent would leave the statute open for that portion of eternity concurrent with the taxpayer's life, whether he lives 3 score and 10 or as long as Methuselah. In most religions, one can repent and be saved, but in the peculiar tax theology of respondent, no act of contrition will suffice to prevent the statute from running in perpetuity. Merely to state the proposition is to refute it, unless some very compelling reasons of policy require visiting this absurdity on the taxpayer." Klemp v. Commissioner, 77 T. C. 201, 207 (1981) (Wilbur, J., concurring).

If anything, considerations of tax policy argue against the result reached by the Court today. In a system based on voluntary compliance, it is crucial that some incentive be given to persons to reveal and correct past fraud. Yet the rule announced by the Court today creates no such incentive; a taxpayer gets no advantage at all by filing an honest return. Not only does the taxpayer fail to gain the benefit of a limitations period, but at the same time he gives the Commissioner additional information which can be used against him at any time. Since the amended return will not give the taxpayer a defense in a criminal or civil fraud action, see ante, at 394,

'Even Judge Wilbur's estimation of the sweep of the Commissioner's position may be too modest, for under § 6901(c)(1) the Commissioner is entitled to assess deficiencies against a taxpayer's beneficiaries after his or her death for one year after the limitations period runs. Since the limitations period will never run, the Commissioner may presumably hound a taxpayer's beneficiaries and their descendants in perpetuity.

386

STEVENS, J., dissenting

there is no reason at all for a taxpayer to correct a fraudulent return. Apparently the Court believes that taxpayers should be advised to remain silent, hoping the fraud will go undetected, rather than to make full disclosure in a proper return. I cannot believe that Congress intended such a result.s I respectfully dissent.

8

8

The Court also argues that the Commissioner cannot be expected to comply with a limitations period since his civil investigation will be hampered if he has referred the fraud case to the Department of Justice for criminal prosecution. Ante, at 399. If that is the problem, however, then in an appropriate case the limitations period could be tolled during the pendency of the criminal investigation. Tolling during periods in which an action could not reasonably have been brought is much more in accord with usual limitations principles than the result the Court reaches today. Additionally, the conflicting demands of dual civil and criminal investigations are evidently no obstacle to the Commissioner in the fraudulent-failure-tofile context, since the Commissioner there is able to live with a 3-year limitations period. In any event, the need to conduct criminal investigations, which in all events must end or result in an indictment within six years, does not justify the power to assess deficiencies in perpetuity, and even in cases, such as No. 82-1509, where no reference to the Department of Justice is ever made.

[blocks in formation]

DONOVAN, SECRETARY OF LABOR, ET AL. v.
LONE STEER, INC.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NORTH DAKOTA

No. 82-1684. Argued November 29, 1983-Decided January 17, 1984 The Secretary of Labor (Secretary) is authorized by § 11(a) of the Fair Labor Standards Act of 1938 (FLSA) to investigate and gather data regarding wages, hours, and other conditions of employment to determine whether an employer is violating the Act, and by §9 to subpoena witnesses and documentary evidence relating to any matter under investigation. Pursuant to these provisions, a Department of Labor official, upon entering appellee motel and restaurant, served an administrative subpoena duces tecum on one of appellee's employees, directing the employee to appear at the regional Wage and Hour Office with certain payroll and sales records. Appellee refused to comply with the subpoena and sought declaratory and injunctive relief in Federal District Court, claiming that the subpoena constituted an unlawful search and seizure in violation of the Fourth Amendment. The District Court held that, although the Secretary had complied with the applicable FLSA provisions in issuing the subpoena, enforcement of the subpoena would violate the Fourth Amendment because the Secretary had not previously obtained a judicial warrant.

Held: The subpoena duces tecum did not violate the Fourth Amendment. Oklahoma Press Publishing Co. v. Walling, 327 U. S. 186, controlling. An entry into the public lobby of a motel and restaurant for the purpose of serving an administrative subpoena is not the sort of governmental act that is forbidden by that Amendment. Here, the subpoena itself did not authorize either entry or inspection of appellee's premises but merely directed appellee to produce certain wage and hour records, and no nonconsensual entry into areas not open to the public was made. Marshall v. Barlow's, Inc., 436 U. S. 307, and Camara v. Municipal Court, 387 U. S. 523, distinguished. While a subpoenaed employer, in an action in federal district court, may question the reasonableness of a subpoena before suffering any penalties for refusing to comply with it, the available defenses do not include the right to insist upon a judicial warrant as a condition precedent to a valid subpoena. Pp. 413-416. Reversed.

REHNQUIST, J., delivered the opinion for a unanimous Court.

[blocks in formation]

Alan I. Horowitz argued the cause for appellants. With him on the briefs were Solicitor General Lee, Deputy Solicitor General Geller, Karen I. Ward, and Charles I. Hadden. Richard G. Peterson argued the cause for appellee. With him on the brief was James Patrick Barone.*

JUSTICE REHNQUIST delivered the opinion of the Court. Section 11(a) of the Fair Labor Standards Act of 1938 (FLSA or Act), 52 Stat. 1066, 29 U. S. C. §211(a), authorizes the Secretary of Labor to investigate and gather data regarding wages, hours, and other conditions of employment to determine whether an employer is violating the Act.' Section

*Briefs of amici curiae urging affirmance were filed for the National Restaurant Association by Robert W. Hartland; and for the Washington Legal Foundation by Daniel J. Popeo, Paul D. Kamenar, and Nicholas E. Calio.

Robert E. Williams, Douglas S. McDowell, and Stephen C. Yohay filed a brief for the Equal Employment Advisory Council as amicus curiae.

Section 11(a), as set forth in 29 U. S. C. § 211(a), provides:

"The Administrator or his designated representatives may investigate and gather data regarding the wages, hours, and other conditions and practices of employment in any industry subject to this chapter, and may enter and inspect such places and such records (and make such transcriptions thereof), question such employees, and investigate such facts, conditions, practices, or matters as he may deem necessary or appropriate to determine whether any person has violated any provision of this chapter, or which may aid in the enforcement of the provisions of this chapter. Except as provided in section 212 of this title and in subsection (b) of this section, the Administrator shall utilize the bureaus and divisions of the Department of Labor for all the investigations and inspections necessary under this section. Except as provided in section 212 of this title, the Administrator shall bring all actions under section 217 of this title to restrain violations of this chapter."

Although § 11(a) grants investigatory authority specifically to the Wage and Hour Administrator, pursuant to Reorg. Plan No. 6 of 1950, 3 CFR 1004 (1949-1953 comp.), 64 Stat. 1263, 5 U. S. C. App. p. 743, the functions of all officers of the Department of Labor, including the Wage and Hour Administrator, are transferred to the Secretary of Labor, who may in turn delegate those functions.

« iepriekšējāTurpināt »