Opinion No. 18-71
Topics:
CRIMINAL LAW.
CONSTITUTIONAL LAW.
TAXATION (INCOME).
Summary conclusion
A taxpayer who refuses to pay Missouri state income tax can be prosecuted for a misdemeanor pursuant to Section 143.330(4), RSMo 1969.
Contents of opinion
January 13, 1971
Honorable Joseph P. Teasdale
Prosecuting Attorney, Jackson County
415 East 12th Street
Kansas City, Missouri 63334
Dear Mr. Millan:
This is in reply to your request for an official opinion of this office in which you seek an opinion on the constitutionality of Section 143.330(4), RSMo 1969,which is an interest and penalties section contained within the provisions of the State Income Tax Law. As you indicate, you have become apprehensive about the validity of Section 143.330(4), supra, which provides for the fine or imprisonment of a person ". . . who willfully fails to pay such tax [state income tax], . . .", in light of Article I, Section 11, Constitution of Missouri, 1945, which provides:
"That no person shall be imprisoned for debt, except for nonpayment of fines and penalties imposed by law."
Apparently, you are concerned that any criminal prosecutions brought by your office for willfully failing to pay one's state income tax, can be met successfully by the defense that to so prosecute would be imprisonment for debt in violation of the Constitution of Missouri, 1945, Article I, Section 11.
It would appear, that you have developed your concern from a reading of two recent cases, Partney v. Partney (Ct.App. 1969) 442 S.W.2d 117; and Barhorst v. City of St. Louis (Mo.Sup. en bane 1967) 423 S.W.2d 843.
Partney v. Partney, supra, was a contempt proceeding brought by a divorced wife to enforce an alimony and child support decree. A motion to hold the husband in contempt was overruled by the Circuit Court, said order being affirmed by the Court of Appeals. The authority for the court's holding was Coughlin v. Ehlert (Mo.Sup. 1866) 39 Mo. 285, in which the Supreme Court of Missouri had held that, An order for the payment of alimony is simply an order for the payment of money. . . .", and thus imprisonment for this civil debt would be in contravention of the Constitution's imprisonment for debt provision. [For discussion see 26 Missouri Bar Journal 560, Woods].
In Barhorst v. City of St. Louis, supra, certain taxpayers urged the unconstitutionality of the charter amendment and ordinances imposing an earnings tax in the City of St. Louis, urging as one basis of the laws unconstitutionality, the invalidity of the laws penalty provisions because it accomplished imprisonment for debt, in violation of Article I, Section 11, 1945 Constitution of Missouri. The court answered that argument thusly:
"The ordinance makes it a violation of the Municipal Code, punishable upon conviction by fine or imprisonment, for a taxpayer to fail to make a return, or to permit the collector to examine his books and records, knowingly to make a false return or to attempt to avoid full disclosure of earnings or profits. It also requires the taxpayer making the return, at the time of filing, to pay the collector the amount of tax shown due but attaches no penalty for failure to pay on time except 6% interest and a 1% per month penalty. Imprisonment for nonpayment of a fine for violation of the ordinance by failing to file a return would not constitute imprisonment for debt, Thunder Oil Company v. City of Sunset Hills, (Mo.Sup.banc) 349 S.W.2d 82, 89. The ordinance does not attempt to authorize imprisonment of a taxpayer for failure to pay the tax, nor does it make payment of the tax a condition precedent to filing, although it does require payment at the time the return is filed. . . ." [loc. cit. 849-850.; emphasis added]
Thus, it would appear, that the court did not have squarely before it in Barhorst, the question of whether, as is present In the statute under instant consideration, a person may be imprisoned for willful failure to pay a tax.
Section 143.330(4), RSMo> 1969, authorizes a criminal prosecution for a person who willfully fails to pay state income tax:
"4. Any individual or any officer of a corporation, joint stock company or joint stock association required under this chapter to pay a tax, make a return, keep any records, or supply any information for the purpose of the computation, assessment or collection of any tax imposed by this chapter who willfully fails to pay such tax, . . . in addition to all other penalties provided in this chapter, shall be guilty of a misdemeanor and, upon conviction thereof, be fined not less than five and not more than one thousand dollars, or imprisoned for not more than one year or both, at the discretion of the court, together with the costs of prosecution." [emphasis added]
As can be seen by reference to Vernon's Annotated Missouri Statutes the Supreme Court of Missouri has dealt with Section 143.330(4) in but two cases, both dealing with venue provisions regarding willful failure to file, State v. Civella (Mo.Sup. 1963). 368 S.W.2d 444; and State v. Poelker (Mo.Sup. en banc 1964) 378 S.W.2d 491. Thus, our conclusions are drawn from a research of the general law dealing with taxation and imprisonment for debt.
Historically, constitutional provisions denying imprisonment' for debt were enacted to avoid imprisoning those individuals who had debts arising out of simple contracts. State ex rel. Lanz v.Dowling (Fla.Sup. 1926) 110 So. 522; Lipman v. Goebel (I11.Sup. 1934) 192 N.E. 203.
In almost uniform application, taxes are held not to be debts, as that term of art is defined for the purposes of constitutional provisions forbidding imprisonment for debt. The theory is expressed that a tax is not a debt due the state by certain and express agreements between the parties, but that tax is money due under a much more compelling compact than any mere agreement between the parties.
In discussing this concept, the Supreme Court of Ohio, in Voelkel v. City of Cincinnati. ( O.Sup,. 1925) 147 N.E. 754, after reviewing cases and text writers, stated:
From an examination of such authorities as have been available to us in the consideration of this case, we are forced to the conclusion that section 15, art. I, of the Con;stitution of Ohio, 'No person shall be imprisoned for debt in any civil action, on mesne or final process, unless in cases of fraud,' is not an inhibition against making the nonpayment of a tax a misdemeanor and the imposing of a fine or imprisonment as a penalty therefore, taxes not being a 'debt' in the sense of an obligation incurred by contract, express or implied, but an. obligation imposed by an act of the sovereign in the exercise of its powers; that the inhibition against imprisonment for 'debt' is an inhibition against imprisonment for an obligation incurred by contract, express or implied." [loc. cit. 756—757]
Similarly, the courts of other jurisdiction have found that the term of art "debt" embodied in constitutional provisions denying imprisonment for debt, were not so inclusive as to attach to criminal prosecutions for failure to pay. a tax'. Austin v. City of Seattle (Wash. Sup. 1934) 30 P.2d 646; City of Cincinnati v. DeGoyer(Mun;.Ct. 1968).211 N.E.2d 769; United States v. Smith (D.C. Mich 1945) .62 F.Supp. 594; United States v. Palermo (E.D. Penn. 1957) 152.F.Supp. 825; Freeman v. United States 217 U.S. 539 (1910).
There, would appear to be another basis by which the; peralty provision of Section 143.330(4), supra, does not contravene Article I, Section 11, Constitution of Missouri, 1945. As can be seen, by reference to Section 1.43.330(4), it is made a misdemeanor for the taxpayer to willfully fail to pay the income tax. That the term of art "willfully failing to pay an income tax" has been given definitional meaning, reference' may be had to the Internal Revenue Code of 1954, Chapter 75, Section 7203, which reads as follows:
"Any person required under this title to pay any estimated tax: or tax, or required by this title or by regulations made under authority thereof to make a return (other than a return required under authority of section 6015), keep any records, or supply any information, who willfully fails to pay such estimated tax ortax, makes such return, keeps such records, or supply such information, at the time or times' required by law or regulations, 'shall, in addition to other penalties provided by law, be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than- $10,000,or imprisoned not more than 1 year, or both, together with the costs of prosecution added]
The Supreme Court of the United States, in a willful failure to file case, in United States v. Murdock, 290 U.S. 389 (1933), in discussing the term "willfully" stated:
"The word often denotes an act which is intentional, or knowing, or voluntary, as distinguished from accidental. But when used in a criminal statute it generally means an act done with a bad purpose. . . without justifiable excuse . . . stubbornly, obstinately, perversely, . . . The word is often employed to characterize a thing done without ground for believing it is lawful . . . or conduct marked by careless disregard whether or not one has the right so to act, . . ." [loc. cit. 394-395]
That Missouri courts have similarly defined willfully, see State v. Foster (Mo.Sup. 1946) 197 S.W.2d 313; and State v. Brown (Ct.. App.1969) 445 S.W.2d 647. As can be seen, the definition given the term willfully in the context of income tax law is. one of a fraudulent act.
Thus it would appear, that under the two previously discussed theories, the penalty provision of Section 143.330(4), does not contravene Article I, Section 11 of the Constitution of Missouri.
There
has been advanced, however, a theory that a legislative body can
transform a tax into a debt by, legislative edict, and that
imprisonment for the collection of a tax transformed into a debt would
contravene a constitutional provision against imprisonment for debt. In
City of Cincinnati v. DeGoyer (Mun.Ct. 1968) 241 N.E.2d 769, the
Municipal Court of Hamilton County, Ohio, had before it the question of
whether the legislative body of the City of Cincinnati had transformed
a tax into a debt by legislative enactment. Recognizing the general
theory that a tax is not a "debt," the court found that on the facts
before it the city council of the City of Cincinnati, had transformed a
tax into a debt by enactment of a city earnings tax ordinance. In so
holding, the court stated:
"The principle that the legislature can make a tax a debt is referred to in 51 Ohio Jurisprudence 2d, Taxation, Section 5, wherein it states, 'and it is to be noted that statutes may specifically make taxes a debt.' This section cites the case of State, ex rel. Hostetter v. Hunt, 132 Ohio St. 568, 9 N.E.2d 676 for the proposition.
". . . As quoted before, Section 11, sub-paragraph A, of the Ordinance says, 'all taxes shall be collectible by suit as other debts.' This, together with Article 11 of the Rules and Regulations, subsection A-1, which reads, 'All taxes become. a debt, leads the Court to the only conclusion which seems apparent from a total reading of the Ordinance and Rules and Regulations, and that is the legislative body intended to create a debt once the tax liability is determined. . . .'" [loc. cit. 773]
To see if this theory is susceptible to application in the instant case, reference must be had to Section 143.290, RSMo 1969, which states as follows:
"At the expiration of thirty days after any delinquency, the director of revenue shall certify the name of any individual, association, joint stock company, syndicate, co-partnership, corporation, receiver, trustee, conservators, or other officer appointed by any state or federal court, or any other person or organization from whom any tax under this chapter shall be due, to the attorney general, and suit shall be instituted in any court of competent jurisdiction by the attorney general, or by the prosecuting attorney of the county at the direction of the attorney general, in the name of the state, to recover such tax and enforce the lein thereof, and service may be had on both residents and nonresidents in the same manner as provided by law in civil actions."
The argument could be made that by the foregoing section, the legislature has transformed a tax into a debt in light of the fact that a civil action is contemplated for the recovery of taxes declared delinquent under Section 143.280, RSMo 1969. We are, however, unable to ascribe such intent to the legislature. A concurrent reading of Sections 143,290 and 143.330, indicates, we believe, that the legislature has provided two remedies to the state on the failure of an individual to pay the state income tax: an action to recover such tax by a civil action, and, a criminal action for the fraud involved for willfully failing to pay a tax. By reference to Section 144.390, RSMo 1969, the specificity with which the legislature can speak in this area can be seen:
1. Any tax due and unpaid under the provisions of sections 144.010 to 144.510 shall constitute a debt due the state and in any case>of failure to pay the tax, or any portion thereof, or any penalty or interest provided for in sections 144.010 to 144.510, when due, the director of revenue in the name of the state may recover the amount of such tax, penalty and interest by an action at law or other appropriate judicial proceedings. The collection of such tax, penalty and interest shall not be a bar to any prosecution under sections 144.0.10 to 144.510." [emphasis added]
Thus, we conclude that the legislature has not, by the enactment of Section 143.280, transformed the state income tax into a debt within the comprehension of Article I, Section 11, Constitution of Missouri, 1945.
The Supreme Court of Missouri has consistently held to the theory that there must be a clear conflict between a legislative enactment and a constitutional provision before it is warranted in declaring a statute unconstitutional. In re. Burris (Mo.Sup. 1877) 66 Mo. 442; Hickey v. Board of Education of City of St. Louis (Mo.Sup. 1953) 256 S.W.2d 775. Additionally, the Supreme Court of Missouri has held that an attack upon the constitutionality of a statute will not be sustained if there is any reasonable theory upon which its constitutionality may be upheld, and if it is susceptible of two constructions, one making it valid and the other invalid, construction sustaining validity will be adopted. State on inf. Dalton v. Metropolitan St. Louis Sewer District (Mo. Sup. en banc 1955) 275 S.W.2d 225; and Brown v. Morris (Mo.Sup. en banc 1956) 290 S.W.2d 160.
Applying the foregoing principles, we find that Section 143.330(4), is susceptible of interpretation upholding validity, and therefore, it is the conclusion of this office, that Section 143.330, does not contravene Article I, Section 11, Constitution of Missouri, 1945.
CONCLUSION
It is therefore the conclusion of this office that a taxpayer who refuses to pay Missouri state income tax can be prosecuted for a misdemeanor pursuant to Section RSMo 1969.
The foregoing opinion, which I hereby approve, was prepared by my Assistant, Kenneth Romines.
Very truly yours,
John C. Danforth
Attorney General