T.C. Memo. 1997-216
UNITED STATES TAX COURT
KEVIN A. ROBERTS, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 7053-95. Filed May 7, 1997.
Kevin A. Roberts, pro se.
Michael D. Baker, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
TANNENWALD, Judge: Respondent determined deficiencies in
and additions to petitioner's Federal income taxes as follows:
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Additions to Tax
Year Deficiency Sec. 6651(f) Sec. 6654(a)
1990 $23,981 $17,986 $1,577
1991 22,695 17,021 1,306
Unless otherwise indicated, all section references are to the
Internal Revenue Code in effect for the taxable years at issue,
and all Rule references are to the Tax Court Rules of Practice
and Procedure.
The issue to be decided is whether respondent's
determination of the deficiencies in and additions to income tax
violates the Double Jeopardy Clause of the Fifth Amendment to the
U.S. Constitution.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulations of facts and the exhibits attached thereto are
incorporated herein by this reference. Petitioner's mailing
address was Philadelphia, Pennsylvania, at the time he filed his
petition in this case.
On January 12, 1993, petitioner was indicted on nine counts,
involving conspiracy to distribute cocaine, possession with
intent to distribute heroin, Federal income tax evasion for
failure to file returns for 1990 and 1991,1 money laundering and
aiding and abetting, including the knowing use of the proceeds of
1
These counts charged that petitioner "did willfully and
knowingly attempt to evade and defeat a large part of the income
tax due and owing by him * * * by failing to file an individual
income tax return" for the calendar years 1990 and 1991.
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an unlawful activity with the intent to conceal and disguise the
proceeds by utilizing such proceeds to acquire designated
property.
On February 5, 1993, petitioner pleaded guilty to all of the
above counts. As part of the plea agreement, petitioner also
consented to forfeit to the U.S. Government, under 21 U.S.C. sec.
853(a)(1994), all assets which were derived from proceeds of his
illegal drug activities, including but not limited to: $129,600
U.S. currency seized from petitioner at the time of his arrest,
bank deposits maintained in petitioner's name, and several
automobiles.
On October 12, 1993, the U.S. District Court for the Eastern
District of Pennsylvania entered its judgment pursuant to said
guilty pleas. Petitioner was sentenced to prison for a term of 4
years. Upon his release from prison, he was to remain under
supervised release for varying periods of 3 to 5 years, which
were to run concurrently. The District Court assessed a $50 fine
against petitioner, in his criminal case, for each of the nine
counts to which he pleaded guilty.
Respondent determined petitioner's gross income to be
$72,090 and $68,980 from the distribution of illegal drugs for
the taxable years 1990 and 1991, respectively, the same amounts
as listed in the counts of the indictment charging income tax
evasion.
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OPINION
Petitioner does not contest the amounts of the
deficiencies or the additions to tax. Rather, petitioner
contends that respondent's determination violates the Double
Jeopardy Clause of the Fifth Amendment to the U.S. Constitution,2
in that he has already been punished for his actions through
imprisonment and forfeiture of all of the proceeds of his
illegally obtained income.
The Double Jeopardy Clause protects individuals against
multiple punishments for the same offense. United States v.
Halper, 490 U.S. 435, 440 (1989). "The Double Jeopardy Clause
does not bar 'a civil action by the Government, remedial in its
nature, arising out of the same facts on which the criminal
proceeding was based'." Ianniello v. Commissioner, 98 T.C. 165,
177 (1992) (quoting Helvering v. Mitchell, 303 U.S. 391, 397
(1938)).
The impact of the Double Jeopardy Clause on civil tax
disputes has been the subject of continuous scrutiny for many
years. The seminal case involving both a deficiency and an
2
The Double Jeopardy Clause of the Fifth Amendment provides
"nor shall any person be subject for the same offence to be twice
put in jeopardy of life or limb". U.S. Const. amend. V.
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addition to tax for fraud3 is Helvering v. Mitchell, supra at
399-401, in which the Supreme Court stated:
Congress may impose both a criminal and a civil
sanction in respect to the same act or omission; for
the double jeopardy clause prohibits merely punishing
twice, or attempting a second time to punish
criminally, for the same offense. The question for
decision is thus whether section 293(b) [the
predecessor of section 6653(b)] imposes a criminal
sanction. That question is one of statutory
construction.
* * * * * * *
The remedial character of sanctions imposing additions
to a tax has been made clear by this Court in passing
upon similar legislation. They are provided primarily
as a safeguard for the protection of the revenue and to
reimburse the Government for the heavy expense of
investigation and the loss resulting from the
taxpayer's fraud. * * * [Citation and fn. ref.
omitted.]
See also Ianniello v. Commissioner, 98 T.C. at 176-185.
Thus, unless the doctrine of Mitchell has been modified or
diluted, petitioner's contention should be rejected out of hand.
Petitioner points to three Supreme Court cases: Department of
Revenue of Montana v. Kurth Ranch, 511 U.S. 767 (1994); Austin v.
United States, 509 U.S. 602 (1993); and United States v. Halper,
supra, as supporting his position that Mitchell no longer applies
in situations such as are involved herein.
3
Liability for the fraud addition under sec. 6651(f)
involves the same elements as under former sec. 6653(b)(1) and
current sec. 6663(a). Clayton v. Commissioner, 102 T.C. 632,
652-653 (1994).
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We disagree. None of those cases involved criminal and
civil liability under the Internal Revenue Code. Their impact in
the Federal income tax arena has been considered by the Court of
Appeals for the Sixth Circuit in United States v. Alt, 83 F.3d
779 (1996), and by the Court of Appeals for the Fourth Circuit in
Thomas v. Commissioner, 62 F.3d 97 (1995), affg. T.C. Memo. 1994-
128, and by this Court in several cases, see, e.g., Louis v.
Commissioner, T.C. Memo. 1996-257; Price v. Commissioner, T.C.
Memo. 1996-204. In each case, the respective court upheld the
additions to tax for fraud as remedial and ruled that the Supreme
Court cases relied upon by petitioner did not apply. See also
Gordon v. Commissioner, T.C. Memo. 1997-36, in which we reach the
same conclusion based on the above-quoted language from Helvering
v. Mitchell, supra.
We see no need to repeat the analysis set forth in the
opinions in those cases. It is enough to point out that each of
them accorded Helvering v. Mitchell, supra, continuing vitality
as the basic authority for their conclusion that the Double
Jeopardy Clause did not apply and distinguished the cases relied
upon by petitioner.4 Moreover, any doubt about their treatment
of Mitchell disappears when one takes into account the Supreme
Court's most recent pronouncement on the issue of double jeopardy
4
See also United States v. Brennick, 908 F. Supp. 1004 (D.
Mass. 1995), which sets forth an extensive analysis in respect of
the continued vitality of Mitchell.
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in the forfeiture context, where the Court reaffirmed the basic
principle involved, namely, that the ultimate test is whether the
Congress intended the civil penalty to be punishment and held
that the forfeiture involved did not fall within the punishment
category with the result that the Double Jeopardy Clause did not
apply. United States v. Ursery, 518 U.S. , 116 S.Ct. 2135
(1996). In reaching that conclusion, the Supreme Court analyzed
in detail Austin v. United States, supra, United States v.
Halper, supra, and Department of Revenue of Montana v. Kurth
Ranch, supra, in the course of which it referred, without
qualification, to and quoted from Helvering v. Mitchell, supra.
See United States v. Ursery, 518 U.S. at , 116 S.Ct. at 2148-
2149.
In sum, we hold that the Double Jeopardy Clause does not
preclude respondent from asserting the deficiencies and the
addition to tax for fraud. A fortiori, it does not preclude the
imposition of the addition to tax under section 6654, which does
not arise out of petitioner's criminal activity, and in any event
is properly characterized as remedial and not punishment. See
Hawkins v. Commissioner, T.C. Memo. 1994-441, affd. without
published opinion 66 F.3d 325 (6th Cir. 1995).
To reflect our holding herein and petitioner's concessions
in respect of the amounts set forth in the notice of deficiency,
Decision will be entered
for respondent.