People v. McLemore

Opinion

WIENER, Acting P. J. A four-count information charged self-styled tax protester Max R. McLemore with wilfully failing to file state income tax returns with the intent to evade taxes for the years 1977 through 1980 in violation of Revenue and Taxation Code section 19406.1 McLemore negotiated a plea bargain in which he pleaded nolo contendere to violating section 19401,2 a misdemeanor, for failing to file income tax returns for those years preserving his right on this appeal to pursue the argument he unsuccessfully made to the trial court. McLemore contends he was excused from filing state income tax returns because of his privilege against self-incrimination contained in article I, section 15 of the California Constitution. Guided principally by United States v. Carlson (9th Cir. 1980) 617 F.2d 518 we reject his argument and affirm the judgment.

Discussion

McLemore believes the government may not validly collect an income tax on wages earned. Eschewing a direct challenge to the state or federal government’s authority to tax, but nonetheless determined to defeat the government’s withholding system, McLemore filed a false withholding exemption certificate for each of the years 1977 through 1980. Although his annual wages ranged from $18,000 to $40,000 McLemore certified under penalty of perjury that he was exempt from federal income taxes. Recognizing this act is punishable under 26 United States Code section 7205, he now claims he cannot be prosecuted for failing to file a California state income tax return because to do so in effect would compel him to incriminate himself [720]as to the false withholding certificate.3 The reason for this is that California and federal statutes provide for reciprocal sharing of taxpayer information between the Franchise Tax Board and the Internal Revenue Service. (See § 19286; 26 U.S.C. § 6103(d).)

On virtually identical facts, United States v. Carlson, supra, 617 F.2d 518 held the Fifth Amendment does not shield a taxpayer from a prosecution for failure to file a complete income tax return where information on the return would likely indicate that the taxpayer previously filed a false withholding certificate. In reaching this conclusion, the Carlson court read California v. Byers (1971) 402 U.S. 424 [29 L.Ed.2d 9, 91 S.Ct. 1535] for the proposition that the Supreme Court has recognized the privilege against self-incrimination is not absolute. Rather, the individual’s need for protection must be balanced against the government’s need for information. (Carlson, supra, 617 F.2d at p. 521 and fn. 5.) In applying this analysis, the court noted that Carlson’s initial crime—the false withholding certificate— was an integral part of an overall plan to evade payment of his income tax. Thus, the Fifth Amendment privilege was not an after-the-fact shield to protect Carlson from a government inquisition but rather a premeditated sword to implement his tax protest philosophy. (Id., at p. 522.) On the other side of the ledger, the court recognized that the efficacy and equity of the income tax system depend on accurate self-reporting by individual taxpayers. (Id., at p. 523.) Carlson further observed that the objective of the tax return filing requirement, as evidenced by the broad scope of persons to whom it applies, is not to elicit incriminatory information but rather to make possible the collection of government revenue. (Ibid.) This may be contrasted with reporting requirements directed at a “highly selective group inherently suspect of criminal activities.” (Albertson v. SACB (1965) 382 U.S. 70, 79 [15 L.Ed.2d 165, 172, 86 S.Ct. 194]; see California v. Byers, supra, 402 U.S. at pp. 429-430 [29 L.Ed.2d at p. 18].) In Carlson’s circumstances, the court concluded the interests sought to be protected by the Fifth Amendment privilege did not warrant its application to shield a patent tax evasion scheme. (617 F.2d at p. 523.)