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An income tax case centering around the term “willfulness.”
Section 7206 of the Internal
Revenue Code defined felony charges for willfully submitting known fraudulent information. Section
7207 defined misdemeanor charges for willfully filing known fraudulent information. The Supreme
Court ruled that the term willfulness meant the same in both statutes.
The Court also stated that, “This longstanding interpretation of the purpose of the recurring word
“willfully” promotes coherence in the group of tax crimes. In our complex tax system, uncertainty
often arises even among taxpayers who earnestly wish to follow the law. The Court has said, “It is not
the purpose of the law to penalize frank difference of opinion or innocent errors made despite the
exercise of reasonable care.”…“Degrees of negligence give rise in the tax system to civil
penalties. The requirement of an offense committed ‘willfully’ is not met, therefore, if a
taxpayer has relied in good faith on a prior decision of this Court… The Court’s consistent
interpretation of the word ‘willfully’ to require an element of mens rea implements the pervasive
intent of Congress to construct penalties that separate the purposeful tax violator from the
well-meaning, but easily confused, mass of taxpayers.” [emphasis added].
Full Text: United States v. Bishop,
412 U.S. 346 (1973) |