## Facts

- William C. Siravo filed individual federal income tax returns for 1958–1960 reporting only wage income from Siravo Motor Sales (not exceeding $7,500 in any year) and claiming refunds.
- During the same period, he operated Trans-Lux Jewelry Co., a subcontract jewelry-assembly business that received substantial payments: $22,242.83 (1958), $28,976.22 (1959), and $54,319.47 (1960).
- On each 1958–1960 Form 1040, he left blank the line for “profit (or loss) from business” and did not attach Schedule C.
- He signed each return’s declaration under penalties of perjury that the return was “true, correct, and complete.”
- The government introduced evidence of Trans-Lux receipts but offered no evidence of business costs or expenses (materials, labor, or overhead).
- For 1961, Trans-Lux received $71,362.73, and Siravo filed no return.
- A federal jury convicted Siravo of three counts of willfully making and subscribing false returns (26 U.S.C. § 7206(1)) for 1958–1960 and one count of willfully failing to file (26 U.S.C. § 7203) for 1961.

## Issues

1. Whether § 7206(1) requires an affirmative false statement in the strict perjury sense, or whether a knowing omission of substantial business receipts can render a signed return false as to a material matter.
2. Whether, in a § 7203 failure-to-file prosecution, the government must prove offsetting business expenses to establish the filing obligation and willfulness, or whether substantial unexplained receipts can suffice.
3. Whether testimony and jury instructions referring to “gross income” (in the context of proved receipts and no expense evidence) improperly relieved the government of its burden or otherwise prejudiced the defense.

## Decision

- The First Circuit affirmed the convictions on all counts.
- The court held that § 7206(1) is satisfied where a taxpayer willfully omits substantial business receipts and signs a return declaring it “true, correct, and complete,” because the return is not true and correct as to a material matter.
- The court held that for § 7203, substantial unexplained receipts may support a finding of gross income sufficient to require filing; the government need not prove specific offsetting expenses where none are shown.
- The court found no reversible error in the agent’s testimony or the jury instructions using “gross income,” given the context and the evidentiary posture.

## Legal Principles

- A return can be “false” under 26 U.S.C. § 7206(1) by a willful omission of material income-related information; material completeness is required, not merely literal accuracy of stated items.
- Signing a return’s perjury declaration while knowingly omitting material receipts can itself constitute making and subscribing a return the taxpayer does not believe to be true and correct as to every material matter.
- When the government proves substantial business receipts and the taxpayer produces no evidence of expenses, the taxpayer bears the burden of going forward with evidence of offsetting costs; the government is not required to negate all possible deductions.
- For 26 U.S.C. § 7203, substantial unexplained receipts can support an inference of gross income above the filing threshold and, together with surrounding circumstances, support willfulness.

## Conclusion

The First Circuit upheld convictions for filing false returns and failing to file, ruling that willful omission of substantial business receipts can violate § 7206(1) and that, absent evidence of expenses, large unexplained receipts can establish a filing obligation and support willfulness under § 7203 without the government proving precise deductions.


Siravo v. United States, 377 F.2d 469 (1st Cir. 1967)