## Facts

- Spies, an individual taxpayer, earned sufficient income in the relevant year to be required to file a federal income tax return and pay tax.
- Spies admitted he did not file a return and did not pay the tax.
- The government introduced evidence about the amount of tax due and Spies’s handling and accounting of income to show an intent to evade.
- Spies offered evidence of good character, physical illness at the time the return was due, and a psychological condition to contest willfulness.
- The government charged Spies only with a single felony count under Revenue Act § 145(b) for willfully attempting to evade or defeat tax, alleging willful failure to file and willful failure to pay as the means of the attempt.
- The trial court instructed the jury that the willful omissions (nonfiling and nonpayment) could alone constitute a felony “attempt” under § 145(b), and the jury convicted.
- The court of appeals affirmed, and the Supreme Court granted review to resolve the proper construction of § 145(b) in relation to § 145(a).

## Issues

1. Whether willful failure to file a return and willful failure to pay tax, without additional affirmative conduct, constitute the felony of willfully attempting to evade or defeat tax under § 145(b).
2. Whether those omissions are limited to the misdemeanors defined in § 145(a) absent proof of an affirmative act directed at tax evasion.

## Decision

- The Supreme Court reversed the conviction and remanded.
- The Court held that § 145(b) is not violated by willful omissions to file and pay that are separately defined as misdemeanors in § 145(a).
- The Court concluded that a felony “attempt” under § 145(b) requires proof of “something more” than willful nonfiling and nonpayment.

## Legal Principles

- Statutory grading matters: when Congress separately criminalizes willful failure to file or pay as misdemeanors, courts should not treat the same omissions, standing alone, as the felony offense of attempted evasion.
- “Attempt” in the felony tax-evasion provision requires an affirmative, willful act beyond omission, directed toward evading or defeating the tax.
- Examples of affirmative acts that may satisfy the felony element include concealment-oriented conduct such as dealing in cash to avoid records, keeping incomplete or false records, or placing assets in accounts under others’ names.
- Jury instructions are erroneous if they permit a felony conviction for attempted tax evasion based solely on willful nonfiling and nonpayment without requiring an additional affirmative act.

## Conclusion

The Court held that willful failure to file a return and willful failure to pay tax are misdemeanors and do not alone establish felony tax evasion; the felony requires proof of an affirmative act undertaken to evade or defeat the tax.


Spies v. United States, 317 U.S. 492 (1943)