United States v. Carroll

Background

The case involves a person or business (the appellee) who was indicted on 101 counts for making payments over $600 in various years and allegedly failing to file information returns (Form 1099) for each payee. The prosecution charged a separate crime for each missing Form 1099 under a statute that penalizes willful failure to make required tax returns. The District Court dismissed the indictment, concluding that the legally required "return" was not the individual Form 1099s but the signed transmittal Form 1096.

Reasoning

The central question was whether the statute and regulations required a criminal "return" for each unverified Form 1099 or for the signed Form 1096 that transmits them. The Court explained the regulations require Forms 1099 to be "accompanied by" transmittal Form 1096, and only Form 1096 is signed and verified. The Court concluded that the verified Form 1096 together with attached Forms 1099 constitute the required return, and that criminal sanctions should apply to the failure to file that verified transmittal, not to each unattached unverified form. The Court emphasized fair warning in criminal law and declined to multiply crimes by counting each Form 1099 as a separate offense.

Real world impact

As a result, prosecutions for failing to file information returns must focus on the omission of the signed Form 1096 rather than charging a separate crime for every missing Form 1099. The decision leaves open other possible defects in an indictment but limits the ability to convert multiple unverified schedules into numerous criminal counts.