[G. L. c. 62, §§ 48-51 the state treasurer who was in office when the tax was collected. If the liability of any person to the tax is questioned by him on the ground that his rights under the federal constitution are violated, he may seek redress in the United States courts, without regard to his citizenship or the amount involved.

Loss of Exemption of Principal by Failure to Return Income

SECTION 49. All property owned by a resident of the commonwealth on April first in any year, which during the preceding calendar year had produced for such owner any income taxable under this chapter, shall, despite anything in this chapter, be subject to taxation to such owner in accordance with chapters fifty-nine and sixty, if such owner does not make to the commissioner a full return of his taxable income from such property on or before September first of the year in which a return of income is required by sections twenty-two to twenty-five, inclusive, and provided the tax so assessed is greater than the amount of the tax properly payable under sections one and thirty-five to thirty-seven, inclusive.

SECTION 50. Property taxable in any year under the preceding section shall be assessed in that year between September second and December tenth, both inclusive. The amount of taxes assessed by the local assessors upon such property in such town in any year, less the amount assessed and collected by the commissioner as hereinafter provided, shall be entered on the tax list of the collector of such town, and he shall collect and pay over the same to the town.

SECTION 51. Any taxpayer aggrieved by the assessment of a tax under section forty-nine may appeal to the commissioner within thirty days after the receipt of the tax bill therefor, or other actual notice of the assessment. In ease of an adverse determination by the commissioner, the taxpayer may appeal to the board of appeal as provided in section forty-five, or to the superior court as provided in section forty-seven; and if the taxpayer shall prove that the income of the property was duly returned or that it was not taxable or that there was reasonable excuse for not making the return, the tax shall be abated, and, if it has previously been paid, the amount abated shall be repaid by the town to the taxpayer, with interest from the time of such payment.

International Paper Co. v. Burrill, 260 Fed. Rep. 664 (1919).

G. L. c. 62, §§ 52-54 inc.]

SECTION 52. At any time prior to the collection by the town of the tax provided for by section forty-nine the commissioner may assess and collect the tax provided for by this chapter on the income of the property, subject to the limitation of time provided by section thirty-seven. Upon the collection of the tax, the commissioner shall at once notify the tax collector of the town where the taxpayer resides, and the tax collected by the commissioner shall be deducted from the tax assessed in that town; and if the tax assessed therein has been collected, the amount so deducted shall be repaid by the town to the taxpayer. If a tax collected by a town under section forty-nine is afterward abated, the amount of the abatement, together with the amount of any interest paid by the taxpayer on that amount, shall be paid by the town to the taxpayer.

SECTION 53. Upon discovery of property the income of which for the preceding calendar year, taxable under this chapter, has not been returned on or before September first of the year in which the return is required, the commissioner shall forthwith notify the assessors of the town where the property is taxable, unless there is within his knowledge a reasonable excuse for the failure of the taxpayer to file the return. Upon making any assessment under section forty-nine, the assessors shall forthwith notify the commissioner.

The object of these sections is to provide, as an additional penalty for failure to file a return, that the owner of securities yielding taxable income shall not have the benefit of the exemption of such securities from taxation at the local rate on their capital value. He is not, however, subjected to a tax on both principal and income, but merely on the income and on the excess of the tax on principal over that on income.

Effect of Unconstitutionality of Part of the Chapter

SECTION 54. If any part, subdivision or section of this chapter shall be declared unconstitutional, the validity of its remaining provisions shall not be affected thereby.

The object of the foregoing provision was to avoid all controversies over the question whether all of the provisions of the income tax act were intended to be so interwoven that the unconstitutionality of one provision therein would result in the upsetting of the entire act.

Penalties

[G. L. c. 62, §§ 55-59

SECTION 55. If any person required to file a return under this chapter fails to file the return within the time prescribed therein, the sum of five dollars for every day during which such person is in default shall be added to, and become part of the tax, as an additional tax; but the commissioner may, in his discretion, abate any such additional tax in whole or in part.

SECTION 56. Whoever files a fraudulent return, and whoever, having failed to file a return or having filed an incorrect or insufficient return without reasonable excuse fails to file a return within twenty days after receiving notice from the commissioner of his delinquency, shall be punished by a fine of not less than one hundred. nor more than ten thousand dollars, or by imprisonment for not more than one year, or both, and shall forfeit his right to hold public office anywhere within the commonwealth for such period, not exceeding five years, as the court determines. Any person filing a fraudulent return of interest deduction under section three, or giving fraudulent information under said section or section four to the commissioner or an income tax assessor relative to any deduction given by section two, shall be punished as provided in this section.

SECTION 57. Any individual, partnership, association, trust or corporation failing without reasonable excuse to file a return, list or report, or otherwise give information, as required by section thirtythree, shall be punished by a fine of not less than twenty-five nor more than five hundred dollars.

SECTION 58. The disclosure by the commisioner, or by the state auditor, or by any deputy, assistant, clerk or assessor, or other employee of the commonwealth, or of any city or town therein, to any person but the taxpayer or his agent, of any information whatever contained in or set forth by any return filed under this chapter, other than the name and address of the person filing it, except in proceedings to collect the tax or by proper judicial order, or for the purpose of criminal prosecution under this chapter, shall be punishable by a fine of not more than one thousand dollars, or by imprisonment for not more than six months, or both, and by disqualification from holding office for such period, not exceeding three years, as the court determines.

SECTION 59. Section thirty-one and the penalties provided by sections fifty-five and fifty-six shall apply to individuals and corpora

G. L. c. 62, §§ 59, 60]

tions acting in any fiduciary capacity. In the case of a corporation, the penalty may be imposed on the corporation, on the officers whose duty it was to make the return, or on both.

SECTION 60. In the case of a partnership one or more members of which are inhabitants of the commonwealth and which has a usual place of business in the commonwealth, the penalties imposed by this chapter may be inflicted upon any member of the partnership who is an inhabitant of the commonwealth and who has any active part in the management of the affairs of the partnership, and if there is no such member, upon the persons in charge of its affairs in this commonwealth. In the case of a partnership, association or trust, the beneficial interests in which are represented by transferable shares, the penalties imposed by this chapter for failure to file a return may be inflicted upon the trustees, managers or officers whose duty it was to make the return.

The foregoing provision when originally enacted in 1916 was the first instance of any statute imposing a penalty (other than the risk of being doomed) upon failure by an individual taxpayer to file a tax return. The harsh operation of the personal property tax when literally enforced rendered the imposition of a penalty for failure to bring in a list out of the question; but it was one of the essential elements of the income tax law that returns should be compulsory, and that a reasonable tax could thus be enforced with equality.

The penalties imposed by the foregoing sections are not the only ones established under the chapter and others are to be found in other sections.

The means for enforcing the filing of returns under the income tax law may be summarized as follows:

(1) Failure to file a return on or before the first day of March may be punished (a) by a penalty of five dollars a day (section 55), (b) by liability to "dooming" by the commissioner (section 36) with no right to an abatement by the commissioner below double the proper tax (section 44) and no remedy whatever in the superior court (section 47) unless there was good cause for the delay.

(2) Failure to file a return on or before the first day of May

[G. L. c. 62, § 60 may be redressed by a petition for mandamus to compel the filing of the return (section 31).

(3) Failure to file a return before the first day of September

deprives the delinquent of the exemption from the tax on capital value, and the securities from which the income was received remain taxable in the city or town in which the owner lives at their capital value at the local rate (section 49).

(4) Failure to file a return after special notice from the commissioner, or the filing of a fraudulent return, may be punished (a) by a fine of not less than one hundred nor more than ten thousand dollars, or by imprisonment for not more than one year, or by both, and by forfeiture of the right to hold public office for not more than five years (section 56), (b) by liability to "dooming" at double the estimated tax (section 34) with no right to an abatement by the commissioner below double the proper tax (section 44) and no remedy whatever in the superior court if the commissioner refuses to make any abatement (section 47.)

Although the statute requires a return in every case in which an inhabitant of the commonwealth has received taxable interest and dividends, where the amount received is trifling, as when a person maintains a small bank balance in a trust company or national bank and occasionally is credited with a dollar or less in interest, the expense of collection would be greater than the amount received, and no penalty is imposed by the commissioner for failure to file a return of taxable interest of less than five dollars in the case of an individual whose total income from all sources is less than two thousand dollars, and whose gross income from business is less than two thousand dollars; and no penalty is imposed upon a bank or other party for failure to file an information return with respect to a payment of interest during the year of less than five dollars.