Vanderbilt Law Review

First Page



The drive against tax evaders is now in full swing after a complete reorganization of the Internal Revenue Service, and the new Commissioner has promised an efficient enforcement of all revenue laws. Although the effective administration of the federal income tax rests primarily upon the willingness of the taxpayer voluntarily to disclose his correct income, Congress has provided certain civil and criminal penalties to punish those who have not fulfilled their obligations to the United States Treasury. This article will deal only with the administration and operation of the civil fraud penalty.

The most severe civil penalty that may be inflicted, the 50 percent fraud penalty, is actually not regarded by the courts as a penalty at all, but has been described merely as a compensatory sum to reimburse the Government for its added expense in detecting the violation. Although the reasoning behind this result is not entirely convincing, it has served as the basis for imposing the fraud penalty against the estate of a taxpayer after his death.