diff -r 48b0c2edb0df -r d8379f5d5a1d src/Parser.cpp
--- a/src/Parser.cpp	Sun Jul 29 18:02:13 2012 -0700
+++ b/src/Parser.cpp	Sun Jul 29 18:19:12 2012 -0700
@@ -922,6 +922,10 @@
 Statement *
 Parser::function(TokenKind token)
 {
+    Local<String> returnTag(zone_);
+    if (matchName(returnTag.ref(), TOK_LABEL) && !returnTag)
+        return NULL;
+
     Local<String> name(zone_, expectName());
     if (!name)
         return NULL;
@@ -1039,7 +1043,8 @@
     }
 
     scope_ = scope_->enclosing();
-    return new (pool_) FunctionStatement(pos, scope, fun, body, parameters, encounteredReturn_);
+    return new (pool_) FunctionStatement(pos, scope, fun, body, parameters, returnTag,
+                                         encounteredReturn_);
 }
 
 ParseTree *