Twinkie III: I was just asking the IRS a Question Defense.
As everyone now knows, the actor Wesley Snipes begins the process of jury selection in his Federal criminal tax fraud trial today. Mr. Snipes is charged with various Federal offenses including tax evasion for, primarily, taking the position and advising others, that the United States can only tax your income generated in other countries, not your income generated in the United States. This position has been rejected on numerous occasions and is more appropriately attributable to tax protestors than to big screen actors.
Tax protestors are those that make varying, often nonsensical, assertions about the inability of the United States to tax their income, an example of which is the assertion that the 26th Amendment to the United States Constitution was never ratified and that therefore the IRS does not have the authority to tax your income. For the most part, the IRS pursues tax protestors through the civil process and those protestors pay monetary penalties for their conduct. Mr. Snipes, however, is facing 16 years in jail for his protesting conduct.
Seems harsh? Yes, it is. Watch the newspapers in the months of March and April. Particularly, the first or second week of April. You will see a very well known person pursued criminally for tax evasion. This is all about compliance. For the most part, the IRS relies on individuals to govern themselves and be honest about the amount of their income and expenses and pay their fair share of tax. That self- governance is kept in check through deterrence. The theory of deterrence is that if the public sees a well known person prosecuted for a tax crime right around the time they themselves are supposed to be honest and pay their taxes, that they will be more inclined to do so. That works. If Wesley Snipes is on trial for tax evasion, it is news. Today, it is a lead on every Internet news site and most television and print media outlets are running the story,
Mr. Snipes submitted claims for refund which are amended tax returns and on those returns, Mr. Snipes apparently took the position that his income from acting was not taxable by the United States. Mr. Snipes is defending his conduct of submitting those refund claims by saying that he didn't act willfully to defraud the United States by asking for refunds on that basis, but rather, that by making those claims for a refund, he was merely asking the IRS if his position was correct. The problem with the "I was asking a question" defense is that you have an obligation to submit only refund claims with "questions" for which there is some basis in law. If there is no basis whatsoever for your claim or worse, that the basis for which you make your claim is one that has been rejected as frivolous on numerous previous occasions, than your claims can be deemed those of a tax protestor.
The United States wants the tax protestors to stop. They have tried everything from prosecuting the tax protestor individuals, the promotors who sell books and other materials to help tax protestors or create them, their accountants and their lawyers...and now, unfortunately for Mr. Snipes, he will be the new face of tax protestor deterrence; take a plea bargain, Mr. Snipes....it's a bad case and there is no take two.
John Hanamirian
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Without question, one of the greatest critics of the IRS and the tax code has been Michael Minns, whose defense of American pilots and aquittal of the Morans against the IRS is gaining attention. The Morans were slandered and their hometown virtually canvassed as a result of the IRS campaign to smear their names. After being aquitted, no such efforts were spent by the IRS to correct the misperception thus created (that the Morans were guilty of the charges and which ruling the Nineth Court of Appeals reversed). Michael Minns has publicly chastised the IRS to publish the reversal as they would the initial conviction.
For those who would like to see the public request by Michael Minns for the IRS to apologize publicly, here it is...