Wesley Snipes tax protest case heads to court

[tivodan1116]

Wesley Snipes tax protest case heads to court - Jan. 17, 2008

FORTUNE Small Business) -- Opening arguments began yesterday in Ocala, Fla., on a tax-fraud case that could land actor Wesley Snipes in jail for up to 16 years. Snipes, along with two co-defendants who once served as his advisors, is in trouble with the IRS for allegedly failing to file income taxes between 1999 and 2004, during which he made $38 million from movie projects such as the popular vampire trilogy "Blade." Snipes also fraudulently filed for $11 million in refunds on income taxes paid in 1996 and 1997, according to prosecutors. Snipes' counsel maintains that their client is not guilty and fell victim to poor advice provided by his two co-defendants, Eddie Ray Kahn and Douglas Rosile. Kahn, who has served jail time for tax crimes, and Rosile, who had his Florida accounting license revoked more than 10 years ago, told Snipes that he was not obligated to pay income taxes on wages made in the U.S., according to the indictment. Proponents of this anti-tax theory, commonly referred to as the "861 position," believe that because this section of the federal tax code does not explicitly say that wages are taxable (the phrase "compensation for services" does not encompass wages, according to this line of reasoning), earners are not obligated to pay taxes on them. Tax experts say that argument - appealing as it may be to some workers and business owners - has been firmly and repeatedly shot down in court. "The fact of the matter is that compensation for services includes employment. That's Tax 101," said Tom Ochsenschlager, vice president of taxation for the American Institute of Certified Public Accountants. "There's just no merit to what he's claiming here." U.S. courts have routinely denied the legitimacy of this position, but have occasionally acquitted tax protestors whose cases have been brought to court on criminal charges. Most famously, the U.S. Supreme Court in 1991 overturned the conviction of tax protestor John Cheek, ruling that a good-faith belief - even if its unreasonable - that one is not violating the complex IRS tax code is a legitimate defense against criminal culpability. While cleared of criminal charges, most of these defendants were ultimately required to pay the IRS the money owed, as Cheek was. Snipes, 45, is being represented by lead attorney Robert Bernhoft, who is no stranger to cases involving section 861 protests. In 2005, he represented Joe Banister, a former criminal investigator for the IRS who decided that the government's taxation system was unconstitutional and began conducting seminars and radio interviews on the hows and whys of organized tax resistance. "If I were to stay silent about this issue, I would be one of the biggest hypocrites that ever walked the face of the earth," Banister told Fortune Small Business in a 2005 article about his case. Banister was arrested in late 2004 and charged with conspiracy to defraud the U.S., but he was acquitted of all charges in June 2005. However, his co-defendant, Walter Allen Thompson, was convicted and sentenced to six years in jail for failing to withhold taxes from his employees and pay off debts to the IRS. Will Snipes' argument hold up in court? Tax attorney Michael Schlesinger doesn't think so. "The law is quite clear," said Schlesinger, of New York City firm Schlesinger & Sussman. "There's no little quirk in the code that says that suddenly wage earners don't have to pay their taxes. You may not go to jail for not filing your taxes, but typically you're going to wind up paying your taxes." That's been the outcome for most of the defendants who have been acquitted in section 861 cases. Though Snipes claims to have been unaware that the filing procedures suggested to him by Kahn and Rosile were illegal, prosecutors claim that Snipes sent payments to the IRS to cover some taxes. "I think he's a great actor," Schlesinger said. "I hope he can act in court."

Hysterical. So after all of his posturing about a conspiracy and racism in the IRS, he's just another looney tax "denier"....

[Chancellor]

Quote by: tivodan1116 Wesley Snipes tax protest case heads to court - Jan. 17, 2008 Hysterical. So after all of his posturing about a conspiracy and racism in the IRS, he's just another looney tax "denier"....

Or he was duped by his accountant and adviser.

[xyzer]

IMO this looney jerk is "going down"! Ignorance of the law is no excuse.Blaming others for what is pretty obviously common knowledge is a transparent and futile defense? Falsification of official documents in an attempt to deceive, is obviously a crime and if it's proved he did or countenanced it, he is toasr! I say looney because he obviously is a dingbat. The entertainment business is full of jerks like this..usually setting a bad example for the rest of society?

[Chaossaber314]

Quote by: Chancellor Or he was duped by his accountant and adviser.

If that were the case he'd have a better defense than "that he was not obligated to pay income taxes on wages made in the U.S."

"I didn't think I had to" is not a defense, nor is it even remotely intelligent.

[Charlatan]

Proponents of this anti-tax theory, commonly referred to as the "861 position," believe that because this section of the federal tax code does not explicitly say that wages are taxable (the phrase "compensation for services" does not encompass wages, according to this line of reasoning), earners are not obligated to pay taxes on them.

If the thing says that people don't need to pay taxes, then they don't, but I don't see it saying so, I only see it taken as common sense that they should. Compensation for services should mean that what the country has done for them is needed to be compensated - to the state - but what has the country done for them? It has only made acailable things that were already paid for and taxed respectively. Unless it means the personnel used are taxable as property, or the actual property used is taxable.

[Chancellor]

Quote by: Chaossaber314 If that were the case he'd have a better defense than "that he was not obligated to pay income taxes on wages made in the U.S." "I didn't think I had to" is not a defense, nor is it even remotely intelligent.

It comes down to whether his failure to pay was in good faith on his part.

[Chaossaber314]

Quote by: Chancellor It comes down to whether his failure to pay was in good faith on his part.

Agreed, but do you believe this was the case with such a defense?

[Chancellor]

Quote by: Chaossaber314 Agreed, but do you believe this was the case with such a defense?

That remains to be seen.

[Charlatan]

Quote by: Chancellor It comes down to whether his failure to pay was in good faith on his part.

Well his knowing whether he owed taxes is the topic then? He could have recieved a note from the government saying that he owed the money, but not have listened. Was there evidence of notice? He could be lying too, but if he was informed he would have surely paid - to avoid the fuss. Would he? Well if his not paying more meant anything to him then he would have. His name is sure to be remebered by the officials, so he was sure they wouldn't forget about it, and if they weren't going to forget him, why him them? Maybe he was trying to dodge it, but how could he think they would be dogeable? Don't you have to sign for something like that? Recieve a warning of funds outstanding? If that is the case, he can't say he didn't know, so either they informed him, or he didn't know.

[tivodan1116]

Quote by: Chancellor It comes down to whether his failure to pay was in good faith on his part.

It does, but in this case he's going to have a harder time proving that than most.

He didn't NOT pay the taxes (sorry for the double negative)

He PAID the taxes, and then when this scheme was cooked up he filed corrected returns and received refunds - it was a proactive move.

[Compugasm]

Considering that even mentioning budget spending cutbacks, is met with "the kids", and the sky will fall, there is no way the government will allow Snipes to become the OJ Simpson of taxes. Then, litterally millions of people will follow suit, citing USA vs. Snipes as a precedent. The government is broke, remember?

[tivodan1116]

Quote by: Compugasm Considering that even mentioning budget spending cutbacks, is met with "the kids", and the sky will fall, there is no way the government will allow Snipes to become the OJ Simpson of taxes. Then, litterally millions of people will follow suit, citing USA vs. Snipes as a precedent. The government is broke, remember?

It's not a matter of whether the government will "allow" anything - the law is quite clear that Snipes is wrong.

If you're implying that the government will take extra-legal or illegal action to ensure his conviction, you have no basis for that and it's simply your own cynical conjecture.

[Charlatan]

Quote by: tivodan1116 It's not a matter of whether the government will "allow" anything - the law is quite clear that Snipes is wrong. If you're implying that the government will take extra-legal or illegal action to ensure his conviction, you have no basis for that and it's simply your own cynical conjecture.

What is the standard punishment for tax frauders? Will he need to pay the money back and then some? A fine should be added to the amount as tax on a loan, because that is essentially what he did, illegally. But what other punishments should be placed onto him? Maybe another fine for being fraudulent is in the making - would the government rather send someone to jail or get money out of them? That is the question.

[tivodan1116]

Well, there are two types of tax cases.

First is the civil case. In a civil tax case, the government simply has to prove that the taxpayer paid less than they owed. The penalty is to pay all of the taxes owed, plus interest and penalties.

Second is the criminal case. In criminal cases, the government needs to prove everything in the civil case PLUS that the act was WILLFUL. In criminal cases, the punishments can include jail time.

Snipes faces both types of case, but the current one is a criminal trial.

[tinybear]

Maybe he was too busy and left the paperwork to his advisers. When he was told to sign documents, he just did so trusting his advisers to fill in the right stuff. You never know. Things like this happen.

[Compugasm]

Quote by: tivodan1116 If you're implying that the government will take extra-legal or illegal action to ensure his conviction, you have no basis for that and it's simply your own cynical conjecture.

Wow, yeah government would never do anything illegal or the police, the prosecutors, the politicians, the judges, and the machinery of government would never grind away at our liberties. Thanks for correcting me.

[tivodan1116]

Quote by: Compugasm Wow, yeah government would never do anything illegal or the police, the prosecutors, the politicians, the judges, and the machinery of government would never grind away at our liberties. Thanks for correcting me.

Strawman.

[Rainbow]

Quote by: tivodan1116 Wesley Snipes tax protest case heads to court Wesley Snipes tax protest case heads to court - Jan. 17, 2008 Hysterical. So after all of his posturing about a conspiracy and racism in the IRS, he's just another looney tax "denier"....

It is either :
- Wesley is : imbecile
- Wesley plays : imbecile
Nevertheless, Wesley has to pay.

[UnemployedBum]

Maybe if Snipes went to jail....they could put a webcam on his head and we'll see if he really does know any martial arts!

[tivodan1116]

Quote by: UnemployedBum Maybe if Snipes went to jail....they could put a webcam on his head and we'll see if he really does know any martial arts!

I loffed.