Wells Income Tax
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Online Income Tax Preparation Specialist
305-654-9020
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Taking a Snipe at the IRS
A Lesson in Don’t Bite the Hand That Feeds You
National Association of Tax Professionals (NATP) Appleton, WI – What do you get when you team up two unethical CPAs with a millionaire who wants to believe he is exempt from paying taxes? BIG TROUBLE. So go the allegations about actor Wesley Snipes and his tax advisors, Eddie Ray Kahn and Douglas Rosile – just the latest in a long string of schemers attempting tax evasion. Obviously, they should have spent a little more time reading old Dick Tracy comics in which Tracy repeated the FBI slogan, “Crime Does Not Pay.”
There are many frivolous arguments for not paying taxes, including the “861 theory” that was allegedly embraced in the Snipes case. It alleges that an obscure provision in the tax code holds only those who live in a federal territory as liable to taxation (i.e. Guam, Puerto Rico, District of Columbia, etc.). Other common arguments include these and many others:
- Paying taxes violates the first amendment (or the fifth or thirteenth or fifteenth…);
- I am a citizen of my state, not of the United States;
- The war goes against my religious beliefs so my taxes should not fund it;
- If I don’t file a tax return, the government is responsible for filing for me;
- Because I am (fill in the blank – disabled, a minority, etc.), I am exempt from paying taxes;
- My assets are in a trust not subject to taxation.
Don’t buy into these schemes or you will be next to join the group of unsuccessful tax evaders. Arguments to protest paying taxes have floated around for years, and every year there’s a new twist on the old story. Currently there are over 40 general categories of tax evasion arguments, none of which are successful. Instead, buying into these false ideas is a ggood way to lose money – and lots of it.
The courts have little patience for those who avoid paying their fair share of taxes, but they see plenty of cases. The outcomes are almost always the same – defendants must pay the taxes they owe and often with civil penalties of 20 to 75 percent of the underpaid tax, and fines of up to $25,000. Some evaders are imprisoned. Snipes could be looking at 16 years. Yet every year a new crop of tax evaders think they have the magic reason, legitimate grounds to not pay, and they clog the court system with frivolous cases.
“Taxpayers need to avoid being taken in by groundless theories suggesting that they don’t have to pay taxes or file returns,” said IRS Commissioner Mark W. Everson. “The truth about these frivolous arguments is simple: They don’t work.”
Bruce Hicks, a professional NATP tax preparer at Freedom Income Tax in Nashville, TN says, “Friends, family, and your golf buddies, despite meaning well, are the worst sources of information on your taxes. As a tax professional a lot of my time is spent debunking the myths that people have heard from others. Another problem is that promoters of these tax evasion schemes will take a percentage of your refund (if they prepared the return) and then disappear when the IRS shows up.”
“Remember, your fair share does not mean ‘overpaying’ your taxes because you do not claim ‘legitimate’ deductions, etc. Rather, it means taking every deduction, deferment, etc. that is legitimately available to you,” adds NATP professional preparer Ken Morales of Lexington, KY. “Our taxation system is a self-imposed system, where the taxpayer is expected to avail themselves of every tax benefit. There is a difference between tax savings and tax evasion, one being legitimately
avoiding tax, the other illegally evading taxes. Your professional tax preparer is trained, and in many instances has years of experience, to properly advise you on this difference. And, the bottom line is that the taxpayer is responsible for his or her tax return and the facts contained therein.”
According to NATP member Doug H. Moy, Lake Oswego, OR, who is a consulting specialist in estate/gift taxation and planning, abusive trust tax shelters rank high on the IRS list of tax scams. "The proliferation and use of sham trusts in estate planning is remarkable in view of the fact that not one single taxpayer who has used a sham trust has prevailed against the government."
If you bought into a scheme to hide your income from the government, no matter how legitimate the method may have sounded, seek the help of a professional tax preparer and make things right. There is no defense for not fulfilling your obligations to the government. Don’t get taken in by falsehoods; pay your fair share and spend a little time to appreciate what those tax dollars buy for you and your family. If you have any questions about the tax system or want help in legally minimizing your tax burden, consult a professional tax preparer who is an expert that keeps up on tax law
changes year-round.
A Lesson in Don’t Bite the Hand That Feeds You
National Association of Tax Professionals (NATP) Appleton, WI – What do you get when you team up two unethical CPAs with a millionaire who wants to believe he is exempt from paying taxes? BIG TROUBLE. So go the allegations about actor Wesley Snipes and his tax advisors, Eddie Ray Kahn and Douglas Rosile – just the latest in a long string of schemers attempting tax evasion. Obviously, they should have spent a little more time reading old Dick Tracy comics in which Tracy repeated the FBI slogan, “Crime Does Not Pay.”
There are many frivolous arguments for not paying taxes, including the “861 theory” that was allegedly embraced in the Snipes case. It alleges that an obscure provision in the tax code holds only those who live in a federal territory as liable to taxation (i.e. Guam, Puerto Rico, District of Columbia, etc.). Other common arguments include these and many others:
- Paying taxes violates the first amendment (or the fifth or thirteenth or fifteenth…);
- I am a citizen of my state, not of the United States;
- The war goes against my religious beliefs so my taxes should not fund it;
- If I don’t file a tax return, the government is responsible for filing for me;
- Because I am (fill in the blank – disabled, a minority, etc.), I am exempt from paying taxes;
- My assets are in a trust not subject to taxation.
Don’t buy into these schemes or you will be next to join the group of unsuccessful tax evaders. Arguments to protest paying taxes have floated around for years, and every year there’s a new twist on the old story. Currently there are over 40 general categories of tax evasion arguments, none of which are successful. Instead, buying into these false ideas is a ggood way to lose money – and lots of it.
The courts have little patience for those who avoid paying their fair share of taxes, but they see plenty of cases. The outcomes are almost always the same – defendants must pay the taxes they owe and often with civil penalties of 20 to 75 percent of the underpaid tax, and fines of up to $25,000. Some evaders are imprisoned. Snipes could be looking at 16 years. Yet every year a new crop of tax evaders think they have the magic reason, legitimate grounds to not pay, and they clog the court system with frivolous cases.
“Taxpayers need to avoid being taken in by groundless theories suggesting that they don’t have to pay taxes or file returns,” said IRS Commissioner Mark W. Everson. “The truth about these frivolous arguments is simple: They don’t work.”
Bruce Hicks, a professional NATP tax preparer at Freedom Income Tax in Nashville, TN says, “Friends, family, and your golf buddies, despite meaning well, are the worst sources of information on your taxes. As a tax professional a lot of my time is spent debunking the myths that people have heard from others. Another problem is that promoters of these tax evasion schemes will take a percentage of your refund (if they prepared the return) and then disappear when the IRS shows up.”
“Remember, your fair share does not mean ‘overpaying’ your taxes because you do not claim ‘legitimate’ deductions, etc. Rather, it means taking every deduction, deferment, etc. that is legitimately available to you,” adds NATP professional preparer Ken Morales of Lexington, KY. “Our taxation system is a self-imposed system, where the taxpayer is expected to avail themselves of every tax benefit. There is a difference between tax savings and tax evasion, one being legitimately
avoiding tax, the other illegally evading taxes. Your professional tax preparer is trained, and in many instances has years of experience, to properly advise you on this difference. And, the bottom line is that the taxpayer is responsible for his or her tax return and the facts contained therein.”
According to NATP member Doug H. Moy, Lake Oswego, OR, who is a consulting specialist in estate/gift taxation and planning, abusive trust tax shelters rank high on the IRS list of tax scams. "The proliferation and use of sham trusts in estate planning is remarkable in view of the fact that not one single taxpayer who has used a sham trust has prevailed against the government."
If you bought into a scheme to hide your income from the government, no matter how legitimate the method may have sounded, seek the help of a professional tax preparer and make things right. There is no defense for not fulfilling your obligations to the government. Don’t get taken in by falsehoods; pay your fair share and spend a little time to appreciate what those tax dollars buy for you and your family. If you have any questions about the tax system or want help in legally minimizing your tax burden, consult a professional tax preparer who is an expert that keeps up on tax law
changes year-round.