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MISSING THE BOAT WITH ANDERSON'S ARK

June 28, 2005

The Tax Protester Honesty crowd is crowing over the jury acquittal of one of their pied pipers, Joe Banister, on conspiracy charges. Back in the real world, people who follow tax protester arguments continue their unbroken and monotonous record of defeat in challenging their actual tax liabilities.

The Tax Court handed down two tax protester decisions yesterday.

HAWKS V. COMMISSIONER

This case involved a couple that bought into the Anderson's Ark tax scam. The A.A. ringleaders are serving up to 20 years in federal prison. These A.A. customers aren't necessarily going to jail, but they will have to pay up $55,590 in back taxes, $11,118 in penalties, and interest.

STANG V. COMMISSIONER

Alan Stang skipped filing tax returns for 1999, 2000 and 2001 after he:

...executed a statement asserting that he was a sovereign citizen of Arizona; a Form W-8, Certificate of Foreign Status; another Form W-4 claiming exemption from Federal income tax withholding; a document entitled "AFFIDAVIT OF CITIZENSHIP AND DOMICILE"; and a document entitled "AFFIDAVIT OF CLAIMS FOR EXEMPTION AND EXCLUSION FROM GROSS INCOME OF REMUNERATION, WAGES AND WITHHOLDING". The affidavits enumerated a litany of typical tax-protester assertions, including that the Internal Revenue Code was Federal legislation inapplicable to him as a citizen of one of the 50 States and therefore not within the territorial jurisdiction of the United States, that wages and remuneration for labor were property not subject to indirect taxation, and that the income tax was voluntary.

Despite his deft use of CAPITAL LETTERS, Mr. Stang was assessed his taxes for the three years ($26,234) and penalties of $7,840.82. He sufficiently vexed the Tax Court that they also fined him $5,000 for wasting the court's time with frivolous arguments. All in all, H&R Block would have been a better deal.

There's nothing particularly unusual about these decisions; the Tax Court has some of these just about every week. In light of the tax protester excitement over Mr. Banisters acquittal, though, it's worth highlighting what "Tax Honesty" advice actually does for folks foolish enough to follow it.

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