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WESLEY WALKS

February 01, 2008

Wesley Snipes was convicted on three misdemeanor failure-to-file charges this afternoon, but he beat the rap on his serious tax evasion charges.

His advisors, Eddie Ray Kahn and Douglas Rosile, didn't fare so well. They were found guilty of consipracy and fraud charges.

I am cooking dinner, so I will have to come back later, but it looks like the jury blamed the advisors and let Mr. Snipes off on his "good-faith fraud" defense.

More at Ocala.com.

UPDATE:

So far I haven't seen anything that explains the jury's thinking. They likely concluded that Mr. Snipes really was stupid enough to believe tax theories that even his defense team called "kooky."

The jury was less charitable to his promoters, Eddie Ray Kahn and Douglas Rosile. They were convicted of felony evasion and conspiracy charges and can expect to go away for some time. While Mr. Snipes may also do some time, it won't be long enough to damage his career as much as some of his roles have.

Based on David Cay Johnston's New York Times account, the prosecutor is frustrated:

Mr. O’Neil, the prosecutor, was asked whether Congress needs to revise the tax laws to deal with people who follow scam artists.

“Absolutely,” he replied, directly contradicting the Justice Department’s written recommendation to Congress. Mr. O’Neil said the current standard “is entirely subjective” and results in acquittals by juries even when they are presented with what he considers unreasonable conduct by defendants.

The prosecutor has a point. While the promoters are going down the river, Mr. Snipes goes to Hollywood. Taking absurd and long-discredited tax protest positions on returns shouldn't qualify for Mr. Snipes' good-faith fraud defense. Maybe this will motivate Congress to rethink the matter.

Still, while Mr. Snipes doesn't face a lengthy prison stay, he still will have to cough up the taxes. He's also likely to face a 75% civil fraud penalty, which is much easier to impose than criminal penalties, and 10 years of accrued interest expense. The Snipes acquittal no more vindicates tax-protester theories than the O.J. acquittal vindicates multiple homicides.

The TaxProf rounds up the big media links.

Tags: tax crime.tax protesters.Wesley Snipes.

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