Tax Update Blog: Permalink

« Previous · Tax Update Blog Home · Next »

WESLEY WON'T WALK

April 25, 2008

The Snipes sentence - the maximum of three years in prison - is good news for the Government's campaign against "tax defiers." While three years is probably less than half what Mr. Snipes would have received had he been convicted of felony tax fraud charges, it's still a fairly unpleasant way to pass three years. It's a reasonably stiff sentence.

What's more, the promoters got clobbered. Eddie Kahn got the full 10 years he was eligible for, and the actual return preparer got 4 1/2 years.

Naturally, the Tax Blogs are on top of this. The TaxProf notes the strange gambit by the Snipes defense team of giving the judge a $5 million check to cover taxes during the sentencing hearing -- a ploy that puzzled the judge, but doesn't seem to have influenced him very much.

The TaxGrrrl notes one reason the ploy might have failed: the defense team had been cliaming that his tax understatement was only $228,000:

It’s nearly impossible to tell what Snipes owes at this point. Prosecutors allege that Snipes has, over the years, hidden at least $41 million from taxing authorities, much of it overseas. Snipes’ lawyers dispute that amount, claiming that the amount actually due is less than a quarter of a million dollars (a claim that reeks a bit, considering Snipes’ $5 million payment today).

She notes that the Snipes team vows an appeal.

Kay Bell chimes in:

Snipes' attorneys had argued for no jail time and offered dozens of letters from family members, friends and even fellow actors Denzel Washington and Woody Harrelson attesting to Snipes' good character.

The judge obviously was not swayed

Russ Fox also was following the sentencing here and here.

The Justice Department is pleased:

"Snipes' long prison sentence should send a loud and crystal clear message to all tax defiers that if they engage in similar tax defier conduct, they face joining him and his co-defendants, Kahn and Rosile, as inmates in prison," said Nathan J. Hochman, Assistant Attorney General of the Justice Department's Tax Division.

Mr. Snipes' acquittal on the felony charges still is important - I estimate that he would have served at least 3 more years had he been convicted. Still, the sentences ought to give some food for thought to the "show me the law" crowd -- especially that given to Eddie Kahn, who refused to recognize the authority of the court. If you don't think there is a law requiring them to pay income tax, but the federal judges, U.S. Marshals, and the Bureau of Prisons think there is such a law, your opinions won't help you avoid prison any more than it helped Eddie Kahn or Wesley Snipes.

UPDATE: This story incorrectly reported that Mr. Snipes was fined $5 million. That is incorrect. We regret the error.

Tags: Eddie Kahn.tax crime.tax protesters.Wesley Snipes.

      Bookmark: del.icio.us • Digg • reddit