Now that 2009 has been over for several whole days, we can look back with the perspective of history to determine a worthy Taxpayer of the Year for 2009. Prior winners are ineligible, while those who win awards from other major tax sites are automatically nominated. Without further ado, the candidates:
To learn more about our candidates, read on!
Mark Anderson, by virtue of his status as Russ Fox's 2009 Tax Offender of the Year. Mr. Anderson pleaded guilty to 19 counts arising from embezzling from a wine-storage warehouse:
He allegedly embezzled some of the pricey bottles of wine he was supposedly safekeeping. Eventually, he was charged in early 2005 by the Marin County District Attorney of committing fraud and embezzlement; that case is still pending. He allegedly sold bottles of wine he was safekeeping to raise $800,000.
While that case was pending he was evicted from the warehouse on Mare Island. How could he get back at the warehouse? And how could he stave off an investigation into tax evasion? Hiring an attorney and working with the IRS is too mundane; instead, let’s burn down the warehouse (arson), and cover the tracks.
Yes, that’s exactly what he did. The fire, on October 12, 2005, destroyed an estimated $200 million worth of wine, put some wineries permanently out of business, and destroyed several collections of wine.
Yeah, that solved his problems.
UPDATE: Alert readers will note that Mr. Anderson has been left off the ballot above. Write him in at the comments section if you support him.
Bradley Birkenfeld, by virtue of his selection as "2009 Person of the Year" by Tax Analysts:
Birkenfeld must be considered among the biggest whistle-blowers of all time. He is the Benedict Arnold of the private banking industry and single-handedly made 2009 the year in which the world finally got serious about cracking down on tax evasion. His story is both personally compelling and significant in terms of the sudden changes it has brought to our tax system.
Although Birkenfeld is responsible for the snaring of countless tax cheats, he's no ordinary hero. His hands were hardly clean in the UBS affair. Like a Shakespearean protagonist, he seems as flawed as he is noble. What's undeniable, though, is that the consequences of his actions have affected millions of taxpayers, the global financial sector, and tax administrations around the world.
Nicolas Cage. Because we have to have one movie star:
Last year Cage settled one IRS debt. Now he's been slapped with a $6.26 million tax lien.
According to WebCPA (via the Detroit News), the IRS filed the lien in New Orleans against Cage's $3.55 million Big Easy mansion.
This is just the latest tax trouble for the star of the National Treasure movies. Last fall, Cage agreed to pay $666,000 plus interest after the IRS said that between 2002 and 2004, he and his company had improperly deducted $3.3 million in personal costs as business expenses.
Helio Castronieves. The Dancing with the Stars heartthrob beat charges of evading $2.3 million of U.S. income taxes and then went on to win the 2009 Indy 500.
Joe Francis. The "Girls Gone Wild" entrepreneur pleaded guilty to two counts of filing false returns and one count of bribing prison personnel to bring him food, after vowing to fight the charges to the last Powerpoint slide. He then went on to sue the IRS for picking on him.
Timothy Geithner. Despite botching his 2001-2004 returns by underreporting taxes on his International Monetary Fund income, and lamely blaming Turbotax for his problems, Mr. Geithner became Secretary of the Treasury. His cabinet portfolio includes, of course, oversight of the IRS.
Willam Halby was inexusably left off this poll at first, but he, of all people, would say "better late than never." The 78 year-old Mr. Halby, a New York tax attorney, claimed a deduction that made him the envy of many a Sun City man:
For 2004, the taxpayer claimed medical expense deductions of $76,314 on his Schedule A. Included in this amount was $65,934 for prostitutes; and $2,368 for medical books, magazines, videos, and pornographic material.
For 2005, the taxpayer claimed medical expense deductions on his Schedule A of $49,023. Included in this amount was $42,152 for prostitutes; and $5,005 for books, magazines, videos, and pornographic materials.
The evidence produced at trial established that Hendrickson had in fact received taxable wages and that his claims to the contrary were knowingly false. In reaching the verdicts, the jury rejected Hendrickson's defense that he had a good faith belief that his statements regarding his lack of wages were true.
Kent Hovind lost his, er, creative appeal of tax charges arising out of his religious mission that included a theme park built around the notion that humans and dinosaurs co-existed:
Employees of Evangelism Enterprises, peers, and legal counsel testified that Kent disputed the authority of the Internal Revenue Service based on the separation of the church and state, debated the interpretation and application of the withholding requirements, and intentionally characterized Evangelism Enterprises as a "church" and his employees as "missionaries" to avoid tax obligations. Kent had opined to attorney David Gibbs that he was "smarter" than other church officials who had forfeited real property after they refused to collect or pay withholding taxes.
He makes the list by virtue of giving me an excuse to invoke the Flintstones:
Rev. Anthony Jinwright rounds out the list. This man of the cloth delivers the Good News in style, according to his indictment on federal tax charges:
The indictment lists ownership in a BMW 530i, a Mercedes-Benz S550V, five (yes, five) Lexus vehicles, a Bentley GT and a Maybach 57 (worth $250,000). Leases during that same time included a Cadillac, an Acura, a Volkswagen, a Maxima, a Durango, a Neon and a Toyota.
His lawyer comments:
"The last time I checked it wasn't a crime to drive nice cars," Hinson said in a hallway of the federal courthouse uptown. "He's always made his car payments."
Because only deadbeats cheat on taxes?
Vote for your favorite Candidate early and often! Polls remain open until the Tax Update decides he has had enough.
The items included in the Tax Update Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation.
Joe Kristan writes the Tax Update items, and any opinions expressed or implied are not necessarily shared by anyone else at Roth & Company, P.C. Address questions or comments on Tax Updates to