Tax Update Blog: Taxpayer-of-the-year Archives

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.

Sadly, the Tax Court denied these deductions even though he maintained meticulous contemporaneous records. Perhaps a shot at "Taxpayer of the Year" will be some consolation.

Flickr image by Photo Denbow under Creative Commons rights;

Peter Hendrickson, author of "Cracking the Code," which rehashes tax protester arguments against the income tax, found a flaw in his theories when he was convicted of federal tax charges:

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."

Flickr Creative Commons photo by jorbasa

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.

Charlie Rangel, who is perhaps the nations chief taxwriter as Chairman of the House Ways and Means Committee, failed to report years of activity from a rental property he owns, and has had to hire a forensic accountant to try to figure out his taxes.

Robert Beale, a Minnesota entrepreneur, skipped his federal tax evasion trial. Arrested after 14 months on the run, he was convicted not only of tax evasion, but of attempting to have the judge "arrested" under the jurisdiction of a home-made "common law court." He has already achieved Russ Fox's coveted "Tax offender of the Year" award.

Randy Nowak tried an innovative approach to handling his IRS exam: hiring a biker to kill the agent and burn down the local IRS office. Unfortunately for him, the "biker" known as "Reaper" was really an FBI agent.

Helio Castroneves is an Indy-car racer perhaps best known for his stint on "Dancing With the Stars." He is also accused of diddling with the tax law by hiding income offshore.

R&B star Ron Isley received a 37 month sentence for tax evasion; his campaign for a presidential pardon has so far come up empty.

Deranged chess genius Bobby Fischer escaped the clutches of the IRS by dying as a fugitive in Iceland in 2008. Subsequently the Icelandic economy collapsed.

Professional psychic David Guardino (Age 64, 366 lbs.) makes the cut for a creative way to to get a judge to show mercy at sentencing: by showing a little lot of leg.

Anthony Vincent Miller, formerly of Pittsburgh, stood out from the crowd by washing his hands of federal tax fraud charges using an "obsessive-compulsive disorder" defense.

Families Against Government Slavery gets nominated based on their creative acronym.

Militant Vegan Law Professor Anna E. Charlton gets nominated for her "ignore it and maybe it will go away" approach to a $27,595,308 balance due notice.

Joseph Francis is one of our celebrity nominees. The founder of the "Girls Gone Wild" empire awaits trial on tax charges, including an allegation that he had a $3.7 million home built for himself in Mexico and deducted it as a business expense.

Attorney Sherrel Jones gets an award for trying to take a $294,877 charitable deduction for donating his papers from his work defending terror-bomber Timothy McVeigh. The workpapers were largely photocopies of the government's evidence. His deduction fared as well in court as McVeigh.

Actor Wesley Snipes, our runner-up last year, kept his name in the tax news by firing his legal crew and hiring the lawyer who won acquittals for tax-protest figures Joe Bannister and Vernice Kuglin. He also argues that he is being selectively prosecuted, apparently for evading taxes while black.

Black-Hawk Sanders is nominated for perhaps the most far-fetched excuse for not paing his taxes - namely a belief that his is descended from "Native American Moors" who came to America from Africa over an ancient land bridge, which somehow is supposed to make him tax-exempt.

Creed J. Pearson gets the old college try nomination for offering to settle his tax liabilities by the taxes he could assess by auditing the Scientologists.

Finally, we have to include Ron Isley. The R&B star, sentenced last year to 37 months in prison for tax evasion, was the subject of a campaign for a Presidential pardon. The heat is on....

Vote daily, early and often!