Frivolous Tax Claims Filed by Ohio Woman Results in Prison Time and Fine

An Ohio woman who challenged the IRS’s authority to collect taxes was sentenced to five months in prison for obstructing and impeding U.S. tax laws.

Terry E. Branco, 65, of Vermilion, Ohio, pleaded guilty to the tax charge and was also ordered to pay $47,475 in restitution of unpaid taxes for the years 2004 through 2007.

According to court records, from 2004 to 2007, Branco filed frivolous and false U.S. individual tax returns in which she stated that her total adjusted gross income for each year was zero. Her actual total adjusted gross income was $109,403, $87,440, $93,277 and $113,845 for the tax years 2004, 2005, 2006 and 2007, respectively.

Branco also signed a form in 2006 on which she falsely claimed she was not a resident of the United States.  In 2008, following an IRS audit and assessment of taxes owed, Branco sent a purported “commercial affidavit” to the IRS claiming that the tax-collecting agency was “perpetuating a fraud” and “not licensed to do business.”

She also stated that failure to rebut the affidavit would result in the “filing of a commercial lien, involuntary bankruptcy and/or tort claim.”

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