I wrote a post on the Tax Matters blog about tax protesters and how their frivolous tax defense against the IRS is a losing battle. Evidence of that is celebrity tax protester, Wesley Snipes who is currently serving a three year prison sentence for willfully refusing to file and pay millions in taxes for years 1999 through 2001. A recent Forbes article titled: “Are Tax Protesters Actually Winning?” examined just how far individuals who believe that paying taxes is wrong will go to prove their point.
The article’s author, Peter J. Reilly focuses on the case of Laurel Ann Curtis versus the IRS. After Curtis’ latest appearance in Tax Court, where Reilly says she got creamed, the question is whether Curtis, (who wrote a book about her winning against the IRS) actually “won.” Here are a few details about why she wound up in tax court:
- The Tax Court found that Curtis’ claims were frivolous and groundless positions about her taxable income.
- A tax audit showed that Curtis had not filed returns for 4 years (’94-98) and had a history of unfiled tax returns dating back to 1983.
- She was uncooperative with auditors and did not provide proper documents to examiners.
- Curtis’ tax debt including penalties and fines was over $400,000 for four years. Given that the IRS penalties include a 75% fraud penalty double tax, and a sanction of $25,000 for frivolous arguments, Reilly believes her entire tax liability is probably over a million dollars.
Reilly believes Curtis may appeal. If she does, she will be in for the following:
- Curtis will wind up in Tax Court again.
- The Circuit will add more sanctions. Each time she returns to tax court means she could be subject to a $25,000 sanction.
- If Curtis delays payment of her IRS tax debt by appealing her case, she will rack up the interest and return to Tax Court.
The courts “victories” the protesters boast about, according to Reilly, are limited to an occasional criminal acquittal and penalty reductions. The protesters don’t “win” – in fact they end up owing more IRS back taxes than a negotiated IRS tax settlement could have.
Sadly, Curtis and Snipes are among the many who are seduced by charismatic promoters of frivolous schemes that encourage taxpayers to avoid paying their taxes. Ironically, these outrageous claims leave promoters unable to prove their case before the court and they often wind up in jail. Eddie Ray Kahn who convinced Snipes of a “pure trust” scam and Irwin Schiff who inspired Curtis are both in federal prison for their gross misinterpretation of the law.
We live in a civilized society meaning we have an obligation to pay taxes. If you have significant tax debt or have participated in any sort of frivolous tax argument or tax shelter you could be looking at an audit and major IRS problems. Your best defense is to consult with an expert certified tax resolution specialist or tax attorney or who can help you get back into tax compliance and in favor with the IRS once again.
More Tax Help, IRS News and Tax Relief Tips:
- Treasury Proposes Multilateral Agreement for Offshore Compliance
- Talking Tax Resolution with Fox 11 Tony Valdez
- Tax Help for Taxpayers who Missed April Deadline
- Back Tax Help-How Long to Keep IRS Records
- Tax Relief-Bankruptcy and Tax Debt
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