Last week, Wesley Snipes was sentenced to 36 months in prison for failing to pay his Federal Income Tax. He was convicted of three misdemeanors for failing to file and pay his income taxes over the past three years. Over the past 10 years, he has failed to pay around fifteen million dollars in taxes. The IRS has also filed a civil suit seeking all due taxes plus any interest and penalties that Mr Snipes must have paid.
The actor defended in a years-long battle with the IRS that he doesn’t have to pay taxes, using a fringe argument common to “tax protestors” who say the government has no legal right to collect. After joining the American Rights Litigators, and its successor group, Guiding Light of God Ministries, Snipes instructed his employees to stop paying their own taxes and demanded $11 million in 1996 and 1997 taxes that he legally paid.
Snipes withholds tax returns based on his belief that the Internal Revenue Service is not an established government agency. Snipes also argued that he did not file a business return because he was “personally not taxed because he is a ‘stateless person’ or ‘non-resident alien,'” or “‘non-taxpayer,'” which prosecutors vehemently denied. .
In the sentencing memorandum, prosecutors cited Snipes’ “reckless correspondence” with the IRS regarding his tax returns and his alleged way of concealing assets.
According to the sentencing memorandum, “It is Snipes’ policy to send checks received at its business offices for deposit overseas.” Court documents add that “the amount of unreported gross income proven at trial” amounted to more than $13 million over a three-year period.
In addition, prosecutors said, Snipes spent money on family members, close friends and other organizations, including “about $498,000 in personal payments to Snipes’ grandmother, his ex-wife, his then-fiancé, his personal attorney, the tax-fighting organization, and M&S Finance. , the Swiss alter-ego with which he fraudulently passed on his business ownership in 1999.”
The bad news is that the IRS is ready, willing, and able to sue people for not filing or paying their taxes. The good news is that there are a variety of programs available to help taxpayers settle their tax debts, avoid penalties and interest, and avoid criminal prosecution. If you are willing to work with the IRS, they are usually willing to work with you.