Wesley Snipes Tax Court Sentence
A Clear Victory for all Taxpaying USA Citizens
Wesley Snipes was sentenced to 3 years in federal tax court in Ocala, Florida. Who's the clear winner in this judgement? Taxpaying USA citizens.
The dust has settled on the Wesley Snipes tax court case. To follow are the facts and circumstances of this case with an illustration as to how USA citizens pay tax on earned income.
Recap of the Wesley Snipes Tax Case
Snipes hooked up with two tax advisors and just decided that he just didn’t have to file tax returns or pay taxes on approximately $38M in income. To add insult to injury, he also filed amended tax returns asking for $11M in refunds for prior years' returns already filed. That $11M in tax paid – imagine what the taxable income amounted to.
The Tax Court Decision
Mr. Snipes had his day in tax court culminating with a sentence of 3 years, two of which to be served in prison. Snipes maintains his tax home in Florida therefore the case was tried at the US Federal Courthouse in Ocala, FL.
Who’s the Clear Winner in this Judgment?
The Justice Department? The Treasury Department? Before one answers that question consider for a moment Joe or Mary Smith - that W-2 wage earner that automatically has federal withholding tax deducted from each and every paycheck and takes on the burden of filing a complete tax return each year.
As an example, in 2004 (one of the Snipes years in question) Mary Smith, a single person, has $50,000 in taxable income. The tax due is $9231. Mary Smith nets $36,944 after deducting all payroll taxes and pays $9,231 in federal withholding tax. Snipes, earning millions of dollars, pays $0. The clear winner in this case is the USA taxpayer who is now not held to any greater standard of tax reporting than that of a rich public figure.
Before one gets started on the government $10,000 toilet seat issue consider how one got to work this morning, or if one has taken recreational or business airline trips, any children in public schools, has received Social Security disability or survivor benefits or unemployment insurance? All these and more are subsidized by federal tax dollars. Is it too much to expect all USA citizens to support the luxuries and freedoms that the tax dollars support?
The Fall out from the Snipes Case
The two promoters of the tax scheme also received jail time in addition to incurring the associated legal fees to defend themselves. Hopefully, this will serve as a wake-up call to those pondering whether the risk is worth it (taxpayer and tax preparer alike).
If one doesn’t agree with the USA tax structure, work to change it. Or how about this – revoke one's citizenship and move to a different country – in the USA one has the freedom to do so.
Source:
2004 Form 1040 Instructions
