August 22, 2005
Tax Protester Tricks Net Upward Departure
Within the tax protester movement, there are those with firmly held beliefs on the impropriety of the federal tax system. Some take their protests beyond just refusing to pay taxes by seeking to exploit the system and take advantage of the various protections it affords to individuals. In U.S. v. Saldana (here), the Fifth Circuit affirmed the convictions of twin protesters Samuel and Saul Saldana for false statements and impeding the administration of the Internal Revenue Code. Among other things, the brothers submitted Form 8300s reporting cash transactions over $10,000 that listed the names of government officials and lawyers involved in various cases against the Saldanas as receiving large amounts of money, including "$213 quintillion or $1,955,000,000,000,000." Needless to say, the Form 8300s caused problems for both the IRS and the individuals identified as receiving the money. Saul tried to claim the forms were submitted in good faith and sought to introduce manuals from tax protester seminars, which the judge refused to allow. Saul received a 24-month sentence and Samuel received a 60-month sentence, both of which involved upward departures. The Fifth Circuit upheld the sentences, although with some trepidation:
At the outset, we again acknowledge that the extent of the departure here comes close to the outer limits of reasonableness. First, the degree of the departure overstates the harm done to the victims. Specifically, most victims testified to experiencing only some annoyance and trepidation at the thought of an IRS investigation, and their greatest inconveniences were contacting the IRS or FBI and filling out forms. Second, Samuel’s sentence is significantly longer than those imposed in similar "tax protestor" cases. We note, however, that —— as in Saul’s case —— the district court’s reasons for upwardly departing are valid and, taken together, clearly justify a sentence of the length of the one actually imposed by the district court. Given the deference we owe to the district court, we will not overturn the extent of the upward departure here as unreasonable.
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