Tuesday, October 17, 2006
Well-known action movie actor Wesley Snipes and two tax shelter promoters, Eddie Kahn and Douglas Rosile, were indicted (here) in Florida on tax, conspiracy, and false claim charges. They are accused of obtaining over $7 million in tax refunds from the IRS based on the "861 argument" that taxes are only owed on certain foreign earned income. An earlier post (here) quoted from a Department of Justice press release that described the "861 argument" and noted that "[c]ourts have consistently held that Section 861 does not provide authority for United States citizens to fail to file income tax returns on income earned in the United States . . . ."
A press release issued by the U.S. Attorney's Office for the Middle District of Florida (here) states:
The indictment alleges that Snipes, Kahn, and Rosile attempted, through dishonest means, to make it appear as if Snipes had no liability for federal income taxes, when, in fact, Snipes had such tax liabilities. As part of the scheme, the defendants allegedly prepared and filed two amended federal income tax returns for Snipes, fraudulently claiming refunds of 1996 and 1997 income taxes previously paid, totaling almost $12 million. The indictment also alleges that Snipes did not file his 1999 through 2004 federal income tax returns, even though the law required him to do so.
Snipes is charged with six counts of failing to file a tax return in addition to the conspiracy and false claim counts. It looks like we may not get to see the fourth installment of the Blade series any time soon. Darn! (ph)