Saturday, December 15, 2007

Stick to Acting

Blog emperor Paul Caron has a post (here) on the Tax Prof Blog linking to an interview actor Wesley Snipes gave to Entertainment Weekly (here) discussing his pending criminal tax fraud case.  Snipes claims that he was simply following the advice of two accountants who said he could claim a substantial refund, which turns out to have been based on an interpretation of an Internal Revenue Code provision that has been roundly rejected by all courts to consider it.  Snipes then offers what may be his core defense to the charges: "I never got a dime . . . I didn't defraud the government by taking money that was not mine. We never got it!"  This is a defense heard before, that the intended victim of a fraud was not in fact defrauded, so the defendant is not guilty without proof of a gain.  While the defense has an intuitive appeal, and may well be Snipes' position at trial, it is not an assertion that works in most cases.   A fraudulent scheme does not have to be successful to be a criminal violation, and the fact that the refund was sought, not whether it was paid, can establish the offense. 

Snipes also points the finger at the two accounts who are also his codefendants, accusing them of suggesting the tax strategy he followed without understanding what they were doing.  If the case dissolves into finger-pointing by the defendants, that could ultimately redound to the government's benefit because the skirmish among the defendants may cause the jury to believe that all are guilty and now just want to escape blame.  (ph)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2007/12/stick-to-acting.html

Prosecutions, Tax | Permalink

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