IRS Bloodsuckers Out To Get Blade Star
MayorBob.
Posted to Business on Wed Oct 25, 2006 at 10:12:30 AM EST. RSS.
If it sounds too good to be true, it almost assuredly is. Hollywood action star Wesley Snipes should have thought about that piece of wisdom when he hooked up with some tax preparers. They more or less assured him he wouldn't have to pay taxes on his substantial income. But, no alarm bells went off and, as a result, the star of movies like the Blade franchise and White Men Can't Jump is charged with multiple counts of tax evasion.
When the word first got out about Snipes' problem with the IRS, his whereabouts were unknown. But that's been cleared up and it turns out he's in Namibia shooting a film. No word on when Tommy Lee Jones and Joe Pantuliano will be sent packing to Africa to pick him up. The feds might want to think about it though, as Namibia has no extradition treaty with the US. Snipes' alleged transgressions include close to nine years worth of underreporting, non-reporting, lying on his tax returns, and then sending the IRS something in the neighborhood of (US)$12 million in worthless checks to cover the amount he had evaded paying over the years. Snipes is the latest, and the biggest, of what have become known as "Section 861" violators. This involves using a portion of the federal code to claim they owe no tax on money earned.
Unfortunately for Snipes and others falling afoul of the IRS over these claims, they conveniently ignored several other sections of the code which make it clear that all income from any source is taxable unless specifically excluded. Snipes, and his tax preparers, filed an amended return where he claimed he didn't really earn $19 million over a two year period - he earned nothing, putting him in line for a $7.4 million return. He also didn't bother to file any taxes for six more years. All tolled, with the money owed and the false information files and the non-reporting, Snipes could spend the next 16 years in prison. Snipes' taxes were prepared for him by Eddie Kahn and Doug Rosile, who began their association with Snipes as American Rights Litigators (ARL) but later traded under the name of Guiding Lights of God Ministry, a purported tax-exempt organization. Kahn and Rosile face 12 years in prison as a result of their participation in the Section 861 scheme. But, if Snipes was unaware that Kahn was basically a modern day snake oil salesman, any other number of people knew it.
With a debt close to $12 million, Snipes doesn't qualify as the biggest celebrity tax cheat of all time. That record still belongs to singer/song writer Willie Nelson whose claims of losses in some questionable tax shelters earned him a tax bill of $16 million. He managed to wangle a settlement with the government of around $9 million, but the IRS is really after Snipes on this one. This is because Snipes is the most famous of those involved in Section 861 schemes. The IRS has been trying to crack down on it for years for a number of years. And, as Leona Helmsley can attest, the IRS loves to have a high profile tax cheat it can use as an example. People will say and claim the craziest things to avoid paying taxes. Of course, if you have some sort of half-assed reason for not paying your taxes, the IRS will likely have a rebuttal.
edited by Port1080
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