Blade IV: Escape From Club Fed

[Miasma]

Link

Wesley Snipes jailed for 3 years in tax case

By Barbara ListonFri Apr 25, 3:39 AM ET

A "very sorry" Wesley Snipes, star of the "Blade" movies, was sentenced to three years in prison on Thursday for willfully failing to file U.S. income tax returns for 1999 through 2001.

Snipes was convicted in February on three misdemeanor counts. U.S. District Judge William Terrell Hodges handed down the maximum sentence and said he felt it was important to create a general deterrent against tax defiance.

"I am very sorry for my mistakes and errors," Snipes told the judge. "This will never happen again."

He read a prepared statement, describing himself as an "idealist, naive, passionate, truth-seeking, spiritual-seeking artist" who epitomized the expression "mo' money, mo' problems."

His lawyers tried to give the court three envelopes with checks totaling $5 million, but the judge and prosecutor said they could not accept the payments. An Internal Revenue Service agent collected the money during a recess.

The judge said prison officials would notify Snipes when to begin serving his sentence. Snipes said he would appeal the verdict but prosecutors vowed to oppose any request to allow him to remain free on bond while the appeal is pending.

Prosecutors said Snipes had earned more than $38 million since 1999 but still had not filed tax returns for the years 1999 through 2007 or paid any taxes prior to Thursday.

They accused Snipes of presenting himself as a victim and called the checks a "grandstanding move" that would turn out to be only a fraction of what he owes the IRS.

They said the notoriety of the case presented a "singular opportunity" to deter tax crimes nationwide.

Snipes was acquitted on two felony charges of filing false claims and fraud in seeking millions of dollars of refunds in other tax years.

The judge did not fine him but the IRS still could levy penalties and interest charges in addition to the taxes owed.

Snipes brought character references from actors Denzel Washington and Woody Harrelson. His lawyer, Linda Moreno, said Snipes had led "an otherwise exemplary life" and had hired reputable tax professionals to help him resolve his tax liability and make amends.

She said Snipes owed less than $400,000 in taxes for the three years related to the convictions and should not be jailed.

Moreno cited the cases of former Washington mayor Marion Barry and singer/actor Marc Anthony, who avoided prison after failing to file tax returns, and singer Willie Nelson, who remained free despite owing $17 million in back taxes.

Co-defendant Eddie Ray Kahn, a longtime tax protester who coached clients of his American Rights Litigators on how to beat the tax system, was sentenced to 10 years in prison.

Co-Defendant Douglas Rosile, whom prosecutors called a "defrocked certified public accountant," was sentenced to 4-1/2 years for his part in the scheme. Both were convicted of conspiracy and tax fraud.

Prosecutors said Kahn and Rosile were "incorrigible tax offenders" whose anti-tax schemes caused "enormous damage to the administration of our tax system." They said at least nine other Kahn customers had been convicted of criminal tax violations and two had been indicted.

Reuters/Nielsen

As a celebrity you can drink and drive, do drugs, buy sex and maybe even commit the odd rape or murder but you should never fuck with the tax man.

[lac]

singer Willie Nelson, who remained free despite owing $17 million in back taxes.

Willie becomes a bit more awesome every day.

[Fabricated]

singer Willie Nelson, who remained free despite owing $17 million in back taxes.

Willie becomes a bit more awesome every day.

Well, ol' Willie was fucked by his accountant more than anything.

[WayAbvPar]

Hopefully this will put all the "taxation is unconstitutional" bullshit once and for all.

Really? You really think that after 200+ years of living under the Constitution, you are the first person to discover this 'secret'? DIACF kthx.

[Riggswolfe]

They're making an example out of Snipes and being assholes about it. His only crime is not having an accountant who finds loopholes to legally keep him from paying taxes.

[Paelos]

We discussed this case quite often in my forensic accounting class. The general consensus was that Snipes was going to roll over to catch the big fish the government wanted, which was Kahn. That dude was a constant PITA to the government and they were waiting to nail him.

Don't screw around with your taxes, people. Find a good tax accountant or planner and you won't have to pay anywhere near as much. It's very much worth it.

And no, Riggswolfe, Snipes was the asshole in this case. He made a big grandstanding show the whole way down the line with a big middle finger to the government tax process. As much as you may not like paying taxes, you don't get that choice.

[Triforcer]

The interesting thing about this case is the Gall/Kimbro implications.  The recommended guideline sentence (given his criminal history, etc) for something like this is probably 0-6 months.  I know Circuit clerks who have said their judges are really wrestling with the standard of appellate review after Gall- how do you determine if extreme upward departures are "reasonable?" 

[Johny Cee]

The interesting thing about this case is the Gall/Kimbro implications.  The recommended guideline sentence (given his criminal history, etc) for something like this is probably 0-6 months.  I know Circuit clerks who have said their judges are really wrestling with the standard of appellate review after Gall- how do you determine if extreme upward departures are "reasonable?" 

Snipes amended tax return for one of the years in question was online for a while....  here:

http://www.thesmokinggun.com/archive/snipestax1.html

Basically,  for one year in question,  he went from millions in taxable income to zero taxable income.  Honestly,  Snipes should be going to prison for felony tax fraud. 

We aren't talking about a few extra deductions....  we're talking about amending a prepared return from CPAs from $19 million in TI to zero.  This should be a huge warning flag to even the most clueless taxpayer.

Also:

Did he really get paid that much for fucking Blade?

[UD_Delt]

Link

Snipes brought character references from actors Denzel Washington and Woody Harrelson.

As a celebrity you can drink and drive, do drugs, buy sex and maybe even commit the odd rape or murder but you should never fuck with the tax man.

Woody Harrelson as a character reference? Seriously? I don't know if I'd be trotting out a marijuana activist as one of my two character witnesses. But maybe that's just me...

Well at least there was no mention of getting stoned in the actual letter. Apparently Snipes defended Woody from Racism...
Here's the letter: http://www.thesmokinggun.com/archive/years/2008/0423084snipes2.html

[Sauced]

Did he really get paid that much for fucking Blade?

The movies were profitable.  Everyone involved made money!

So, was his participation in late-night Ab Machine infomercials with Chuck Norris part of his alibi?  "C'mon, man, if I made $20 million last year, would I be on the science channel at 3am doing sit ups?"

[WayAbvPar]

I figured those were some sort of deal he made with prosecutors to avoid the electric chair.

[Morat20]

singer Willie Nelson, who remained free despite owing $17 million in back taxes.

Willie becomes a bit more awesome every day.

Well, when Willie got caught -- he basically went to make good on it. (Hell, my parents bought his "IRS Tapes" -- I think that's what he called the box set he released for the quite open reason of settling up with Uncle Sam).

Snipes fought it tooth and nail, and it was bullshit through and through.

I haven't owed the IRS money, but several people I know have found themselves (set up their W-4 wrong, or were self-employed and fucked up the numbers) owing the IRS more than they could pay, and from that purely anecdotal experience -- the IRS would rather work with you and get that money eventually than take you to court. Hell, their interest rates aren't bad at all (of course, they charge you 1 point more for taxes you owe THEM than they pay you for taxes they owe you).

IIRC, though, Snipes had a number of oppurtunities to put a stop to this and pay what he owed. Or set up a payment plan for what he owed.

I don't doubt the length of the sentence was manifold -- first, the man had the resources to know it was all bullshit. It wasn't like he was some idiot off the street -- Snipes has, or can afford to hire, legal experts, accountants, CPAs, and tax experts, all of whom would have told him "FUCKING PAY THE GOVERNMENT". Second, he IS a public figure and this "Taxes are unconstitutional/You don't have to pay Taxes" scam mostly fucks the idiot on the street. It's a scam, pure and simple -- and the people that take it up the ass the hardest are ordinary joes -- fucking gullible joes, but ordinary folks.

So yeah, throwing the book at Snipes means maybe some of those ordinary joes won't bite at the scam. Had Snipes showed the slightest bit of remorse, or at ANY point tried to dig himself out -- I'd feel uncomfortable with him getting the maximum sentence.

But what are maximum penalties FOR, if not for the people who show no remorse, regret, and offer no reasons to suspect they won't do it again?

[Paelos]

The IRS will deal. They always will. That's the way you can beat them if you owe a ridiculous amount. Most people I've seen that have underpaid taxes are the people who had large deferred gains such as real estate, or they had tax shelters that they inappropriately financed.

People are stupid. You tell them, "Ok, you don't have to pay tax on this today, you have to pay it in 5 years."

They hear, "FREE MONEY, K?!? BLOW IT ON A BOAT AND A MORTGAGE YOU CAN'T AFFORD!"

So, in 5 years, instead of taking that money they actually owe the government and making 8-10% a year on it, they have nothing in the bank accounts.

[Johny Cee]

singer Willie Nelson, who remained free despite owing $17 million in back taxes.

Willie becomes a bit more awesome every day.

Well, when Willie got caught -- he basically went to make good on it. (Hell, my parents bought his "IRS Tapes" -- I think that's what he called the box set he released for the quite open reason of settling up with Uncle Sam).

Snipes fought it tooth and nail, and it was bullshit through and through.

I haven't owed the IRS money, but several people I know have found themselves (set up their W-4 wrong, or were self-employed and fucked up the numbers) owing the IRS more than they could pay, and from that purely anecdotal experience -- the IRS would rather work with you and get that money eventually than take you to court. Hell, their interest rates aren't bad at all (of course, they charge you 1 point more for taxes you owe THEM than they pay you for taxes they owe you).

IIRC, though, Snipes had a number of oppurtunities to put a stop to this and pay what he owed. Or set up a payment plan for what he owed.

I don't doubt the length of the sentence was manifold -- first, the man had the resources to know it was all bullshit. It wasn't like he was some idiot off the street -- Snipes has, or can afford to hire, legal experts, accountants, CPAs, and tax experts, all of whom would have told him "FUCKING PAY THE GOVERNMENT". Second, he IS a public figure and this "Taxes are unconstitutional/You don't have to pay Taxes" scam mostly fucks the idiot on the street. It's a scam, pure and simple -- and the people that take it up the ass the hardest are ordinary joes -- fucking gullible joes, but ordinary folks.

So yeah, throwing the book at Snipes means maybe some of those ordinary joes won't bite at the scam. Had Snipes showed the slightest bit of remorse, or at ANY point tried to dig himself out -- I'd feel uncomfortable with him getting the maximum sentence.

But what are maximum penalties FOR, if not for the people who show no remorse, regret, and offer no reasons to suspect they won't do it again?

Snipes had a big CPA tax firm prepare his first returns.  He then listened to a screwball without a certification who talked him into the fact he owed no taxes, that his previous tax preparers were wrong, so he amended.

That's huge.  You can't really argue any kind of ignorance or a good faith attempt to follow the law if you ignore what the CPAs said and listen to the whackjob because he could save you a few bucks.  Most of the time when these things come up,  the taxpayer gets to plead ignorance and get a reduced penalty in return for rolling on the preparer.

When you've had the benefit of tax advice from professionals,  which you ignore in favor of someone who tells you you can get more money back it looks a hell of alot more like a concious and criminal attempt to defraud the government.

Seriously,  Snipes should be a felon right now.

[Johny Cee]

The IRS will deal. They always will. That's the way you can beat them if you owe a ridiculous amount. Most people I've seen that have underpaid taxes are the people who had large deferred gains such as real estate, or they had tax shelters that they inappropriately financed.

People are stupid. You tell them, "Ok, you don't have to pay tax on this today, you have to pay it in 5 years."

They hear, "FREE MONEY, K?!? BLOW IT ON A BOAT AND A MORTGAGE YOU CAN'T AFFORD!"

So, in 5 years, instead of taking that money they actually owe the government and making 8-10% a year on it, they have nothing in the bank accounts.

Bah Paelos, you're supposed to sell the guy a nice bunch of tailored investment products before they leave the building. 


I had a client sell his small business for a decent sum.  He managed to find an actual Nigerian businessman to start up an investment company that promptly went under a year later.

[DarkSign]

The interesting thing about this case is the Gall/Kimbro implications.  The recommended guideline sentence (given his criminal history, etc) for something like this is probably 0-6 months.  I know Circuit clerks who have said their judges are really wrestling with the standard of appellate review after Gall- how do you determine if extreme upward departures are "reasonable?" 

If the factors that cause an upward departure are proven beyond a reasonable doubt [Apprendi[ then going past the maximum is ok.
If your question is how far over the max can you go, under Booker, federal courts have the authority to set any reasonable sentence as long as they explain their reasoning - and the standard would be "abuse of discretion."