The Internal Revenue Service has lost a lawyer’s challenge in front of a jury to prove a constitutional foundation for the nation’s income tax, and the victorious attorney now is setting his sights higher.
“I think now people are beginning to realize that this has got to be the largest fraud, backed up by intimidation and extortion and by the sheer force of taking peoples property and hard-earned money without any lawful authorization whatsoever,” lawyer Tom Cryer told WND just days after a jury in Louisiana acquitted him of two criminal tax counts.
There’s just one problem with the idea that this struck a death blow to the income tax: he still owes the taxes. Even though he’s dead. Being aquitted in a criminal tax case doesn’t make it legal to not pay taxes any more than the O.J. Simpson acquittal legalized multiple homicides in Brentwood.
The Tax Court yesterday ruled that Mr. Cryer owes taxes, interest and civil fraud penalties for tax years for which he didn’t file income tax returns. From the Tax Court:
In essence, Mr. Cryer claimed that the income he received during the tax years at issue from certain “sources” was taxable under Louisiana law, but not under Federal law. In United States v. Clayton, 506 F.3d 405, 412 (5th Cir. 2007), the Court to which an appeal would lie in this case, cited and followed its prior unpublished opinion holding that “the argument that income derived from sources within the United States” is not taxable under Federal law is “patently frivolous” and “absurd”.
The moral: No matter how convincing they are on the Internet, “Tax Honesty” arguments don’t work. They will not keep the IRS from taxing you. When “winning” means staying out of jail but paying 75% civil fraud penalties, you set the bar for victory too low.
Related: Daniel B. Evans, The Tax Protester FAQ
Prior Coverage: ‘NOT GUILTY’ DOESN’T MEAN ‘NOT TAXABLE’
Nick Kasprak, Weekly Map: State and Local Sales Tax Rates, 2013 (Tax Policy Blog)
Peter Reilly, Carried Interest Debate Heats Up Without Much Light . A reasonable outline of the issues involved in the so-called “loophole” for private equity:
If “carried interest” were really just a loophole it would not need such an elaborate fix. In fact, it is based on fundamental principles of partnership taxation.
I don’t think it’s a problem, so I don’t think it needs fixing. Related: New York Times Dealbook, Why Carried Interest Is a Capital Gain.
Missouri Tax Guy, Is that Gift Taxable?
Martin Sullivan, Showdown in Kansas: Realtors vs. Governor (Tax.com). Will Kansas eliminate the home mortgage deduction on its state returns?
Jeffrey M. Kadet, Tax And Territoriality: The Corporate 99% Versus The Law School 1%
William Perez, IRS Plans Spending Cuts Due to Sequestration. They can’t answer their phones, but they still want to regulate preparers.
Kay Bell, NYC soda ban overturned. Would a soda tax have been better? Maybe better, but still unwise.
TaxGrrrl, Former Detroit Mayor Found Guilty On Multiple Counts, Including Tax Charges. Poor Detroit.
Tax News from the Animal Kingdom.
Beavers’ tax-evasion trial to begin (WGNTV.com)
Former Bear Chris Zorich charged in tax case (WGNTV.com)
Remember, Calendar 2012 1120 and 1120-S returns are due Friday!