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November 24, 2004

Tax protestors in action

Judge Easterbrook famously wrote in Coleman v. Commissioner, 791 F.2d 68 (7th Cir. 1986):

Some people believe with great fervor preposterous things that just happen to coincide with their self-interest. "Tax protestors" have convinced themselves that wages are not income, that only gold is money, that the Sixteenth Amendment is unconstitutional, and so on. These beliefs all lead -- so tax protesters think -- to the elimination of their obligation to pay taxes. The government may not prohibit the holding of these beliefs, but it may penalize people who act on them.

A group of tax protestors got sufficiently overconfident over the lack of IRS enforcement against their tax evasion that they took out a full-page ad in USA Today bragging about their success and inviting others to join them. That woke the feds up, and Al Thompson was arrested last week after a high-speed car chase. (David Cay Johnston, "Leading Foe of Income Tax Is Arrested After Car Chase", NY Times, Nov. 19). As tax-blogger Roth CPA put it, "He should have told his tires that there is 'no law' requiring them to go flat when they run over highway spikes." Other signatories of the USA Today ad are meeting similar consequences.

David Cay Johnston also interviews the now-bankrupt and prison-bound Jerome Schneider, whose schemes met with more mainstream acceptance by a variety of millionaires who now face prosecution or suit for the taxes they evaded. ("Pioneer of Sham Tax Havens Sits Down for Pre-Jail Chat", NY Times, Nov. 18).

Posted by Ted Frank at 05:31 PM | TrackBack (0)




Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.