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Tuesday, October 17, 2006 

Say It Ain't So, Blade

Actor and vampire killer Wesley Snipes has been indicted for tax fraud. This is most disappointing to me, as I watched Rising Sun during my recent week long illness/film festival. The book was better... and that's not saying much.

According to The Smoking Gun, here's what happened...
According to the indictment, Snipes, 44, conspired with Eddie Ray Kahn and former certified public accountant Douglas Rosile in the tax scam. Kahn is the founder of a Florida company (now known as Guiding Light of God Ministries) that, investigators allege, "promoted and sold fraudulent tax schemes" to clients like Snipes. Kahn has claimed that U.S. citizens could only be taxed on income earned from certain foreign-based activities (and not on money made in this country). This claim--known as the "861 argument" for the section of the tax code to which it refers--has been flatly rejected by the Internal Revenue Service. As part of the alleged Snipes scheme, the actor filed amended tax returns seeking $12 million in refunds on taxes he paid in 1996 and 1997.
TSG also has a copy of the indictment, in case you've never seen one and want to read it for yourself.

In Tax (and to a lesser extent Criminal Law), I learned one thing about clever income tax arguments: don't make them. First, the IRS has heard just about everything. They know of your scheme, and they have rejected it. Second, even if the IRS doesn't know about it, they are going to fight you tooth and nail. Don't expect them to sit back while you try to weasel funds to the tune of $12 million out of the federal coffers.

On top of the 861 argument, there is this...
The government also says that Snipes tried to pay some of his income taxes between 2000 and 2002 by sending bogus checks totaling $14 million to the U.S. Treasury.
Wesley, Wesley, Wesley... what are you doing? All of these separate federal charges add up too. Snipes faces more than 16 years in prison. Maybe Snipes and Woody Harrelson can devise a basketball hustling scheme to get Snipes out of this.

The other hitch in the story is that Snipes is AWOL. No one knows where he is. Maybe he'll never resurface...

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