Snipes' New Role: Tax Denier

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Wesley Snipes has battled vampires, international terrorists, the New York Yankees, cryogenic imprisonment and Sylvester Stallone in his movies. But perhaps none of those on-screen enemies measures up in fear and dread inspired by the actor’s real-life opponent in a Florida courtroom: The Internal Revenue Service.

Snipes, 45, is currently standing trial in Ocala, Florida for federal tax fraud and conspiracy. The charges include failing to file tax returns between 1999 and 2004, a period in which Snipes earned $38 million.

If convicted, he faces 16 years in federal prison.

The long potential sentence reflects the key role prosecutors say Snipes played in the alleged tax evasion. He is not accused of being a celebrity jet-setter too busy or distracted for the lowly work of filing taxes. Nor is he accused of delegating to an unscrupulous business manager.

No, prosecutors say, Snipes purposefully flipped the IRS the financial bird after joining up with a fringe group, known as tax deniers, who insist there is no legal basis for the government to tax domestic income. The theory has been discredited by courts across the country repeatedly as a misreading of the law.

Snipes admits he did not pay taxes, but his attorneys told jurors in opening statement that the actor did not understand that he was doing something wrong. A defense lawyers said Snipes believed two co-defendants, tax deniers who introduced him to the group, were providing sound financial advice and that he tried to communicate with the IRS, even requesting that they audit him.

“Wesley Snipes has never had any intention to defraud the government,” the lawyer insisted. Among the details that have emerged at Snipes’ trial is that the IRS sets aside for extra scrutiny returns containing diatribes against the constitutionality of the tax system.

Surely, most people are too savvy to do that, but there are a host of other common errors that yank taxpayers off the money train and into an audit or even bigger trouble with the IRS.

1.) Math problems Stupid addition errors are among the most common mistakes submitted to the IRS. If you insist on doing your return by hand, check your addition with a calculator. Twice.
“It sounds plebeian, but the IRS tells us every year, ‘Watch out for this.’ It’s an easy thing you can do,” says Tom Ochsenschlager, the vice president for taxation for the American Institute of Certified Public Accountants.

2.) Taking advice from amateurs. Your cousin tells you can deduct your car costs if you make calls about work while driving. On one hand, Wow! On the other, your cousin works at the deli counter. Too-good-to-be-true tips sound that way for a reason and should always be checked with a professional. They move at viral speed through companies, families and the Internet.
“If you have one monkey, you have five monkeys following them,” says Cindy Scalisi, an enrolled tax agent in Santa Barbara. The IRS tends to notice large groups of deductible-heavy monkeys and investigate them.

3.) Guessing. Think keeping receipts and logging mileage is a hassle? Try being audited. If you guess at deductions, you will be always be off. Your figure might be so wrong that it attracts the attention of the IRS. Or it could be so wrong that you lose hundreds or even thousands of dollars that was rightfully yours.
“The secret to good record keeping is staying on top of it every day. Don’t expect to remember what you did today in a year,” says Bill Geideman, the chairman of the California Tax Education Council. “If you have a log, whatever you deducted becomes a very defensible thing.”

4.) Claiming more charity than you can prove. This year, the IRS is requiring receipts for all charitable donations, whether $5 in the church plate or $5,000 to the United Way. If you don’t get audited, no big deal, but if you do, any donation you can’t document never occurred in the eyes of the government.
“In prior years, this only applied if the contributions exceeded $250,” says Ochsenschlager. “I suppose some people will have to ask the bell ringer for a receipt.”

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