Many years ago I remember seeing a Peanuts cartoon where Snoopy wrote to the IRS, “Please remove me from your mailing list.” As much as you and I would like to not have to deal with the IRS, if you don’t file when you should you’re guilty of tax evasion. You can’t opt out from your responsiblities. Yet for the Bozo wing of tax fraudsters opting out is fine…until they get caught.
Take David Struckman of Renton, Washington. Mr. Struckman co-founded Global Prosperity. Global Prosperity claimed that you could elect to not follow the Tax Code by just renouncing the US government’s sovereignty. Global Prosperity sold lots of audiotapes for their purported scheme. Among other things that Global Prosperity suggested was to move your income to offshore accounts, and to hide funds in foreign trusts. Mr. Struckman followed his own advice.
The Seattle Times reported that Mr. Struckman attempted to renounce his Washington state citizenship in 1997, and filed papers in King County (Washington) stating that he was no longer going to follow US laws.
Unfortunately for Mr. Struckman and his other co-founders, the IRS and the Department of Justice wasn’t pleased with the scheme. Indeed, all of the co-founders were indicted in May 2004 on multiple charges of tax evasion. And they were all either found guilty or pleaded guilty to various charges. Mr. Struckman fled to Panama to escape prosecution. He was extradidted in 2006 back to the US. He was found guilty of tax evasion and conspiracy to defraud the US government on Friday.
Mr. Struckman faces up to 20 years at ClubFed plus a possible fine of up to $1 million when he’s sentenced next March. Mr. Struckman’s claim that he acted in good faith and thought he wasn’t violating the law doesn’t hold water. If he asked any competent accountant he would have been laughed out of the room. Yet he and his other co-founders built a $40 million business selling these phony trusts and bad advice to individuals. The reality is that we all have to pay our taxes. As Richard Morrison, Acting Assitant Attorney General for Tax, said, “People who sell or use these scams can expect serious trouble.”