Apparently this blog has a wider circulation than I thought. Today I received an email from Tom Teale, the Assistant Director, Criminal Investigations of the Minnesota Department of Revenue (the state tax agency in Minnesota). While I generally focus (when I report on tax evaders) on IRS/Department of Justice prosecutions and California I’m happy to highlight the lowlights from other states.
And I do wish to point out that many states are suffering revenue shortfalls. If you file your federal tax return and skip your state tax return your state will find out. Every state but Nevada has an information sharing agreement with the IRS. Given that state income tax payments are generally deductible on your federal tax returns and are usually for far smaller amounts than your federal income tax doesn’t it make sense to ensure your compliance with state law?
In any case, Mr. Teale highlighted four cases in Minnesota. I’ve already covered Robert Beale, the tax evader who attempted to arrest the judge. He received eleven years of nonconsensual incarceration.
There were two cases I wasn’t aware of. In one, an attorney, John Hatling of Fergus, Falls, claimed that he could deduct his own wages using the “claim of right” deduction. If you’ve never heard of the deduction you’re not alone. It’s yet another tax protester argument and it doesn’t hold water. Mr. Hatling will plead guilty to one felony count and will be sentenced in state court next Friday.
In the other case, a judge didn’t file his Minnesota income tax returns. Donald Venne of Anoka County faces four gross misdemeanor charges. While the total unpaid tax is relatively small (about $3,200) a judge, of all people, should understand about compliance with the law. His attorney said that the problem was caused by a “traumatic family event that occurred over a period of years.”
Again, remember that you do need to pay your state income taxes. And my thanks to Mr. Teale for bringing these cases to my attention.