Taxable Talk

Boy, what a year. And what choices we have in naming our 2005 Offender of the Year. The nominees include,

- Richard Hatch, who had over 300 million witnesses to winning $1 million on Survivor, but didn't include the winnings on his tax return (among other alleged problems);

- John Ashton Wray, Jr., and Judge Michael Luttig of the 4th Circuit Court of Appeals. Judge Luttig wrote an opinion that says that Wray's failure to file income tax returns, "is not a serious crime." (Hat Tip: TaxProf Blog);

- David Guardino, of Caryville, TN (hat tip, Roth Tax Updates). Mr. Guardino is a self-proclaimed psychic accused of tax evasion. Didn't he know this was coming?

- Willy Witzel (courtesy of Roth Tax Updates). Mr. Witzel's son, Roy, prepared his tax return. When Roy explained his tax return to Willy, Roy got angry and attacked Willy with a sword. Both were martial arts experts. Roy, in self-defense, had to kill his father. (Read the whole story from the link above.)

- All of the taxpayers who claimed that there is no income tax in front of the Tax Court.

And our winner is...


Sharon Lee Caulder, formerly of Oakland and now from New Orleans, our voodoo priestess who wrote a book and was convicted of tax evasion. She did not include the $1.7 million she earned between 1998 and 2002 (mainly from sales of her book, Mark of Voodoo, on her tax returns. As I wrote when she was convicted, "Voodoo is more profitable than I realized, especially if your net income after taxes is the same as your net income before taxes (until Uncle Sam catches you)." Ms. Caulder will be sentenced in February, and faces up to 15 years in prison and fines of up to $1 million.

Thanks to all of our lucky participants and I'm sure we'll have just as good a bunch of players in 2006.

Richard Hatch, the Survivor winner who allegedly elected to stiff the IRS, faces a January 10th trial date in Providence, Rhode Island on ten counts of tax evasion, filing a false income tax return, wire fraud, bank fraud, and mail fraud. Yesterday Hatch lost three motions, where he attempted to have his case continued (postponed), some charges separated, and to force the IRS to disclose how much in taxes he allegedly owes.

For those who don't remember, early in 2005 Hatch agreed to a plea agreement but then he backed out of it. The plea agreement Hatch rejected would have had him pay his tax, plus interest and penalties, and have him serve two years in prison. Hatch now faces up to 73 years in prison, and fines of over $1 million. Hatch won exactly $1 million in CBS' first Survivor show.

Where are those immunity cards when you need them?


News Story: The Providence Journal

The joy of frivolity. Having fun at the expense of others (playing practical jokes, for example) can give yourself a good laugh. However, it is not a good idea to do it in Tax Court.

As noted in Roth Tax Updates, Glen Silver filed a petition in Tax Court in regards to his 2001 and 2002 returns (which he did not file). In Tax Court, he "...did not raise any bona fide dispute...." This was his third try in Tax Court, and he had been fined $3,000 for his frivolous arguments on his last attempt. He had also been warned, "[The Court] urge[s] him to reconsider any positions he takes that may result in an increase in penalties for making similar arguments in that case when it’s called next year about this time."

He didn't reconsider his positions. No surprise, he was fined $25,000.

And the Court noted that he is trying a fourth time in Tax Court, in a petition likely to be heard in 2006. The Court warned Mr. Silver, "...if he pursues the same arguments in that case, he may expect an additional penalty under section 6673."

Case: Silver v. Commissioner, T.C. Memo 2005-281