Taxable Talk

I keep saying that if it sounds too good to be true, it probably is. Offshore trusts formed just to shelter income tax sound too good. For Michael Diesel of St. Marys, Kansas, they were.

On the advice of Aegis Co., a now discredited Illinois vendor of offshore trusts, he invested in the scheme to avoid taxes. He was convicted of three counts of filing false income tax returns. Diesel faces up to three years in prison and fines of $250,000 on each count when sentenced in May.

Irwin Schiff won't be muttering "There is no income tax" to his gullible victims clients anymore. The 78-year old Schiff was sentenced yesterday to 13 years in prison. He must also make restitution of $4.2 million. Schiff, during his sentencing, still claimed that there is no income tax.

He'll have the rest of his life to think that one over.

Yesterday, we blogged about Irwin Schiff, who is going to be spending the rest of his life in an institution because he was convicted of defrauding the IRS by telling and selling clients various methods so they didn't have to pay the IRS. Here is a link to the Tax Protestor FAQ, which debunks just about every tax protestor argument. Judges especially dislike tax protestor arguments.

In any case, today's Tacoma News-Tribune has a story about a man who has been accused of tax fraud. Allegedly, he has sold over 400 sham trust packages, costing the IRS over $7 million in uncollected taxes. David Carroll Stephenson believe he's done nothing wrong. Indeed, he argues that the court has no authority (I'm sure the judge will like that argument), the government has no authority (to collect income tax), and the IRS was never authorized. As an aside, all of these arguments are debunked in the Tax Protestor FAQ.

I'll be shocked if Mr. Stephenson isn't found guilty.

...when you withhold taxes from employees and keep them.

Crime does pay, as long until you get caught. Take nursing home owner Jack Easterday, formerly of Alameda, CA, and soon to be residing in a federal penitentiary. Mr. Easterday was convicted on Friday of failing to pay over $3 million in payroll taxes. Evidence indicated that the scheme netted over $18 million.

It took the jury two days to find Easterday guilty of 47 counts; the maximum penalty on each count is five years and a $10,000 fine.

News Story: North County Gazette