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Wesley Snipes acquitted of federal tax fraud, but actor could owe millions in back taxes
OCALA, Florida: Attorneys for action film star Wesley Snipes admitted his ideas were crazy — that Americans have no obligation to pay taxes and the IRS cannot legally collect them.
But the star of the “Blade” vampire trilogy was the victim of crooked advisers, promoters of the tax protest movement, they argued, and a jury apparently agreed.
Snipes was acquitted Friday of federal tax fraud and conspiracy, but jurors found him guilty on three misdemeanor counts of failing to file a tax return.
“There was no intent to defraud anybody — he’s not a fraudster, he’s not a felon,” defense attorney Robert Barnes said. “There’s a couple of returns he should have filed. He’ll be looking to make amends on anything he needs to make amends on.”
Snipes faces up to three years in prison, and is still liable for millions in taxes likely to be pursued in civil court. He had faced up to 16 years in prison if convicted on all charges.
The actor sat emotionless as the verdict was read, then nodded as his lawyer gave him a congratulatory pat on the leg. Afterward, he refused to talk to reporters who camped outside the courthouse for three days as jurors deliberated.
Co-defendants Eddie Ray Kahn, the founder of a known tax protest group, and Douglas P. Rosile, a delicensed accountant, were convicted Friday by the same jury of tax fraud and conspiracy. Both face up to 10 years in prison.
The actor, who also appeared in “White Men Can’t Jump,” is among the most famous targets of an IRS criminal investigation, and his prosecution was key for the government.
Snipes paid taxes in the 1990s, but changed his mind after meeting Kahn, prosecutors said. He refused to file tax returns from 1999-2004, during which he signed two contracts for more than US$10 million on “Blade” sequels, they said.
Snipes used bizarre arguments to justify his position, saying the IRS’ own code meant income earned in this country was not taxable, and the agency had no legal authority because it was not a proper government entity.
Later, the actor threatened the government and individual agents in his pursuit, declaring himself a “nonresident alien” not subject to tax laws.
Courts have long rejected such arguments, but there were exceptions.
U.S. Attorney Robert O’Neill, who prosecuted the case, speculated that jurors might have bought Snipes’ argument that he should not be tried in Florida for certain tax years because he was living elsewhere at the time.
It was also possible that jurors determined Snipes did not have to file returns for 2002-2004 because the IRS notified him that he was the target of a criminal investigation and any tax filings could be used against him, O’Neill said.
“We thought there was sufficient evidence for a conviction on all counts, but obviously the jury disagreed,” he said.
Kahn founded the central Florida tax protest group American Rights Litigators and its successor, Guiding Light of God Ministries. He has been using tax scams since at least the early 1980s, according to government documents, and refused to defend himself in court against the charges.
Rosile, a CPA who lost his licenses in Florida and Ohio, allegedly prepared the fraudulent documents for Snipes, along with numerous other Kahn clients.
The IRS bears a unique burden of proof in criminal tax cases. It must show not only that someone broke the law, but he or she did so with willful, bad purpose to defraud the government.
A few defendants have won acquittal because the jury thought they sincerely believed they did not have to pay.
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