Wesley Snipes: Tax Conviction and 3 Year Sentence Upheld

Actor Wesley Snipes lost his appeal of his 3 year sentence for tax crimes today. The 11th Circuit opinion is here. The factual part -- with Snipes arguments against filing returns for five years on more than $37 million of income, is interesting. (He was convicted for three of those years and the amount of taxes he owes is $17 million.)

Although Snipes earned more than thirty-seven million dollars in gross income from 1999 to 2004, he did not file individual federal income tax returns for any of those years.

Among the reasons he claimed he didn't have to pay taxes:

Snipes also claimed that as a “fiduciary of God, who is a ‘nontaxpayer,’” he was a “‘foreign diplomat’” who was not obliged to pay taxes.


Snipes was convicted of misdemeanors, not felonies. Under federal law, the maximum sentence for a misdemeanor is 12 months. But because his guidelines were higher than that, the court could and did stack the counts, maxing him out at 36 months.

It seems the principal reason the court imposed the maximum sentence was general deterrence -- to discourage others from committing the crime. Making an example of someone always seems to me to be a poor reason for a sentence -- but particularly in this case, considering the small percentage of our population who earn more than $7 million a year that might be deterred.

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    This opinion doesn't make Snipes (5.00 / 1) (#1)
    by andgarden on Fri Jul 16, 2010 at 09:26:54 PM EST
    look good at all. I prefer to read it as dry comedy:

    Snipes claimed that he believed he had a Fifth Amendment privilege not to file his personal income tax returns because Special Agent Lalli advised him of his right to remain silent. The district court declined to give this instruction, observing that there was no evidence that Snipes had directly asserted his Fifth Amendment right as a basis for refusing to file his federal income tax returns. Snipes's counsel did, however, argue to the jury in closing that Snipes's reliance on Agent Lalli's pre-interview advice of rights constituted a good faith basis for his failure to file his individual income tax returns.

    You might want to make clear, TL, (5.00 / 1) (#2)
    by Peter G on Fri Jul 16, 2010 at 10:14:06 PM EST
    that none of the issues we raised on appeal for Mr. Snipes (I wrote most of the brief and argued the appeal) were based on the "reasons" you quoted from the opinion that he gave at the time.  The appeal raised serious legal questions about the trial -- particularly the government's choice of a rural Florida venue to indict someone who lives in LA and NYC -- and about the sentencing process.  And although the IRS says Mr. Snipes owes millions in taxes, the judge determined that the "tax loss" under the Sentencing Guidelines for the three years of conviction was only $220,000, with zero as the loss in one year.  

    For the record (none / 0) (#6)
    by andgarden on Sat Jul 17, 2010 at 12:51:14 AM EST
    I was making no comment on the quality of your representation!

    The CoA does present Snipes as a loon. That might not be fair.


    I give Snipes props... (2.00 / 0) (#10)
    by kdog on Sat Jul 17, 2010 at 11:48:55 AM EST
    for trying...paying the vig without question is the way of the enabler....like sending cases of champagne to an alcoholic.  I often think widespread tax revolt is the only way to make the government change their ways...to end the wars, thin out the prisons, end criminal cronyism.  Reason ain't working...money talks.

    But as Snipes as learned, it's a battle you're bound to lose...everytime.

    Obvious (none / 0) (#3)
    by Abdul Abulbul Amir on Fri Jul 16, 2010 at 10:32:50 PM EST
    Among the reasons he claimed he didn't have to pay taxes

    Snipes also claimed that as a "fiduciary of God, who is a `nontaxpayer,'" he was a "`foreign diplomat'" who was not obliged to pay taxes.

    It ia obious he was not represented by Jeralyn.

    See my comment #2 (none / 0) (#4)
    by Peter G on Fri Jul 16, 2010 at 11:13:22 PM EST
    Those "claims" were not presented as defenses in court, either at trial or on appeal.

    Wadda maroon. (none / 0) (#5)
    by sarcastic unnamed one on Sat Jul 17, 2010 at 12:29:06 AM EST

    Deterrence (none / 0) (#8)
    by lentinel on Sat Jul 17, 2010 at 07:22:01 AM EST
    I believe the sentence was meant to deter everyone, not just the very rich, from seeking to avoid paying income taxes.

    It seems that every so often, someone comes along with credible evidence that the whole internal revenue act is unconstitutional.

    People seeking not to contribute to illegal and immoral wars, such as the one in Vietnam, tried all sorts of gambits.

    So I think Snipes is being used as a general example.

    I do ask myself, "WTF was he thinking?"

    Did he really think he could get away with it - and if so - why?

    I don't know if his "foreign diplomat" ploy was actually presented in court - but it is the stuff of a Peter Sellers comedy.

    Credible evidence? (5.00 / 1) (#9)
    by andgarden on Sat Jul 17, 2010 at 08:29:20 AM EST

    Yes, deterrence (none / 0) (#11)
    by ding7777 on Sat Jul 17, 2010 at 03:54:56 PM EST
    to any/all who use the American Rights Litigators ("ARL"), to stop paying taxes.

    The founder and leader of "ARL," (none / 0) (#14)
    by Peter G on Sat Jul 17, 2010 at 04:32:17 PM EST
    Eddie Ray Kahn, was convicted as a co-defendant at the Snipes trial of much more serious charges, and sentenced to ten years' imprisonment, which he did not appeal.  The government then prosecuted him again, in another similar case, in federal court in D.C., where he was recently convicted of even more fraud charges against the IRS.  Kahn has not yet been sentenced in that second case.  You would think that that story might be the key deterrent.

    One Wesley Snipes (none / 0) (#15)
    by ding7777 on Sat Jul 17, 2010 at 06:11:51 PM EST
    is worth more than 1000 Eddie Ray Kahns media wise - a much better deterrent

    Are these human beings... (5.00 / 1) (#18)
    by kdog on Sun Jul 18, 2010 at 10:25:08 AM EST
    we're talking about, or chess pieces?

    Just checkin'.


    how could the jury find him (none / 0) (#12)
    by ding7777 on Sat Jul 17, 2010 at 03:57:44 PM EST
    guilty for tax years 1999, 2000, 2001 but not guilty
    for 2002, 2003, 2004?

    At least two reasonable theories (none / 0) (#13)
    by Peter G on Sat Jul 17, 2010 at 04:19:33 PM EST
    for a not guilty on the later 3 years:  First, there was evidence from which the jury could have decided that even if Mr. Snipes resided in Florida prior to 2002, he had moved to the New York area during that year, so the required proof of venue in the Florida federal district failed.  Second, there was evidence that an IRS agent, who attempted an interview with Mr. Snipes in May 2002, advised him at that time that he was under criminal investigation, had the right to remain silent, and that anything he said or wrote to the IRS could be used as evidence against him.  Trial counsel argued, and the jury may have agreed, that from this official advice Mr. Snipes concluded that he had a Fifth Amendment right not to file tax returns.  While that conclusion would be incorrect, a good faith misunderstanding of one's Fifth Amendment rights is a defense to the element of "willfulness" that is necessary to convict for a tax crime.  So that mistaken belief would provide a basis for acquittal on those particular counts as well.  In the end, though, a jury in a criminal case simply returns a general verdict, which it does not have to explain.  If there is a logical basis for any convictions the jury returns, based on record evidence that could be credited beyond a reasonable doubt, those verdicts will stand.  Acquittals, on the other hand, do not even have to be rational.  Under the Double Jeopardy Clause of the Constitution, acquittals are final and binding regardless.

    thanks for the info (none / 0) (#16)
    by ding7777 on Sat Jul 17, 2010 at 06:14:14 PM EST
    of course, (none / 0) (#17)
    by cpinva on Sun Jul 18, 2010 at 05:46:57 AM EST
    had mr. snipes consulted competent legal counsel, subsequent to his interview, by the IRS agent, said compentent counsel would surely have informed him, as he was bound to by professional ethics, that the fifth amendment is no bar to filing your tax returns.

    the "deterrence" effect sought by the government is two-fold:

    1. even rich and famous people are required to file returns/pay their tax liabilities., and

    2. already litigated, stupid tax evasion scams will cost you.

    of course, as we see over and over, the deterrence effect seems to be limited in duration.

    That's allright if "deterrence",,, (2.00 / 0) (#19)
    by kdog on Sun Jul 18, 2010 at 10:29:35 AM EST
    doesn't work, these sentences for vig evasion keep prison guards employed.

    Don't wanna deter too much "crime" ya know...might have to cut taxes.  The criminal threat & receivables must be maintained.


    You seem to have a great understanding of (none / 0) (#20)
    by Untold Story on Sun Jul 18, 2010 at 06:37:27 PM EST
    law - so, perhaps a little off-topic, but it still concerns the IRS -

    For instance in a civil case if a prospective witness is given depositions to read - and comes across what appears as outright tax evasions, i.e., questioning attorney: you were compensated $300K but felt you did not have to report that on your taxes? Well, no I didn't because (answers as silly as Snipes but with perhaps more thought as to make it sound reasonable!)

    And there more similar payments not reported to the IRS throughout the different depositions by several different parties.  The civil suit has nothing to do with the IRS.

    So, my question is, can this prospective witness, horrified at what seems to be outright tax evasion, send copies of the pertinent tax evasion material in the depositions to the IRS?  Or, would it be illegal to do so?


    Why not ask the lawyer ... (none / 0) (#21)
    by Peter G on Sun Jul 18, 2010 at 08:51:22 PM EST
    ... who gave you (I assume it's you) those depositions to read whether they are "under seal," or shared with you under some umbrella of a professional relationship that creates an ethical obligation to keep them confidential, or otherwise restricted from copying and sharing.  If not, you not only could share them with the local IRS office, you might even be eligible for a cash reward for doing so.  I'm not commenting on whether you would or should want to do this to someone else.

    Thanks (none / 0) (#23)
    by Untold Story on Mon Jul 19, 2010 at 08:16:26 AM EST
    Lawyer has referred a couple of times in amazement about the non-payment of taxes - but it may be a pattern of behavior that he intends to use at trial.  

    Good point - I will ask him, and it may well be he intends to do something himself about this down the road - if he can ethically. I wonder about the court itself wouldn't it need to advise the IRS?

    No, for this crew, wouldn't mind them spending some time for their crimes of greed!  In my mind the man who steals a loaf of bread because his family is hungry gets sent to jail, but white collar professionals always seem to get away with instituting ways to avert paying taxes.  Set up phony entities to pay for their Maseratis, Benzes, and equipment (understand the equipment part, but not the cars), all of which is depreciated and not taxable income.  Blows my mind!

    The kid on the street gets locked up for a little bit of pot - but these 'up-standing citizens' get community awards - all the time they are socking away millions w/o paying taxes.

    Appreciate your answer.


    Took your advice (none / 0) (#24)
    by Untold Story on Mon Jul 19, 2010 at 04:54:54 PM EST
    He said that his first obligation is to his client and to get him the money owed - then the IRS can come in and take what's left.  Also, there is a statute of limitations that will give them protection, ten years, in some of the monies not reported.  Thank you.

    some questions (none / 0) (#22)
    by Palli on Mon Jul 19, 2010 at 07:09:09 AM EST
    So the appeal was not on personal moral grounds but Snipes says (thinks) he doesn't pay his fair share of financial responsibility for the general welfare of this country...because God is taking care of it?

    Is the $220,000 his tax burden after the DOD portion is removed?

    Where are the LA homeless shelters he built with his tax "personalized" deductions?  ...or the thousands of jobs he created in the private sector?