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Friday, January 11, 2008

The 861 Tax Argument Brought to you by Wesley Snipes

If all goes well in the US Governments plan this is pretty much the next picture you'll see Starring Wesley Snipes in. According to the IRS Mr. Snipes owes Income Taxes on $38 Million in income generated between 1999 and 2004. First, who knew being "Blade" paid that much, and two how do you have $38 MILLION in income and think that you can not pay taxes. That wasn't far enough for Mr. Snipes, actually he went a step farther and said the government owed HIM $14 Million.

Actually there are many arguments that citizens have filed saying that Federal Income Taxes are unconstitutional, or illegal, or not binding due to the way the statuette is written. Mr. Snipes is basing his argument on something called the 861 Argument.

This refers to Internal Revenue Code Section 861 titled "Income from sources withing the United States." This section deals with what income can be called income from within the United States. The tax protesters say that the statute excludes some portion of the income of US citizen and Resident Aliens.

The argument is that since the domestic activities of residents of the United States (Americans and resident aliens) are not shown to be taxable, the domestic income derived from such activities does not become taxable "gross income" according to Wikipedia. The argument goes on that even this small amount is still eligible for your deductions. This is how he believes that the Government owes him $14 Million as that is what was already withheld.

Wesley believes in this so strongly even after the IRS told that wasn't going to hold water, he continued to withhold payment for two more years. The potential fine? Up to 16 years in prison. Under that same Wikipedia article it goes on to tell of 10+ more of these type protests like 861 that is out there.

Just a quick moment of clarity...say he is right. not just right, but the sort of right where the US government goes, "Oops, he is right! We never even thought of that. We are going to have to refund 100% of all monies collected from US citizens since 1861." "Gosh we're sorry!" It would be mayhem and the government would default. So if the government couldn't let it happen, even if you were right (which courts have said over and over that you are not) what is the best possible outcome? That you won't get audited? To recap, he not only didn't pay, He asked for $14 Million back!

You may be able to fight vampires Mr Snipes, but you'll never kill the biggest bloodsucker of them all, the IRS...


Larken said...

While you are quite right that the government cannot afford to "let" Mr. Snipes, or anyone else, not pay their extortion fee, it isn't only up to them. They must convince a jury to lock up Mr. Snipes. In my own case, they had to cheat their butts off to do that, but they did it. By making sure the jury wasn't allowed to see my web site, my written report, and my video, all explaining in detail why the 861 Evidence is absolutely correct (see www.861.info), the prosecution and judge made sure I wasn't able to defend myself, and so I was convicted.

That proves you can't fight city hall, right? Well, no. When Tom Cryer, a Louisiana attorney, stopped filing tax returns based on two legal issues, one being the 861 Evidence, he was acquitted. When Joseph Banister, former IRS "Special Agent," was charged with supposed tax crimes related to the 861 evidence, he was acquitted. Of course, the government didn't have much to say about those, and neither did the lazy mainstream media. But if Mr. Snipes is also acquitted--well, let's just say it will be a little tough to keep THAT quiet.

Your article repeatedly says things like, "even if Mr. Snipes is correct..." I would suggest that it's more important for Americans to FIND OUT if he is correct, than it is to wonder about whether the federal leviathan will successfully destroy another famous person. After all, the powers that be did a pretty good job of hurting Galileo, but he was still right.


Larken Rose

RacerX said...


First Thanks for Commenting!

I am not a lawyer at all, just a concerned citizen, but my understanding is that most of these cases are lost due to three things:

1. In a jury case you cannot have the jury decide the validity of the law, just the guilt or innocence. Validity of a law has to be argued sidebar between the lawyers and the judge, who can then rule and dismiss. In other words a jury can't let someone off because they don't agree with the law.

2. Cases are usually after the fact that someone hasn't paid the tax. Not that they paid and then sued in protest. I don't believe anyone has successfully sued the Government back for their payments.

3. Publicity - Mr Snipes is really high profile and the case has gone on for years. I don't want to say "you can't fight city hall," but it really raises the stakes with a famous case. the government will through everything at the wall to make sure it sticks.

Add in what's possible to lose and most wouldn't fight it.

Even Galileo recounted when the church threatened him...it was a matter of survival!

Thanks again!

CatherineL said...

That is a lot of cash to owe tax on. in the UK he would have to pay 40% on that. What percentage do you have to pay over there?

Your USA tax people really suck. I am in the process of selling two timeshares and they are deducting 10% from me on the total sale price when I actually made a loss on them - something called FIRPTA tax.

I don't know how I go about claiming it back, but I'm certainly going to try my best.

Mrs. Micah said...

Catherine, I think he'd be in the 38% tax bracket. It's complicated, but he would be paying 38% taxes on most of his income. Not the first bits, though.

Mr. Larken, I hope you don't plan to use the roads anytime soon. After all, government bloodsucker money pays for them and their upkeep. It would really be a moral failing on your part to protest taxes and then use them.

RacerX said...

@CathL - Mrs M is right about that being the highest bracket, but the interesting thing is that you really get a much smaller portion of that as an actor.

Say you recieved $1M to be in the new James Bond movie. 10-15% would go to your agent, 5-10% to your publicist, and 40%+ plus to Fed and local taxes. So that cool $1M becomes $400k pretty easy or less. Not that I wouldn't take it :)and not to mention union dues as well.

Same thing with athletes too...lots of hands out.

Not defending not paying taxes, but you could see if 60-70% of every dollars you bring in goes away, and you spend like it doesn't, why some people fall victims to tax schemes.

@Mrs M - I agree about your point. The government would fall apart without the taxes on Income. Although I do wish that there was a lot less waste and more of the money went to what it was really for!

Thanks for commenting and reading!

Catherine Lawson said...

Fair enough - they don't make as much as people think. But that's the same with businesses too - you don't make your gross sales, you have to take off your taxes and expenses first.

And most small businesses make nowhere near the sums that famous actors make.

I don't see why he should get away with not paying it - when others are all paying their fair share.

RacerX said...

Not defending him at all. Just understand how frustrating it can be to earn x and have little to show (or in his case less).

That being said, It would be one thing to pay and then fight it. Even if you thought he was pulling a Don Quixote, at least you would respect that.

This is really just about not wanting to pay your fair share, even if you believe the fair share, well, isn't too fair.

Early day for you? :)

Thanks for commenting!

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