U.S. Indicts Actor Snipes
In Tax-Avoidance Case
By ROBERT GUY MATTHEWS
October 18, 2006
WASHINGTON -- Action star Wesley Snipes, who once played a Treasury agent in the film "Boiling Point," was indicted for trying to cheat the government with false tax-refund claims and failing to file personal returns for six years.
The charges stem from a well-known but illegal scheme that asserts that U.S. citizens only have to pay taxes on income earned from foreign sources. The scheme purports that wages and other income earned in the U.S. aren't taxable. The Internal Revenue Service and various courts have ruled that the argument is a misreading of the tax code.
If convicted on all eight counts handed up against him, Mr. Snipes could be sentenced to a maximum of 16 years in prison.
Along with Mr. Snipes, Eddie Ray Kahn, of Sorrento, Fla., and Douglas P. Rosile, of Venice, Fla., were also indicted for allegedly defrauding the IRS and presenting a fraudulent claim. Mr. Kahn is the alleged head of a commercial business that promoted and sold the fraudulent tax scheme to Mr. Snipes. Mr. Rosile was the accountant who prepared Mr. Snipes's tax returns.
According to the indictment, the Justice Department is charging that Messrs. Snipes, Kahn and Rosile attempted to make it appear as if Mr. Snipes had no liability for federal income taxes. As part of the scheme, the defendants allegedly prepared and filed two amended federal income-tax returns for Mr. Snipes, fraudulently claiming refunds for 1996 and 1997 income taxes previously paid, totaling almost $12 million. The indictment also alleges that Mr. Snipes didn't file his 1999 through 2004 federal income-tax returns.
Mr. Snipes is one of the more than 200 mostly high-wealth individuals who were part of Mr. Rosile's and Mr. Kahn's attempts to "help" American taxpayers argue that the tax system itself is a hoax, and that they didn't have to pay taxes on income earned within the U.S. The Justice Department sued Mr. Rosile in 2002 and forced him to turn over a list of most of his clients.
Mr. Rosile's clients would typically pay him $100 for preparing their tax returns, and if there was a refund, 20% would go to Mr. Kahn's group, called American Rights Litigators, or its successor, Guiding Light of God Ministries. The Justice Department alleges that the groups helped defraud government coffers of at least $36 million.
Mr. Snipes couldn't be reached for comment.
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