of the tax evasion coin
Friday, February 24, 2006
Irwin Schiff, a long-time anti-tax crusader who was convicted last year on federal conspiracy, tax evasion and tax fraud charges, is headed to Camp Fed for 13 years.
The judge also sentenced the tax protester to three years probation after his prison release and ordered him to pay more than $4.2 million in restitution.
While federal prosecutors are no doubt pleased, the money Schiff was instructed to hand over is just a drop in the bucket compared to what his schemes cost the U.S. treasury. The IRS says that Schiff and those he convinced not to pay taxes cheated the country out of $56 million.
Over the years, Schiff has argued that the IRS uses an improper definition of income and therefore is not entitled to collect taxes on an individual's earnings. He promoted his anti-tax position in books, lectures and broadcast appearances.
His numerous sheep, uh, supporters argued for many years that the IRS' slowness to prosecute was a de facto admission on the agency's part that Schiff's tax position was correct.
Those arguments are almost as laughable as their contention that there's no law requiring U.S. citizens to file tax returns.
This latest trial was, in fact, the third one for Schiff, who was also convicted for tax violations in 1980 and 1985. He spent a total of four years in jail back then, apparently as practice for his upcoming term.
Plus, in addition to going after Schiff, the IRS also nailed a couple of his co-conspirators, including his former girlfriend. She was sentenced yesterday, which also happened to be Schiff's 78th birthday. It's safe to assume that it probably wasn't the happiest birthday celebration he's ever had.
For his 79th, he'll probably be asking for one of those special cakes with a file inside.
Meanwhile, another well-known septuagenarian has found that working within the tax code can be pretty darn lucrative.
The New York Times reports today that "Boone Pickens, the often controversial and always colorful Texas oilman turned investor, took advantage of a temporary tax break to make a gift that propelled him into the ranks of the nation's top philanthropists last year."
The break was part of hurricane relief legislation and removed some giving limits that are based on a taxpayer's adjusted gross income.
Basically, for donations made between last Aug. 28 and Dec. 31, you (and by you, I mean mostly really rich people like Pickens and his pals) could contribute amounts that exceeded 50 percent of your income.
Even better, although the change was part of legislation related to Hurricane Katrina, the new, larger contributions didn't have to go just to hurricane-related philanthropies.
So Pickens gave $165 million to a golf-related charity at his alma mater, Oklahoma State University.
Then Pickens took the tax break a step further.
As part of the university's investment committee, he got to help direct where the money would go. So, get ready now to feign shock and dismay, the committee put the gift in a hedge fund, BP Capital Management, controlled by Pickens.
According to the newspaper, the transaction appeared to be legal under federal law. One lawyer told the Times, "Sadly, it's another case of a rich man manipulating charity for his own benefit."
TODAY'S TAX TIP: Got a couple spare million to dole out to your favorite charity? Sorry but the tax-break door that Pickens waltzed through closed at midnight Dec. 31.
But check out this story for all the details on taxes and donations. You might be able to come up with some ideas on how to contribute now to reduce your 2006 taxes.
Or you can use the information to review the gifts you gave in 2005 to make sure you get the most out of them on your current return.
Where's the initial? One thing about the Pickens' story really bothers me, though. No, it has nothing to do with his tax machinations.
What in the heck happened to the "T." that used to precede his middle name?
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