Not paying taxes saves you money...until it doesn't
Filed under: Make Money Fast, Tax, Fraud
If committing your day to 4,800 words about income taxes isn't your idea of fun, do yourself a favor and sit down with Jason Zengerle's "Hell Nay, We Won't Pay!" from Sunday's New York Times Magazine. Think I'm kidding? Here's the story's lead: "On Monday, April 16, 1990, millions of Americans sent their tax returns to the Internal Revenue Service. Peter Hendrickson sent a bomb."Just in time for Tax Day, the article exhaustively documents America's restive tax-protest movement -- if such a Balkanized, ragtag crew can be called a movement. Every year, when it isn't fielding bombs from its constituents, the I.R.S. receives as many as 100,000 tax returns it considers frivolous, which bureaucrats place in what they call "the funny box." You don't have to be frivolous to be labeled as such, according to Zengerle (who, in full disclosure, is a friend of mine). Any tax rebel who files a so-called "educated return" after learning, erroneously, that income taxes are unconstitutional, or that only income earned outside the U.S. is taxable, usually winds up having to defend his or her actions in court. And not surprisingly, the court always seems to win.
Which doesn't prevent tax-denial from being its own cottage industry. Zengerle cites, among others, an entrepreneur named Irwin Schiff, a onetime insurance broker who's spent decades writing half a dozen books on income taxes and why they can and should be avoided. Schiff's tax philosophy stands as a cautionary tale: He declined to pay taxes for years-until 2005, when he was convicted on multiple charges of tax evasion and sentenced, at age 78, to 13 years in prison. More famously, Wesley Snipes took a pass on Tax Day between 1999 and 2004, and now he's appealing a three-year prison sentence.
That's the thing about the "nontaxpayer" movement: Declining to pay taxes is a lucrative money-saving strategy up until the moment it isn't. And that moment always seems to come sooner or later. "Obviously, getting sentenced to 13 years in prison doesn't really recommend you to anybody," one protester says of the lack of leadership.
Trying to join a movement entirely lacking in inspiring success stories might provide enough deterrent from throwing crates of tea into Boston Harbor on Tax Day. And if that's still not enough, then just consider the humiliation of landing in the funny box.
