September 25, 2018

Joseph Stack Was Not the First Violent Tax Protester…and He Won’t Be the Last

While the apparent kamikaze raid on the Austin IRS offices yesterday may be the first air assault on an IRS office, it’s not the first time somebody on the wrong end of the tax law attempted an entirely stupid and futile gesture of violent tax resistance.

Take Minnesota computer entrepreneur Robert Beale. Rather than showing up for his tax trial, he hit the road and spent 14 months on the run. When in jail awaiting his rescheduled trial, he arranged a “common law court” of associates to “arrest” his judge. He unwisely made these arrangements through a wired prison phone, and got an extra 11 years in prison for his trouble. He had a solution for that, too, telling his sentencing judge: “’I do not consent to incarceration, fine or supervised release,’ he said. ‘I have not committed a crime.’” Amazingly, convict consent is not required in the Federal prison system, and Mr. Beale is currently residing in Yazoo City, Mississippi.


A Florida contractor, Randy Nowak, chose a different path. In 2008, he was concerned that an IRS agent was closing in on offshore bank accounts. As the IRS offshore amnesty wasn’t yet up and running, he attempted to hire out the murder of the IRS agent. For good measure, he wanted to burn down the local IRS office. He met with a mean looking 6-4 biker nicknamed “The Reaper” to arrange the work. Plans went awry when “The Reaper” turned out to be an undercover FBI agent wearing a wire. Mr. Nowak had an explanation:

Nowak’s attorney argued that his client was actually afraid of the biker and that a friend had gotten him unwittingly involved in the plot. His lawyer pointed to a number of phone calls between Nowak and his friend, who secretly alerted the authorities to the plot. The attorney claimed that Nowak had been trying to persuade his friend to call off the hit, but the friend warned him against angering the gang.

The jury didn’t buy it, and Mr. Nowak received a 30 year sentence. Still, he is only in his early 50s, so he has more to look forward to than 67 year-old Ed Brown. When Mr. Brown’s trial on tax charges seemed to be going badly, he retreated to a fortress-like New Hampshire homestead filled with food and ammo and surrounded by booby traps. He held out for months until he was captured by U.S. Marshals posing as sympathizers. He will begin his 37-year sentence on federal weapons charges when he completes his 63-month tax sentence. He is scheduled for release in 2044, when he will be about 111 years old.

The Austin Kamikaze’s plans did sort of resolve his tax problems, but at a price beyond what most people with tax problems are ready to pay.

While the apparent kamikaze raid on the Austin IRS offices yesterday may be the first air assault on an IRS office, it’s not the first time somebody on the wrong end of the tax law attempted an entirely stupid and futile gesture of violent tax resistance.

Take Minnesota computer entrepreneur Robert Beale. Rather than showing up for his tax trial, he hit the road and spent 14 months on the run. When in jail awaiting his rescheduled trial, he arranged a “common law court” of associates to “arrest” his judge. He unwisely made these arrangements through a wired prison phone, and got an extra 11 years in prison for his trouble. He had a solution for that, too, telling his sentencing judge: “’I do not consent to incarceration, fine or supervised release,’ he said. ‘I have not committed a crime.’” Amazingly, convict consent is not required in the Federal prison system, and Mr. Beale is currently residing in Yazoo City, Mississippi.


A Florida contractor, Randy Nowak, chose a different path. In 2008, he was concerned that an IRS agent was closing in on offshore bank accounts. As the IRS offshore amnesty wasn’t yet up and running, he attempted to hire out the murder of the IRS agent. For good measure, he wanted to burn down the local IRS office. He met with a mean looking 6-4 biker nicknamed “The Reaper” to arrange the work. Plans went awry when “The Reaper” turned out to be an undercover FBI agent wearing a wire. Mr. Nowak had an explanation:

Nowak’s attorney argued that his client was actually afraid of the biker and that a friend had gotten him unwittingly involved in the plot. His lawyer pointed to a number of phone calls between Nowak and his friend, who secretly alerted the authorities to the plot. The attorney claimed that Nowak had been trying to persuade his friend to call off the hit, but the friend warned him against angering the gang.

The jury didn’t buy it, and Mr. Nowak received a 30 year sentence. Still, he is only in his early 50s, so he has more to look forward to than 67 year-old Ed Brown. When Mr. Brown’s trial on tax charges seemed to be going badly, he retreated to a fortress-like New Hampshire homestead filled with food and ammo and surrounded by booby traps. He held out for months until he was captured by U.S. Marshals posing as sympathizers. He will begin his 37-year sentence on federal weapons charges when he completes his 63-month tax sentence. He is scheduled for release in 2044, when he will be about 111 years old.

The Austin Kamikaze’s plans did sort of resolve his tax problems, but at a price beyond what most people with tax problems are ready to pay.

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UBS Closer to Getting the McCarthy Treatment

IRS_logo-thumb-150x140.jpgIf you’ve got a Swiss bank account, here’s hoping you opened it because it was convenient for your monthly skiing/Toblerone getaway.
The U.S. and Swiss governments have agreed to share more tax information in order to crack down on all the tax dodgers out there that send their money offshore. The timing of this agreement is is especially diabolical because the IRS is currently trying to get Swiss bank behemoth UBS to name names of over 50,000 American clients.
Hearings in Miami are scheduled for next month to see if the names can be released, however, the Swiss have stated that this may violate Swiss law of double-secret-no-tattling-on-clients.
Ultimately, the Swiss Federal Council and Parliament will decide if the new agreement is kosh but judging by the Obama Administration’s hard-on for closing tax loopholes, they’ll probably play ball.

U.S. and Switzerland to Share More Tax Data
[DealBook/NYT]

BBC: Grant Thornton is Scheming for the Rich People

Grant-thornton-logo.JPGOkay, so large accounting firms don’t have the best reputations. They also have the tendency to be thick as thieves when they come under scrutiny. And the green eyeshade look has never been one that screams trustworthy.
But now, in what might be a bit of presumptuous awesomeness, the BBC is coming right out and calling Grant Thornton’s Growth Securities Ownership Plan (GSOP) a scheme. Maybe we’re jumping to conclusions but the subtitle doesn’t strike us as being subtle: “A big accountancy firm has denied that it has been peddling a tax avoidance scheme to help rich people avoid paying the new 50% income tax rate from 2010.
Let’s break some of the key words and phrases down:
Peddling: Use of this word basically implies that narcotics are involved
Tax Avoidance Scheme: Implies a conspiracy of smart people to screw the tax authority on behalf of…
Rich People: Not the best time in history to be lumped into this particular demographic
WTG, G to the T. Not only are you trying to screw the taxing authority in Britain by virtue of the equivalent of slinging financial smack, you’ve got the audacity to do it on the behalf of rich people.
Accountants deny ‘new tax dodge’ [BBC]