Snipes received the maximum one year sentence for each of his three misdemeanor convictions. Snipes claimed he was misled by his tax advisors and was arrogant enough to file claims for millions in refunds, even though he paid no tax on $35 million of income during the six-year period involved in the case.
On October 12, 2006, Wesley Snipes and Douglas P. Rosile were charged with one count of conspiring to defraud the United States under 18 U.S.C. § 371 and one count of knowingly making or aiding and abetting the making of a false and fraudulent claim for payment against the United States. The conspiracy charge against Snipes included allegations that he filed a false amended return including a false tax refund claim of over US$4 million for the year 1996 and a false amended return including a false tax refund claim of over US$7.3 million for the year 1997.
The indictment said Snipes used accountants who already had a history of filing false returns to obtain refund payments for their clients. The government also charged that Snipes sent three worthless, fictitious “bills of exchange” to the IRS in the amounts of $1,000,000 (on November 30, 2000), $12,000,000 (January 18, 2001), and $1,000,000 (September 10, 2002), with each accompanied by an IRS tax payment voucher coupon.
The Eleventh Circuit Court of Appeals issued a scathing 35 page decision, unanimously upholding his conviction and mocking some of his bizarre assertions. The court noted that Snipes used phony tax protester arguments not only for his personal taxes, but with respect to his movie production companies and stopped paying payroll taxes for his employees.
At various times, Sniped claimed he was a “foreign diplomat” and a “fiduciary of God”, and, therefore, not subject to U.S. taxes. The appeals court held that the failure to file tax returns and pay approximately $17 million in taxes supported the district court’s three-year sentence.
After the Court of Appeals affirmed his conviction, the trial court judge ordered Snipes to jail, stating that “The Defendant Snipes had a fair trial; he has had a full, fair, and thorough review of his conviction and sentence by the Court of Appeals; and he has had a full, fair, and thorough review of his present claims, during all of which he has remained at liberty. The time has come for the judgment to be enforced.”
Snipes is the most famous of a long list of tax protesters who learned the hard way that criminal tax violations inevitably lead to significant prison time, as well as financial ruin.
