Ever since the Wesley Snipes trial it has been interesting to see what turns up from under the woodwork when it comes to tax protesters or “resisters” as T. Milton Street, Sr. calls himself. Frankly, I just call him a “cook!” While I am in no way proud of my background (spent time in federal prison for white collar crime in the mid ’90’s), I do know something about the tax law, as I was formerly a tax partner in a CPA firm. And, Mr. Street, is a died in the wool – dummy – who must have a desire to spend time in federal prison – cause that is exactly where he is headed.
According to the Philadelphia Inquirer, “T. Milton Street Sr. took the witness stand in his own defense this past Thursday, telling a federal jury he paid his taxes until he became convinced the tax code is unconstitutional.” Now the question is: how many times are people going to argue this point and lose, before they figure out it is a one-way ticket to jail. (Keep in mind, while Wesley Snipes did not get convicted of fraud, he was found guilty on not filing and facing sentencing soon).
A portion of the article (the link here) is reprinted:
Street, 68, of Moorestown, testified for almost two hours, mostly being interrogated by Assistant U.S. Attorney Jennifer Arbittier Williams.
Questioned by Williams about why he did not file federal income-tax returns in 2002, 2003 and 2004, Street testified that he relied on his accountant.
He said he gave his accountant power of attorney, left the tax returns for him to figure out, and never bothered reading or signing them.
Then, Street said, he stopped even worrying about the accountant. He launched into a long digression about the U.S. Tax Code, its legislative history, and its interpretation by the Supreme Court. Street’s conclusion was that it was unconstitutional.
“If you find it” – referring to a statutory basis for the tax code – “look it up for me and I’ll plead guilty to all these charges,” an animated Street challenged Williams.
When Williams persisted, Street talked about the tax loophole he said he found, known as the “missing OMB control number.” It’s a defense that has been tried by tax resisters – periodically and unsuccessfully – at least since the 1980s.
Basically, the theory goes that, because some IRS forms and instruction booklets do not carry a control number from the Office of Management Budget as required by the Paperwork Reduction Act, a citizen may ignore the rule that requires filing a federal tax return.
Let’s see, he’s using a 20+ year old argument that has been struck down. People have lost using this, yet, Street uses it. Oh, I know, he should use the “insanity” argument – as he fits the classic definition – continuing to do the same thing and expect a different result.
Now the fed’s have said that Street earned hundreds of thousands of dollars doing nothing more than selling his name and perceived influence with the administration of his brother, the mayor.
Street insisted he did work for the money, but he candidly admitted he had told associates that his brother’s election was a windfall but that “I have a very small window in which to make real money.”
“This is just business,” Street repeated to Williams’ questions.
The indictment against Street alleges that he failed to pay taxes on $2 million in consulting fees and income not derived from his $30,000-a-year food-vending business between 2000 and 2004, and that he failed to even file a tax return in 2002, 2003 and 2004.
In addition to the tax charges, Street and Velardi, 54, of Media, are charged with wire and mail fraud in what prosecutors say was a 2003 scheme to defraud a Vietnamese businessman of $80,000 by selling him the rights to a $3.2 million airport maintenance subcontract that Street and Velardi knew did not exist.
Now, just in case, as you read this, you think that Street has a screw loose – you might be right. Street, however, honed his approach with over 30 years of street theater. Likewise, he had a stint in the state legislature (don’t know what that says about Pennsylvania).
Here’s a bit of a reality check – since Snipes didn’t get convicted of fraud, there are folks who think that not filing and not paying taxes might be worth a roll of the dice. Of course, as mentioned above, we’re waiting on the sentence in the Snipes case. But, what if Street is only convicted of a misdemeanor (like Snipes) – well, the IRS is in for a rash of tax resistors. My bet – Street doesn’t have a chance. Unlike Snipes, who was smart enough not to testify, Street’s ego is too big and testifying in his own defense will be his undoing.
As a business ethics and white collar crime speaker (www.chuckgallagher.com) I will be following this closely. Expect to see a verdict this week. As soon as it is reported, you’ll see it here – so stay tuned.