T. Milton Street Guilty of Not Filing Tax Returns – Same Verdict as Wesley Snipes

The similarities are amazing. T. Milton Street was charged with mail and wire fraud along with failure to file tax returns. Just like in the Snipes trial – all the government got was a conviction for failure to file tax returns. The jury acquitted Street of mail- and wire-fraud offenses in an alleged scheme to sell an airport-maintenance contract they did not control.

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“No corruption, no fraud. No corruption, no fraud,” Street, 68, said outside the federal courthouse in Center City after the verdict. “Failure to file – that’s what we were found guilty of. But as long as there’s no corruption, no fraud, and no wrongdoing with this whole issue, then I’m happy.”

While innocent of the more serious charges, Street admitted on the stand that he did not file tax returns for 2002, 2003 and 2004, claiming the federal income tax was unconstitutional. The jury did not accept that argument, which the Supreme Court has ruled is no defense no matter how sincere the belief.

According the the White Collar Crime Prof Blog: “this case has similarities with the prosecution against Wesley Snipes in that both were charged and acquitted of substantive charges beyond the failure to file taxes. In both cases, the individuals accused of crimes was only found guilty of misdemeanor tax offenses for some of the years in question. And in both cases the jury did not immediately reach a verdict.”

Now the question for both Wesley Snipes and T. Milton Street is will the government impose jail time for the crime they are convicted of? As a white collar crime speaker, I think they will. This, however, is speculation on my part. It just makes sense that two popular cases where folks who have garnered some attention and been convicted will not escape some jail time. IF they do – what message will be sent to the public at large?

Remember, we operate on a system of voluntary compliance. If that system has no teeth – then people won’t be motivated to comply.

Your comments are welcome!

Business ethics speaker, Chuck Gallagher, signing off…more to come!

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3 Responses to T. Milton Street Guilty of Not Filing Tax Returns – Same Verdict as Wesley Snipes

  1. C. Dan White says:

    The Federal Government is an enumerated authority; that authority emanates from the collective People. Moreover, we are a nation of written law: If it is law, then it is to be found in our books. If it is not found in our books, then it is not law. Nowhere in Title 26, Subtitle A, has Congress imposed a tax directly upon income; nor can Congress constitutionally impose a tax directly upon income without rule of apportionment. (See Pollock v. Farmers, 158 U.S. 601 (1895). The so-called “federal income tax” is a tax upon revenue-taxable activity only; it is not a tax directly upon income. If you do not have a federal revenue-taxable activity, then you are not under a duty to file a report of income (Form 1040). According to Congress: The income tax is, therefore, not a tax on income as such. It is an excise tax with respect to certain activities and privileges which is measured by reference to the income which they produce. The income is not the subject of the tax: it is the basis for determining the amount of tax. (See House Congressional Record, March 27, 1943, page 2580)

  2. Wow…let me get this. You say “you are not under a duty to file a report of income (form 1040)! Dude…both Street and Snipes were convicted – LET ME REPEAT – CONVICTED for not filing. But, let me encourage you to put you thoughts into principle – do you have the guts not to file? Doubt it!

  3. C. Dan White says:

    A “duty of law” to file a report of income (1040 Form) must rest on the fact that you engaged in a federal revenue-taxable activity that produces sufficient income to trigger a “duty of law” to file. Absent a federal revenue-taxable activity that produces income equal to or greater than the minimum required by the statute taxing the activity, there is no duty to file a report of income. Until it is known by the jury which activity or privilege the alleged statute imposed a tax upon, a jury cannot be expected to properly determine whether a duty to file a report of income exists or not. Of course if there is no attempt to identify what statute imposed the tax and what the statute imposed the tax upon, the jury is led to decide a fact based on a presumption of law. And as to your doubts about my guts: (smile)

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