“During difficult economic times such as these, it is critical that American taxpayers feel confident that everyone is paying their fair share of taxes. Part of our mission is to vigorously enforce the tax laws to instill that confidence,” said Michael P. Lahey, Special Agent in Charge of IRS-Criminal Investigation, Dallas Field Office.
This quote from the US Attorney’s news release about the conviction of James Michael Long speaks volumes. You can bet that “during difficult economic times such as these” people will be tempted to avoid paying income taxes – either outright or through fraudulent deductions or both. If the choice is paying your mortgage and keeping the house or filing or paying your taxes – more than likely the house will come first. This is just the beginning of a title wave of such convictions that will occur for years to come.
But let’s look at this case! According to the news release, James Michael Long was convicted of failure to file tax returns.
During trial, the government presented evidence that during tax years 2001, 2002, 2003 and 2004, Long received income from several sources, including Dallas Auto Auction, ADESA Texas and affiliates, Assister and Associates, Caison Auction Service, Greater Nevada Auto Auction, John Sisk Auctioneering, Ward Brothers Tractor Co., and DFW Auto Auction. His income was $65,447.47 for 2001; $72,714 for 2002; $188,485 for 2003; and $135,177.60 for 2004. His income was well above the minimum amounts required to file an income tax return for each of the respective years.
Long was arrested in May on the charges and was detained pending further proceedings because, as U.S. Magistrate Judge Charles Bleil noted in a written order of detention, the defendant “refused to talk with probation officers about his background, employment, address or any pertinent information. Additionally, he refused to complete a financial affidavit. The defendant was also bizarre in his conduct, seemed irrational, and expressed a lack of recognition of any authority over him.” Long was eventually released on bond in early September.
The jury took 15 minutes to reach a verdict. Long’s sentence is to follow.
If Wesley Snipes can be sentenced to three years for not filing his tax returns, then Long could easily face a significant sentence. And, trust me, I know that time in federal prison is no fun…I was there (not proud of that fact) but know that every choice has a consequence. As a white collar crime and business ethics speaker, I remind audiences of that often.
Let’s hope that Long learns as he has time to reflect on his lost income while in prison. Earning 12 cents per hour for prison work is a radical change from his prior income patterns. But then prison earning are tax exempt.