Defiant Tax Protester Gets Seven Year Sentence

Convicted in January on 29 counts of violating U.S. income tax laws, Bedford businessman Richard Simkanin remained defiant in his anti-government stance at his sentencing Friday.

Simkanin, 59, told U.S. District Judge John McBryde that after spending thousands of hours studying federal tax laws, the Constitution and the Declaration of Independence, he concluded that he did not agree with the tax laws.

But McBryde had heard enough. Going beyond federal sentencing guidelines, McBryde sentenced Simkanin to seven years in prison and ordered him to pay $302,000 in restitution to the government.

In explaining the tough sentence, McBryde cited Simkanin's history of radical anti-government beliefs and his "contempt and disrespect" for the federal government and the federal courts.

"He and those who share his views have a cultlike belief that laws that are generally accepted by citizens of the United States are not applicable to them," McBryde said. "The defendant has entrenched himself in anti-government groups."

McBryde said Simkanin would continue to violate income tax laws. The judge recalled that Simkanin threatened to kill federal judges and that he surrendered his Texas driver's license but continued to drive with a home-made ID card.

On Jan. 7, a federal jury convicted Simkanin on 10 felony counts of failing to withhold about $139,000 in taxes from employees' wages at his company, Arrow Custom Plastics, and 15 felony counts of filing false tax refund claims for about $235,000.

He was also found guilty of four misdemeanor counts for failing to file individual income tax returns from 1998 to 2001. Simkanin had an estimated gross income of about $410,000 during these years, prosecutors said.

Arch McColl, the Dallas lawyer representing Simkanin, said he would appeal. McColl had asked for a sentence of 41 months at the low end of the federal guidelines. He described Simkanin as a non-conformist American in the tradition of Henry David Thoreau.

"He has a sincere, well thought-out position that is at odds with the government position," McColl said. "Reasonable people disagree about the tax laws. My client is an American citizen who, like Thoreau, walked to the beat of a different drummer."

But prosecutors pointed to Simkanin's long history of law-breaking, saying the last time he filed complete individual and corporate federal income tax returns dates back to the mid-1990s.

"We're going to have chaos in this country if individual citizens are allowed to decide unilaterally which laws are constitutional and which aren't," Assistant U.S. Attorney David Jarvis said. "The sentence for Mr. Simkanin was quite severe and appropriate."

Jarvis noted that Simkanin's defiance of the federal courts continued even after his conviction in January.

In a court judgment entered March 11, Simkanin and Arrow Custom Plastics' new owner, James Keffer, to whom he sold the business Feb. 17, agreed to file employment tax returns for the years 2000 through 2003 within 30 days. The judgment was issued by McBryde in a civil action filed by tax attorneys for the Justice Department in December to force Simkanin to comply with tax laws.

But the requested tax documents were not filed by the deadline, government lawyers said in a motion on April 21, asking McBryde to hold Simkanin and Keffer in contempt.

Simkanin rose to fame in tax protester circles -- and gained the attention of the IRS -- in March 2001 when he appeared in a full-page ad in USA Today with a group of like-minded citizens who announced their opposition to the federal income taxes. Later that year, prosecutors sent Simkanin a target letter notifying him that he was under investigation.

The group behind the ad, We the People, soon portrayed Simkanin as a martyr for the cause of freedom from IRS tyranny.

While under investigation, Simkanin posted a warning on his Web site that spoke of the "fury of a fire" that would consume his adversaries. He wrote to the Treasury secretary that he had repatriated himself from the United States to the "Republic of Texas." He vowed to ignore the laws of the United States.

While tax protesters from the We the People group crowded McBryde's courtroom during the trial, hardly a handful of supporters showed up for his sentencing.

Wearing an orange jail jumpsuit and a blue jacket, Simkanin invoked Scripture, James 5:4. In his view, the passage means that a laborer's wages are withheld through fraud.

His face showed an expression of defiance and sadness. He expressed no remorse for his actions but regretted the effect of his prison sentence on his severely ill wife, Carole.

"I do apologize to my wife for what she will go through in my absence," Simkanin said.

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"The reason experts are hired is simple cost vs. benefits."

Ya know I've been in business now for over 25 years, I have yet run into a situation where I needed a professional buyer.

If I somehow screw up when I buy my product to sell the worst that can happen is I lose money.

If I screw up when I do my taxes I can end up in jail and have all my assets seized and sold without my permission.

You can dance around the subject and try and spin the Tax system and the need to hire a guy to tell you how much you owe the government all you want but you sound silly at best!

The tax system in it's present state is beyond any sense of reason when in comes to the complicated procedure one must go through to see how much one really does owe.

If I ran a grocery store in the same fashion I dare say my customers would never come back.

Heheh I can see it now:

Customer: How much for a loaf of bread?

Me: Well first you must file form 1040A and figure your annual income less deductions and don't forget the depreciation on your house also what is your marital status how many children do you have living at home and do you have additional income from rental property or spousal support...

Customer: will 5 dollars do it?

Me: Of course! But, if you have figured what you owe for the Bread wrong, we can come back in a few years a make you pay penalties and interest, we can also seize all your banking accounts and any property you own.

Customer:I won't stand for it!

Me: Actually you will or go to jail! See, we at the I.R.S. grocery store have unlimited power in going after folks who don't pay the proper amount for a loaf of bread. Also we get to carry guns!

Heheh Yea that is the way to go about it...

Ya know I've been in business now for over 25 years, I have yet run into a situation where I needed a professional buyer.

You ignored the cost benefit ratio. I guarantee that major food chains have experts that purchase bread. The cost benefit is there. When you buy or sell a home you normally have an expert realtor.

whenever a purchase becomes significant, the use of experts becomes a cost that can save you more money than what you are spending.

If the NRST became a reality a whole industry would be born to assist folks in both planning to avoid transactions (lets assume you get transferred every few years, paying sales tax on each home will get expensive...you will likely find creative purchases being used) or at least plan on reducing the consideration (maybe your employer purchases the homes and provides them rent free instead of paying you a salary).

Don't underestimate the ability of people to create transactions that avoid tax. The folks who think out these things have amazingly creative minds. Just because one changes the playing field doesn't mean the game won't continue.

If investment is not taxable then I will create a personal corporation in which I own my property. When it comes time to sell anything like my home,

LOL, as if wrongful conversions were not illegal today under current sales taxes.

One little thing you overlook, any business that can take advantage of a taxfree purchase, is also licenced & audited to for such shenannigans by the state tax authority.

Second factor there are less than 10% fewer taxable entities under a Retail Sales tax to monitior.

Good luck. Jail terms go with discovery of fraudulent conversions.

Why not just invest in real estate to beginwith, earn enough to pay the tax, and avoid the risk and attendant problems of remaining undetected. Lest risk more gain.

If there is a transfer tax on assets

There isn't a transfer tax on assets, investments are not tax ever. The rule is tax once but only once and only on retail new goods and services for final consumption.

Anything owned as non-business property prior to implementation of the NRST is grandfathered. No NRST on resale, no transfer tax on assets.

You really ought to read the legislation instead of trying to out-guess what it might contain.

read ==> H.R.25, S.1493
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.
Refer also: http://www.fairtax.org & http://www.salestax.org

In addition, swapping and trading will become the main methods of sales. I will purchase my drugs from the pharmisict in exchange for my services. We will charge either $1. instead of the market rate.

Go ahead, but then that is all to the advantage of having a retail tax on consumption:

Federalist #21:

"It is a signal advantage of taxes on articles of consumption
that they contain in their own nature a security against excess.
They prescribe their own limit, which cannot be exceeded without
defeating the end proposed - that is, an extension of the revenue.

OTOH state sales tax people have lots of experience dealing with that sort of scam.

Of course the fun thing will be to find a licensed pharmacist willing to go along with you considering he, as the seller, is the one putting his business and license at risk in not collecting the tax from you (being paid to do so by the way) and remitting the appropriate taxes to the state tax collectors while maintaining receipts and records of all sales.

"You ignored the cost benefit ratio."

No you ignored the simplicity rule!

There is no logical need whatsoever for our tax system to be as complicated as it is.

It is set up to keep lawyers and accounts sucking from the teat and that is all.

We are not talking about rocket science or brain surgery, we are talking about paying a bill. But some see fit to make it complicated so as to profit from it.

The only reason there is a cost benefit ratio in the first place is because congress at the urging of lobbyists set up a jumble of rules and loopholes in the tax code. It is an artificial construct created to benefit those who if they make enough money can skimp around and pay less tax.

Remove the complicated rules and loopholes and everyone could pay less tax and eliminate unneeded services like tax lawyers and such.

I guarantee that major food chains have experts that purchase bread. The cost benefit is there.

And they still will, only they won't be focused on tax ramifications anymore as business to business sales are not taxed under the NRST, nor are there business income or payroll taxes to be concerned with. The experts will be looking for the lowest cost for highest quality of goods instead tax avoidence. No tax, nothing to avoid, one can concentrate on business and productivity instead.

When you buy or sell a home you normally have an expert realtor.

That certainaly won't change, but taxes won't be the reason there. No tax on loan interest under the NRST, (mean lower cost to buy overall). Only concern will be whether to by an older house (no NRST), or a new built house(without NRST collected). Means the expert realtor can concentrate on legal issues and protecting his clients from all the other snafus associated with real estate.

If the NRST became a reality a whole industry would be born to assist folks in both planning to avoid transactions

Yep, they are called financial planners, and will be providing advice on the best investments in which to place your money. Investments after all are not taxable under the NRST. Avoid the NRST by investing simple straight forword, no legal entanglements and profitable as well.

(lets assume you get transferred every few years, paying sales tax on each home will get expensive...

Only if you insist on buying new houses all the time. Secondly, a resale does not require you to collect or remit the NRST. getting transferred need not incur any such sales tax at all.

Even then one must remember that in buying a new house the cost of such actually is lower as the products that go into building the house are not taxed for the contractor, nor is any income or payroll tax levied on the contractor or his suppliers. All told the costs of building go down, consequently the price for a new house can go down nearly as much as the tax imposed.

Buy the way you are aware, are you not, the land the new house would be built on is not subject to the NRST? Residential land itself is grandfathered by the legislation. Thus on a new building will have the NRST collected from the retail consumer.

Don't underestimate the ability of people to create transactions that avoid tax.

Great, plenty of opportunity in small business there, resale of items like antiques, used cars, thrift shops ... all NRST free requiring no collection or remittence of the NRST, and no income or payroll taxes to worry over besides. The best of both worlds.

Just because one changes the playing field doesn't mean the game won't continue.

Won't it be nice to be able to do so without all the hassles and risks involved under the current tax system where just earning income places you at risk of Congress' minions in the IRS.

NRST provides unbounded opportunity for the legal creation of income & wealth without taxing it away. Go for it.

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