Wesley Snipes’ battle with the IRS isn’t over just yet.
The Blade actor may have been acquitted of tax fraud and conspiracy on Feb 1, but he is scheduled to be sentenced on April 24 on three counts of failing to file a tax return.
Since he was found not guilty of the most serious charges against him (he was accused of trying to cheat the government of almost $12 million in false refund claims and not filing returns for six years), the 16 years he could have spent in federal prison is knocked down to three. Snipes stands to face up to one year in prison for each year that he did not file a tax return between 1999 and 2001.
Although he may not be looking forward to any prison sentence, Snipes should be happy that the tax evasion charges are no longer being held against him. On April 8, Nathan Hochman, the Department of Justice’s Tax Divisions’ Assistant Attorney General, announced the creation of the National Tax Defier Initiative which will crack down on those deliberately trying to evade the system.
The initiative defines these ‘tax defiers’ as “those who do not meet their federal tax obligations and seek to transfer those obligations to their neighbor’s back… the tax defier is someone who rejects the legal foundation of the tax system, despite decades of legal precedent upholding the system’s constitutional and statutory validity, and who takes specific and concrete action to violate the law.” This is precisely what Snipes had originally been charged with.
As the government cracks down, the experts warn people to watch out. Jane Bergner, a tax attorney on Washington, D.C., says, “Some people think that because they didn’t get audited one time, or because a friend did the same thing and didn’t get audited, then the position that they took is correct. But that is not the attitude to have.”
Now, more than ever, people should remember to file their taxes each year and be sure to have to proper documentation in case the IRS starts to investigate. Tom Ochsenschlager, the vice president of taxation at the American Institute of Certified Public Accountants, says that most people should keep financial records for at least three years. Those who are self employed or have underestimated their income by more than 25% should have records for at least six years. These numbers are based of the statue of limitations for the IRS on how long after a return is filed can they investigate.
This means hanging onto previous tax returns, receipts, bank statements, W-2s, 1099s, records of charitable giving, mortgage statements and other investment records. With this information at your fingertips, any questions the IRS may have can be answered immediately. “If you’re able to prove what you’ve claimed, you will be fine,” says Ochsenschlager.
Note that the IRS does not recognize a depleted bank account as good reason for not filing a tax return. Bergner advises, “File a tax return even if you cannot pay. It is better to deal those consequences than with the penalty of not filing.”
For those who thought they would skip tax season this year, it may be time to reconsider. And remember, the deadline for filing for an extension is midnight April 15th, so if you get moving now, you might just make it to the post office in time.