Crackdown Hits Tax Protesters, Celebrities Included
It's been a tough couple of years for tax-dodgers in Florida, where the IRS has recently indicted more than 20 individuals in some of the most high-profile cases in the history of the radical tax-protest movement.
Capping a four-year criminal investigation, a Pensacola federal court in January sentenced the globe-trotting evangelist minister, creationist activist and businessman Kent Hovind to 10 years on 58 counts of tax fraud, including failure to pay $845,000 in employee-related taxes and threatening investigators. Hovind's wife Jo was convicted on the same charges, which along with tax evasion included 44 counts of evading bank-reporting requirements.
Kent "Dr. Dino" Hovind is a veteran anti-evolution activist whose speeches are estimated to have brought him $50,000 a year, mostly in cash. This income paled, however, next to the revenue produced by his other two cash cows: a bizarre creationist theme park called Dinosaur Adventure Land and Creation Science Ministries, which sells books and other merchandise. Together, the theme park and ministry grossed more than $2 million dollars a year.
Because they considered themselves "workers of God," the Hovinds did not believe they were subject to taxation. To avoid paying payroll and FICA taxes at their theme park, the couple paid their employees in cash and labeled them "missionaries." This did not stop the Hovinds from treating them like employees, however, including docking their pay for being late.
The duo "hadn't filed tax returns ever, to my knowledge," testified IRS Agent Scott Schneider, the former Army interrogator who led the investigation. "He tried to stress to me that he was like the pope and [his business] was like the Vatican," a member of the Christian Law Association said of Kent Hovind, who explained to the lawyer with "a great deal of bravado" how he had "beat the tax system." On his Internet radio program, Hovind had previously declared that he was not a citizen of the United States and therefore was not subject to taxation.
The Hovinds weren't the only Florida-based tax evaders to draw national attention last winter. In the town of Mount Dora, two hours northeast of Tampa, Eddie Kahn, a veteran tax-protest leader and strategist who operated Guiding Light of God Ministries, was indicted for conspiracy to defraud the IRS and presenting false claims for payment. Also indicted were a colleague of Khan's and the film actor Wesley Snipes, who federal investigators say Khan tutored in the art of tax evasion. Snipes is accused of bilking the IRS for as much as $12 million; he filed no returns between 1999 and 2004.
On the day the indictments were announced, almost two years after federal agents first raided the Guiding Light office, Kahn and his wife Kathleen "Kookie" Kahn packed their bags and disappeared to Panama. He was later expelled by the Panamanian government and flown to Miami, where he was arrested last Nov. 1. He was scheduled to go to trial this spring.
Snipes, a star of films including the "Blade" trilogy and "Demolition Man," was already out of the country when the warrant for his arrest was announced. The 44-year-old veteran actor was filming in the African country of Namibia, which has no extradition treaty with Washington. In December, Snipes voluntarily surrendered to authorities in Orlando after returning to the country on a private jet. If convicted on all charges, he faces up to 16 years in prison.
Along with Kahn, Snipes allegedly learned the art of tax evasion from Arthur Farnsworth, a Pennsylvania-based anti-tax guru. Farnsworth was convicted last December of failing to pay an estimated $80,000 in federal taxes on $220,000 in income from 1998 to 2000. It was a 2002 raid on Farnsworth's home that uncovered documents leading to a wider investigation that netted more than a dozen arrests, including that of Snipes.