Never believe everything you read. A Baltimore man read a book written by a couple convicted of tax crimes and decided to try it himself. It earned him 18-months in prison.
Dr. Warren Belcher, a 60-year old Salisbury, Maryland man worked as a chiropractor for 20 years. As befits a professional practice, he was paid for his services by patients, insurance companies and others
Despite his successful business, Dr. Belcher chose to file false income tax returns for seven years, from 2009 through 2015, claiming he earned no income. During the jury trial at which he was convicted, evidence was introduced that showed Dr. Belcher earned more than $350,000 during those years.
During this time, the Internal Revenue Service (IRS) notified Dr. Belcher that he had underreported his income. Because he had filed fraudulent tax returns, the IRS assessed him penalties and additional taxes. In response, Dr. Belcher wrote to the IRS that it was violating the law by pursuing his taxes and assessing him additional fines.
While disputing the legalities of the tax code with the IRS, Dr. Belcher carried out ongoing correspondence with parties that paid him. In letters later produced in court, Dr. Belcher threatened patients and insurance companies with criminal penalties if they reported payments made to him on their own taxes. Dr. Belcher went so far as to create fraudulent 1099-MISC forms from these companies, to counter claims they made to paying him income.
“Frivolous” tax arguments and the IRS
In 2015, Dr. Belcher got word that he was the subject of an IRS criminal tax investigation that was being considered by a federal grand jury. He then filed a false tax return for 2015, and another fraudulent tax return while awaiting trial in 2016.
During this time, Dr. Belcher was also fined $5,000 for filing a “frivolous tax return,” which is the term of art used by the IRS to describe “frivolous tax arguments made by those who oppose compliance with federal tax laws.”
Filing frivolous tax returns is common. Dr. Belcher apparently lifted his reasoning from a book called “Cracking the Code,” by authors who have been convicted of tax crimes. Just some of the frivolous arguments made by those who commit tax fraud or file false income tax returns include:
- Filing income tax returns is voluntary
- Income tax liability can be reduced by filing “zero returns”
- Only foreign-source income must be reported
For his efforts, Dr. Belcher received a surprisingly short sentence of only 18-months in prison, one year of probation, and $63,763.58 in restitution.
Dr. Belcher fought the law, and the law won. If you become aware that your personal or business returns are out of compliance, speak with an experienced criminal tax defense attorney sooner than later.
Skilled legal help with tax controversy and criminal tax matters
From offices in Cleveland and Chicago, the law offices of Robert J. Fedor, Esq., LLC provide knowledgeable legal representation and sophisticated tax solutions to challenges of tax fraud, offshore tax issues, and criminal tax charges. Contact or call us at 800-579-0997 today.