Richard Michael Simkanin

Richard Michael Simkanin is a tax protester serving a prison sentence after having been convicted on twenty-nine counts of United States federal tax crimes.

Background

Simkanin owned a company in Bedford, Texas, called Arrow Custom Plastics, Inc. In 1993, an accountant advised Simkanin that a required change in the accounting method for the company would result in greater corporate income tax. Simkanin then began to question the validity of the Federal income tax. On his 1994 and 1995 personal tax returns, he made notations to indicate that the returns were filed under protest, and did not file personal returns for years 1996 through 2001. ["United States v. Simkanin", 420 F.3d 397, 2005-2 U.S. Tax Cas. (CCH) paragr. 50,507 (5th Cir. 2005), "cert. denied", 126 S. Ct. 1911 (2006).]

Simkanin told his accountant he was not required to file returns because he lived off his savings and had no income. The United States Court of Appeals for the Fifth Circuit, in affirming his conviction, stated that this assertion was false, and that Simkanin had received a salary from his company. The Court also stated that Simkanin had received payments from Arrow for his personal expenses, and that those payments were booked as "repair and maintenance." [Id.]

In reviewing the case, the Fifth Circuit Court of Appeals stated:

::In 1996, Simkanin surrendered his Texas driver's license, and when stopped by the police while driving, he showed a card styled "British West Indies International Motor Vehicle Qualification Card," which he had acquired from a mail order business in Connecticut. He also mailed to the U.S. Treasury Secretary a statement that he had expatriated himself from the United States and repatriated to the Republic of Texas. He posted the same statement on Arrow's internet website, where he also vowed to ignore the laws of the United States.

::In 1997, Simkanin removed his name from Arrow's checking and credit card accounts, replacing his name with the name of Arrow's bookkeeper [ . . . ] . Simkanin told [the bookkeeper] that he did not want his name to appear on documents requiring his social security number. Simkanin then listed [the bookkeeper] as Arrow's president on various legal documents, although he retained complete de facto responsibility for the company's affairs and continued to make all of the decisions regarding finances and taxes.

::By May 1999, Simkanin had become involved with an organization called We The People Foundation for Constitutional Education ("WTP"), which promotes the view that, despite common misconceptions, there is actually no law that requires most Americans to pay income taxes or most companies to withhold taxes from employees' paychecks. WTP also espouses the view that the Sixteenth Amendment was fraudulently declared to have been ratified. In accordance with these views, Simkanin told [his] accountant [ . . . ] and others that he was not required to pay taxes and that filing returns was purely voluntary. [The accountant] advised Simkanin that filing returns was not voluntary and that Simkanin could get into trouble if he did not file. Simkanin rejected this advice, and he began to pressure Arrow's employees to attend seminars sponsored by WTP. [Id.]

The USA Today advertisement

On March 2, 2002, Simkanin appeared in a full page advertisement in "USA Today" (including a photograph of him and four other individuals) [Id.] in which he announced that he had not withheld income taxes from the paychecks of his company's employees because he believed the income tax to be voluntary. The advertisement also requested donations for the We the People Foundation.

Arrest, trial and conviction

In June 2003 Simkanin was arrested and arraigned on various tax charges. [http://www.usdoj.gov/usao/txn/PressRel04/simkanin_convict_pr.html] He was convicted in United States federal court on January 7, 2004 on ten counts of willfully failing to collect and pay over employment taxes under usc|26|7202, fifteen counts of knowingly making and presenting false, fictitious or fraudulent claims for refund of employment taxes under usc|18|287 and usc|18|2, and four counts of willfully failing to timely file federal income tax returns under usc|26|7203. His convictions were upheld on appeal. [Id.]

Simkanin was sentenced to seven years in federal prison. After the sentencing, the "Houston Chronicle" reported: "U.S. District Judge John McBryde said during the sentencing that Simkanin was 'entrenched' in a 'cultlike' anti-government group that 'holds nothing but contempt for the laws of the United States.' McBryde ordered Simkanin to pay the government $302,076 in restitution." ["Houston Chronicle", "Businessman gets 7-year term for tax protest," by Thomas Korosec; Saturday, May 1, 2004, 3 star ed., section A, page 33.] The "Houston Chronicle" also reported that a prosecutor indicated that Internal Revenue Service agents and prosecutors had given Simkanin "repeated opportunities to reconsider his position and begin paying taxes" before the government began criminal prosecution. Assistant United States Attorney David Jarvis was quoted as saying "I guess he just figured we wouldn't do anything." [Id.]

Simkanin is incarcerated at the Federal Correctional Institution at Texarkana, Texas, and is scheduled for release in July 2009. [See prisoner number 30383-177, Federal Bureau of Prisons, United States Department of Justice, at [http://www.bop.gov/iloc2/InmateFinderServlet?Transaction=NameSearch&needingMoreList=false&LastName=Simkanin&Middle=&FirstName=Richard&Race=U&Sex=U&Age=&x=29&y=31] .]

Notes

References

[http://lawprofessors.typepad.com/whitecollarcrime_blog/2005/08/can_membership_.html Can membership in a tax protester organization be a ground for an upward departure?] . "White Collar Crime Prof Blog." [Accessed September 17, 2005] .