It’s Fix the Tax Code Friday! Since I posted about Marion Barry’s tax woes earlier today, I thought it would be great fodder for Fix the Tax Code Friday. Tax evasion cases have often made news – from Wesley Snipes to Joe Francis to Helio Castroneves – especially when jail time is involved. Counsel in these matters generally argue that an alleged failure to file tax returns should be a private matter and not made a criminal case. Prosecutors argue, however, that big time jail sentences deter other citizens from committing similar crimes (tax fraud, tax evasion, etc).
Today’s Fix the Tax Code Friday question is:
Should failure to file federal tax returns be a criminal offense? Is jail time an appropriate response for failing to file federal tax returns? And if so, should there be a dollar amount or number of years for which taxes are not filed, before jail time is imposed?
Gosh, I can think of about a hundred smart comments for this one… A porn star goes to prison? But my mother could be reading. So just the facts.
Janine Lindemulder (a/k/a Janine James), a porn star who goes by the clever stage name “Janine”, learned her fate last week stemming from a guilty plea to tax evasion. Janine will spend six months in prison (plus one year of supervised release) after pleading guilty to a misdemeanor count of willfully failing to pay tax.
Janine’s adult film career started out predictably: she was a stripper. She appeared in Penthouse and was named as a Pet of the Month in 1987, eventually being named a runner up as Pet of the Year in 1990. Yet, despite those sterling credentials, she could not make it into mainstream film and television.
In 1992, Janine made her porn debut and eventually secured a contract with Vivid, the most famous of the adult film production companies. She “retired” from the adult film industry in 1999 to become – and I’m not making this up – a kindergarten teacher. She stayed “retired” from the industry until 2004 when she returned to the adult film business. That year, Janine signed a $350,000 contract to perform in more films and did not pay any of the outstanding taxes owed for prior years, despite being aware of the bill. At the time, she owed more than $200,000 in income tax. Part of her sentence includes restitution in the amount of tax due plus penalties and interest, totaling almost $300,000.
Janine claims that her ex-husband, Jesse James (of West Coast Choppers fame), turned her into the IRS following a bitter divorce. James, who left Janine to marry Sandra Bullock, denies the charge and claims that he agreed to a larger divorce settlement so that Janine could pay off her outstanding tax debts. Instead, she used the money to put a down payment on a new home.
The feds in this case recommended prison time due to Janine’s actions during the time that she had the outstanding tax obligations, including her dramatic spending. Assistant U.S. Attorney Christopher Cardani wrote in his pre-sentencing memo, comparing Janine to Wesley Snipes, that, “[w]hile Snipes failed to report far more income than defendant James, her tax defiant conduct is similarly offensive. She has demonstrated an attitude of greed and privilege, and has taken advantage of her status as a high profile figure, while at the same time wantonly ignoring her obligation to pay taxes. A meaningful sentence is necessary to get the message to her and others that no one is beyond the law and they must pay their taxes just like everyone else.”
PS – A word of caution: be careful if you Google this one. You’ve been warned!
(Hat Tip: Phil G from Slacker Manager – thanks, Phil!)
It’s time for our annual review! Here are my picks for the top stories on taxgirl.com for the year:
10, Dancing With The Stars champ and race car driver Helio Castroneves is indicted on federal tax evasion charges. In a related story, my mother is stricken with grief and may never samba again (okay, I’m not sure that she sambaed before but I’m pretty sure that this will end any chance).
9, Prop 8 in California passes and prompts the promise of tax boycotts by the gay and lesbian community.
8, taxgirl endorsed Obama for President. I was both roundly cheered and jeered for my picks but stand behind my choice. One of my most controversial and commented posts of the year.
7, Tax evaders hit the slopes. A massive tax fraud investigation in Germany, the UK, the US and other countries points the finger at the tiny Alpine principality of Liechtenstein. I am elated to finally have a reason to prove that I can spell Liechtenstein.
6, After Congress says no, President Bush says yes and earmarks taxpayer dollars to save the Big 3 automakers. As a result, Fiat misses its chance to hit it big in the US.
5, Wesley Snipes is acquitted of tax fraud. Remarkably, the world did not end, though we will now be subjected to more of his movies.
4, Congress commits US taxpayers to a remarkable bailout package. Treasury Secretary Paulson is now more powerful than Oprah.
3, The “biggest tax fraud ever” tax trial finally reaches an end. Out of the original 19 defendants involved in the spectacle that was the KPMG trial, only 3 were eventually convicted.
2, Rebates, rebates and rebates. I probably posted the most – and received the most comments – about this year’s rebate checks. Taxpayers were confused about the amount of the check, set-offs, when checks might arrive and more. An overwhelming majority of Americans admitting to being as cynical about the chances of the checks stimulating the economy as they are about Paula Abdul “just being tired.”
1, taxgirl gets a nod by the editors of the American Bar Association in the ABA Journal Blawg 100 for 2008. In case you missed it before, voting by readers for the best of the blawgs runs through January 2 – just click to vote. And no, this tidbit never gets old (not for me, anyway)!
So those are my picks for the year. What did you like? What did you hate? And what did I miss?
A federal judge has granted Wesley Snipes’ request to travel overseas while he waits the outcome of his appeal.
Snipes had requested to go to London to sit in on the editing process for his new horror flick Gallowwalker and to fly to Bangkok to film the action thriller Chasing the Dragon. The prosecution argued that Snipes was a flight risk based on his prior behavior but the judge apparently disagreed.
