Richard Michael Simkanin
Encyclopedia
Richard Michael Simkanin was a tax protester
who was imprisoned after having been convicted on twenty-nine counts of United States
federal tax crimes.
, 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 he did not file personal returns for years 1996 through 2001.
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".
In reviewing the case, the Fifth Circuit Court of Appeals stated:
which 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.
on various tax charges http://www.usdoj.gov/usao/txn/PressRel04/simkanin_convict_pr.html. On January 7, 2004, he was convicted by a United States federal court
on ten counts of willfully failing to collect and pay over employment taxes under , fifteen counts of knowingly making and presenting false, fictitious or fraudulent claims for refund of employment taxes under and , and four counts of willfully failing to timely file federal income tax returns under . His convictions were upheld on appeal.
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." 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."
Simkanin was incarcerated at the Federal Correctional Institution at Texarkana, Texas. He was released on June 18, 2010, one day prior to his scheduled release date. However, on June 23, 2010, he was order jailed again, pending a hearing to be held on July 1, 2010, regarding alleged violations of his terms of release.
On July 2, 2010, his terms of release were revoked, and the Court sentenced him to an additional six years and seven months in prison. He was incarcerated at the Beaumont Low Federal Correctional Complex at Beaumont, Texas, and had been scheduled for release on March 18, 2016.
While serving his sentence, Simkanin died on December 28, 2010, at the age of sixty-seven.
Tax protester (United States)
A tax protester is someone who refuses to pay a tax on constitutional or legal grounds, typically because he or she believes that the tax laws are unconstitutional or otherwise invalid...
who was imprisoned after having been convicted on twenty-nine counts of United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
federal tax crimes.
Background
Simkanin owned a company in Bedford, TexasBedford, Texas
Bedford is a suburban city located in northeast Tarrant County, Texas, in the "Mid-Cities" area between Dallas and Fort Worth. It is a suburb of Fort Worth. The population was 46,979 at the 2010 census...
, called Arrow Custom Plastics, Inc. In 1993, an accountant
Accountant
An accountant is a practitioner of accountancy or accounting , which is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and others make decisions about allocating resources.The Big Four auditors are the largest...
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
Income tax in the United States
In the United States, a tax is imposed on income by the Federal, most states, and many local governments. The income tax is determined by applying a tax rate, which may increase as income increases, to taxable income as defined. Individuals and corporations are directly taxable, and estates and...
. On his 1994 and 1995 personal tax returns, he made notations to indicate that the returns were filed under protest, and he did not file personal returns for years 1996 through 2001.
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
United States Court of Appeals for the Fifth Circuit
The United States Court of Appeals for the Fifth Circuit is a federal court with appellate jurisdiction over the district courts in the following districts:* Eastern District of Louisiana* Middle District of Louisiana...
, 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".
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 IndiesBritish West IndiesThe British West Indies was a term used to describe the islands in and around the Caribbean that were part of the British Empire The term was sometimes used to include British Honduras and British Guiana, even though these territories are not geographically part of the Caribbean...
International Motor Vehicle Qualification Card" which he had acquired from a mail-order business in ConnecticutConnecticutConnecticut is a state in the New England region of the northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, and the state of New York to the west and the south .Connecticut is named for the Connecticut River, the major U.S. river that approximately...
. He also mailed 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")We the People FoundationWe the People Foundation for Constitutional Education, Inc. also known as We the People Foundation is a non-profit education and research organization in Queensbury, New York with the declared mission "to protect and defend individual Rights as guaranteed by the Constitutions of the United States."...
, 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.
Advertisement in USA Today
On March 2, 2002, a photograph of Simkanin and four other people appeared in a full-page advertisement in USA TodayUSA Today
USA Today is a national American daily newspaper published by the Gannett Company. It was founded by Al Neuharth. The newspaper vies with The Wall Street Journal for the position of having the widest circulation of any newspaper in the United States, something it previously held since 2003...
which announced that he had not withheld income taxes
Tax withholding in the United States
Three key types of withholding tax are imposed at various levels in the United States:*Wage withholding taxes,*Withholding tax on payments to foreign persons, and*Backup withholding on dividends and interest....
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 arraignedArraignment
Arraignment is a formal reading of a criminal complaint in the presence of the defendant to inform the defendant of the charges against him or her. In response to arraignment, the accused is expected to enter a plea...
on various tax charges http://www.usdoj.gov/usao/txn/PressRel04/simkanin_convict_pr.html. On January 7, 2004, he was convicted by a United States federal court
United States federal courts
The United States federal courts make up the judiciary branch of federal government of the United States organized under the United States Constitution and laws of the federal government.-Categories:...
on ten counts of willfully failing to collect and pay over employment taxes under , fifteen counts of knowingly making and presenting false, fictitious or fraudulent claims for refund of employment taxes under and , and four counts of willfully failing to timely file federal income tax returns under . His convictions were upheld on appeal.
Simkanin was sentenced to seven years in federal prison. After the sentencing, the Houston Chronicle
Houston Chronicle
The Houston Chronicle is the largest daily newspaper in Texas, USA, headquartered in the Houston Chronicle Building in Downtown Houston. , it is the ninth-largest newspaper by circulation in the United States...
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." The Houston Chronicle also reported that a prosecutor indicated that Internal Revenue Service
Internal Revenue Service
The Internal Revenue Service is the revenue service of the United States federal government. The agency is a bureau of the Department of the Treasury, and is under the immediate direction of the Commissioner of Internal Revenue...
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."
Simkanin was incarcerated at the Federal Correctional Institution at Texarkana, Texas. He was released on June 18, 2010, one day prior to his scheduled release date. However, on June 23, 2010, he was order jailed again, pending a hearing to be held on July 1, 2010, regarding alleged violations of his terms of release.
On July 2, 2010, his terms of release were revoked, and the Court sentenced him to an additional six years and seven months in prison. He was incarcerated at the Beaumont Low Federal Correctional Complex at Beaumont, Texas, and had been scheduled for release on March 18, 2016.
While serving his sentence, Simkanin died on December 28, 2010, at the age of sixty-seven.