Prominent Tax Evasion Conviction

Tax evasion occurs when an individual or organization uses illegal means to avoid paying taxes. Most Americans fill out their tax returns sincerely and carefully. However, some do not have high regard for the tax laws. The IRS cannot track all those who fail to follow the laws. However, it puts most of its attention high income and high net worth (often both) people. Many wealthy people worldwide who evade taxes do so because they say they pay an unfair share of tax. Those in the U.S. sometimes believe the tax system is unconstitutional. No matter the rationale behind evading taxes, it is always big news when prominent people in High Society society are tried and convicted of tax crimes.

The largest tax evasion case in the history of the United States is that of former telecommunication executive Walter Anderson. Authorities accused him of hiding most of his money through aliases, shell companies, and offshore bank accounts. In 2006, Anderson entered a plea deal and admitted hiding more than $365 million in income. He paid restitution of $200 million and received a reduced sentence of nine years in prison.

One of the most publicized tax cheat cases happened in 1931, in Chicago, Illinois, when mob boss Alphonse Gabriel Capone, known as Al Capone, was sentenced to 11 years in prison for five counts of income tax evasion. Al Capone was famous for his involvement in organized crime and known as the king of Chicago gangsters; however, the government couldn't gather substantial criminal evidence against him until they nabbed him for tax cheating in 1931.

In 2008, actor Wesley Snipes was convicted of three misdemeanor counts for failing to file tax returns from 1999 to 2004. The charge against Snipes alleged he filed amended false returns, including a fraudulent tax refund claim of more than $4 million in 1996 and another false tax refund claim of $7.3 million in 1997. In 2006, Snipes tried to vindicate himself by declaring that he was a non-resident alien of the US and didn't need to pay taxes, but in reality, Snipes is a US citizen by birthright. Truly he did not get and follow good advice.

On April 24, 2008, Snipes was sentenced to three years in prison for deliberately failing to file federal income tax returns. In 2011, he appealed for retrial, but the United States Supreme Court declined the appeal. In December 2010, he reported to prison at the McKean Federal Correctional Institute in Pennsylvania to carry out his sentence.

In 2007, "Girls Gone Wild" creator Joe Francis was charged with felony tax evasion for filing false corporate tax returns. He was accused of filing more than $20 million of incorrect business costs to escape paying taxes. A plea deal allowed the felony charge to be dropped.

However, in November 2009, the Internal Revenue Service (IRS) accused Francis of filing a false return and bribery. He later pleaded guilty and reached a plea deal that included paying $250,000 restitution to the IRS.

In 1989, businesswoman and real estate tycoon Leona Helmsley, who was dubbed "The Queen of Mean," was convicted of evading more than $1.2 million in taxes. In addition to her conviction, she was hit with a $7.1 million fine plus an outstanding $1.7 million she owed in back taxes. In the course of her trial, most of her employees testified against her; even her former housekeeper said she overheard Helmsley say, “We don't pay taxes. Only the little people pay taxes.” She served 18 months in federal prison.