"It's so simple, it's ridiculous": taxing times for 16th amendment rebels

Reason, May, 2004 by Brian Doherty

In one question-and-answer session, a woman airs her concerns about all the practical difficulties that accompany the tax honesty path. How, for example, can one get a mortgage loan without tax returns to show? She seems to be begging for some loophole in the loopholes--some reason she doesn't have to refrain from paying income taxes. But the crowd and Schulz are pitiless. After she offers up too many what-ifs and how-do-yous, Schulz acknowledges that this path of truth might not be for everyone--only, by implication, for the bravest and staunchest of patriots.

Reality does, however, toss the tax honesty movement the occasional sweet crumb of hope. A couple of the crumbs that materialized in the last year seemed substantial and nourishing at first nibble.

Most significantly, a tax honesty true believer named Vernice Kuglin, a vivacious and attractive Federal Express pilot who has a crowd of admirers following her everywhere during the conference, was slammed with criminal charges for failure to file and for tax evasion. She beat the rap in August, acquitted of all charges by a federal jury in Memphis.

Also last year, Texas plastics manufacturer Dick Simkanin was finally brought to trial for failure to withhold income taxes for his dozens of employees. Simkanin had been a poster child in We The People--sponsored ads in USA Today, featured as a businessman who honestly believes it is his right under law not to withhold. Two grand juries who had gotten to speak to Simkanin failed even to indict him. Finally a third grand jury, whom he didn't get to speak to, did indict. But at the end of his first trial in November, the jurors could not reach a verdict, with 11 out of 12 favoring acquittal.

Both these events occasioned great rejoicing in the tax honesty community. But both had grimmer denouements. Kuglin stayed out of jail, but she was slapped with civil liens for past taxes due and penalties. These days she's only collecting around $290 per pay period from her FedEx job, with the rest snatched by the IRS. Simkanin was promptly retried and found guilty in January, and he now faces a potential 129 years in prison.

How the Simkanin case played out should give the tax honesty movement pause. Judge John McBryde was not entirely fair to his client, says Simkanin's lawyer, Arch McColl, who spoke at the conference. Schulz and other movement heroes testified on Simkanin's behalf in vain. McBryde prevented McColl from mounting a real defense, the attorney complains, sustaining the prosecutors' objections almost every time he tried to raise tax honesty arguments.

The jury sent back a question to the judge asking to see the codes that directly stated Simkanin was required to withhold. (Some of the defendant's ideas clearly had gotten through.) The judge told them simply to trust him when he said the law required Simkanin to withhold--essentially directing the verdict, since Simkanin never denied not withholding. (McColl has strong expectations that this response, among other things, will help guarantee a successful appeal.)