On Friday July 6, a
federal jury in Covington convicted a local lawyer on three counts of filing false
tax returns. The charge was that he had under-reporting
his income.
The convictions came after four
years of prosecution following an armed raid on the lawyer’s offices in April
2008. At that time agents of the IRS,
FBI and DEA along with other law enforcement officials, armed with machine
guns, burst into the attorney’s offices and while holding his staff at gunpoint
seized his records and computers.
At the same time other groups of
armed government agents raided his home and went to his bank seizing records
and several hundred thousand dollars in cash.
In
the last four years, the
government returned all of the cash to the lawyer. Why? Well, for starters it is no more illegal to
hold hundreds of thousands of dollars in cash than it is to hold one hundred
dollars in cash.
You might ask, “why would the
attorney have so much cash on hand”? His
explanation at trial was that his grandfather had lost everything he had during
the depression when his bank failed and he couldn’t withdraw his life savings
in time. The lawyer admitted that he kept
some of his money in bank accounts but that he had been slowly putting away his
savings in cash for nearly 30 years as his “nest egg”. He explained that while others had put their
money in retirement accounts only to see those accounts lose half their value
in recent years, this was his retirement.
He was preparing for an uncertain future.
There being nothing illegal about
his cash holdings, the IRS returned all of the cash they seized cash to him.
But for four year they kept up
the prosecution which reportedly cost the government perhaps as much as $2
million in taxpayer money. And what was the result?
The result is that the lawyer
will likely be sentenced to serve time in a federal prison, which you might
note will also be at taxpayer expense.
In addition he will likely lose
his license to practice law which means that he will no longer be the high wage
earner he has been for thirty plus years which will cost the government even
more money in lost revenue on his earnings.
According to various reports the
lawyer asked the government how much they claim he owed them and yet they never
supplied him with a figure.
The government could have charged
the lawyer for back taxes, levied a substantial penalty and of course since
they already had their hands on more than enough cash to obtained payment,
could have settled the matter pretty much on their own terms. But they did none of these things. Why?
What could possibly have been the
purpose of this four year prosecution which was obviously very expensive in
more ways than one?
For the answer to this question,
go back to where I asked you to stop a minute and assess your reaction to this
case and how it made you feel. Over
powering prosecutions like these serve only one purpose, to make an example out
of people for the rest of us to see. In
other words, cases like this make us fear our government.
Of course the lawyer denied that
he had failed to report any of his income.
In addition to his law practice he ran several businesses and his books
were handled by a book keeper, his tax returns prepared by a CPA and he
testified that he trusted these professionals to do things right. But of course the government stood firmly on
the law that says no matter who prepares your taxes, your signature means that
you have affirmed the accuracy of everything reported on those returns and if
any of it is wrong you have committed perjury.
It is hard to tell how much money
this lawyer spent defending himself, but one thing is clear; we have all now
been taught to shudder at the thought of the government coming after any of us.
What is the solution? A lot of politicians these days like to say
they favor a “fairer/flatter tax”. But
things don’t seem to be getting any better.
In fact things have just gotten a
whole lot worse. The Supreme Court has declared that the penalties under
ObamaCare are really a tax which of course will be enforced by the IRS. The IRS has just
added thousands of new agents. We hear
annual reports how the IRS is ramping up its enforcement efforts and with
thousands of new agents and a whole new set of laws to enforce things just got
a whole lot scarier.
Is there a plan is to make
American citizens fear the government more and more each day? It should be the other way around. As Thomas Jefferson said "When governments fear the people, there is liberty. When the
people fear the government, there is tyranny."
The time has come to eliminate
the IRS, to pass “The Fair Tax” thus removing the need for citizens to file
burdensome tax returns under penalty of perjury. The “Fair Tax” would streamline collection, eliminate
loopholes, spread the tax burden equally over the entire population and result
in a steady stream of revenue to the government throughout the year.
And the fair tax would eliminate
the fear of government agents bursting into your private property wearing
bullet proof vests, carrying machine guns aimed at your head and shouting
orders at you. That’s how this case of
lawyer, Larry Lawrence started and it will end with him going to prison.
And after considering that he is
headed to prison, isn’t it fair to ask “for what”? Was all of this really worth a few dollars in
unpaid taxes? No matter how much he owed
it had to be a drop in the bucket compared to the federal budget.
