The taxes paid relate to a 1993 partnership agreement that provided for Merck to shift taxable income to a subsidiary of a United Kingdom bank, Abbey National PLC, but avoid the financial loss of shifting comparable book income. For more information on tax fraud and corporate whistleblower rewards, click here.

Hollywood actor Wesley Snipes has been indicted on federal criminal tax fraud charges. The Government alleges that Snipes made it appear that he had no liability for federal income taxes when in fact he had liability for approximately $12 million dating back to approximately 1999. If convicted, he faces up to 16 years in prison. Snipes conducted his movie business through various companies which operated as “loan-out” companies i.e. contracting to provide Snipes’ services, collecting monies for his services and paying compensation to Snipes and others. Snipes was arrested and appeared in federal court on December 8, 2006. His co-defendant Eddie Ray Kahn was the founder and leader of American Rights Litigators (”ARL”) and Guiding Light of God Ministries (”GLGM”), allegedly involved in promoting and selling fraudulent tax schemes. Allegedly, Kahn would through these organizations, send power of attorney forms to the IRS on behalf of its members listing an attorney and CPA who would act as the members’ representatives in tax matters before the IRS. According to the indictment, they would then make false and frivolous arguments and requests to the IRS. According to the allegations listed in the indictment, Douglas P. Rosile was a former CPA who worked as an accountant even after his CPA licenses in Ohio and Florida were revoked. He would prepare false tax returns for ARL members alleging the fictitious and fraudulent “861 argument” i.e. U.S. citizens and residents were not subject to tax on their wages or other income derived within the United States based on the claim that the IRS imposed taxes only on income bases on certain foreign-based activities.

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