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On December 1, 1966, petitioner accepted employment as a
civilian employee with the Department of the Navy (the Navy) in
Oakland, California. From December 1966 until sometime in 1997,
petitioner worked for the Navy as an electrician.
Petitioner filed individual Federal income tax returns for
1962 through 1982. Petitioner prepared many of these returns
himself.
For 1983 through 1991, petitioner was not entitled to be
exempt from withholding. Sometime during 1982, petitioner
purchased, reviewed, and studied a book entitled “How Anyone Can
Stop Paying Income Taxes” by Irwin Schiff (Mr. Schiff’s book).
After reading Mr. Schiff’s book, petitioner, on November 23,
1982, filed a false Form W-4, Employee’s Withholding Allowance
Certificate, with the Navy claiming to be exempt from Federal
income tax withholding. On January 7, 1983, petitioner again
filed a false Form W-4 claiming to be exempt from Federal income
tax withholding. Prior to filing the false Forms W-4, petitioner
was aware that Mr. Schiff had been convicted for failing to file
tax returns.
During the years in issue, the Navy had a policy of rolling
over Forms W-4 until employees filed a replacement form.
Petitioner was aware of this policy, and during the years in
issue he allowed the false January 1983 Form W-4 to remain on
file with his employer. As a result of the false January 1983
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