Bad Financial Advice Behind Wesley Snipes' Tax Woes, Lawyer Argues

In the trial’s opening remarks Wednesday, Snipe attorney Robert Bernhoft said his client was "ready to pay and file” once he heard back from the Internal Revenue Service regarding his tax returns queries.

But the prosecution painted a very different portrait of the action hero, saying Snipes was intentionally trying to “defraud” the U.S. government.

They asserted in their opening that the 45-year-old star of the “Blade” series and movies like “White Men Can’t Jump” willfully did not pay taxes on income from the years 1999-2004, totaling some $35 million.

If found guilty, Snipes faces up to 16 years in prison and could pay tens of millions of dollars in fines and back taxes.

Also on trial alongside Snipes are Eddie Ray Kahn, a known tax protester, and former accountant, Douglas Rosile.

"The defendants Snipes, Kahn and Rosile willfully agreed to defraud the United States of revenue it was due," said prosecutor Robert O'Neill in his opening statement to the jury Wednesday.

O’Neill added that in 2000, Snipes joined a group led by Kahn known as the “American Rights Litigators,” whose goal is to "thwart the process of the IRS."

Kahn, who is charged with conspiracy and also faces a possibly lengthy prison sentence, has refused to participate in the trial, though he did tell the jury he thought the court in the central Florida city of Ocala did not have jurisdiction in the case.

Snipes is said to have lived some 80 miles from Ocala in an exclusive enclave known as Isleworth at the time of his alleged tax fraud.

Kahn meanwhile has already served a previous prison sentence for a tax-related crime. Both he and Rosile were ordered by a federal court to cease promoting tax avoidance.

Both codefendants are considered well-known tax protesters who aided Snipes by citing a section of the federal tax code known as the 861 provision. According to members of the anti-tax movement like Snipes and his co-defendants, the 861 provision does not specifically list wages as taxable. It does however read that “compensation for services” rendered are taxable.

Prosecutors have also accused Snipes of moving much of his wealth to off-shore accounts and said they would prove the actor purposefully gave the government three checks totaling $14 million that were never covered by Snipes’ accounts.

Lawyers for Snipes are expected to argue that their client sincerely does not believe he owed any back taxes based on his interpretation of the 861 provision.

Defense lawyer Daniel Meachum said that his client had been dependant on the financial advice of others and portrayed Snipes as an innocent victim “who has been betrayed by many.”

“These programs by tax protesters lack merit,” he said.

“It’s very unfortunate. These programs are for sale in bookstores about tax protester positions that lack merit,” said Mitchell Fuerst, a partner in the Miami-based law firm of Fuerst, Humphrey Ittleman, which specializes in tax law.

“That argument (against taxing wages) has been around for maybe 30 years,” said Fuerst, who predicted that Snipes will likely wind up serving between seven and eight years in prison if convicted.