A Texas business owner has pleaded guilty to a felony charge of failing to turnover withholding
taxes, the New York Times reports.
Under a plea agreement with a federal attorney, Richard M. Simkanin, owner
of Arrow Custom Plastics, will pay a $250,000 fine, will remain liable for taxes
owed, and will be sentenced to no more than three years in prison, according
to the newspaper. In exchange for the guilty plea, the U.S. attorney dropped
26 other charges against Simkanin.
Simkanin stopped withholding taxes from his employees' paychecks in 1999 and
adopted the so-called 861 position. Advocates of this position contend the section
of tax code with the number 861 requires only a small number of employees, primarily
those who work for foreign-owned businesses, to pay taxes on their wages.
The newspaper notes that a group of Americans who challenge the validity of
the collection of taxes have cast Simkanin as a hero to their cause.
The newspaper reports that the Internal Revenue Service has said it will prosecute
and seek civil orders against businesses that refuse to withhold taxes. The
Justice Department has filed three lawsuits to force three employers to withhold