Simon Phoenix Shrugged

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After Snipes had a falling out with his investment adviser in the late ’90s, a friend referred him to a tax denier named Eddie Kahn, whose firm, American Rights Litigators, advised clients to use the so-called 861 argument — which claims (erroneously) that Section 861 of the Internal Revenue Code holds that only income earned outside the country is taxable. Working with Kahn, Snipes did not file tax returns between 1999 and 2004; he also applied for about $7 million in refunds for the years in which he did file. Snipes began recommending Kahn to his own friends and employees, at one point inviting Kahn to his California home to give a seminar on the 861 argument. When Snipes, Kahn and an American Rights Litigators accountant named Doug Rosile were charged with multiple tax felonies in 2006, there was talk of a joint defense; some tax deniers believed that Snipes would emerge as a new spokesman for the tax-honesty movement.