Most electrical engineers are intelligent. Perhaps I’m biased: My father was an electrical engineer and my brother has a degree in electrical engineering. This story focuses on an electrical engineer who showed a lack of intelligence in dealing with taxes.
Harold Stanley worked as a consulting electrical engineer. He was paid $971,604 from 2005 through 2009, and he undoubtedly received Form 1099-MISC’s for those years. I’ll let the Department of Justice press release take it from there:
According to court documents, Stanley is a tax defier who failed to file any tax returns for 2005 and 2006. Stanley has participated in “sovereign citizens” groups that believe the federal income tax system is voluntary and that they do not have to pay their fair share in taxes.
For tax years 2007 through 2009, Stanley filed substantially correct returns but left the tax line entry blank and failed to submit any payment. According to court documents, Stanley has not filed a tax return for tax years 2010 through 2015.
Unfortunately for Mr. Stanley, the IRS investigated why he hadn’t filed proper tax returns (or any tax returns for some years). However, it’s his actions once he was being investigated that drew my attention to this case:
Stanley submitted fake money orders for payment to the Internal Revenue Service, returned documents to the Internal Revenue Service claiming that the tax assessments were satisfied because they were “Accepted for Value,” filled out payment vouchers with his name in all capital letters but didn’t submit payment and submitted a false criminal referral to IRS – Criminal Investigation.
After his arrest, Stanley filed a civil suit against the Commissioner of Internal Revenue, an employee of the IRS, and an Assistant United States Attorney. On July 22, 2016, the District Court dismissed the case with prejudice. The court wrote that “by filing his complaint in this court, Mr. Stanley attempted to throw a wrench into his criminal proceedings in the Western District of Missouri and re-present the same arguments that he had previously and unsuccessfully litigated in other federal courts including the United States Tax Court, the Western District of Missouri, and the Eighth Circuit Court of Appeals.”
Mr. Stanley was found guilty of tax evasion back in June. There are a lot of actions I’d consider before sentencing. Mr. Stanley, though, wanted to be nominated for my coveted “Tax Offender of the Year” award, so he chose something I would not have considered:
On June 9, 2016, after the verdict in this case, a claim for damages was filed on behalf of Stanley, alleging that “Chief Magistrate Judge Sarah W. Hayes, Judge Roseann A. Ketchmark & District Attorney Paul Becker trying to collect an IRS debt in violation of 18 USC section 8 and when the 26 CFR states its voluntary and a civil action not criminal.” The claim for damages alleges personal injury in the amount of $55 million.
This past week Mr. Stanley was sentenced to five years at ClubFed; he received a sentencing enhancement for obstruction of justice. I assume that civil actions to recover the tax, penalties, and interest will be forthcoming.
Mr. Stanley was sentenced by Judge Ketchmark—yes, the same judge he sued. I’m sure that went over well with her. A helpful hint to anyone about to be sentenced: Don’t file a lawsuit against the judge! On the bright side, Mr. Stanley does have a far better chance of winning the Tax Offender of the Year award than winning his personal injury claim.