"Mr. B"

[VinnyZ]

Today, I was taking a Circular 230 CE class and this was one of Case Studies:

>>>>>>>
This case from 2015 concerns a CPA (Mr. B) who worked for 6 years as a special agent in the
Criminal Investigation Division of the IRS during the 1990s before leaving to start his own tax
advisory practice. The practice was based around Mr. B’s view that US citizens are not obligated to
pay income tax, and in the year 2000 he published a book which made a number of different
arguments to that affect. These arguments included the contention that payment of taxes by citizens is
strictly voluntary, as well as other legalistic arguments such as that the collection of taxes by the
Government is unconstitutional and that the Sixteenth Amendment to the Constitution was never
legally ratified.
Apart from providing tax consultation services, Mr. B also began speaking at conventions around the
country and selling books, CDs and DVDs in which he expounded on his opinions about income tax
and the Government’s authority, or lack thereof, to impose and collect it.
Not surprisingly, Mr. B’s activities drew the attention of the Office of Professional Responsibility
(OPR) which in 2003 filed a complaint to initiate proceedings to bar him from practicing before the
IRS. The complaint alleged disreputable conduct in violation of Circular 230 Sections 10.22, 10.34
and 10.51. Later that year the complaint was amended to include additional grounds for Mr. B’s
disbarment or suspension, specifically his failure to file Federal income tax returns from 1999-2002
inclusive.
The OPR applied for, and was granted, summary judgment in the case and Mr. B was duly disbarred
from practice before the IRS late in 2003. In that decision the administrative law judge concluded that
Mr. B’s advice to taxpayers, as alleged in the complaint, constituted disreputable conduct.
In a subsequent appeal, the decision was affirmed because it had been shown that Mr. B had advised
numerous taxpayers to rely on frivolous positions. However the matter of the unfiled tax returns from
1999-2002 was overturned because it had not been demonstrated that Mr. B had sufficient income
during those years to require the filing of a tax return. Nevertheless, the disbarment decision was
confirmed because the allegations regarding Mr. B’s advice to his clients were enough to constitute
disreputable conduct on his part.
Mr. B’s license to practice as a CPA was revoked by his state’s Board of Accountancy in 2007.
Subsequent appeals during the next few years against that decision and those made to disbar him from
practice before the IRS were all defeated. In the meantime Mr. B continued to operate his tax
consulting practice and other related business activities promoting his views on income tax and its
underlying legal structure.
Evidently Mr. B found a very receptive audience for his opinions and during the years 2003-2006 he
deposited substantial sums into six different bank accounts totaling in excess of $1.1 million. In line
with his strongly-held views on the income tax system Mr. B neither paid income taxes nor filed a tax
return for any of those four years.
Once again the attention of the IRS was attracted and an audit of Mr. B’s tax years from 2003 to 2006
was initiated. However Mr. B refused to cooperate with the audit and failed to provide the examiners
with complete and adequate books and accounts for the years in question. He also resisted IRS efforts
to obtain bank records through the use of summonses, Eventually the IRS prepared substitutes for
returns for the years 2003 to 2006, and these were used as a basis to proceed with establishing Mr.
B’s tax liability. However Mr. B continued his refusal to cooperate with the audit process and refused
to testify when the matter came to court.
Eventually in 2015 the US Tax Court found that his consistent pattern of behavior of failing to file tax
returns, failing to report substantial amounts of income, failing to maintain adequate records, failing
to cooperate with taxing authorities and failing to present a plausible non-fraudulent explanation for
his behavior together rose to the level of fraud under Internal Revenue Code Section 6673.
Accordingly Mr. B was penalized $25,000 which is the maximum allowed under Section 6673. In his
ruling the Judge noted that while a fine of $25,000 may not have a strong deterrent effect on Mr. B
who already has a large tax debt, it may serve as a warning to other taxpayers—particularly those
whom Mr. B counts as clients—to avoid following a similar approach to their tax obligations.
<<<<

I am sorry that this is so long but, I think that we know who "Mr. B" is..........

[Chaos]

Bosley of course.

[KickahaOta]

I always knew that Mr. B Natural had a racket going on the side.

(warning: potentially soul scorching)

"MST3K: Mr. B Natural"