Terrence Howard

[wserra]

Most U.S. readers have likely heard of and/or seen Terrence Howard. He is a well-known actor (Crash, The Best Man, Hustle & Flow, many others) who has on multiple occasions been nominated for and won various awards. Last week, a DJ in PAED (2:22-cv-5042) entered judgment against him in the amount of $900K for unpaid income taxes, penalties and interest (which, of course, continues to accrue).

The judgment in itself, substantial as it is, is not the most remarkable thing about the proceedings. First of all, it was entered on default. Despite six months of notices, Howard never responded in court. The DJ was thorough enough to hold an actual in-person hearing right before entering judgment - something unnecessary, because the documents the govt submitted with the default motion were fully sufficient. He even requested that the RO testify at that hearing, which he did.

Although Howard never responded in court, he did respond, after a fashion - he left a voicemail message for the AUSA handling the case. That message, in part, went as follows:

I believe that it is immoral for the United States Government to charge taxes to the descendants of slaves who built this country for 400 years. Was re-, was forced to work in this place. Pulled from our families. 400 years of forced labor and never receiving any compensation for it. And now you have the gall to try and prosecute and charge taxes to the descendants of-, of a broken people that you are responsible for causing the breakage. … In truth, the entire United States should, by default, become the property of the descendants of slaves. But since you do not have that ability to do that, since you do not have the courage to do it let’s-, uh, let’s try this out in court. I am calling you, I’m going to post this on the internet and let them know that I have reached out to you [name of AUSA redacted - WS]. And I wonder if every descendant of slave gathered together and decided that what you’re doing is immoral and [Laughter] we’re gonna bring you down. Looking forward to this.

Well, not only did Howard fail to "try this out in court", but during the hearing the DJ asked the AUSA if she was aware of the implied threat. She responded that she was, she had notified DOJ Security, and she believes that they opened an investigation.

It's not clear to me that this is a sufficient threat for DOJ to decide to prosecute. It may well not. But, if it does, a $900K judgment will be the least of Howard's worries.

Knucklehead.

[AnOwlCalledSage]

What's an AUSA?

[wserra]

Assistant United States Attorney. The prosecutor assigned to a case.

[Burnaby49]

Apparently Howard is a mathematical genius. Not having any idea who he is I looked him up on Wikipedia and found he's researching this Nobel-worthy project.

In a 2015 interview with Rolling Stone, Howard explained that he had formulated his own language of logic, which he called Terryology, and which he was keeping secret until he had patented it. This logic language, he claimed, would be used to prove the statement "1 × 1 = 2".

"How can it equal one?" he said. "If one times one equals one that means that two is of no value because one times itself has no effect. One times one equals two because the square root of four is two, so what's the square root of two? Should be one, but we're told it's two, and that cannot be."

Howard blames his leaving Pratt over disagreements with a professor regarding this hypothesis. He also stated that he spends many hours a day constructing models of plastic and wire that he patented and claims to confirm his belief.

I can't even conceive how you can begin to prove an abstract mathematical concept through plastic and wire models. I guess that's why I failed calculus in university.

Models withstanding he's not quite there yet;

In 2017, Howard published his "proof" of the claim that "1 × 1 = 2" on his Twitter account. It was heavily criticized as containing multiple logical errors and faulty reasoning.

[Burnaby49]

My hand calculator tells me that the square root of 2 is an infinite number sequence starting with 1.4142135. Damn thing must be broken, Howard wouldn't have spent years researching Terryology if he couldn't do basic math.

[eric]

It's not clear to me that this is a sufficient threat for DOJ to decide to prosecute. It may well not. But, if it does, a $900K judgment will be the least of Howard's worries.

Obviously DOJ is sorely mistaken. I am quite sure, that using Terryology, it's the other way around and they owe him the money. What is Terryology you may well ask? Anyways, Terrence claims to almost, but not quite, have a PhD in Chemical Engineering and Materials Science. His professors just wouldn't accept his new system of mathematics based on the premise that 1 X 1 = 2. For the engineers and mathematicians amongst us, here is his mathematical proof: (sorry it takes a long time to load) https://web.archive.org/web/20220629153 ... 1881877507

[eric]

Looks like Burnaby49 and I posted at the same time....

[eric]

My hand calculator tells me that the square root of 2 is an infinite number sequence starting with 1.4142135. Damn thing must be broken, Howard wouldn't have spent years researching Terryology if he couldn't do basic math.

Damn, we posted simultaneously...

[The Observer]

While this is an interesting story, I find little indication that Howard has gulped the koolade of the typical tax denier gibberish. I guess his argument that slavery in this country means he shouldn't have to pay taxes might be a novel tax denier strategy; it just seems to be an argument that very few have tried to push in the courts of law. I don't think even the Moor movement has made this a central core of their sovrun beliefs.

From what I saw in his Wikipedia bio, Howard appears to be a violent person who wants his own way. Besides the charges of his beating up the women in his life, he is also accused of beating up an airline stewardess who had told him to go back to his seat and the brother of the director of a play that Howard was appearing in. So I think the DJ and the AUSA were perfecty correct to look to their safety.

[wserra]

his argument that slavery in this country means he shouldn't have to pay taxes might be a novel tax denier strategy; it just seems to be an argument that very few have tried to push in the courts of law.

Not that novel. DOJ actually brought suit to enjoin various "tax preparers" from using it several years ago. And, in a detailed RR, the IRS has labelled it frivolous.

[AnOwlCalledSage]

Ha ha. Found this on the tweets today!

[The Observer]

Not that novel. DOJ actually brought suit to enjoin various "tax preparers" from using it several years ago. And, in a detailed RR, the IRS has labelled it frivolous.

Thanks for reminding me about that episode - it had slipped from my memory. But Howard didn't file returns claiming the phony credit for slavery reparations, as far as we can tell. Nor did he appear in court to push that argument. I am guessing he may be flirting with the reparation gibberish now that the dust has settled - as though that would do him any good. I put it all down to his ego being bruised and he needs to demonstrate that he is going to do something to show that he can't be pushed around.

Given that this is a judgment for some pretty old periods, my guess is that Howard has already been dodging the IRS collection program for quite a while; DOJ is simply not going to push such a suit until the IRS can demonstrate that they exhausted all administrative means to collect from Howard's income and assets. From what I see of his filmography, Howard has had continuous acting and singing gigs since the earliest tax period (2010) to the present. It's a bit of a mystery why the IRS would not have been able to get a levy to attach to some of that income stream.

[wserra]

But Howard didn't file returns claiming the phony credit for slavery reparations, as far as we can tell.

Hmm. That's a good question. I can't tell whether he was assessed based on SFRs, or whether he filed but didn't pay anything. You know more about this stuff than I do; maybe the affidavit of the RO who testified at the hearing answers that for you (it doesn't for me). And the DJ asked that RO about a series of $x,000 payments in Howard's account; the RO responded that they most likely represented payments on an installment plan. Does the IRS allow installment plans from non-filers?

Anyway, there's not much difference between "I'm not filing because you owe me reparations for slavery" and "I'm filing but not paying because you owe me reparations for slavery" and "I'm filing and claiming a credit for all tax due because you owe me reparations for slavery". The only difference is in the penalty: non-filer penalty vs non-payment penalty vs frivpen - or some combination of those. Although failure to file is a crime . . . .

[The Observer]

I can't tell whether he was assessed based on SFRs, or whether he filed but didn't pay anything. You know more about this stuff than I do; maybe the affidavit of the RO who testified at the hearing answers that for you (it doesn't for me).

The only thing that popped out at me were the assessment dates on the chart on the affidavit. Typically when the IRS prepares SFRs (substitute for returns) the taxpayer has several years that were not filed; the SFR unit will prepare the substitute returns at the same time - thus they should all have the same assessment date - or at least assessment dates that are close to each other on the calendar. Howard's assessment dates are scattered across the years, which makes me think that he filed the returns on his own (perhaps with prodding by the IRS and/or his tax person). Additionally two of the years in the question show additional assessment dates as though the IRS discovered additional unreported income and two years look as though they could have been filed late given their tax years. All in all, if I had to put money on the question, I would argue that these assessments were not the result of an SFR.

And the DJ asked that RO about a series of $x,000 payments in Howard's account; the RO responded that they most likely represented payments on an installment plan. Does the IRS allow installment plans from non-filers?

The problem that I saw was the RO testifying that he thought the payments were installment payments. All payments recorded have a designated payment code that tells you what the payment was for - including whether it was an installment payment. Secondly, a careful review of the transcripts would show if the tax periods in question were ever in installment payment status. I can understand that the DJ may have accepted this as a best answer, but either the RO failed to research this issue ahead of time or is a complete dunderhead. And the AUSA should have grilled the RO on this prior to the affidavit.

And to answer your question, the IRS does not allow installment plans if the taxpayer is not currently in compliance. That means that all future returns must be filed timely and full paid by filing date, that the taxpayer is currently making timely and accurate estimated tax payments or has proper withholding to cover future taxes. Is it possible that Howard got an installment plan anways? Yes, if the RO and the manager approving the agreement were not paying attention. But within 12-18 months the agreement would be defaulted by the system once a future return was not filed or a return was filed with an unpaid balance.

Anyway, there's not much difference between "I'm not filing because you owe me reparations for slavery" and "I'm filing but not paying because you owe me reparations for slavery" and "I'm filing and claiming a credit for all tax due because you owe me reparations for slavery".

Not much difference, I agree. But my contention is we only have evidence that Howard raised this issue after the court case concluded. If he had made those claims on the face of his returns or had disputed it with the IRS through correspondence, I think DOJ would have raised it during the filing for judgment. If Howard is raising credits for slavery reparations now, I think its only because he thinks he can gain some sympathetic support and publicity out of it - not that he really believes in it. But time will tell. If he starts filing returns claiming those pie-in-the-sky credits I am sure we will hear about it.

Finally, I am a little puzzled as to why the affidavit had the RO testifying as to the address that appears on Howard's driving license. Unless that address is Howard's personal residence and the judgment will be attaching to it...

[morrand]

Finally, I am a little puzzled as to why the affidavit had the RO testifying as to the address that appears on Howard's driving license. Unless that address is Howard's personal residence and the judgment will be attaching to it...

No chance they're preparing against an argument that he's not resident in the "united States" or something like that, is there?

[JamesVincent]

Terrence Howard is reportedly being investigated for criminal tax evasion.

According to court documents obtained by The Blast, the federal government is interested in possible financial crimes allegedly committed by the Empire star, his third wife Mira Pak and Universal Bridges Inc., a company reportedly owned by Pak.

The case is reportedly being handled by the United States Attorney’s Office in the Eastern District of Pennsylvania and is ongoing.

https://people.com/tv/terrence-howard-u ... on-report/

Found this article from 2019. He's apparently been ditching the IRS for quite awhile and this article mentions corporate evasion as well as personal. Not many details in there though.

[wserra]

No chance they're preparing against an argument that he's not resident in the "united States" or something like that, is there?

Doubt it. This was a default. They're likely just establishing that he was served correctly.

[The Observer]

Terrence Howard is reportedly being investigated for criminal tax evasion.

Reading through both articles, the first question that pops into my mind is what sort of documents would be available in a court filing that would tip the government's hand that they are investigating someone for financial crimes? I note that neither news source saw fit to provide copies of these documents; this only makes the articles more suspect that they cannot or will not backup their story with prime evidence. Protecting a source that leaked the documents to them? All I will say at this point, we are nearly at the 5 year mark and nothing has transpired that would turn this so-called investigation into an actual court case against Howard. My guess is someone jumped the gun ahead of the facts.

Doubt it. This was a default. They're likely just establishing that he was served correctly.

That makes sense. I thought it could have been for the purpose of establishing that Howard received legal notice of the tax assessments for the years in question, but the affidavit only mentions one of the assessed years, 2019. The affidavit was completely vague as to why the RO was testifying in regards to the address. I would have thought that a statement attesting that the service on the taxpayer occurred at that address. Most affidavits that I have seen are painfully detailed and and precise about events like this.

[The Observer]

I found two more recent articles covering Howard's tax issues:

https://abovethelaw.com/2024/03/actor-t ... of-slaves/

https://www.inquirer.com/news/terrence- ... 40228.html

It appears that Howard's phone call to the AUSA was in November of 2023; the judgment was granted in February of this year. This gives more context to Howard's comment that "...let’s try this in court … We’re gonna bring you down.” and indicates that Howard was going to appear in court to contest the judgment. I agree with the one article that said "It is unlikely that Howard will be punished for his statements as they seem more like a rant made in frustration than a legal argument." It is also doesn't seem to be much of a phsyical threat. But the AUSA has the right to ask for protection if she perceives a threat to herself.

One other thing of note is one of the articles addresses the issue of two of the tax periods appearing to have passed the collection statute expiration of ten years, based on them being for tax years 2010 and 2011:

(1) In regards to 2010, from the affidavit we see that there were two assessment dates (11/21/2011 and 2/18/2013). The first assessment would have presumptively expired in 2021 while the second would expire in 2023. If the article is correct, DOJ initiated suit on December 19th, 2022. The filing of suit in federal court suspends the collection statute, thus only the first assessment could have expired. But if Howard had submitted a request for an installment agreement, the statute would have been suspended for the time it took the IRS to accept or deny the request, plus 30 days after the IRS rejected the statute; if Howard had appealed the rejection, the statute would have been suspended during the time it took to resolve the appeal. So it is possible that the statute could have still been in effect for the first assessment at the time DOJ filed the suit to reduce the tax lien to a judgment.

And there are other possible events, such as a filing of bankruptcy, that could have resulted in the collection statute being suspended. But there are no facts to demonstrate that this has happened.

(2) Regarding 2011, it is obvious that the author of the article was not aware of the assessment date. The affidavit shows it was not assessed until 2015, so the collection statute was still open at the time the suit was filed.

[wserra]

Wow. I didn't realize that there would be this much interest. Should anyone wish to listen to the audio of the hearing (including the testimony of the RO), it lasts just under 30 minutes and is contained in this 13M mp3 file.