“Celestial Kingdom Jurisdiction” and Tax Protesters

In 1999, Jimmie Duane Ross got $840,000 from his former employer, the result of an arbitration hearing. I don’t know what Ross did with that money; I do know, however, one thing he didn’t do: pay his taxes.[fn1]

Which is wrong, of course, but not by itself newsworthy. Lots of people don’t pay their taxes.[fn2] So why blog this? Two reasons: first, today is April 15th.[fn3] Second, in addition to standard tax protester arguments for why he didn’t need to pay his taxes, Ross made some expressly Mormon arguments. 

Tax protesters have a series of stupid and frivolous arguments they forward to claim that (a) the U.S. government doesn’t have the power or authority to tax citizens, and/or (b) even if it does, the tax protester is not subject to taxation. Ross, as he defended himself against criminal tax evasion charges, appears to have made a number of these frivolous arguments.  But he added one. According to the court, in addition to the standard-issue tax protester claims, Ross asserted that

he is a “[s]overeign, non-corporate, spirit filled man sojourning on the domain of Elohim, His Creation” subject only to “Celestial Kingdom jurisdiction pursuant to the source of the highest universal laws: the Bible, Book of Mormon, United States Constitution, Declaration of Independence 1776 and Magna Carta 1215/1225.”

And how’d that go over? Let’s just say, the court was not impressed by any of Ross’s arguments. In denying his constitutional arguments, the court held that Ross “will not be on trial for . . . his purported religious beliefs. He will be on trial for the alleged conduct of tax evasion.”

But it gets worse.[fn4] Not only does his Mormonism not justify his tax evasion (or, at least, remove him from the jurisdiction of federal courts), but it in fact hurts his ability to defend himself.

See, to convict someone of criminal tax evasion, the government must show three things: (1) that the taxpayer didn’t pay the full amount of taxes owed; (2) that the taxpayer willfully (rather than, e.g., accidentally or negligently) failed to pay, and (3) that the taxpayer made an affirmative act of evasion or attempted evasion.

Ross clearly met (1) and (3). (After the settlement with his former employer, Ross allegedly “filed a false mortgage on his home and a false lien on his vehicle, moved funds to an offshore account and used cash for many transactions in an attempt to cover his trail.” That looks like affirmative acts to me.)

To defend himself, then, Ross was likely to raise a “good faith” defense. That is, he would argue that he sincerely believed that the tax law didn’t apply to him. In response, the government intended to introduce, among other things, “evidence that various [Mormon] church officials reminded [Ross] of his duty to pay income tax.”[fn5]

Ross argued that such evidence should be inadmissible as, among other things, unfairly prejudicial. But the court said that these statements were clearly relevant to the question of good faith, were not unduly prejudicial, and could be introduced at trial.

Ultimately, Ross was convicted on 5 counts of tax evasion, and was sentenced to 51 months in prison and 3 years of supervised release after his prison term. He was also required to pay $532,389 in restitution.

Which is to say, though we all hope one day to fall under Celestial Kingdom jurisdiction, in this life, that doesn’t free us from our income tax obligations.[fn6]

Also, happy Tax Day!

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[fn1] Just an aside, for the sake of clarity: if the settlement had been for a physical injury, it would not have been taxable. There’s no indication, though, in the various opinions and orders or in the press that the recovery was for injury; it’s probably fair to assume that the recovery  was, instead, related to salary he should have received.

[fn2] (though the U.S. has pretty good tax compliance)

[fn3] You know, tax day? Which is to say, if you haven’t filed your return or filed for an extension yet, you should probably stop reading this, and find a Post Office that will be open late. Be warned, though, that this year, it looks like there will be a lot fewer of those.

[fn4] (as it almost inevitably does for tax protesters)

[fn5] And thank goodness; the Church clearly does not condone tax evasion, and it will not have your back if you try to evade. Which is exactly how it should be. Ross is not representative of Church members—it was actually tough to find a tax protester case that explicitly mentioned that the defendant was a Mormon—but is, ultimately, an interesting-enough footnote to the world of Mormonism and taxes.

[fn6] Is this the right place to point out that church policy requires members to pay their taxes? Because this is where I’m going to do it.