Business and Economics

U.S. Attorney’s Office Warns Against “Zero Income” Returns

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 April 18 2014—United States District Attorney David Capp is warning residents that an argument from a popular book and website claiming that residents do not have to pay most federal taxes is bogus, and those who use the theory to avoid paying taxes will be prosecuted.

 Capp’s office announced Friday that 53 year old Steven Borchert of Warren County was sentenced to 51 months with 1 year of supervised release after being found guilty of filing false income tax returns between 2001 and 2009. Borchert operated a carpet cleaning business for which he reported “zero income” on his tax returns. The U.S. Attorney’s office says the business generated over $1.8 million in revenue during those nine years. Borchert reportedly based his argument against the taxes on information from the website LostHorizons, and the book “Cracking the Code” written by Peter Hendrickson. The site and book claim, among other things, that wages and business activity are not income under the Internal Revenue Code, and encourage people to file “zero income” tax returns.

 The U.S. Attorney’s office press release states, “The website and book fail to mention that Hendrickson has been twice convicted for federal tax offenses. Hendrickson’s most recent conviction was for filing “zero income” tax returns, the same conduct for which Borchert was convicted.”

 Capp warns that the Internal Revenue Service will “continue to vigorously investigate and prosecute those who file these bogus tax returns.”


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