Protester Tells Court: Wages Aren’t Taxable

A nationally known tax fighter who ran for governor of California two years ago has a straightforward answer to the charge that he failed to pay state taxes on $3 million in income: He doesn’t have to.

The state wants George “Nick” Jesson and his wife, Trina Thi Vu -- who appeared Monday at the West Justice Center in Westminster -- to pay $650,000 in unpaid taxes and penalties.

Jesson, who is charged with six counts of felony income tax evasion, says the state cannot confiscate his personal wages.

“It was Nick’s belief that the tax system as applied by the IRS and the Franchise Tax Board exceeded their legal authority and that they were perpetrating a fraud against the citizens of California,” said his attorney, Robert Barnes. “They’re prosecuting Nick because of his political beliefs.”

But Orange County Deputy Dist. Atty. William Overtoom said Jesson is not above the law. “You have to make an accurate, complete and truthful tax statement,” he said. “You can protest it, but that’s different from making a false statement to the state of California.”

Court documents show that the Fountain Valley couple reported their taxable personal income as zero for tax years 1997 through 1999. The county has also accused Jesson of tax fraud at his Huntington Beach company, No Time Delay Electronics.

If convicted, Jesson faces a maximum sentence of nine years in prison. His wife, who is charged with four counts of state income tax evasion, would face seven years. Each is free on $250,000 bail, and Judge Mary Fingal Erickson has set arraignment for July 26 at Superior Court in Santa Ana.

In 2002, Jesson ran for governor as a Republican on an anti-income-tax platform. He received less than 1% of the vote in the primary.

Jesson has also been involved with We the People for Constitutional Education, a tax-protesting organization. The group bought a full-page advertisement in USA Today in March 2001, claiming that the government does not have the authority to collect taxes from employees’ paychecks.

But Barnes contended that his client would pay all taxes -- property, sales and utility -- that Jesson believes are legally owed.

“He will pay every penny of a tax that’s properly assessed, but a person’s labor is still free in California,” Barnes said. “His belief in the American Dream has been badly shaken.”

The Franchise Tax Board said it and the district attorney’s office have been investigating the Jessons for about two years.

“Tax evasion is not a victimless crime; it hurts everyone in California,” said Franchise Tax Board spokesman Barry Gilbert. “This is certainly a big case for us.”