Justice Dept. Stepping Up Pursuit of Tax Scofflaws

Fearing that a new anti-government tax protest movement is gaining momentum, the Justice Department said Thursday that it is strengthening efforts to go after tax scofflaws.

Assistant Atty. Gen. Loretta C. Argrett, chief of the tax division, said the Justice Department has appointed two special counsels to coordinate national efforts to prosecute tax protesters.

In the last year alone, the Justice Department has seen a 50% surge in tax protest cases referred for criminal prosecution by the Internal Revenue Service, Argrett said.

Tax protests had been subsiding since the 1970s, when refusing to pay federal taxes became a form of protest against the Vietnam War. But in recent years, right-wing groups have begun refusing to pay taxes as a way to deny the legitimacy of the federal government.

Atty. Gen. Janet Reno, seeking to focus public attention on the seriousness of the issue, noted Thursday that the Justice Department won convictions and harsh sentences against operators of what is believed to be the nation’s largest tax protest movement.

The group, the California- and Colorado-based Pilot Connection Society, cost the U.S. Treasury $50 million in unpaid taxes and defrauded individuals of $10 million in fees, the Justice Department said. The group claimed more than 12,000 members.

In a federal court in San Francisco on Wednesday, society founder Phillip Marsh, 72, also known as Milton Pilot Jr., was sentenced to 17 1/2 years in prison. The society sold an “untax package,” which guaranteed to free buyers from all federal and state tax obligations, to 4,000 individuals for as much as $2,100 per copy.

Marsh’s wife, Marlene, 60, received a 14-year sentence and four other group members were handed sentences ranging from four to seven years.

The group spread its anti-tax and anti-government message in a series of seminars and on television. The Justice Department alleged that the group’s plan included detailed instructions on how to evade taxes.

The agency has identified more than 6 million Americans who do not file returns but it often lacks the resources to go after them.