Tuesday, April 28, 2015

Tax-free Roth Conversions - From The Boston Tax Institute

Lu Gauthier of the Boston Tax Institute  has given me permission to reproduce his email blasts.  BTI is a great value for live tax continuing professional education.  If you decided to contact BTI because you read about it here, be sure to mention it to Lu. It won't get you a discount or me a commission, but it will show him that this blogging thing is a thing.

Our thanks to Natalie Choate, Esq. for the following article!  Natalie will be discussing this and other exciting topics at her seminar on May 29 in Waltham!

Can You Do a Tax-free Roth Conversion?

If you have after-tax money in your IRA or in your qualified plan account, there is a brand new IRS-blessed safe opportunity to convert that money into a Roth IRA. The conversion would be "tax-free" because (since this is after-tax money we're talking about), you already paid income tax on it.
The debate rages about whether Roth conversions are "worth it." If all the assumptions work out right, converting your traditional plan or IRA to a Roth IRA could be a great move. But if the assumptions don't work out? Like if your future tax bracket goes down instead of up, or your investments plunge in value, or the government changes the rules on us? A Roth conversion could be a disaster!

Well here's a Roth conversion "no-brainer." If you ALREADY have after-tax money in your plan or IRA, and you can safely legally and easily move that money into a Roth IRA, you have nothing to lose. You get a Roth IRA for an additional investment of....zero! So the future gains will be tax-free, and there will be no required distributions during your lifetime...but if something goes wrong, it didn't cost you anything so there will be no regrets.

Unfortunately not everybody can take advantage of this conversion nirvana. In order to do the tax-free Roth conversion, you must meet both of the following conditions:

You participate in a qualified retirement plan (QRP), such as a 401(k), 403(b), pension or profit-sharing plan, or Keogh plan.

You have after-tax money in a qualified plan (such as a 401(k)) or in a traditional IRA.
Since most people do not have after-tax money in their IRAs or retirement plans, right off the bat we know most people will not be able to use the "tax-free Roth conversion." But if you do happen to meet those two conditions, here is how to convert your after-tax money to a Roth IRA tax-free.

If your after-tax money is in the QRP:

When the time comes to take a distribution from your QRP (perhaps because you're retiring for example), you are entitled to direct the plan administrator to send your plan money via direct transfer (called a "direct rollover") to an IRA. So you open a traditional IRA and a Roth IRA. And you direct the plan administrator to send your pretax money via direct transfer into the traditional IRA (to continue deferring income tax on that money), and to send the after-tax money via direct transfer into the Roth IRA. Voila, a tax-free Roth conversion has taken place.

 Natalie will be discussing this and other scintillating topics at her seminar on 05/29 at the Hyatt house in Waltham.

Natalie's discussion at the beginning of the problems with converting taxable IRAs to ROTH is a mild version of my own view of that concept.  I always thought of it as hitting your head against the wall because it feels so good when you stop. - PJR

Peter J Reilly CPA  hopes to be the first tax blogger to give up his day job.  Quality content that costs him no money or effort is an integral part of his plan.

Sunday, April 26, 2015

Could Rand Paul Back Kent Hovind?

The big news in Hovindology this week is an inroad into the Rand Paul campaign.

First some background for those who have not been following along


Independent Baptist minister and young earth creationist Kent Hovind, nearing the end of a long prison sentence for tax related crimes, finds himself facing more time in prison.  In mid-March, he was convicted of contempt of court, while the jury hung on more serious fraud and conspiracy charges.  He faces retrial on May 18th.

Kent Hovind has managed to spark a pretty powerful social media campaign for Hovindication.  There is a pretty slick website #FreeKent and Kent, making collect calls from the Santa Clara County Jail, has appeared on numerous podcasts and youtube channel ranging from the extremely obscure such as mine

to the borderline mainstream such as Alex Jones

His primary venue is Rudy Jones's LoneStar1776 where of late he has been appearing more than daily.

I have a number of issues with the Hovindication narrative that Kent Hovind is an innocent man, who has paid all the taxes that he has owed and is a victim of religious persecution.  Hovindicators have suggested that I might be a paid disinformation agent of the IRS and that since my views on taxation are treasonous, I should move to Communist China.  They have even offered to pay my expenses.

Nonetheless I have some common ground with them.  (Somebody once suggested that I want everybody to get along because I'm an Aquarian).  Kent Hovind has written a powerful critique of the prison industrial complex.  I also agree that he has probably already served enough time and that there is a thinness to the current charges against him.

My biggest source of sympathy with Hovind is his apparent sincerity. When I look at how things have worked out for Kent Hovind as opposed to how they would be if he had followed the fairly mundane tax advice I or a few hundred thousand run of the mill CPAs, enrolled agents, tax attorneys or unlicensed tax advisers (rather than the three idiots he relied on) would have given him, how can I doubt his sincerity? He has spent over eight years in prison, had his wife sent away for a year and faces multi-million dollar deficiencies when he is finally released.

If he had run his organization as a 501(c)(3) organization, taking most of his compensation as a tax free housing allowance and electing out of social security, he would probably have quite a little empire there in Pensacola without having paid much in the way of taxes. Clearly he was not motivated by greed in his war with the government. As one of the people Jonathan Schwartz interviewed mention "Hovind picked a strange hill to die on."

Rand Paul?

One of the regular features of LoneStar1776 is a weekly meeting of Hovindicators to discuss how the campaign is going.  Their perennial concern is to move the cause closer to the evangelical right wing mainstream.

The big news, a bit past the 25:00 mark, comes from Erin Davis.  A Rand Paul delegate will be making an appeal to Rand to come out in favor of Kent Hovind.  She was assured that the Senator is already aware of and sympathetic to Kent Hovind's plight.

Hovindologists that I have mentioned this development to are dismissive of the notion that it might come to anything.  I don't agree with their analysis.  Ed and Elaine Brown held similar view on the validity of the income tax to "I'm not a tax protester" Kent Hovind.  They took much more extreme measures, holing up in their home with a stockpile of food and weapons.  Nonetheless Presidential candidate Senator Ron Paul endorsed their stand comparing them to Gandhi and Martin Luther King.

If Rand Paul were to pledge that after his election one of his first acts will be to pardon Kent Hovind, there might be a good bit of upside for him.  It just might bring a decent number of alienated voters into his fold.  He can insulate himself from criticism from potential supporters who are closer to the center by focusing on IRS heavy handiness and the amount of time that Hovind has already served. I really think a pledge like that is a winner for him with little downside. There is a lot of alignment between the Hovindication movement and the Rand Paul campaign.

I have to say that I thought this piece was almost forbes worthy, but I think I'll wait to hear something directly from a Rand Paul source.  Also I have quite a backlog of straight tax material for forbes right now.

Peter J Reilly CPA  hopes to be the first tax blogger to give up his day job.  He has no interest in moving to China, but is open to other offers of all expense-paid travel.

Tuesday, April 21, 2015

Kent Hovind Trials - Final Round Of The First Fight - Installment Four

Jonathan Schwartz continues his analysis of the final day of Kent Hovind's March trial along with some commentary on the Hovindication movement. No pictures for this one, so Jonathan asked me to insert some clips.

An Introduction as the Government and Defendants lay down closing arguments

On March 11th, 2015 the Government delivered its close, with a passionate and peppery presentation by Assistant District Attorney Tiffany Eggers.

It was followed by an hours’ worth of a highly personalized plea from Attorney Klootz for John Paul Hansen. Looking earnest and dashing and full into a 1980’s civil rights courtroom drama persona, he recalled his days mustering a hard fought defense resulting in the freedom for a man falsely accused of murder who had festered on Death Row for a dozen years. He talked about fishing with his boys.

Klootz exuded the charm of a tousled haired and gangly idealistic young lawyer from Mississippi. He referred so often to Hovind, we began to forget he was Paul John Hansen’s attorney. When he did occasionally refer to Hansen, he told us among other things that Hansen knew more than anyone about the 1776 legal milieu but should avoid trying to involve himself in modern law.

Attorney Keith for Kent Hovind was methodical, believable, broadly intelligent, clearly liked by the Jury for his sincerity. Then, the piece de resistance, the rebuttal by Eggers, where she came out in force, newly energized and engaged, and at times, seemingly hostile and frustrated.

Despite the genuinely moving work by the attorneys for the defendants, which I found stirring, Kent Hovind is guilty of violating the law. Paul John Hansen as well. This despite the fact that Hovind is a cutesy pop icon, the panda brand of the extreme Christian right, a fast talking wind up doll that was the bright kid in class who was both admired and despised by the other boys , always has an answer, paternal and sadly hapless, Doctor Dino.

It’s quite interesting to watch the efforts of the Free Kent Hovind folks, as they plan and get ready for the second trial date of May 18th, keeping as busy as possible doing what “Free Someone” movements do complete with dissension in the ranks.

They mostly want what we all want.  And that is to be part of a movement with folks they know and respect, who “get” them, for whom their beliefs are normal and not kooky. Each of them wants to snag that brass ring and make a difference, uncovering a new factoid of the day that will be the silver bullet that sets Kent free, or at least gives his team a new angle to pursue.

They want to get recognition for recruiting a new and important member who will become active. A good social media campaign is a huge plus for them, and to be able to demonstrate that their organizing techniques are cutting edge and high tech and attractive, down to the graphics and a quality digital aesthetic. Choosing and funding a legal team that reflects their ideology is paramount.

 It is a social thing as well, being able to talk and chat and write to other kindred souls that are also moved by Kent Hovind’s plight, or even who once long-ago stirred by his videos and teachings.

Unfortunately, many of those in the Free Kent movement also look for a new enemy to dump on, almost on a daily basis. There have been lurid video trailers produced replete with images of Hitler as a stand in for the US Government, as well as nicely made mini-video narratives, one with a capable teen presenter.

 Like Hovind himself, they are on a perpetual search for the panacea that will set Hovind free, a loophole, such as a Freedom of Information Act Suit to find out just how expensive this expensive trial was, or snagging a fabulous Christian/Sovereign Citizen Lawyer, mounting an attack on Wikipedia, and other campaign techniques to try and get a ground swell of public support.

Getting into the majors for the Free Kent Hovind movement types means getting right-wing Christian talk show hosts and politicians to give then the time of day.

 Above all, they need a common enemy, those people and institutions they can rail against. Maybe it will help them find inner peace, but a few in their movement are just plain mean, mocking and picking at weaknesses they perceive in their opposition, taunting and needling and trying to shame. It’s not just politically incorrect, it’s the wrong way to act, so hatefully and obviously bigoted, intolerant of others and demonstrative of the insecurity that needs to put others down to be fulfilled.

Jonathan is off on assignment and promises the last two installments of this series will be ready next week.

Monday, April 20, 2015

New Player In The Kent Hovind Defense

Although Hovindicators tend to group me with the "enemy camp", I have a sincere wish that Kent Hovind would get out of prison sooner rather later. So I find the latest turn in his defense a bit discouraging.  It seems like the money being raised for his defense will be going to an organization that will not have defending him as its top priority. The organization that Ernie Land and Dave Daubenmire (the United States Justice Foundation) have selected to support Kent's defense will by Ernie's account be focusing on an appeal, while feeding his public defender, who will remain in place, whatever useful bits of research they pick up.

The reason I can't get that excited about that is that Kent has already been convicted on one count.  The best stab that I can take at the sentencing guidelines is that he will get two to three years for that.  A lot of that time will have passed, by the time any appeal is decided.  A successful appeal of a criminal conviction can result in a retrial.  The Supreme Court's decision in the case of John Cheek energized people with alternative views of taxation, but did not, in the end, do Mr. Cheek much good as he lost on retrial.

Still, Kent has put his trust in Ernie, so if you want to support Kent's defense USJF is where it is at, so don't let me discourage you.

I am second guessing Ernie's decision and I have a theory as to why he went the way he did, but I'll give you a bit of background first.  If you are very familiar with the case and the movement surrounding it, you can skip a few paragraphs.

What Is The Kent Hovind Case About?

Independent Baptist minister and young earth creationist, Kent Hovind, nearing the end of a long sentence for tax related charges (including "structuring", the systematic withdrawal of amounts slightly less than $10,000 to avoid currency reporting requirements) finds himself facing new charges. In March, a jury found him guilty of contempt of court, but did not reach a verdict on more serious fraud and conspiracy charges.  A new trial for Kent and his co-defendant, Paul John Hansen is scheduled on May 18 in Pensacola, although both time and place are subject to change.

The Hovindicators

Kent Hovind's supporters have been waging a vigorous social media campaign on his behalf.  Their flagship website is #FreeKent. Rudy Davis's youtube channel LoneStar1776 features regular calls from Kent Hovind and lately Paul John Hansen also. Rudy Davis has deferred his interest in geocentrism and the illegitimacy of the Obama presidency to make his channel all Hovindication all the time.

Not Ready For Prime Time?

Hovindication is still struggling to break out of its own echo chamber into the broader Christian right. A We The People petition for a pardon was archived after getting 1,812 signatures.  Before shifting to another venue, Coach Dave Daubenmire's legal defense fund struggled to hit $5,000. Compare that to the Indiana pizza shop that indicated that it would not cater gay weddings (Really big demand for that? Who knew?).  The site for their benefit raised over $800,000 from over 29,000 donors in a couple of days.

I have a lot of issues with the Hovindication narrative that Kent Hovind is a victim of religious persecution imprisoned on trumped up charges for taking his own money out of the bank and now being threatened with life imprisonment for mailing a letter.  I do, however, still believe that the government's current prosecution of Hovind might be excessive and that we would all be better served if they fought crime elsewhere.  I keep wavering in that view the more I listen to Hovindicators, but that's another story.

At any rate, I was glad to hear that Coach Dave Daubenmire had stepped up and offered to raise money for Kent to put on a conventional defense, although from what I could gather his public defender was doing a pretty good job. There are more developments there, but first we should take a look at the course that Paul John Hansen has chosen.

It's All About Jurisdiction

Paul John Hansen went on LoneStar1776 to send a message to his attorney to instruct him to file a number of defenses and turn over documents and that Hansen would be representing himself.  Hansen had two separate phone calls with Rudy afterward to more thoroughly explain his theories.

Much of the Hovindication narrative is something of a confusing Gish Gallop of things like the pedophile prosecutor and Jo Hovnd not being able to put on her bathrobe when arrested, bibles not being opened in the courtroom and one of the prosecutors being a Georgetown graduate.  (Georgetown is run by the Jesuits.  See the connection?)  Hansen, however presents a clear articulate theory.

The Cliff Notes of it is that the statutory law of the United States and the jurisdiction of its courts is much more limited than most people think.  Hansen does not have a contractual relationship with the United States government and nothing he is purported to have done was done on land owned by the federal government.

In his closing statement at the first trial, Christopher Klotz, Hansen's public defender, indicated that Hansen had a fine legal mind, that was stuck in the eighteenth century.

What's In A Name?

Rudy asked if Hansen should be referred to as a "free inhabitant" as the term "sovereign citizen" which some have used in relation to his views has taken on unsavory connotations as this write-up from the Southern Poverty Law Center shows?  Hansen said that he had used the term "free inhabitant", but now prefers to make "them" prove what category he falls in.

How Is It Working So Far?

Hansen is quite sanguine about the defense that he is going to put on, with witnesses being called to demonstrate that the government has no jurisdiction over him.  After that the judge and the prosecutors will find themselves in front of a "court of record" which will order damages.  He thinks the best thing they can do is to back down now.

I have been having trouble figuring out the whole "court of record" thing.  Hansen gives instructions on how they should be set up here.  Here is the only example of a filing in one of Hansens's courts I have been able to find.

Hansen was taking on Rhonda K. Peavy, whose job it is to collect property taxes.  For whatever it is worth the Court of Appeals of Nebraska ended up with summary judgment in her favor.


I found a power point that explains the Independent Jural Society Community Court.  Apparently free inhabitants can convene a court in accordance with the "Word of God".  Among the reasons for convening a court is to protect people against "encroachment from other claims of governance"- like the United States Of America, whose agents seem to believe that their authority is not as severely circumscribed as Hansen does.

The part that is a little troubling is that "Each individual can, by he authority of God, take a valid determination and get what is rightfully his."

What is frightening about the "sovereign citizen" movement is the prospect of sovereigns out there enforcing the decisions of their courts. JJ MacNab in a forthcoming book - The Seditionists: Inside the Explosive World of Anit-Government Extremism in America  discusses the implications of there being as many as 300,000 Americans who believe that they are exempt from all laws, taxes and debts.  (Of course, Hansen believes we are all subject to God's law, which will be interpreted by godly men gathering in "courts of record")

For whatever it is worth Hansen seems to believe that circumstances where violence is justified are extremely rare.

Hovind's Defense

The latest is that Kent will be sticking with his public defender, but that will be backed up by the United States Justice Foundation, which is where the money being raised is headed.  My experts on federal criminal defense, who prefer to stay off the record,  were not impressed when they looked into USJF which seems to be more into writing briefs to support right wing causes than actually representing people charged with crimes.
 I doubt that USJF will help Hovind.  It looks like that Group is in to right wing causes.  What Hovind needs is a solid legal defense, not a cause or a group that sponsors causes.
USJF briefs, while espousing extremely "conservative" -- i.e., 19th Century-based, property-rights-focused, limited-federal-government -- constitutional theories, are of reasonable professional quality.   I don't see any evidence of expertise in federal criminal law or federal tax law, which makes the Hovind choice seem questionable.  My own opinion, as you know, is that KH needs criminal defense assistance more than he does political/rhetorical support.

In yesterday's conference call of the Hovindicators, Ernie Land indicated that Thomas Keith, the public defender, will continue representing Hovind. USJF will focus on preserving matters for appeal. According to Ernie, the attorney and paralegals working on the matter are representing USJF not Hovind.

One of my experts indicated that if Hovind were going to put on a totally conventional defense, his attorney would move for severance of his case from Hansen's.

My impression of their thinking is that there is hope that Hansen's approach will work or that failing that Kent's conventional defense will work giving him two bites at the apple.  I don't think that the first bite is worth much at all, but of course that is not Ernie Land's view.  Ernie had previously put an appeal out on We Are The Future Generations for "common law theorists" and people with similar views to step up to make Kent Hovind a test case.

Why Kent Hovind?

One of the tenets of Hovindication is that Kent Hovind has never been a tax protester and that he has paid all the taxes that he owes.  Ironically the number one proof cited by #FreeKent are letters from three "professionals"  that are a potpourri of discredited tax protester arguments.  The theories in the letter and the theories that Hovind propounded when he spoke about the income tax before his incarceration indicate that almost nobody has to pay income taxes.

Despite the disingenuousness of Kent's "I have paid all the taxes I owe" statements (There is the matter of the final order of the Tax Court saying he owes over $3 million), I have little doubt of his sincerity.  The purpose of the small number of prosecutions for tax related crimes is to encourage compliance by the rest of us.  This particular prosecution seems like it may be doing more harm than good.

 If Hovind had been conventionally tax compliant, he would have not had to pay much in the way of taxes.  His organization would have qualified as a 501(c)(3) and paid him most of his salary as a housing allowance.  As a minister he was entitled to elect out of social security on earnings from his ministry. True CSE would have had to pay payroll taxes on the ministry employees, but donations to CSE would have been tax deductible (People might have been deducting them anyway, but that is a different issue).

At the present time, this mess promises to not end well for either Hovind and his family or the cause of conventional tax compliance.  You know, the notion that most of us are required to file income tax returns and pay the balance due and that it is reasonable for their to be an agency charged with enforcing those requirement.

Since Hovind was convicted of one charge in the first trial, we can be confident that there will be an appeal of some sort and that it will likely be run with Hovnd in prison, so the Hovindication movement in its present form promises to persist for at least another couple of years.  Its elements resonate with many of the concerns of the Christian right and there is a decent chance that it will break into the mainstream, possibly being picked up by a relatively prominent politician.

My dream of a free conventionally tax compliant Kent Hovind who will focus his energies and persuasiveness on prison reform, where I find much common ground with him, continues to recede, but I can keep hoping, which brings me to why I think Ernie chose USJF.

Where Ernie Seems To Be Coming From

Ernie Land holds similar views to Paul John Hansen on the illegitimacy of the federal judiciary.  I asked Ernie to explain to me what they were talking about when they were referring to a "court of record" and this was his response.

 Great Question, and a question I now have asked of many due to the FACT the US District Courts are not allowing Constitutional arguments and denying even the Constitutional right of amendment VI assistance of counsel. To any intelligent person who does some research one realizes that amendment VI was framed and ratified before there were any BAR licensed Attorneys, therefore, all and I do mean all, statues, codes and regulations requiring said counsel to be a BAR licensed Attorney fails. So how can hundreds of cases set bad precedent to the effect Judges can not only refuse amendment VI right of assistance of counsel to those like Paul Hansen , who insist on it, but also forcibly steal the rights of those like Paul by granting BAR licensed Attorney over their objections on record, and then refusing to allow them (Paul) to even act on his own behalf, by saying you have an Attorney and your power of Attorney recognized by this court lies with that Attorney I appointed, against your wishes and rights. This is a clear to even a dummy violation of the people’s rights under the people’s Constitution, and the 1 area I feel could be fought to and won at the Supreme Court level to overturn any conviction. So are these Courts, courts of record?

Judge Dale, the claimed retired Federal Judge, says the only actual court of record is the International Court of Trades. I kind of buy into that because in my previous actions against Government Agencies my U.C.C. claims stopped all their actions against me personally, and against business I held ownership of. HUMMM? Wonder why? I have also noted that a proper claim under common law, backed up with a U.C.C. 1 lien recorded at the Hague International Court and after proper securing and perfecting recorded in Washington D.C. does something financially to even those public officials claiming public immunity. It destroys their ability to have any credit and live a lifestyle they like to live at their levels in Government. This is a form of retaliation against them which wrecks their lives. Maybe if enough people knew this and attacked them in this way the violations of our rights might cease by these corrupt Judges and Attorneys. I know you oppose this method, but I also know it works well. I also know trying to convert those U.C.C. liens to U.S. dollars leads to prison time as enemy of the state. (Montana 7 as example). So my thoughts destroy the false State, but never convert it into their false money.

Conspiracy or not, our freedoms are not allowed in the current Court system, so where does one find the court of record that holds true to the U.S. Constitution? Good question?
So Ernie Land seems to believe that the federal judicial system is totally corrupt. Nonetheless, Kent charged him with helping put on a conventional defense.  So he found an organization that focuses heavily on running lawsuits complaining about what the government is doing is unconstitutional rather than some cynical bastard who is good at getting people out of trouble using every reasonable trick in the book.  It reminds me of a story that my friend James told me about a problem he had once. It is important that you realize that I am changing the details quite a bit, although the essence of the story is still there.

A Shared Language

James had a client name Joe who inherited a business corporation in another country.  Let's call it a vineyard if France. (So now you know that the guy's name is not Joe.  The business has nothing to do with grapes and wine and it's not in France.)  Only Joe forgot to tell James about the vineyard for like four years.  Then he casually mentioned it and James's head nearly exploded.

I won't get into the technical detail, but even if Joe's individual income tax was not affected by the vineyard transactions, there were definitely all sorts of disclosures that needed to be made and the penalties for not making them are really nasty.

James told Joe that he was going to have to pull in an expert in order to get it all straight and it would have to be a larger firm or a very specialized boutique firm that understood the disclosures, knew how to deal with them being late and could get the information from Joe's people in France.

Joe told James he would have to talk to Jean who could talk to Maurice who did all the accounting work for the vineyard. The solution that ended up being arrived at was that Joe would hire an American firm that Maurice knew of and thought very highly of.  James figured that would work out. Only it didn't.

The problem was that the firm that Maurice thought so highly of focused on the problems of French nationals doing business in the United States.  They did not have a clue as to what the requirements are for a United States national doing business in France.  So why did Maurice insist on Joe hiring that particular firm?  Everybody there spoke French, really well.

So Ernie Land charged with finding "bar attorneys" to help in Kent's defense found some who "speak his language" to the greatest extent possible.  It does not appear from his discussion that they are really addressing Kent's immediate need, which is to win the next trial on the more serious fraud charges.

I'm afraid this is not going to end well.

Peter J Reilly CPA hopes to be the first tax blogger to give up his day job.  The Hovind story will probably not do it for him, but his readers seem to find it interesting so he is sticking with it.

Thursday, April 16, 2015

From The Boston Tax Institute

Lucien Gauthier has given me permission to reprint his e-mails to his customers.  Here is the latest.

In Larry Williams v. Comm., TCM 2015-76 (04/16/15), the Tax Court applied Reg. 1.469-2(f)(6) to recharacterize the net rental income from rental real estate, which was rented by an S corporation which was wholly-owned by the taxpayer to a wholly-owned C corporation in which the taxpayer materially participated, as NONPASSIVE income.  If the taxpayer had owned the rental real estate individually or perhaps though a single member LLC, there would have been no question that -2(f)(6) applied, and the Tax Court concluded that owning the rental real estate through a wholly-owned S corporation should not change this result.  Sections 469 and 1411 may be the two hottest areas of tax practice today.  If you would like to learn more about section 469 from a Tax Attorney/CPA with two masters degrees in taxation and 28 years of experience with section 469, please attend our full day seminar on May 27 entitled Passive Activity Losses at the Hyatt house in Waltham!!!           

I'm behind on my reading thanks to tax season.  There is a good chance that I will find the Williams case to be forbes worthy. 

Saturday, April 11, 2015

Kent Hovind Trials - Final Round Of The First Fight - Installment Three

Jonathan Schwartz continues his coverage of the final day of the Kent Hovind trial in March.

Episode Number Three

Sticking to the facts:  The Kent Hovind Fraud and Conspiracy Trial 

The Judge breaks it down as to what criteria the Jury has to follow to determine innocence or guilt

 Did the Government prove its case beyond a reasonable doubt?

Judge Casey told the jury, verbally and in her written instructions, to decide if the Government has proved beyond a reasonable doubt that each Defendant, Kent Hovind and John Paul Hansen, is guilty of the crimes charged in the indictment.

You must make your decision only on the basis of the testimony and other evidence presented here during the trial. Nothing outside of this courtroom should or can be considered by you in any way during your deliberations, including any language on any signs outside of this courthouse or any statements by any person outside of this courthouse. Also, nothing outside of this courthouse should be attributed to either Defendant.

So in other words, ignore the hullabaloo. Keep your head down and stick to the facts. Furthermore, don’t go and get sentimental on me.

Your decision must not be influenced in any way by either sympathy or prejudice for or against the Defendants or the Government.

My attention begins to wander slightly, and I started to silently hum lyrics that I had not sang since I did the solo in a school play back in Newton South High School,  from a play Trial by Jury a libretto by W.S Gilbert and Music by Sir Arthur Sullivan.  Now this in no way should confuse the anti-elitist Rudy Davis for one moment, I also drank beer out of 40 ounce bottles and equipped a GTO, the 500th off the assembly line, with heavy duty mufflers, custom shifter, and jacked up tires. He was probably driving around in his first Dodge Dart at the time, maybe with blue shag rug interior. Anyway, I began to hum to myself lest the Marshals shush me.


CHORUS OF JURYMEN (advancing stealthily)
I'm now a respectable chap
And shine with a virtue resplendent
And, therefore, I haven't a scrap
Of sympathy with the defendant!
He shall treat us with awe,
If there isn't a flaw,
Singing so merrily—Trial-la-law!
Trial-la-law!  Trial-la-law!
Singing so merrily—Trial-la-law!

RECIT—USHER (on Bench)

Silence in Court, and all attention lend.
Behold your Judge!  In due submission bend!

Enter Judge on Bench


All hail, great Judge!
To your bright rays
We never grudge
Ecstatic praise.
All hail!

The judge continued.

You must also follow the law as I explain it to you whether you agree with that law or not; and you must follow all of my instructions as a whole. You may not single out, or disregard, any of the Court's instructions on the law.

That brings us to an obvious association.

Which loosely translates from the Latin, The law is hard and bitter, but it’s the law.

Use your common sense

The Judge went on to explicate:
Proof beyond a reasonable doubt, therefore, is proof of such a convincing character that you would be willing to rely and act upon it without hesitation in the most important of your own affairs.
What I think she was trying to say was “would you buy a used car from this man”?

Judge Casey quickly sums up the case by referring to what the Jury decided last time Hovind was up

The jury’s  verdict in the earlier case included a finding that $430,400 was subject to forfeiture to the United States. Title 18 of the United States Code section 982 provides for the criminal forfeiture of property interests as part of the punishment for the commission of certain criminal offenses, including those for which the Hovinds were convicted…The Court later entered an Order forfeiting the Hovinds’ interest in ten parcels of real property located in Pensacola in partial substitution for the $430,400 forfeiture judgment. The charges in the present case relate to the Government’s efforts to sell nine of those parcels of property in order to satisfy the monetary forfeiture in the previous case. 
Count One of the Indictment charges that both Defendants engaged in a mail fraud conspiracy by devising a scheme to deliver certain documents for the purpose of obtaining money and property that this Court had previously ordered forfeited to the United States.
Count Two charges both Defendants with a substantive count of mail fraud for mailing or causing to be mailed Memoranda of Lis Pendens on four of the parcels of real property that had been previously forfeited to the United States. 
Count Three charges Defendant Hovind with criminal contempt for willfully and knowingly disobeying lawful Orders of the Court, namely, the Order Forfeiting Hovind’s Property dated June 28, 2007, and a subsequent Order that enjoined Creation Science Evangelism from “filing or attempting to file liens, claims or other encumbrances in any manner whatsoever without a prior Order of this Court;” or from “filing or attempting to file, directly or through the services of others, new notices of lien, indebtedness, claims or purported liens, of whatever nature, with the Clerk of Court in and for Escambia County, Florida, on any property forfeited to the United States.

There are other counts, I know, but let’s hold off of them for a moment.

It doesn’t matter what they succeeded in doing, what matters is that they tried to do something illegal

The determination of whether a Defendant is guilty of committing the offense of conspiracy does not depend on the substantive crime actually having been committed.

So, what the government must prove, it that

the Defendant knowingly devised or participated in a  “scheme to defraud” includes any plan or course of action intended to deceive or cheat someone out of money or property using false or fraudulent pretenses, and the speaker either knows it is untrue or makes it with reckless indifference to the truth.

A “conspiracy” is an agreement by two or more persons to commit an unlawful act.

 In other words, it is a kind of partnership for criminal purposes. Every member of the conspiracy becomes the agent or partner of every other member. The Government does not have to prove that all the people named in the indictment were members of the plan, or that those who were members made any kind of formal agreement.

A person may be a conspirator even without knowing all the details of the unlawful plan or the names and identities all of the other alleged conspirators. If the Defendant played only a minor part in the plan but had a general understanding of the unlawful purpose of the plan – and willfully joined in the plan on at least one occasion – that is sufficient for you to find the Defendant guilty.

That is why, regardless of the Dr Dino demonstrations, better and better graphics on his behalf, cute inflatable dinosaurs, more widely viewed blog casts, Kent Hovind will be found guilty by a Jury.

The Judge lays it out the meaning of Contempt Counts 3, 5, and 6

Title 18 of the United States Code Section 401 makes it a federal crime for anyone to disobey or resist a lawful writ, process, order, rule, decree, or command of a Court of the United States. The Order must be clear, definite and unambiguous in requiring or prohibiting the action in question.

Ordinarily, any act a person can do may be done by directing another person, or “agent.”  Or it may be done by acting with or under the direction of others. A Defendant “aids and abets” a person if the Defendant intentionally joins with the person to commit a crime. 
A Defendant is criminally responsible for the acts of another person if the Defendant aids and abets the other person. A Defendant is also responsible if the Defendant willfully directs or authorizes the acts of an agent, employee, or other associate.

You don’t have to love the law, but you have to obey it

The word “willfully,” as that term is used in the indictment or in these instructions, means that the act was done voluntarily and purposely, with the intent to do something the law forbids;
" that is, with the bad purpose to disobey or disregard the law, rather than accidental, inadvertent, or negligent. 
While a person must have acted with the intent to do something the law forbids before you can find that the person acted willfully, the person need not be aware of the specific law or rule that his conduct may be violating. However, disagreement with the law or a belief that the law is wrong does not excuse willful conduct, no matter how sincerely that disagreement or belief is held." 
"A Defendant’s belief that a court’s order is still invalid after all direct challenges to the order on appeal have been lawfully rejected is not evidence of good faith, even if the Defendant’s belief is sincerely held."

Closing your eyes and blocking your ears is not a valid defense

"The elements of knowledge may be inferred if a Defendant deliberately closed his eyes to what would otherwise have been obvious to him."
The Government must show beyond a reasonable doubt that a Defendant made a conscious decision to avoid learning facts that otherwise would have given him the actual knowledge.

Don’t be a softie

Judge Casey finishes with a call to let her do the sentencing, and the jury the deciding
You must never consider punishment in any way to decide whether a Defendant is guilty. If you find a Defendant guilty, the punishment is for the Judge alone to decide later. Your only interest is to seek the truth from the evidence in the case.

Friday, April 10, 2015

Hovindication Finds Its Opposite If Not Equal Reaction

One of the implications of Young Earth Creationism, the notion that there is scientific support for a hyper literal reading of the Book of Genesis, is that human beings, as they are now, must have existed contemporaneously with dinosaurs.  Kids love dinosaurs. So you can understand why Kent Hovind, Doctor Dino, came up with the notion of Dinosaur Adventureland so that he could teach "real science" to young people while they played around with dinosaurs.

The militantly rational as, I call them, find Dinosaur Advetureland offensive in more ways than there are begats in Genesis. Amanda Kondrat'yev has been covering the Kent Hovind trial under the pen name Janet Yang.  She is planning counter demonstrations at the May trial and would like to see a park that teaches "establishment science" or what most of us would call "science" at the site of the original Dinosaur Adventureland.  Here is what she has written. PJR

I visited Anthony Jaworski today. He is the current owner of the only part of Kent Hovind’s compound that wasn’t tangled into ministerial trusts by Hovind’s son and friends/family. I had written a letter to Mr. Jaworski inquiring about the Dinosaur Adventure Land property. He called me about two weeks later and invited me to see it. I went the following morning with my husband and a real estate investor/filmmaker friend.

When we arrived, Mr. Jaworski slid open the gate and pulled up patio chairs. He claims that police and the owner of the Drowsy Poet are working with Hovind’s family to force him out of the house. He has been assaulted to the point of losing eyesight. He says that when he deals with the police they too ask him to sell the property rather than helping him. He has lost all of his money to lawyer fees and court costs, and complains about the terrible economy in Pensacola. He wants nothing more than to go back to Maryland and get his money back. He says there is only one building going up in the area (N. Palafox), but that it is a good sign.

I look over at the abandoned Dinosaur Adventure Land wistfully. It would be so perfect as an actual science learning play center. More on the Pensacola Dino U later. We may need a letter campaign or something to break up those ministerial trusts. Not quite sure.

After it all, he told us that he believed God restored his eyesight because he prayed for days, and that Christians like Hovind’s family confuse him because they are so horrible to him. He called us Angels, and thanked us for filling him in about Kent Hovind and the charges he faces. Until today, he believed what he had heard on Alex Jones and was convinced that Hovind was being tortured instead of still in business through his son’s Creation Store just a few streets from Dinosaur Adventure Land. Even after being “allegedly” harassed, framed, and assaulted he was willing to believe that it was the government’s fault for selling the land to him when the Hovinds won’t leave him alone. He has no friends, no money, his car is broken, and he’s ready to go. We made sure he knew that he could call us in case of trouble. I want to help him leave.

Dino U is an idea to replace the Creation Science Evangelism park with an actual Science park with fun things that help kids understand the world including Dinosaurs and their place in the history of the world. It is important! You cannot leave out science and then wonder why kids are growing up unable to perform to standards. It turns every instant into a learning opportunity and unleashes the mind. There will always be new questions that need to be asked so that problems can be solved. Hovind used the park to brainwash children and indoctrinate them into obedience. Dino U would help supplement the deficiency in science education in the area.

There are many under performing and failing schools within a 30 minute drive. The closest school to Dinosaur Adventure Land is a charter school where teachers were caught just last week in a scandal involving grade changing and teachers watching porn in the classrooms. Escambia County is in dire need of Dino U and knows it. The idea gains supporters daily, and I am determined to make something happen. Never in my life have I felt something so desperately needing attention than the state of education system here and the gross abuse and greed from many of the churches.

Pensacola Christian College has a sprawling campus, state of the art facilities, and uses them to ignore science in favor of religion. PCC intentionally refuses science and is unaccredited because of it, yet they own so much of Pensacola’s land and wealth and live richly tax free. There are homeless people outside by the interstate, yet PCC has security cameras and segway cops guarding the vast amount of space that could be used to help.

You also cannot forget A Beka Books. Without A Beka, we would not have the steady supply of Bibles and religious home school textbooks. This business, like all the rest of the ones they own, is not taxed. Hovind probably wouldn't even be in jail if he had filed the right papers because Christian privilege permeates this whole area and the nation. Why should the churches be fencing off their tax free property? Why should public schools suffer while bigger churches are opened every day?


I’m trying to organize a counter protest to the anti-choice/homophobic/delusional people who came from out of town to support Hovind. What I want to do is walk right into Dinosaur Adventure Land and hold a large concert/speaking event. I want to hear from people that have been hurt by these people. Everything science, anti-homophobic, pro-choice, climate, Humanists, Atheists, Progressive Christians, and more is welcome. Costumes would be hilarious and probably make national news.

What we will probably do is just go downtown to the courthouse. A party sounds like so much more fun. Who’s ready for civil disobedience? It can’t be just me again.

Follow my pages facebook.com/creationismisnotscience and facebook.com/PensacolaDinoU for updates. I'm busy all the time and could use help leading up to the trial on May 18th. Please let me know if you are interested and what you're good at or want to help with. I'm open to ideas. Thanks!

Kent Hovind has issued a response to this article.

Kent Hovind Trials - Final Round Of The First Fight - Installment Two

Jonathan Schwartz continues his analysis of the final day of the Kent Hovind trial.

Judge Rodgers reviews the charges as she gives her instructions to the Jury

Just the Facts Ma'am

There are a lot of emotions that come up in the course of a trial, especially by, or on behalf of, the defendants. Most of us have a love-hate relationship with the law and lawyers, but the reality of much of that they do is droll-- cut and dry. It’s based on facts. Yes, facts interpreted by those in a position of authority. Those same empowered officials however have less leeway than is popularly supposed. So if anyone is sincerely interested in the current trials and tribulations of Kent Hovind, affectionately known as Dr. Dino, than one needs to put some time in and slog through facts.

Lately, the internet is waterlogged with audio and video blogging by those that support Kent Hovind, or backers or a version they want to believe is his cause. When we started working on coverage of this case most of felt that Hovind should not be serving hard time for tax evasions and related shenanigans, and wished like many others that he would suddenly wake-up, chill out a little bit, stop being so self-defeating, and get back to teaching and preaching and his family. We still by and large feel that way.

The Internet is Waterlogged and it’s bad for Dr Dino

The truth of the matter is that as hullaballoo continues, posting and organizing in his defense, it’s been laced with hate speech and smear tactics. It’s hotly directed towards anyone with a tangential connection to the trial who might not be not convinced that justice would be served by Hovind taking a taxi home tonight.
Rudy Davis in particular, who has set himself up as the “ mouth” for Kent Hovind, encouraged by Hovind who reports in often on a daily basis. David has verbally attacked the subjects of my interviews, and my journalism associates, who for the most part are Christian or home schooled Baptists or Pentecostals, not atypical of Pensacola, Florida. 

Rudy Davis is Hovind’s court Jester, the eighth grader who was always getting bullied and sadly learned to love getting chased 

Davis likes attention and he likes to act out, at least in front of the camera or the microphone. He is quite pleasant in person. He’s also indicated that there are those of us on the judicial and journalistic side of things who would be better dead. He likes to shock and offend, and makes leering jokes about the prosecutor’s choice of skirts, twists names up deliberately as the self-appointed buffon of malapropos, and so on. 

Now, in certain neighborhoods that I have lived in there are penalties for disrespect. Filmmakers, of which I am one, are as protective of their crews as border collies. But there is a bigger problem than my offense, and it is directed squarely at Davis’s and Hovind’s own followers. 

Country folks don’t like those that act dumb and pander. They are far too smart for that.
Davis, whom Hovind actively entrusts as the main spokesperson for his defense, plays the phony working class hero who pretends that being Texan and country means you can sell a cause by acting ignorant. That is deeply insulting to country folk who are generally much deeper thinkers than city folk. It is equally insulting to faith-based congregations and believers who might want to join the Free Kent movement but don’t buy the shock jock routine of sneering insults and taunting innocents in the hopes of attracting a few angry allies.

What a trial is, is about a crime, whether it has been committed, and if there are laws broken. Davis and others are rapidly burning out any sympathetic feelings for Hovind on the part of the public or the judicial system, which is where the good-will capital should be. 

The Jurors are given a cheat sheet listing the Charges

The Jurors received a cheat sheet of the criminal counts offered up against Hovind and Hansen. It is to the validity of these charges that the Jury needs to make a decision. The brief began with an introduction.

The Original charges

“That Defendant KENT E. HOVIND owned Creation Science Evangelism ("CSE") and various related business entities located in Pensacola, Florida. In or about July 2006, the Grand Jury in the Northern District of Florida returned a fifty-eight count Indictment against defendant KENT E. HOVIND and his wife, Jo 0.Hovind, for various charges including failure to withhold payroll taxes of CSE employees, structuring, and impairing and impeding the lawful function of the Internal Revenue Service. On or about November 2, 2006, HOVIND and his wife were found guilty following a jury trial. That jury unanimously also found that $430,400 was subject to forfeiture.

The cliff notes continue with some detail so that the Jury learns about Forfeiture
“In or about June 2007, the United States District Court entered an Order Forfeiting Substitute Property, which forfeited the interest of defendant KENT E. HOVIND and his wife, Jo D. Hovind, in the currency held in a Wachovia Bank account and the following properties located in Pensacola, Florida: including North Palafox; Cummings Road; Old Palafox Street; an Oleander Road; and 116 Cummings Road. ( shortened by the author of this blog)

Immediately, Eric Hovind, (one of Kent’s son and the heir apparent), “filed an objection to the forfeiture of 23 Cummings Road, and Glenn Stoll filed an objection to the forfeiture of the remaining nine pieces of real property, as purported trustee for various alleged trusts.”

Who in heaven’s name is Glen Stoll anyway?

Throughout the trial, the prosecutor Tiffany Eggers was barred from mentioning the injunction against Glenn Stoll, who Kent Hovind had hired and was basically running all fiduciary aspects of the ministry property. For some reason it was inadmissible. But a blog is not a courtroom, so I found the press release put out by the Federal Department of Justice the year before Kent Hovind’s tFOR IMMEDIATE RELEASE

Edmonds Man Uses Sham Corporation, Trusts, and “Churches” To Help Customers Evade Taxes
WASHINGTON, D.C. - The Justice Department announced today that a federal court in Seattle has barred Glen Stoll, of Edmonds, Washington, from promoting a tax-fraud scheme using sham trusts and a corporation to help customers evade federal taxes. The preliminary injunction order, entered yesterday by Judge Ricardo S. Martinez of the U.S. District Court for the Western District of Washington, states that Stoll continued to promote the fraudulent scheme after the Justice Department filed the suit earlier this year to stop it. 
The court found that Stoll sold a fraudulent “corporation sole” and “ministerial trust” scheme, falsely telling customers that conducting their personal and business activities through a corporation sole and ministerial trusts, and treating them as churches, eliminates obligations to file federal tax returns and pay federal tax. The court stated that the ministerial trusts Stoll created for his customers were not created for religious reasons, but were instead used to operate secular businesses, such as pest-control and carpet-cleaning firms. The order states that Stoll sells the scheme through a website and falsely claims to be a lawyer. 
“People who buy into tax-fraud schemes are buying nothing but trouble—past due tax bills with interest and penalties and the possibility of criminal prosecution,” said Eileen J. O’Connor, Assistant Attorney General for the Tax Division. “The Justice Department and the Internal Revenue Service are committed to stopping the promotion of tax fraud.”
The court’s order also requires Stoll to give the government his customers’ names, mailing and e-mail addresses, and Social Security and telephone numbers. The court also ordered Stoll to notify customers of the injunction, remove materials about the banned promotions from his website, and post a copy of the injunction on that site for the duration of the case.

Interesting guy, this Glen Stoll many of us were hoping he would magically appear at this trial, it would have been interesting.

Then, the summary to the Jury, their cheat sheet, continued with this retiree who had come down to Florida to enjoy the dream of comfort and peace in Pensacola as he grew frail.

Little did Jurwaski know what a nightmare he had gotten into

“In July 2011, Anthony Jurwaski . purchased the real property located at 5720 North Palafox Highway, Pensacola, Florida, and a warranty deed was issued to A.J.” Boy, what a mistake that would prove to be as he later tried to sue the federal government for getting him in to this mess.

Hansen files liens to try to block sale of property

“ Beginning in or about June 2011, and through in or about September 2011, defendant PAUL JOHN HANSEN caused liens to be filed with the Escambia County Clerk of Court on the nine pieces of real property ordered forfeited by the United States District Court in July 2009.”

Yes, those were the famous filings by John Paul Hansen at the Escambia County Clerk’s office. They were expressly forbidden and Hansen knew that but he liked to mess with the government. Some guys like fly fishing, or golf, or spending their time as a Big Brother to some fatherless child. Not our Hansen.

Hansen files some more  liens

The court further reminded the Jurors that …“On or about September 19, 2011, defendant PAUL JOHN HANSEN caused a document titled "Quiet Title -Equitable Action" to be filed in the Circuit Court of the First Judicial Circuit in Escambia County, Florida. HANSEN's pleading identified the nine pieces of real property ordered forfeited by the United States District Court in July 2009. Thereafter, HANSEN' s civil action was removed to the United States District Court of the Northern District of Florida in case number 3:1lcv475/MCR. On or about December 2011, the civil action was dismissed.”

The Court files an injunction against Hansen: Do not cloud the title to the property, and would you hire a real attorney if you are going to try?

On or about March 26, 2012, the United States filed a Complaint in case number 3:12cv 136/MCR seeking an Order from the District Court for the Northern Districtof Florida

to declare that the liens filed by defendant PAUL JOHN HANSEN between June 201 1 and September 2011 were null and void….any agent or representative acting on their behalf take no further action to file or attempt to file any liens, notices, financing statements, and claims of whatever nature with the Clerk of Court in and for Escambia County, or attempting, in any manner, to cloud title of the properties without first obtaining the advice of a licensed Florida attorney or an Order from the Court.

A court order is a Court Order

A court order is crystal clear, and delivered to your door. With easy to read instructions. Like don’t drive on the sidewalk or pee in the pool. Hansen and Hovind were the kings of filing, Hovind topped the One Hundred mark.

Thereafter, defendant PAUL JOHN HANSEN caused documents and Northern District of Florida in case number 3: l 2cv 136/MCR. The documents and pleadings were rejected by the District Court.

Seems Hansen and his client Hovind were not paying attention. This time the court was saying, listen up or you are going to get in a world of legal hurt. But Hansen, shall we say, just kept on keeping on. Between Stoll and Hansen, Hovind sure could pick ‘em, for their incompetence an criminality. And the hits just kept on coming…

Between on or about April 10, 2013, and April 15, 2013, G.S. caused a Claim of Lien Affidavit of Obligation, with attachments, to be mailed and delivered to the Clerk of Court of Escambia County, Florida.

Hoving sues a bunch of prison guards for over a hundred dollars grand each. They were slow to forward a box with some of Hovinds paperwork. This was supposedly a way to show that there was hope for his case.

Hovind files a salvo at the title attorney.

Thereafter, on or about May 22, 2013, defendant PAUL JOHN HANSEN caused the Claim of Lien Affidavit of Obligation, with attachments, discussed in paragraph 14 above, to be mailed and delivered to the real estate title attorney handling the real estate closings for the United States with regard to the properties previously ordered forfeited by the United States District Court in or about June 2007.


Now it’s Hovind’s Turn. 

Now the interesting thing here is that Hovind, the original do-no-evil, hear-no-evil, and see-no-evil guy, did his prison Capo thing and got the address of the title insurance guy from his kid and passes it along to Hansen. And then he did his own thing, with the help of a real estate type doing ten for fraud, and files a Lis Pendens with the Clerk of Courts in his home town. Tsk, tsk fellas, you had about a dozen warnings not to poke the hornets’ nest.
On or about May 29, 2013, defendant KENT E. HOVIND caused documents titled Memorandum of Lis Pendens to be filed with the Clerk of Court of Escambia County, Florida, on the four properties previously ordered forfeited to the United States
The pair gets charged with plotting an attempt to block the forfeiture
Between June 1, 2011, and on or about July 1, 2013, in the Northern District of Florida and elsewhere, the defendants, did knowingly and willfully conspire, combine, confederate, and agree together and with other persons to devise a scheme to defraud the United States and for obtaining money and property by means of materially false and fraudulent pretenses, representations, and promises by the use of the United States Postal Service, for the purpose of executing the scheme and artifice to defraud, in violation of Title 18, United States Code, Section 1341. The purpose of the scheme was to defraud the United States and others and to obtain money and property previously ordered forfeited to the United States.
From there the counts go on, Hansen resisting arrest, Hovind acting in contempt, broken down so that the jury had the charges squarely in front of them when they would get to deliberation.

Peter J Reilly concludes:

Jonathan has promised more installments and they will be coming soon.  I should say that personally I have grown rather fond of Rudy Davis, but I have to agree with Jonathan that the antics of the Hovindicators are probably not helping Kent Hovind get free. If you listen carefully to Kent, he is still putting out the message that people don't have to be what I call "conventionally tax compliant", yet his supporters persist in pretty much ignoring that aspect of the fight.

Monday, April 6, 2015

Kent Hovind Trials - Final Round Of The First Fight - Installment One

 In mid March as I struggled with corporate extensions and continued wrestling with the tangible property regulations, my friend, filmmaker Jonathan Schwartz was in Pensacola covering the trial of Kent Hovind, Independent Baptist Minister and young earth creationist charged with contempt of court and fraud.

Jonathan's account of the final day of trial, to which he brought his filmmakers eye will be delivered in six installments.  - PJR

Paint by numbers.  

An account of the closing arguments in the 2015 trial of Kent Hovind aka Dr Dino.

Hovind will be found guilty despite the fine defense put up by his court appointed attorney.  He will be convicted,  Here are the facts, Episode one of six.


Kent Hovind was accused of interfering with the sale of forfeited property seized as a result of a conviction for structuring - the systematic withdrawal of amounts somewhat less than $10,000 to avoid currency reporting requirements. The trial took place this March in Pensacola, Florida. Hovind was found guilty of contempt of court. The trial has been declared a mistrial, continued to May on the remaining fraud and conspiracy charges as a result of a hung jury. It seems as if there was a single juror reluctant to throw the book at Hovind.

Hoopla bereft of the reality of the courtroom

For months, there have been hundreds of hours of video blogging by members of the Christian right, thousands of words penned by experts offering analysis, barely veiled death threats against the judge and prosecution team courtesy of  the lunatic fringe, street demonstrations by those who sincerely believe Hovind is being persecuted because he is a Creationist Christian, and finally, conference calls and strategy sessions hurriedly convened by the best minds in the Sovereign Citizen, tax protest and various conspiracy theory movements. They are trying to plot the best recourse to free Kent Hovind and resuscitate a version of his dinosaur themed creationist theme park and ministry.

All this has just about nothing to do with what is going on in the courtroom.

That is important to remember. Because none of it will have any impact on the case. The jury and judge will decide if he is guilty and what’s to happen with him. And they will do so within stringent federal sentencing guidelines and other constraints which have nothing to do with the judge’s personal feelings as portrayed by Hovind’s supporters who actively engage in smear tactics of the most base sort.


Yes, he’s guilty, despite a spirited defense lawyer and a relentless social media campaign. It’s easy to forget sometimes, with all the hoopla. He is not the marathon bomber, nor Nelson Mandela nor Leonard Peltier nor Aung San Suu Kyi.  It’s time to lay out why the prosecution will win despite a robust defense and a handful of supporters willing to throw themselves on the sword for him for their own political gain, or out of solidarity,plain pity, or because they think dinosaurs remain the best toys.

The Federal Government VS Kent Hovind and Paul Hansen.  Closing arguments.

Good morning Pensacola.  Good morning Courtroom.

Hovind and Hansen showed up for the closing arguments of the trial wearing darker suits then on previous days. They are similar in physique, lean, a bit professorial, decidedly boyish with hair swept in neat parts. The seats for observers were comfortably full, one or two of us journalists, the rest Hovind supporters from out of town, some in suits, some in Jesus T-shirts. A half-dozen Ukrainian twenty year olds had come down from Virginia, friendly but looking like they could handle themselves.

Blogger Rudy Davis and his entourage of half a dozen were in attendance, as they had been daily. Rudy liked to occasionally get up and leave the courtroom in a dramatic fashion, seemingly to update an important person in the movement or check in with his stockbroker. I wanted to give him paper, I felt bad, because he took notes on graph paper (very European for a Texan) in tiny neat letters like a castaway on some Pacific Rim island with just a single sheet of paper remaining, and trying to write his will.

I sat next to George Lujack for most of the closing day. He’s a creationist and debates fellow Christians and Catholics with great enthusiasm, but’s that not why I sat next to him. He is an ex-NY cop built more like an ex-cage wrestler, except bigger. Big head, big knuckles, big wrists, and if there was one guy there that looked as if could give the suited federal marshals a run for their money it was George. Journalists want to ride the bomb just like Dr. Strangelove, we gravitate towards aberrance. But he didn’t act rash, just muttered softly (any audible muttering or utterances was immediately shushed by the Marshals) under his breath. Once, only once, I was richly rewarded by a Lujack getting particularly annoyed at a cross by prosecutor US ADA Tiffany Eggers and he cracked his neck, loudly. The way a thug cracks his neck before beating the kindly Dutch shopkeeper for being a day late on his protection monies.

In from the cold

A couple of families new to the court room had previously been out of doors demonstrating. Their young, Christian homeschooled children were getting a free lesson in civics and joining the Free Kent movement in one go. In clean Khakis and knee socks, again, the children accompanying their parents in protest were remarkably well behaved, and not the least bit twitchy.

And of course, there were the regulars, Rudy Davis and his entourage in the Free Kent Hovind movement. They were middle-aged men, mostly from around the Gulf, mostly devoted anti-government Christians with a sprinkling of straight up right wing tax protesters.  There was a doctor who had served 13 years in various lock ups finally returning to his home town and a Pensacola jail, since burned to the ground. He almost lost an eye from a lock in a sock swung at him.

What they generally had in common, aside from the fact that they were all pretty nice in person, friendly and earnest in their preaching, is deep dislike for evolutionists, and more often intense disgust for Jews, Blacks, Catholics, Evolutionists, female judges, female assistant district attorneys, and anyone who disagreed with them. They like to taunt their detractors, especially over the internet.

Hovindicators, a new social movement or angry creationist shock- jock porn putting on a show for each other ?

Someone mentioned today that they, the Hovindactors, had built a movement. I disagree. It is akin to a chimera. The Free Kent Hovind types post and post, and hurl lurid school boy insults at their opponents. Their opponents parry, as expected, and it becomes cyclical and self-sustaining for the Hovindicators especially but everyone gets a measure of attention. The Hovind supporters get to act out for a good cause, show sympathy, and have their offbeat beliefs affirmed in guest appearances on rabid Youtube blogs hosted by kindred souls who rant on similar topics. This is not a social movement, it is an opportunistic one, a chance to attach oneself to a cause that others are carrying on about.

I have been part of or witnessed many grassroots movements, in many countries and all along the political spectrum. Real movements spread, they gain more followers at a good clip, their ideology deepens, and the cause gains new perspectives and molts.

Most of the folks supporting Hovind have long been staunch free Kent choir members. Kent is a Christian who went to the federal pen for not paying taxes and being obnoxious about it. As Hovind enjoys little support in this home town there is zero local movement building going on in Pensacola.  He is ridiculed, not because of his religious beliefs, not in Pensacola which is a cradle of imaginative and orthodox fundamentalist interpretation, but because he brought shame, and risk through his tax  shenanigans. At the core of the Hovind movement is a group with their own form of hate-anyone-not-like-us porno, getting attention by spitting spew, presenting the same half dozen talking points, making the rounds of each other’s webcasts, like a high school lacrosse team on a yellow bus. Not a movement, just comments about comments on social media.

Federal Judge Margaret Casey addresses the Jury

The Judge admonished the full courtroom that there could be no disruption or people would be removed. After almost a week and a half, we were one big happy family and security and such was visibly looser despite the Judge’s preventative scolding. One stern Marshall manning the metal detector at the lobby entrance turned out to be from New Hampshire, we talked ice and fly fishing, and ski mobiles out in the wilderness. He still took my phone, water bottle and extra pen, but let me chug my coffee on the first floor. And yes, after many tries I found a great coffee shop near the Courthouse. Polanza Bistro, phenomenal.

Judge’s instruction to the Jury. Do not be influenced by sympathy! Are they guilty, or not?

 As trials in her courtroom go, “this has not been a long trial” the Judge said.

For most of us assembled, it felt like a hundred years or so had elapsed, so I had one of those “if you say so” kind of moments.

She asked that the Juror’s not be influenced by sympathy or otherwise for the defendants or the government. She then went on to define reasonable doubt as the sort of common sense that you would enlist in making determinations in your own affairs. Her tone was kind, clear, and none of her admonishments were delivered in a way that seemed intended to skew. We who have been watching cop and crime shows all of our lives never heard instructions to the jury before, not once, and by no means was all that she was explaining and rolling out instantly intuitive. She was defining how one gets to the guilty or non-guilty stage, what you ought to hold into account and how this differs from the Hollywood version of a jury doling out justice.

She then explained the Criminal Forfeiture, 18 U.S. Code § 982 and listed the properties it was to include.

You have that to look forward to in the next installment.

Friday, April 3, 2015

Bill Caplinger Says You Can't Be A "Thug For Jesus"

Independent Baptist minister and young earth creationist Kent Hovind nearing the end of a long federal prison sentence finds himself facing new charges. His trial in mid-March resulted in a conviction for contempt of court and a hung jury on more serious fraud and conspiracy charges. Retrial is scheduled for May 18.

Jonathan Schwartz has been covering the trial and investigating its Pensacola background.  Creation Science Evangelism and its Dinosaur Advertureland Theme Park was part of the Pensacola evangelical scene which included a strong pro-life movement, the Brownsville Revival and Pensacola Christian College, where men and women ride in separate, but presumably equal, elevators.

Supporters of Kent Hovind have built  a vigorous social media campaign.  The flagship website of the movement is #FreeKent  and Rudy Davis's youtube channel LoneStar1776.  Rudy has deferred discussion of other matters that concern him such as geocentrism and the illegitimacy of the Obama presidency to focus on Hovinidication.

The essential elements of Hovinidication are that Kent Hovind is an innocent man being subjected to religious persecution, that he is not a tax protester, has not broken any laws and has paid all the taxes that he owes.  I have issues with that narrative, but I won't detain you with them here.

Something that is a puzzle to both me and Hovindicators is the lack of support for Hovind in his old stomping ground in Pensacola. As noted,  Pensacola has a very strong evangelical community and Kent Hovind's Creation Science Evangelism was part of that rich mosaic.  His son Eric has continued the ministry with his Creation Today.

Yet the people inside and outside the courtroom supporting Kent Hovind were almost all from out of town.  Here Rudy Davis relates his discussion with local minister Brian Donovan who was unwilling to help.  Rudy goes on to note the large number of churches in the area and that none of them are doing anything to help Kent Hovind, because they seem to think he is a "tax cheat".

Perhaps talks like this one by Kent in which he indicates that he has not filed a federal income tax return in 28 years are still in the minds of the Pensacola Christians who believe in rendering unto Caesar.

Ironically Proof Number 1  of Hovind's innocence according to the #FreeKent site are letters from "tax professionals" that are a pastiche of frequently debunked tax protester arguments.  If those letters are correct, hardly anybody is required to file an income tax return.  They're not, by the way - at least not according to any federal court that has considered the arguments.

To get another view on why Pensacola might not be rallying behind Kent Hovind.  Jonathan Schwartz and Abigal Megginson interviewed Bill Caplinger.  Bill Caplinger has been the president of the Unitarian Church of Pensacola.  As a religious liberal, he can have an appreciation for the warm loving embrace of evangelical Christianity, (In Pensacola it is largely Baptist and Assembly of God, apparently) while acknowledging it tendency to sometimes slip into intolerance (Not that religious liberals don't also have issues with tolerance).

Bill ran into Kent Hovind in two different contexts.  Bill managed the physics lab at the University of West Florida.  As Kent was building up his video library and giving his lectures he would call the professors there with notions he had picked up that he believed supported intelligent design.  Eventually they started referring Kent to Bill who had more patience with him.

Bill also served as an escort at the clinic where abortions were being performed shielding patients and clinic personnel from pro-life demonstrators.  He would often see Kent riding by on his motorcycle and sometimes stopping apparently checking to make sure that people who had committed to be there demonstrating were covering their assigned shifts.

The pro-life/pro-choice dispute got extremely heated in Pensacola.  Bill relates one time explaining to one of the pro-life leaders John Burt that you can't be a "thug for Jesus".

The speculation is that Pensacola Christians have had enough radical confrontation to last a while and that out-of-towners trying to import that will not find a warm welcome.

Which brings us back to Rudy Davis.  If you don't have time for this entire clip below go to about 14:00 and draw your own conclusions.

The full interview with Bill Caplinger is available here.

Peter J Reilly CPA hopes to be the first tax blogger to give up his day job.  He has a long way to go.