Pay your taxes
There’s no ‘opt out’ clause available to ministry-minded
By John W. Kennedy
Anyone thinking about avoiding payment of taxes due this
week should heed the advice of Shane Grady and Marty Dingman. The otherwise
law-abiding, well-educated co-owners of a successful leather goods
manufacturing company in Arkansas recently wrapped up a five-year legal battle
with the Internal Revenue Service.
On Jan. 29 in federal court in Springfield, Mo., Dingman and
Grady received three years of probation for willfully failing to file federal
income tax returns.
The men, both 53, avoided potential two-year prison terms.
However, they have endured criminal charges, attorney fees, IRS back payments,
stress and shame that nearly ruined their lives.
Their troubles began in 1996, when Grady, Dingman and about
two dozen others attended a three-hour “constitutional tax conference” in
Branson, Mo., where they both live. Trusted Christian friends had invited the
men to the seminar, although they attended different churches. In fact, a
deacon at Dingman’s church approached him about coming, and his pastor’s wife
turned out to be employed by those promoting the seminar.
Many well-respected area citizens attended the faith-based
function, and various purported expert speakers freely quoted Scripture in
arguing that taxes are unconstitutional and illegal. Presenters, appealing to
listeners’ patriotic, spiritual and stewardship sensibilities, told how to
establish an asset-protecting trust in order to stop paying “unlawful” taxes.
In short, the speakers asserted that the U.S. government had no legal or moral
authority to assess taxes.
“There was a great level of comfort there,” Dingman recalls.
“They talked about doing godly things with our money. We weren’t led to believe
anything was illegal.”
The seminar reinforced information the men had repeatedly
heard about how the government had usurped authority by funding evils such as
abortion while undermining religious liberties. Presenters ignored Scripture
such as Romans 13:5,7, which declares, “Therefore, it is necessary to submit to
the authorities, not only because of possible punishment, but also because of
conscience. … If you owe taxes, pay taxes” (NIV).
“The guys doing these are slick salesmen,” says Grady, who
now attends an Assemblies of God church. “We were ripe for the plucking.”
The false, misleading and unorthodox advice Dingman and
Grady soaked in during eight subsequent highly organized seminars didn’t set
well with the IRS. The men ceased filing federal income tax returns after they
each paid the promoters a $15,000 commission to establish family planning trust
programs. Dingman took several letters he received from IRS civil authorities
demanding payment of taxes to promoters of the scheme, but they told him it
amounted to unwarranted harassment.
Grady says he remained convinced that the promoters — who by now had received his
power of attorney — would protect his family from what they claimed were
unchristian values that the government supported. Paranoia set in, Grady says,
as the anti-tax schemers convinced him that attorneys and accountants — except for the enlightened
ones who had joined the cause — were
part of the corrupt system.
The Christian businessmen used their newfound funds not to
enrich themselves but rather for ministry purposes. In fact, Grady and his wife
even started a still-thriving ministry in the Philippines that has planted
churches, offered free medical clinics and taught morals in a national high
Eventually, IRS criminal investigator Susan Prine paid a
visit to the men. She convinced them they had been duped in the tax scheme.
They have made restitution on six years’ worth of unpaid taxes. Dingman has
repaid $342,258 in taxes and Grady, $219,091 to cover the six-year span.
“It’s not illegal to use asset trusts, but it becomes
illegal when you hide income from the IRS,” says Toni Weirauch, assistant
special agent in charge of the IRS criminal investigation office in St. Louis.
The businessmen agreed to cooperate with IRS officials in
publicizing their legal difficulties in an effort to help others avoid a
similar path. Various organized groups use similar techniques to convince
unsuspecting conservative Christians — from Baptists like Dingman to
Pentecostals like Grady — that paying taxes isn’t required. Such
scammers, who typically extract consulting fees and membership dues out of
victims, employ methods that border on brainwashing.
“Courts have again and again knocked down claims that the
tax system is illegal,” Weirauch says. “But every year, all across the country,
individual groups hold meetings to promote false tax advice.”
“These schemes feed upon Christians because they appeal to
morals,” says Bonnie MacLeod, special agent with the IRS criminal investigation
unit in Mission, Kan. “Going into these meetings they can’t believe anyone
would ever con them.”
MacLeod says the IRS is willing to work with recalcitrant
tax avoiders who have been caught up in such schemes but realize their errors
if they agree to comply voluntarily — before
any criminal charges are filed.
Dingman and Grady remain friends. Their health and their
families remain intact. Grady is now a self-employed real estate agent; Dingman
has his own leather goods manufacturing company. And they haven’t forsaken
“I wasn’t listening to the Holy Spirit at the time; I was
listening to people,” Dingman says. “God put me through a purifying fire. It
didn’t feel good.”
Dingman and Grady take full responsibility for breaking the
law. By conducting a series of media interviews, including for this article,
the men hope to prevent others from falling into the pitfalls they faced. Their
cooperation with the IRS likely convinced U.S. Chief Magistrate Judge James C.
England to avoid pronouncing a prison sentence. Dingman and Grady also must
each complete 40 hours of community service as part of their plea agreement.
“I ignored the Holy Spirit sending me warnings,” says Grady,
who still must deal with potential IRS civil fines and interest penalties.
Although the criminal legal morass is largely behind them,
the business owners are remorseful about their actions.
“I’m ashamed and embarrassed,” Dingman says.
JOHN W. KENNEDY is news editor of Today’s Pentecostal
Evangel and blogs at Midlife Musings (jkennedy.agblogger.org).
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