Richard Simkanin had been the president and sole shareholder of Arrow Custom Plastics, Inc., in Texas, until he was arrested and convicted of the tax crimes described below.
Simkanin publicly endorsed the section 861 argument, claiming that the federal income tax did not apply to domestic incomes. At his criminal trial (see below), he relied on the "Cheek defense" and testified that he had a good faith misunderstanding of the tax laws.
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After he stopped withholding taxes from the wages paid to his company's employees and stopped filing income tax returns himself, Simkanin was indicted on 12 counts of willfully failing to collect and pay over taxes, 15 counts of attempts to defraud the United States, and 4 counts of willfullly failing to file tax returns. He was convicted on 19 of the 31 counts and sentenced to five years in prison, three years of supervised release, and order to pay restitution of more than $300,000. United States v. Simkanin, No. 4:03-cr-00188 (U.S.D.C. N.D. Tex. 5/5/2004), affirmed, 420 F.3d 397, 2005-2 U.S. Tax Cas. (CCH) ¶50,507 (5th Cir. 2005), cert. denied, 126 S. Ct. 1911 (2006). Simkanin served his sentence and was released from prison on June 18, 2010.
Five days later he was ordered jailed for allegedly violating the terms of his release, for which a hearing was set for July 1, 2010. Order, entry 349, June 23, 2010, United States v. Simkanin, case no. 4:03-cr-00188-A, U.S. District Court for the Northern District of Texas.
On July 2, 2010, his terms of release were revoked, and the Court sentenced him to an additional six years and seven months in prison. Judgment of Revocation and Sentence, July 2, 2010, docket entry 358, United States v. Richard Michael Simkanin, U.S. District Court for the Northern District of Texas, case no. 4:03-CR-188-A. Simkanin died while serving his sentence in late 2010, at the age of 67.
Simkanin came public attention when his name appeared in the full-page advertisement published in USA Today on March 2, 2001, by Robert Schulz's "We the People Foundation for Constitutional Education, Inc." He was one of five employers who publicly announced that he had stopped withholding taxes from wages paid to their employees. The other employers were: Walter Thompson of Cencal Aviation, Inc., David Bosset of Bosset Marketing Partners, Inc., Nick Jesson of No Time Delay Electronics, Inc., and Leonard Roberto of Batavia Enclosures, Inc.
In 1999, Simkanin was advised by Eduardo Rivera, and paid him $10,000. Rivera testified at Simkanin's trial.