Doreen Hendrickson has been sentenced to 18 months in prison followed by one year of supervised release after being convicted of criminal contempt for failing to file amended tax returns as ordered by a judge and for filing a false income tax return (Hendrickson, No. 13-cr-20371 (E.D. Mich. 4/8/15)). The defendant has been described by the government as “a hard core anti-government zealot” (Government’s Response to Defendant’s Sentencing Memorandum, p. 1 (4/1/15)), and she is the wife of Peter Hendrickson, who wrote a book, Cracking the Code: The Fascinating Truth About Taxation in America (Hendrickson 2003), which the Tax Court has described as “an antitax screed” (Waltner, T.C. Memo. 2014-35 at *42).
Doreen Hendrickson was found guilty of one count of criminal contempt under 18 U.S.C. Section 401(3) in a jury trial in July 2014. The indictment for criminal contempt stemmed from her “filing a U.S. income tax return for single and joint filers with no dependents (Form 1040-EZ) which falsely reported that she carried zero wages in 2008 and failing to file with the IRS amended U.S. individual tax returns for 2002 and 2003.” The defendant argued that the indictment did not allege any tax crimes.
The defendant and her husband filed tax returns for 2002 and 2003 that claimed refunds for all taxes withheld from their wages, based on the theory that their income was not taxable (a theory propounded in Peter Hendrickson’s book). In a 2007 civil judgment, the Hendricksons were ordered to file amended returns for 2002 and 2003, and they were prohibited from filing any tax returns that used the “false and frivolous” arguments found in Cracking the Code (Hendrickson, No. 2:06-cv-11753 (E.D. Mich. 5/2/07)).
After the issuance of that order, Doreen Hendrickson filed a 2008 tax return that claimed a refund on the theory that her wages were not taxable income (she filed this tax return even though her income for the year was below the threshold requiring a return to be filed). The couple also filed amended returns for 2002 and 2003, but they wrote “under duress” over their signatures and attached a statement asserting that nothing in the returns should be taken as an admission that they had income in 2002 or 2003. The IRS argued that these were not valid returns because the Hendricksons had altered the part of the tax return in which the taxpayers declare their returns are made under penalties of perjury by adding the words “under duress.”
After Peter Hendrickson was sentenced to prison in a separate trial for filing false returns, Doreen Hendrickson filed a second set of amended returns to which she attached an affidavit disclaiming those amended returns and reasserting that the original returns were correct.
The defendant argued that, at most, she should be sentenced to seven months in prison under federal sentencing guidelines. The government asked for a sentence of 24 months plus one year of supervised release.
—Alistair M. Nevius (email@example.com) is the JofA’s editor-in-chief, tax.