Tax evasion
In 1996 Hovind unsuccessfully filed for
bankruptcy to avoid paying federal
income taxes. Hovind was found to have lied about his possessions and income
[20]. He claimed that as a minister of God everything he owns belonged to God and he is not subject to paying taxes to the United States on the money he received for doing God's work (citing US tax code §508(c)(1)(a))
[21]. The court ordered him to pay the money and supported the
IRS view that Hovind's claim "was filed in bad faith for the sole purpose of avoiding payment of federal income taxes." In the ruling, the judge called Hovind's arguments "patently absurd." The judge also noted that "the IRS has no record of the debtor ever having filed a federal income tax return," although this was not the court's reason for denying the bankruptcy claim.
On May 13, 1998, Hovind and his wife attempted to evade all responsibility for any previous promises, debts, or legal agreements made prior to April 15, 1998, by filing a document called "Power of Attorney and Revocation of Signature"
[22] with the
Escambia County Clerk of Courts. The document reads, in part: "I/we do hereby revoke and make void... all signatures on any instruments...". The Hovinds claimed they had signed government documents "due to the use of various elements of fraud and misrepresentations, duress, coercion, under perjury, mistake, 'bankruptcy'."
In the document, the Hovinds argue that
Social Security is essentially a "
Ponzi scheme" (many
conservative and
libertarian economists agree, e.g.
Thomas Sowell). The Hovinds referred to the
United States Government as "the 'bankrupt' corporate government" and said they were revoking their
United States citizenship, saying they were each "a natural citizen of 'America' and a natural sojourner." They referred to their home state of Florida as "the State of Florida Body-Politic Corporation." Judges and the IRS did not appear to honor this as a legally relevant document in future decisions.
In 2002 Hovind was again in trouble for not paying his taxes, and unsuccessfully sued the United States Internal Revenue Service for harassment. In 2004, IRS agents raided Hovind's home and business to confiscate financial records. IRS agent Scott Schneider said none of Hovind's businesses had a business license, nor tax-exempt status. The Associated Press quoted Schneider as saying "Since 1997, Hovind has engaged in financial transactions indicating sources of income and has made deposits to bank accounts well in excess of $1 million per year during some of these years, which would require the filing of federal income taxes."
[23] On June 3 2004, the IRS issued tax
liens[24] of $504,957.24 against Hovind and his son and their businesses. A separate lien was filed for each, due to previous legal maneuverings on the part of the elder Hovind to evade taxation by moving property between himself, his son, and other legal entities.