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Two former Grass Valley residents recently extradited from Costa Rica on bankruptcy fraud and federal tax evasion charges allegedly refused to pay their taxes as part of a protest group known as IRS Code Busters.
The indictment, recently unsealed by the U.S. Attorney General's Office in Sacramento, revealed additional details of the case against Lin Bartee, 65, and his wife, Christine Wenger-Bartee, 51.
The couple was indicted on charges of conspiracy to avoid paying federal taxes, making false statements in a bankruptcy case and concealing property in a bankruptcy case.
The Bartees married in 2000 and, that year, they filed a joint tax return reporting income from a consulting business and losses from two other businesses — CJ's Boutique and Master's Tug & Towing, a partnership co-owned by Lin Bartee and another person.
The Bartees filed for an extension in 2001, but never did file a tax return for that year, the indictment said. That same year, they allegedly joined IRS Code Busters.
In 2002, despite allegedly receiving $472,933 from income and from liquidating their assets, the Bartees also did not file a tax return.
Lin Bartee allegedly sent the Internal Revenue Service a letter in February 2003, titled “Report of 2000 Decoded Individual Master File,” suggesting he was not liable for taxes.
Between August and December 2002, the Bartees allegedly transferred nearly $240,000 to Wenger-Bartee's parents.
Between October and December of that year, Wenger-Bartee and one of her parents allegedly wired approximately $146,000 to a bank in Costa Rica.
In April 2003, the Bartees allegedly declared bankruptcy without naming the IRS as a creditor. By then, the Bartees owed about $181,000 in unpaid taxes from 2001 and 2002, the indictment alleged.
They also allegedly failed to report their 2002 income and falsely claimed to have suffered gambling losses.
The bankruptcy court denied the discharge of the Bartees' debt in November 2004, and soon after, the couple moved to a remote area of Costa Rica. The trustee came upon the evidence that they had transferred assets prior to filing, said Assistant U.S. Attorney Philip Ferrari, who is prosecuting the case. An indictment was filed in June 2008.
The Bartees were arrested in Costa Rica on May 14, 2009, but fought extradition. The couple was returned to Sacramento by U.S. Marshals on Sunday.
Counsel has been appointed, and the Bartees were arraigned Tuesday. They pleaded not guilty and have been detained for the time being, Ferrari said. They next appear in federal court Feb. 8.
The maximum statutory penalty the Bartees face is five years in federal prison.
No charges are pending against Wenger-Bartee's parents, Ferrari said.
“They were not knowing participants in any kind of wrongdoing,” he said.
The prosecuting attorney did not have any specific information regarding the tax protest group, IRS Code Busters.
According to Anti-IRS.com, IRS Code Busters claimed computer codes on one's IRS Individual Master File show that a person doesn't have to pay taxes.
Former Mets pitcher Jerry Koosman pleaded guilty last year to failing to file an income tax return for 2002; Koosman allegedly used IRS Code Busters materials.
“There are people who believe, mistakenly, that for various reasons, they are not required to pay taxes,” Ferrari said. “This is one of those groups. Over and over again, those claims have been raised and rejected by the courts.”
To contact Staff Writer Liz Kellar, e-mail lkellar@theunion.com or call (530) 477-4229.
The indictment, recently unsealed by the U.S. Attorney General's Office in Sacramento, revealed additional details of the case against Lin Bartee, 65, and his wife, Christine Wenger-Bartee, 51.
The couple was indicted on charges of conspiracy to avoid paying federal taxes, making false statements in a bankruptcy case and concealing property in a bankruptcy case.
The Bartees married in 2000 and, that year, they filed a joint tax return reporting income from a consulting business and losses from two other businesses — CJ's Boutique and Master's Tug & Towing, a partnership co-owned by Lin Bartee and another person.
The Bartees filed for an extension in 2001, but never did file a tax return for that year, the indictment said. That same year, they allegedly joined IRS Code Busters.
In 2002, despite allegedly receiving $472,933 from income and from liquidating their assets, the Bartees also did not file a tax return.
Lin Bartee allegedly sent the Internal Revenue Service a letter in February 2003, titled “Report of 2000 Decoded Individual Master File,” suggesting he was not liable for taxes.
Between August and December 2002, the Bartees allegedly transferred nearly $240,000 to Wenger-Bartee's parents.
Between October and December of that year, Wenger-Bartee and one of her parents allegedly wired approximately $146,000 to a bank in Costa Rica.
In April 2003, the Bartees allegedly declared bankruptcy without naming the IRS as a creditor. By then, the Bartees owed about $181,000 in unpaid taxes from 2001 and 2002, the indictment alleged.
They also allegedly failed to report their 2002 income and falsely claimed to have suffered gambling losses.
The bankruptcy court denied the discharge of the Bartees' debt in November 2004, and soon after, the couple moved to a remote area of Costa Rica. The trustee came upon the evidence that they had transferred assets prior to filing, said Assistant U.S. Attorney Philip Ferrari, who is prosecuting the case. An indictment was filed in June 2008.
The Bartees were arrested in Costa Rica on May 14, 2009, but fought extradition. The couple was returned to Sacramento by U.S. Marshals on Sunday.
Counsel has been appointed, and the Bartees were arraigned Tuesday. They pleaded not guilty and have been detained for the time being, Ferrari said. They next appear in federal court Feb. 8.
The maximum statutory penalty the Bartees face is five years in federal prison.
No charges are pending against Wenger-Bartee's parents, Ferrari said.
“They were not knowing participants in any kind of wrongdoing,” he said.
The prosecuting attorney did not have any specific information regarding the tax protest group, IRS Code Busters.
According to Anti-IRS.com, IRS Code Busters claimed computer codes on one's IRS Individual Master File show that a person doesn't have to pay taxes.
Former Mets pitcher Jerry Koosman pleaded guilty last year to failing to file an income tax return for 2002; Koosman allegedly used IRS Code Busters materials.
“There are people who believe, mistakenly, that for various reasons, they are not required to pay taxes,” Ferrari said. “This is one of those groups. Over and over again, those claims have been raised and rejected by the courts.”
To contact Staff Writer Liz Kellar, e-mail lkellar@theunion.com or call (530) 477-4229.
