A federal grand jury in Alexandria yesterday indicted three Northern Virginia residents and two Georgia men on charges of selling more than 140 people advice on how to cheat the government out of federal income taxes.
The taxpayers who signed up for the scheme -- many of them from the Washington area -- paid between $2,000 and $32,000 for information they were told would show them how to avoid paying past, present or future federal income tax, according to federal prosecutors.
Assistant U.S. Attorney Joseph Aronica would not say whether the 140 people who paid for advice and services to avoid federal income, would be prosecuted.
One of the men indicted, Burton D. Linne of Arlington, was described by Justice Department officials as the leader of several tax protest groups including Citizens for Dollars and American Liberty Information Society.
Yesterday, Linne said he was innocent of the charges on which he has been indicted -- conspiring to defraud the government, mail fraud, and failure to file income tax returns.
"I categorically deny any wrongdoing," Linne said. "There is no legal bases for income taxes, it is based on a bogus amendment."
Tax protest groups have argued for years that the federal income tax is unconstitutional, but the courts have consistently rejected their claims.
The others indicted could not be reached for comment. They were John C. Imlay, of Arlington, Jack O. Slater of Annandale, and two Stone Mountain, Ga., residents, Paul L. Robinson and his son Richard A. Robinson. All five are scheduled to be arraigned Monday in Alexandria.
As part of the scheme, the five men deposited "several millions of dollars" in various bank accounts to conceal assets belonging to participants in the scheme, said a statement released by the U.S. attorney in Alexandria. Prosecutors also said some of that money was invested in the Bahamas.
"This is a significant case because of the extent of the program . . . " and that it was marketed thoughout the nation, said Justice Department criminal tax prosecutor Thomas D. Blondin. He would not comment on how much revenue the government lost because of the scheme.
Yesterday's indictment was described by prosecutors as part of the government's crackdown on tax protest groups. The Internal Revenue Service recently reported that for the first time in recent years the number of tax protesters declined in 1984 (52,242 compared with 57,754 in 1983,) because of a new Justice Department campaign to prosecute them.