Taxing Situation

A tax-protesting CEO enlists his employees in the cause

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Randy Hageman hires some of the new employees at Arrow Custom Plastics, and it's his job to explain the company's unique approach to taxes. He knows how they feel; he heard about it three days before starting his job as plant engineer.

"At first I thought he was going to make us all contract labor. I had no interest in that," Hageman says. "I was told that wasn't the case."

Hageman's doubt turned into curiosity and trust. Simkanin is very up-front, even eager, to share the rationale behind his stance. Simkanin's research of the tax code and months of forethought and planning convinced Hageman; he took the job. He still harbors doubts, but in the end he trusts his boss.

"This wasn't an overnight decision," Hageman says. "I've learned a lot since I've been here...I have more direct exposure (to Simkanin) so I have a lot better feel for where he's at and what he's doing, and the integrity. He's not crazy. He stands up for what he believes."

Hageman knows that some of his co-workers are worried that trouble is coming, and that there are no guarantees that the IRS won't drop violations on the company or its employees. They know it's risky, but they are waiting to see what the authorities will do.

"There's nothing in black and white that says you don't have to pay income taxes, but no one can prove we have to, either," he says. The door opens and Simkanin comes in with sheets of paper -- an e-mail freshly printed.

"I just got this," Simkanin says, handing it over. The message is from a retired Air Force major who agrees that "there is no law that makes any American 'liable' or 'subject' to pay or file income tax." It's clear from a reading that it's typical conspiracy theory fare: godless globalists create the Federal Reserve Bank, which bleeds America dry, while our civil liberties are eroded by traitor politicians. The nation is bankrupt when interest on debts become unbearable, the economy collapses and the New World Order moves to make totalitarian peace, and is welcomed by a ruined and ruled population.

Hageman scans the paper for a couple of seconds and smiles. "When he constantly gives us stuff like that, it's reinforcement. As this goes across the country it's exciting. It's not Bedford."

Not every employee is content to wait for the government's next move, or to put his or her faith in Simkanin. Cathy Daum has worked for Arrow Custom Plastics in quality control for more than 16 years, and she isn't as gung-ho about the boss' new policy.

"What he does with his personal life is his business. But he's forcing his opinion on the rest of the company," she says. "He made an announcement that we were no longer going to do it. I was irritated because it was being dumped on me, because I'm not going to not pay my taxes. It takes the burden off him, but for the individual it's a lot more aggravating."

Daum -- once a short-form filer -- now calculates all her federal taxes and pays her income taxes in quarterly installments. She has also calculated how much she must pay Social Security, an amount that was once paid to the government by Arrow Custom Plastics.

"Yeah, my paycheck's bigger, but I take home less," she says. "He seriously thinks he's doing us a favor. I just can't see it from that angle."

Indeed, Simkanin does not insist his employees keep their money; anyone's tax payments are their own business. An estimated one-half of the staff is not paying income or Social Security taxes. They too could face criminal charges.

"I would hate to see people think they don't have to do it or can get away with it and then get caught." Daum reflects for a second. "I never get away with anything. I always get caught."

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An estimated dozen companies in the United States today have publicly renounced income taxes and refuse to withhold, but that figure comes from unsubstantiated Web sites and is hard to verify. Some of the tax protesters have claimed to receive money back from the IRS and others relish the fact that they have not yet been prosecuted.There's a clique within the anti-government or Patriot Movement that is promoting these tax-revolution schemes avidly. The clique -- of which Simkanin is now a member, or at least a poster child -- is networked through Internet sites and counter-media publications. They are not a secret group and do not operate with any veiled agenda. They hide in plain sight, shielded only by their own analysis of the law.

Simkanin delved into this world of loose historical and legal interpretation in 1994, when a friend told him of the IRS "loophole." Simkanin was captivated. He began his slow education into tax law, relying on the research of tax protesters who generate respect among the short-wave radio and Internet community. Simkanin became more involved, attended anti-government gatherings, and slowly considered the options.

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