American Notes

In most cases, ignorance of the law is no excuse. But the U.S. Supreme Court made a rare exception last week, when it ruled that individuals may not be convicted of federal criminal tax violations if they sincerely believe they are exempt from income tax laws. The 6-to-2 decision set aside the one-year prison sentence and five years of probation imposed on American Airlines pilot John Cheek, who filed no returns for six years. Cheek's defense: he claimed that his salary was not taxable under the IRS code because he believed only gains or profits are income.

Tax chiselers are not expected to benefit much from similar pleas. The decision does not change the obligation of all nonpayers to pay any back taxes due, plus interest and applicable civil penalties. Last week's ruling affects only criminal convictions, which must be based on "willful" violations. Still, dissenting Justice Harry Blackmun blasted the court for encouraging "taxpayers to cling to frivolous views of the law."