Pentecostal Evangel

Pay your taxes

There’s no ‘opt out’ clause available to ministry-minded Christians

Anyone thinking about avoiding payment of taxes due this week should heed the advice of Shane Grady and Marty Dingman. The otherwise law-abiding, well-educated co-owners of a successful leather goods manufacturing company in Arkansas recently wrapped up a five-year legal battle with the Internal Revenue Service.

On Jan. 29 in federal court in Springfield, Mo., Dingman and Grady received three years of probation for willfully failing to file federal income tax returns.

The men, both 53, avoided potential two-year prison terms. However, they have endured criminal charges, attorney fees, IRS back payments, stress and shame that nearly ruined their lives.

Their troubles began in 1996, when Grady, Dingman and about two dozen others attended a three-hour “constitutional tax conference” in Branson, Mo., where they both live. Trusted Christian friends had invited the men to the seminar, although they attended different churches. In fact, a deacon at Dingman’s church approached him about coming, and his pastor’s wife turned out to be employed by those promoting the seminar.

Many well-respected area citizens attended the faith-based function, and various purported expert speakers freely quoted Scripture in arguing that taxes are unconstitutional and illegal. Presenters, appealing to listeners’ patriotic, spiritual and stewardship sensibilities, told how to establish an asset-protecting trust in order to stop paying “unlawful” taxes. In short, the speakers asserted that the U.S. government had no legal or moral authority to assess taxes.

“There was a great level of comfort there,” Dingman recalls. “They talked about doing godly things with our money. We weren’t led to believe anything was illegal.”

The seminar reinforced information the men had repeatedly heard about how the government had usurped authority by funding evils such as abortion while undermining religious liberties. Presenters ignored Scripture such as Romans 13:5,7, which declares, “Therefore, it is necessary to submit to the authorities, not only because of possible punishment, but also because of conscience. … If you owe taxes, pay taxes” (NIV).

“The guys doing these are slick salesmen,” says Grady, who now attends an Assemblies of God church. “We were ripe for the plucking.”

The false, misleading and unorthodox advice Dingman and Grady soaked in during eight subsequent highly organized seminars didn’t set well with the IRS. The men ceased filing federal income tax returns after they each paid the promoters a $15,000 commission to establish family planning trust programs. Dingman took several letters he received from IRS civil authorities demanding payment of taxes to promoters of the scheme, but they told him it amounted to unwarranted harassment.

Grady says he remained convinced that the promoters —  who by now had received his power of attorney — would protect his family from what they claimed were unchristian values that the government supported. Paranoia set in, Grady says, as the anti-tax schemers convinced him that attorneys and accountants —  except for the enlightened ones who had joined the cause —  were part of the corrupt system.

The Christian businessmen used their newfound funds not to enrich themselves but rather for ministry purposes. In fact, Grady and his wife even started a still-thriving ministry in the Philippines that has planted churches, offered free medical clinics and taught morals in a national high school.

Eventually, IRS criminal investigator Susan Prine paid a visit to the men. She convinced them they had been duped in the tax scheme. They have made restitution on six years’ worth of unpaid taxes. Dingman has repaid $342,258 in taxes and Grady, $219,091 to cover the six-year span.

“It’s not illegal to use asset trusts, but it becomes illegal when you hide income from the IRS,” says Toni Weirauch, assistant special agent in charge of the IRS criminal investigation office in St. Louis.

The businessmen agreed to cooperate with IRS officials in publicizing their legal difficulties in an effort to help others avoid a similar path. Various organized groups use similar techniques to convince unsuspecting conservative Christians — from Baptists like Dingman to Pentecostals like Grady — that paying taxes isn’t required. Such scammers, who typically extract consulting fees and membership dues out of victims, employ methods that border on brainwashing.

“Courts have again and again knocked down claims that the tax system is illegal,” Weirauch says. “But every year, all across the country, individual groups hold meetings to promote false tax advice.”

“These schemes feed upon Christians because they appeal to morals,” says Bonnie MacLeod, special agent with the IRS criminal investigation unit in Mission, Kan. “Going into these meetings they can’t believe anyone would ever con them.”

MacLeod says the IRS is willing to work with recalcitrant tax avoiders who have been caught up in such schemes but realize their errors if they agree to comply voluntarily —  before any criminal charges are filed.

Dingman and Grady remain friends. Their health and their families remain intact. Grady is now a self-employed real estate agent; Dingman has his own leather goods manufacturing company. And they haven’t forsaken attending church.

“I wasn’t listening to the Holy Spirit at the time; I was listening to people,” Dingman says. “God put me through a purifying fire. It didn’t feel good.”

Dingman and Grady take full responsibility for breaking the law. By conducting a series of media interviews, including for this article, the men hope to prevent others from falling into the pitfalls they faced. Their cooperation with the IRS likely convinced U.S. Chief Magistrate Judge James C. England to avoid pronouncing a prison sentence. Dingman and Grady also must each complete 40 hours of community service as part of their plea agreement.

“I ignored the Holy Spirit sending me warnings,” says Grady, who still must deal with potential IRS civil fines and interest penalties.

Although the criminal legal morass is largely behind them, the business owners are remorseful about their actions.

“I’m ashamed and embarrassed,” Dingman says.

JOHN W. KENNEDY is news editor of Today’s Pentecostal Evangel and blogs at Midlife Musings (jkennedy.agblogger.org).

E-mail your comments to tpe@ag.org.