Hollywood Star in Court on Tax Fraud Charges

Hollywood star Wesley Snipes used a novel interpretation of US tax laws to avoid paying anything on the $38m he earned from blockbusters including Blade and Demolition Man, a court has heard.

The actor also demanded that the US government pay him back another $7m (about £3.5m) that he did hand over before he signed up for a bizarre tax avoidance program promoted by two crooked advisers, prosecutors say.

And when investigators closed in on the actor, once tipped to become the first black James Bond, he allegedly fled to South Africa on a false passport.

Snipes, 45, went on trial in Ocala, Florida, yesterday charged with conspiracy to defraud and failing to file tax returns between 1999 and 2004. The case is expected to last four weeks and Snipes faces up to 16 years in jail if convicted.

His tax advisers and fellow defendants, Douglas Rosile and Eddie Ray Kahn, are accused of setting up and marketing a fraudulent scheme that claimed US citizens were exempt from income tax on money earned in the country. The so-called 861 position, named after a section of America's complicated tax legislation, has become popular with tax protesters, including a couple who engaged in an armed siege against federal agents at their New Hampshire ranch last summer after failing to pay more than $1m in tax debt.

Snipes, according to defense lawyer Robert Barnes, had no intention to defraud and was guilty of nothing more than "asking legitimate questions" of the tax authorities by filing forms claiming the exemption. He said his client received bad advice from Rosile, who lost his accounting license in 1997, and Kahn, who had served a jail sentence for tax offenses.