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Loophole Lotto

Next time you write a check to the IRS, you may wonder whether you really have to.

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This story appears in the July 2001 issue of Entrepreneur. Subscribe »

Death and taxes may be the only sure things, but don't tell that to Dick Simkanin or Al Thompson. Both have decided to do away with the hassle of income tax. Why? They say it's to keep from breaking the law.

After years of scrutinizing tax regulations, Simkanin, 56, and Thompson, 54, came to a few conclusions, the most notable being a controversial reading of the Internal Revenue Code's section 861 as saying that only foreign-owned businesses are liable to pay federal income tax. Eventually, both entrepreneurs made a decision: no paying the IRS and no withholding from employees' paychecks.

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