Wright lives in Grass Valley, California. Judge Edward J. Garcia ruled in favor of the IRS, and an appeal was turned down in both the Ninth Circuit of Appeals and Supreme Court. Such troubles are inevitable outcomes of taxing income, gifts, and estates. The United States and most States, as well as many countries, tax income, gifts and inheritances, with costly procedures such as probate to transfer the property. People then set up legal entities, such as trusts, to make it less costly to handle the ownership and transfers.
Government then sets up complex rules about various types of trusts.
The IRS and other government agencies have wide discretion over which persons and organizations to examine and act against. This creates an opportunity for the agency to act against those who have been vocal critics of its policies. It is difficult, if not impossible, to reform the enforcement of income taxes, because by its very nature, income taxation creates incentives to avoid and evade being taxed, and thus leads to enforcement to prevent excessive evasion. Critics then arise to expose abuses in enforcement and suggest tactics of tax reduction, and the IRS has an incentive to silence criticism by attacking its critics. Judges, appointed by the same government that is enforcing taxation, tend to side with government when the legality and tactics of enforcement are challenged.