Sometime after midnight, 10-year-old Kenneth Young awakened and found an intruder tying his hands and covering his eyes with a blindfold. When he started to scream, a man warned, "shut up or I will kill you." The man carried the frightened youngster out of his Beverly Hills home and drove off.

The next morning, Arline Young discovered her son was missing. On the bed was an envelope marked "IMPORTANT. Do not call the police. Give this letter to the master of the house at once." She gave the letter to her husband. The letter said if Kenneth's father called the police, his "missing merchandise" would be "vindictively destroyed." It demanded $250,000 and warned Young he would "never see his merchandise again" if he refused to pay.

As directed, Young took $250,000 in $100 bills in an overnight bag to a service station in Westwood, Calif. What followed then was something out of a grade B action movie.

A man motioned for the boy's father to tag along behind a white Chevrolet Impala, later found to be stolen. After speeding down a street toward the San Diego Freeway, the driver of the Chevrolet pulled over, took the money and said Kenneth would be home by the end of the day.

That evening the kidnapper gave Kenneth sleeping pills loaded him into a car and left him in a garage in Santa Monica. When the boy woke up he ran to the nearest apartment and called home.

When police questioned Kenneth and his father, the boy wasn't certain whether two or more men were involved. Although Young's description of the physical appearance of the man who picked up the ransom was detailed, he wasn't sure about the man's hair. He thought the kidnapper wore a wig.

The police arrested IRS agent Ronald L. Miller and found wigs, moustaches and makeup in his apartment.

Although the agent pleaded innocent, the criminal court found him guilty of kidnapping based on evidence presented at the trial and testimony of several witnesses, including Gene Patterson. Patterson, a convicted felon, said he had met with Miller on numerous occasions. He testified he was Miller's lookout and was with Miller when they dumped the ransom car. Another witness said Miller had talked about hiding money in a Swiss bank account.

Miller's troubles continued when his buddies at the IRS came after him for a cut of the ransom money. After all, income is income, whatever the source -- and Miller hadn't reported income of $250,000.

Miller, accusing his former colleagues of foul play, appealed to the Tax Court. He said he didn't commit the crime or receive the money.

The evidence from both trials convinced the judge that Miller had received the ransom.

Miller then argued that even if he had kidnapped Kenneth, he couldn't have acted alone, so he shouldn't have to pay taxes on the entire ransom.

Miller was the main actor in the kidnapping, the judge declared. "The IRS was thus justified in attributing the entire proceeds of this crime to Miller, for, where there are multiple participants in an income-producing criminal activity, the IRS is entitled to determine that each participant received the entire proceeds . . ."

The Moral: If you do the crime, you pay in time -- and taxes.