Rieffer made his mark on this northeastern Arizona community. He was a Sunday school teacher, a school board member, a father. His reputation was beyond reproach and spread beyond the perimeters of Woodruff. The Navajos who frequented his trading post at Wide Ruins 80 miles to the northeast depend on Rieffer for much more than groceries, He was their marriage counselor, banker, grave digger. Says his son, “They depended on Dad for everything.” And if he let his customers build up too much credit for too long, which was not unusual, he’d chalk it off as a mistake.

“They all loved Dad. Everybody did.” His daughter says quietly.

But John Rieffer is dead now.

His widow and seven children blame a faceless bureaucracy that refused to believe an honest man. Rieffer had spent more than four years preceding his death trying to convince the Internal Revenue Service of his honesty. He eventually won the battle, but he lost the war. Rieffer died June 14, just two days after a jury in U.S. District Court in Prescott acquitted him on all charges of filing false income tax returns.

Sharon Rieffer sits motionless in her living room surrounded by her children, trying to suppress the sobs that well up whenever she thinks about the ordeal of the last four years.

“He died right out there,” she says, pointing out the screen door to a weedy patch of lawn . “He died before I could even get to him.”

Rieffer, a seemingly healthy man who neither drank nor smoked, was not overweight and had no history of heart trouble, died of a heart attack at age 47. “The man who did the autopsy asked if John had been under a lot of stress lately.” Mrs. Rieffer says, trying to muster a smile at the ludicrousness of the question. “Of course he had been under tremendous stress. He hadn’t even had the luxury of a full night’s sleep since the IRS first contacted him.” She says.

Rieffer’s nightmare began in February 1975 when an IRS agent contacted him regarding some rather large bank deposits that had gone unreported on his 1972 and 1973 tax returns — about $10,000 in 1972 and $26,000 in 1973. They were transactions from the trading post to Rieffer’s personal account.

The case was turned over to the IRS’ Criminal Investigation Division, which after a lengthy probe referred it to the Justice Department for prosecution. Rieffer was indicted last February.

“We’d just get settled down and it would start all over again,” Mrs. Rieffer says. “They went to our friends and tried to find out all they could. We could never plan a vacation for fear they’d contact us again. The whole time he was so worried about his reputation. It was so degrading for him.”

The nightmare ended abruptly when the jury acquitted him June 11. But the victory was short lived. Phoenix attorney, Al Henkle remembers the day his client was acquitted. “He took us all out to lunch that day after the verdict came back. The cashier said, ‘Have a nice day,’ and he said, ‘I’ve already had one.’”

Rieffer told his wife he felt like a newborn baby. He slept soundly that night and late into the next day.

Life was so much simpler when he and his bride set up housekeeping at the Wide Ruins Trading Post. That was in 1959, the year that Rieffer discovered Navajo rug weaving. He became an avid collector and an expert on the art. His son says he collected only Wide Ruins rugs, in deference to his Navajo friends and neighbors.

About 1966, Rieffer rose from employee at the trading post to part owner. Life was good, low key, quiet. The Rieffers and their children lived in quarters behind the store. But in 1973 the American Indian Movement was gaining momentum and there were reports of harassment from owners of trading posts on neighboring reservations. Rieffer feared for the safety of his six daughters and decided to move his family off the reservation.

He began to sell the rugs from his prized collection to raise the money needed for a down payment on a new house. Rieffer had many virtues, but business acumen was not among them. Aside from a six-week course in accounting, he’d had no formal business training. He knew little about income tax — especially capitol gains taxes, which he should have paid on the thousands of dollars he’s made from the sale of his rug collection.

But the IRS didn’t believe he didn’t know about capital gains. To further complicate matters, he took rugs from his private collection and placed them with rugs for sale in the trading post. When customers bought rugs, they were likely to purchase rugs from both stocks. Rieffer usually would receive one check from the customer made out to the trading post, and to compensate, he would take checks of an equivalent amount received by the trading post, and deposit them in his personal account. This unusual business practice led the IRS to question whether Rieffer even had a rug collection of his own.

“I think Mr. Rieffer was willing to admit that he made a mistake. He didn’t think that the gains from the sale of his private collection were taxable. I think he thought everything would be okay if he paid the back taxes. All along he just wanted to get the black mark off his name.”

As far as the IRS was concerned, Rieffer had committed a crime and there was no turning back. An IRS spokesman puts it this way: “If a person robs a bank but offers to pay back all the money, a crime has still been commited. You can’t wipe the slate clean.”

Henkle said the problem was just a lack of business savvy. He tells how Rieffer had lost a sizable amount of money in a business venture but never knew enough to deduct the loss. It was in 1972 Rieffer and a partner bought another trading post. The Business was a financial disaster, Henkle says, because the former owner opened a trading post just down the road, taking his customers with him. Rieffer lost about $14,000 before abandoning the enterprise. He did not take a tax deduction on the loss because he didn’t know he was entitled to one.

Henkle worked for the IRS for 20 years in various capacities, including six years as director of the Criminal Tax Division, Office of Chief Counsel in Washington. The attorney doesn’t think the Rieffer case should ever have made it through all the reviewing channels. He also believes there should be legislation that would authorize the judge in criminal tax cases to order the government to pay attorney’s fees when a defendant is acquitted. “This would make the reviewers more aware of their responsibilities and weed out cases like John’s.”

In a memo Henkle dictated in preparation for the final argument before the jury, he wrote, “This man has had this thing over his head for over four years. The government probably will say it was within statute, but is it morally right? This thing should have been over two or three years ago. They humiliated and harassed him inch by inch. This man has been put through the wringer.”

The IRS spokesman says criminal investigations typically last about nine months. That division of the IRS investigated Rieffer for almost 2 and a half years. Federal law prohibits the IRS from discussing individual cases, but in general, if an investigation drags on, it’s due to “a lack of cooperation on the part of the taxpayer.”

Henkle says Rieffer “gave them all his records. He wasn’t putting any obstacles in their way.” He didn’t retain an attorney until after the IRS investigation was completed. During the four years the ordeal dragged on, something happened to Rieffer’s family. They found themselves losing faith in the system they’d always believed in. And when he died out there on the lawn, they say they learned beyond a doubt, that no matter how honest, how moral, how American, putting your faith in the system does not ensure a happy ending.

Rieffer never lost faith, however. After the trial, he approached the government attorney to say there were no hard feelings. Henkle’s wife says, “I would have spit in his eye, but John said he couldn’t feel bitter toward someone for the rest of his life.” His family is left behind to feel the bitterness and anger, though. Mrs. Rieffer shakes her head sadly. “I don’t know why they don’t believe the common people. They’re supposed to believe you’re innocent until proven guilty. John was guilty until proven innocent. That’s not the way it’s supposed to be set up.

“No one loved this country more than John did. He taught his family to love his country.” His 19-year-old daughter Anneta says, “Dad wouldn’t want me to feel hatred. But I feel upset, angry, mad. I know he wouldn’t like it. He never hated anybody.”

John trusted everybody, the family nods in agreement — even the IRS. His 17-year-old daughter Kathy was baby-sitting for some neighbors the other day. The IRS called while she was there, asking questions about the family. Kathy didn’t tell them anything.

“My children have learned their lesson well.” says Mrs. Rieffer.