Ask the girl who deals with tax protesters everyday!

Miscellaneous and Personal Stuff I Must Share
1

I suppose a little background is in order. Our family business is a tax representation firm that operates in two states (CA and NV, if that’s important) and I’ve been in and out of the office since I was able to do nothing more than toddle around. I’ve officially worked here since I was 15 years old and I’ve been a full time employee since starting college.

Mostly I am a sales person, as clients really seem to like me and the way I explain the potential resolution to their problems. While my father (the President of the company and founder of it some 30 years ago) is an Enrolled Agent and a CPA, I don’t have any certifications. In fact, my college degrees are in (well, will be in, in a year) Political Science and History. I’ve actually studied extensively to take the Enrolled Agent certification exam, but the test is only administered once a year and that day is always the first day of school- a day where if I miss, I’ll get dropped from classes.

Of course though, I’ve picked up quite a bit working here over the years and I am regularly forc- er - I mean, in attendance at tax conferences.

Most of our clients are just your average Joes that maybe had a big balance due on their taxes one year, couldn’t pay, and then were too scared to file for the following years, thus snow balling their problem into something huge. We generally wont take on a case unless they owe more than $10,000, but it seems most of our clients owe between $50k and $200k. These people really aren’t what the thread is about.

Reading the Ed Brown GD thread made me figure that some of you may be curious about my first hand experience with tax protesters, groups we’ve seen increasing numbers of in recent years.

So rather than writing what I know about the folks we deal with, I’ll let you guys ask anything you’re wondering. (You know, assuming this doesn’t sink like a stone. It probably will :stuck_out_tongue: )

Oh, I figure I should add: If they want to retain our services, they have to sign a document pinky promising they will stop being tax protesters for ever and always (or so long as they are working with us).

2

How do they end up as your clients? Is it because the IRS is after them? Have you heard any **original ** reasons for protesting taxes? Who was the wackiest, whether or not they ended up retaining your services? How much to they generally owe and how many years have they gone without paying taxes?

3

Generally, they begin to realize that they are in a bad spot when their checks are being levied ( in CA they will get levied by both the IRS and the much more aggressive state agency, the Franchise Tax Board) and the IRS agents have showed up at their house. Or maybe they’ve called and tried to resolve the problem themselves or gotten no where. Or maybe they believed the IRS’ threats about prison.

On that last part, I should say that we have clients that owe millions of dollars that have never even been genuinely considered for criminal prosecution- even before they retained us. While the IRS is getting much more difficult and vicious with their prosecution of folks, most of the folks getting tried are the ring leaders of tax protesting organizations.

Original reasons? Well, because we work in Nevada and because of California’s proximity to Vegas, many of our protester clients had previously dealt with Irwin Schiff. For oodles of money ($5000 +), Schiff promised these people (many of whom are uneducated, working class folks) that they’d never have to pay tax again. For their fee, the people received tons of paper work to mail to the IRS, thus confirming their supposed tax free status.

Let me tell ya, reading those documents is pure hilarity. First of all, these pseudo-legal documents are full of spelling and basic grammar errors, but that’s the least of the problems. Apparently, CA is a sovereign nation and these protesters are citizens of the Bear Flag Republic. I kid you not. I regularly joke that our clients have invented time travel and have gone back to 1849. I can explain this particular position further if anyone is interested in that.

And they almost always end up retaining us- if not when they first meet with us, they always come back. The fact is, you can only hide so long.

I’ll say though that the people that irritate me the most are the ones that refuse to get social security numbers for their children. I mean, do they have any idea what they are doing in the way of screwing up their kids’ lives? I mean, just think of the problems they’ll have with college! Eesh.

Oh and: most of our general clients haven’t filed in about 6 years and owe anywhere from $30k up. The tax protesters often haven’t filed in 10 or 20 years and owe hundreds of thousands of dollars.

4

Can the royal ’they’ [IRS] - attach a lien on your home or paycheck for owing them less than 2k?

My brother has a tax issue from 04’ that is haunting him…and he has skipped a few payments on his plan he made with them.

5

Ahem,* I am not your tax professional- hell, I’m not a tax professional period. Don’t take my advice, it’s bad advice because you don’t know me. I might be some random person on the internet that’s sitting in a glittery dolphin tshirt and typing while fighting off my 50 cats*. That said:

Yeah, they can, though I’m not sure of the likelihood that they will. We do regularly get calls from people that owe smaller amounts and want some help, but our retainer is often more than they owe.

In his case, I would probably just suggest he call them up and reinstate the installment agreement. If he can’t make the agreed upon payment amount, he can show them proof of that fact and they should work with him to find a more reasonable number. 1-800-829-3903 (that’s the number for ACS- Automated Collections at the IRS).

6

Please do elaborate on the Bear Flag Republic! When they’ve decided to pay up, do they have to pay the entire bill, plus interest, or will the IRS/Franchise Tax Board write some of it off? How do the repayment plans work? Paying back hundreds of thousands (or millions) of dollars seems like it would take a looooong time.

7

Adam’s brother?

8

Well, the documents go on for pages and pages, explaining that the United States is really just a confederation and not a real, unified country. Oh, and that the Constitution is really just an amended Articles of the Confederation, thus proving that each state is its own country. Yes, I know- as a Poli Sci and American History Major, it makes my head hurt, too.

I had saved some of the text from the docs, but I can’t seem to dig it up (and I’ve been looking for a while, curses). But anyway, it goes on to say that California is a sovereign nation- The California Republic. Therefore, citizens of the CA Republic have no obligation to pay taxes to the IRS, which is- as they see it- an unlawful taxing agency. I can’t remember how, but they somehow manage to throw in a paragraph in there that argues that they shouldn’t have to pay State (er, I guess that’d be Federal to them) taxes.

The documents also go on to attack the argument that they’ve clearly been operating under the federal system by opening bank accounts, having social security numbers, and other forms of ID (California STATE driver’s license, for example). They say that any time they opened a bank account, did any banking, got a driver’s license, etc. it was done under “extreme duress and cohersian” (their spelling, I remember that particular error for some reason) and that their life was on jeopardy. Seriously.

If the clients didn’t have representation, odds are that they’d be expected to pay the full amounts owed. Our biggest service to them (aside from our ability to almost guarantee asset protection) is negotiating those penalties, fees, and interest. I’m sure you’ve seen the ads on TV for some of our competitors that guarantee “cents on the dollar” settlements. We don’t promise that (and frankly, we’re amazed that anyone else can legally do so), but our clients are always very happy with the settlements we reach. There are so many factors that come in to play that no two cases are the same, but sometimes 10% of the fees are removed and sometimes 100% (most of the time about half).

But even if you do get the initial penalties and interest removed, your debt to the taxing agencies will continue to grow interest again as you pay it off.

There are various ways to settle, one that a lot of people ask is an Offer In Compromise. This is where you say you’ll pay X% of your balance flat out and you guys shake hands and all is well. Again, I have no idea why so many other representatives push these, as it’s well known (and I mean that, everyone was talking about it at the tax conference last week) that at least 50% of offers aren’t even going to be looked at by the IRS, as they’ll just toss 'em.

It’s often just good ol’ negotiations and agreements that solve the problems for many of our clients. Few of the problems are ever solved in the short term though.

Oh and usually the people that owe HUGE amounts are pretty wealthy - doctors, lawyers, accountants (yeah, makes me laugh too), so they are in a position to just drop $100,000 for their half a mil owed and settle the problem.

9

I don’t think so, as Adam was born in 1960 and Irwin was born in 1928. If anything, it would be his son (but according to Wiki he only has two: Andrew and Peter) or nephew or something. Irwin is from Connecticut, while Adam is from Mass- so who knows. I know if I were a politician, I wouldn’t publicize that family connection if it existed heh.

10

So it must be hard keeping that nice T-shirt clean with all those damn cats. :smiley: I have to ask, please, If don’t mind too much. My wife filed an extension on our filing. Do you have an idea how long it’s for? She is an accountant but is kind of dragging her feet about doing them. I am afraid to ask her because, well, she’s my wife and all and it doesn’t pay to poke the bear. But what I do know is that you don’t F with the IRS. They have all they lovely qualities of some post office workers I know, except they can garnish your wages, take your home and possessions. You know, all that that wacky stuff. If you wouldn’t mind terribly.

11

A Federal Extension (Form 4868) is good for 6 months from April 16th (or was it the 17th this year because of that random holiday in DC? I think it was the 17th).

And my shirt is ok, I use one of those lint roller things. They work great! :wink:

12

6 months.

So, Diosa, tell me about your wonderful tax software. There must be some terribly sweet and interesting people that are (or were) behind that product.

On edit: I believe it IS the 17th. I’d either poke the bear or double check with your local authorities. (heh…“poke the bear”…sounds like a disgusting euphemism for something you want your wife to do to you…)

13

Oh, it’s fabulous, though this one guy that used to work 1040 tech support there was totally rude. He’d always yell at me to make him a pot roast or something. It was strange.
(For those of you not in the know, LOUNE used to work for the tax software we use. And he’d always yell at me to make him pot roasts :frowning: )

14

Sounds like they are onto something, haven’t paid taxes in 10~20 years and the IRS isn’t prosecuting.

Do they have a newsletter we can subscribe to? :stuck_out_tongue:

15

Ooops. You thought I meant http://www.schiff4congress.com/ but I really meant http://en.wikipedia.org/wiki/Adam_Schiff_(Law_&_Order)

sorry,
Mark (Law & Order Fan)

16

I’m not sure what a tax representation firm does, so if you don’t mind, could you just outline what it is you do for your clients, why they need you, and where the profit comes from?

17

Oh sure! Yeah, give me your address and I’ll send you where you can sign up for the newsletter and a few of our business cards, you’ll need them in a few years. :wink: :stuck_out_tongue:

18

The easiest way to explain it is that we’re sort of like lawyers (in fact, some people that do rep work are lawyers, though it’s rarely necessary). You give us a retainer (generally a percentage of what you owe) and then we do a few things. First, we protect your money by making sure your paychecks don’t get levied, your bank accounts stay untouched, and set it up so you can buy or sell a house if you need to (something that is not easy to do when you have a big ol’ levy on your credit or a big ol’ lien on the house). Beyond that though, we negotiate on your behalf before the IRS.

Sometimes (most of the time) with even the most simple of cases, the IRS is not acting lawfully and you often need someone to represent you that has perhaps a stronger knowledge of probably one of the most complicated codes in our country. It’s funny because most CPAs and Enrolled Agents wont even touch rep work because it can be so incredibly complicated; so, as you can imagine, it’s definitely a pretty tough thing to deal with yourself if most professionals can’t do it.

But I think the lawyer analogy is good though. I mean, you could represent yourself before the court and you might get the desired result, but why risk it when you can have someone who is virtually guaranteed to win your fight for you to one degree or another?

I above explained many of the options we go through with our clients. Which path we take depends entirely on the situation, really. I do often tell our clients though that our best service is that we are sort of a bouncer between you and the IRS, making sure they are doing everything they should be doing and can do. Many of our general clients have tried to solve their problems with the IRS themselves, but just couldn’t get anywhere.

And as for profit, it’s similar to a lawyer. We work off of a retainer that is actually comparable to some of the larger law firms in town. If for whatever reason the issue goes beyond the original retainer (rarely does, but hypothetically), we may charge an hourly rate or implement another retainer. We also have flat rates for tax preparation that are generally a bit higher than the chain on the corner, but that’s just because we don’t do annual tax prep for folks that need just on year (though we will do it for ongoing clients).

19

Not a question, but just a fun story about one of my relatives.

My grandmother’s brother (so my great uncle, I guess) was quite a character. He refused to use banks and owned a number of rather shady construction businesses involving huge cash payments for “services rendered.” He never actually owned anything (other the household stuff, and the occasional car) - he always rented. He lived with a woman for many years, but they never married, presumably to keep their finances separate.

When he was about 75, Revenue Canada finally caught up with him and declared that he owed them about $1,000,000 in back taxes and how would he like to pay? He then used every legal (and possibly some illegal) loopholes to delay them until he died at 82, the whole time reveling in how he was sticking it to the man.

Ah, good times, good times. He always felt (rightly) that no one would seriously pursue putting a 75 year old man in jail for tax evasion.

I can’t imagine what sort of quagmire his estate was when he died.

20

I’ve heard that if you are proactive in settling with the IRS that they are more lenient with you. Instead of waiting till they come after you. Is this true?

And why is it that some of these guys can go for several years before they get caught?
I always thought the IRS, you know, knew how much you got paid each week and would see a default in payments almost immediately.