Ask the girl who deals with tax protesters everyday!

[mischievous]

I had the dubious honor of being a juror in a (state) tax-fraud prosecution. The guy had all of the normal withholdings, but at the end of the year, he would apply to get his withheld money back since it had been earned while living and working in a “foreign country”. Mind you, the guy lived in Brooklyn and worked at one of the MTA trainyards (the MTA run the NYC subway).

The defense counsel kept trying to imply that this whole thing only became a problem because his superiors at the MTA hated him. I never did understand the connection - I mean, even if they were totally out to get him, how could they have changed the tax returns he filled out? One of the most unintentionally hilarious moments in the trial was when the prosecution called a MTA payroll employee to testify. First, the payroll person reads the defendant’s pay records out loud (as evidence that the MTA had, in fact, been paying him). Then it’s the defense’s turn:

Defense: (suspiciously) What sort of feeling did you have for John Smith?
MTA woman: (confused) Huh? I don’t understand the question.
Defense: Did you think he was a good employee or a bad employee? Did you and your coworkers like him?
MTA woman: (confused) I don’t know.
Defense: Was there a general feeling that the John Smith was someone to get rid of?
MTA woman: I have no idea. I don’t know him.
Defense: (now confused) You don’t know him?
MTA woman: I’ve never seen him before in my life.
Defense: (paging through notes) Did you testify to the grand jury on July 12, 2005?
MTA woman: (thinks a moment) Yes.
Defense: Was it in regard to John Smith?
MTA woman: (after a pause, light dawns) Yes, I think it might have been!
Defense: (triumphant) And what did you think of him?
MTA woman: I dunno. I just read the payroll information.

That’s right, the evil MTA was so determined to “get” poor John that his superiors… don’t remember who the hell he is. Right.

Had to convict the poor twit - there was just no reasonable doubt.

mischievous

[DiosaBellissima]

I thought I’d pop in for a second and just mention how I met with a client the other day who sat and argued with me about whether or not taxation is legal.

I explained that we would need to do several years’ tax returns for them (which is the standard thing we do for protesters) and the person said they don’t legally have to file taxes. I calmly explained that yes, in fact their income IS taxable and therefore they need to fill out a 1040.

“Oh, so you help the IRS rob innocent citizens then?” they says. Why yes, yes- that’s exactly what we’re doing. I smile and calmly explain that no, we are trying to help them protect their assets from the taxing agencies, all while getting them in current compliance so they wont have this problem ever again.

“You know,” they say, “the 16th Amendment was never properly ratified and even if it was- which it wasn’t- the Constitution itself doesn’t allow the government to tax individuals engaged in just regular ol’ domestic commerce.”

“Actually,” I say, “Those arguments have been roundly disproven by several landmark Supreme Court cases.”

“No. You don’t know what you’re talking about. Don’t you know anything about our government? The 16th Amendment gave them NO new power of taxation.”

I sigh, smile, and say, "Again, while you may feel that is the case, the Supreme Court disagrees time and time again. They decide what is and isn’t Constitutional and we have a professional obligation to uphold the standards put in place by the Court. All I can tell you is that if you retain us, you will need to get into current compliance and stay there, otherwise your contract with us would become null in void. "

At this point, they realized I wasn’t going to listen to their protester arguments, let alone play along with them, so they started asking how we could asset protect them.

Sigh.

Anywho, I have some of the protester docs here (after a bit of searching). Interested parties who want some fun reading are welcome to message me or email me and I can give you some of the tidbits.

[redtail23]

Diosa, how does one go about finding a firm like yours in my area (OKC)?

I’m dealing with such a situation (not tax protesters, but defaults due to health/mental issues).

I’ve seen two different accountants and gotten no help from them. They’re quite willing to take very large amounts of money to prep the returns, but get pretty damn wishy-washy about doing anything else. And as far as I’ve found out, they want an outrageous hourly rate for anything they do.

I really don’t think calling the guys for whom I see ads on late-night TV is a good method, but I don’t know what else to do!

I’ve been thinking about posting a question here, but this has me so stressed that I’ve not even been able to read your thread until today - just that has taken me, what, almost 2 weeks?!!

Thanks for any suggestions.

[lisacurl]

@gonzomax

Truth is tax protester arguments are not frivolous are are carefully thought out. Shiff was a vocal spokesman and was not thrown in jail for 40 years. If it were so simple he would have been summarily jailed 30 many years ago.

He was convicted of tax evasion in 1985… that’s what? Over 20 years ago? He’s, at best, a loon. At worst, he’s a con artist par excellence.

[DiosaBellissima]

@redtail23

Diosa, how does one go about finding a firm like yours in my area (OKC)?

I sent you a PM for a little more info to help you find someone.

In general though, it is a bit difficult to find someone who wants to work with people with collection issues, as it is a more difficult thing. Most accountants wont touch it or they try and end up over their heads.

This is a good website with various lists. Obviously we work with them, but the founder has been a friend of my dad for years. Anywho, that website even has a guide to hiring a tax professional for whatever needs you might have!

[Lemur866]

@gonzomax

Truth is tax protester arguments are not frivolous are are carefully thought out. Shiff was a vocal spokesman and was not thrown in jail for 40 years. If it were so simple he would have been summarily jailed 30 many years ago.
The first time he lost a case was when he wrote on the tax return , I do not recognize your right to tax . The court said because he wrote on a tax form ,he was recognizing the form as official. Does that sound like it is so cut and dried. They have chased protesters for many years and if it were simple they would have disappeared long ago.
If you want to avoid taxes you need to be rich enough to take advantage of tax shelters.

:rolleyes:
Uh-huh. Exactly what tax protestor arguments are not frivolous?

That the 16th Amendment was never properly ratified?
That “income” doesn’t mean wages?
That you can opt out of citizenship in the United States and not pay taxes?

They are all frivolous in the sense that no court will agree with you, regardless of how “correct” your arguments might be. Regardless of your arguments about Ohio not being a state, or that the various documents by the states ratifying the 16th amendment had slightly different punctuation, no court in America will agree with you.

It is true that there are various illegal ways to avoid paying taxes, some of which have varying chances of success. But those methods are illegal–if you employ them, and the courts find out, you’ll be forced to pay the taxes you owe. There are no magic words that when spoken will render IRS agents powerless, and they live in terror of the day the average citizen learns those words, because it will mean the end of their ability to collect taxes.

[Dangerosa]

Plus the courts aren’t fond of throwing people in prison for tax fraud. They’ll take every penny you have, put a lien on everything you own, and try to wring nickels out of your piss, but if you are in jail you are only costing them money. Generally speaking, you have to start encouraging other people to commit tax fraud before the tax courts get serious about jail.

Didn’t go to jail isn’t necessarily the winning hand in tax court.

[DiosaBellissima]

@Lemur866

It is true that there are various illegal ways to avoid paying taxes, some of which have varying chances of success. But those methods are illegal–if you employ them, and the courts find out, you’ll be forced to pay the taxes you owe. There are no magic words that when spoken will render IRS agents powerless, and they live in terror of the day the average citizen learns those words, because it will mean the end of their ability to collect taxes.

And don’t forget that even then, they’re out to get you. The IRS has a tipster line set up so you can report everyone you know that is committing tax fraud.

Hell, if it’s over a certain amount (one or two million, I don’t remember), you get a cut of what the IRS collects (as much as 30% if I remember). Some people make careers of finding business that are cooking their books, turning them in, then living off of the reward from the IRS.

[Dangerosa]

@DiosaBellissima

And don’t forget that even then, they’re out to get you. The IRS has a tipster line set up so you can report everyone you know that is committing tax fraud.

Hell, if it’s over a certain amount (one or two million, I don’t remember), you get a cut of what the IRS collects (as much as 30% if I remember). Some people make careers of finding business that are cooking their books, turning them in, then living off of the reward from the IRS.

1 - 15% of the amount collected (including penalties and fines but not interest )depending on how material your information was, with a cap of $2 million. But you can file for as little as $100 in reward if you want. They don’t pay often, though and you have to file.

http://www.irs.gov/pub/irs-pdf/p733.pdf

[OttoDaFe]

I haven’t posted to this thread because any germane comments and/or links I might have provided have been covered long ago (although Debunking The Story of the Buck Act is an interesting read in a “WTF???!!!???” sense); still, I have to ask:

Is the reward money . . . taxable income?

[DiosaBellissima]

@OttoDaFe

I haven’t posted to this thread because any germane comments and/or links I might have provided have been covered long ago (although Debunking The Story of the Buck Act is an interesting read in a “WTF???!!!???” sense); still, I have to ask:

Is the reward money . . . taxable income?

Heh

At the tax conference I was at a few weeks ago, they said no. But don’t take my word for it.

[movingfinger]

I read somewhere that people who actively encourage others not to file taxes , and do so through books, seminars and the like, are generally scrupulous about paying their own taxes as they know they are under heavy scrutiny by the IRS.

In other words, they quietly pay their taxes and lie loudly about how they don’t pay their taxes.

Any truth to this?

[DiosaBellissima]

You know, we only really deal with the people those folks scam, so I couldn’t tell you. The IRS is coming down harder on those ring leaders though.

From wiki

Convictions for 1997 through 2002 tax years

On October 24, 2005, Schiff was convicted in the U.S. District Court in Las Vegas, Nevada, on multiple counts of filing false tax returns for the years 1997 through 2002,[15] aiding and assisting in the preparation of false tax returns filed by other taxpayers,[16] conspiring to defraud the United States,[17] and income tax evasion,[18][19] and he is again serving jail time.

So it looks like he was filing, he was just lying about what he was reporting.

[Dangerosa]

@OttoDaFe

Is the reward money . . . taxable income?

You bet your bippy.