A good friend of mine from college has gone a bit…erm…wacky in her post-graduate years. She isn’t very stable and comes from a family with a history of mental illness.
We recently had lunch. During that conversation, she went on about how the IRS is an illegal organization, that only those selling drugs or alcohol have to pay taxes, that the 1040 form isn’t actually for the continental US but instead is for the Virgin Islands and thus an illegal form, etc. There was something also about how we are in the war in Iraq because we need not just the oil, but the drug money to run lower Wall Street businesses. She said her parents had been audited, and once they sent a letter detailing such things, the IRS left them alone (??). She then also described that, come to find out, her credit card company (Visa) was also an illegal organization and that she was protesting having to pay her debt with them as they don’t have the right to exist. ??
Aside from it being a bit disturbing to hear my friend describe her descent from reality (there was plenty more that had nothing to do with money), I was beginning to wonder…how would the IRS and Visa treat her? Do they prosecute the same as anyone, or is it sort of a “how nature says do not touch” thing?
I’m curious about whether the IRS really backed down from her folks, or just kinda backed away slowly. I’d assume the credit card company would still come after her money, but who knows.
I’d say: For Visa, that sound you hear is her crumbling credit record. Plus I’m sure some bill-collectors may get involved. The bill-collection may back off if she was declared legally insane, but the credit record stuff would be there. Period.
For the IRS: That new sound would be the court engines warming up. These tacitcs simply do.not.work. The IRS will simply seize her property and wages. They don’t care how looney she is.
Somewhat related: there’s a great page on the IRS’s website which lists all the common tax dodges, and detailed explanations on why they are bogus. I’ll see if I can dig up a link.
I don’t know about VISA, but I really believe the IRS is illegal and there is no real ‘legal’ reason to give them a cent, but then again that thug that held me up at gunpoint was also acting illegally but I handed him my money anyway, the potential punsihment of the IRS means I will be writing a check each and every year till I die and as far as I’m concerned breaking the law in doing so.
Guy I knew awhile back claimed he prepped for an IRS audit by eating several cloves of garlic.
Throughout the first interview with the IRS agent, the guy presented himself as a loquacious, but somewhat dim individual, who had difficulty grasping simple concepts. The meeting lasted a couple of hours with virtually nothing accomplished - from the agent’s POV.
The reek of garlic must have been overpowering. There was no second interview.
The story could be baloney, but the fact is, I wouldn´t put anything past this guy. He turned out to be the sleaziest, most amoral and dishonest person I ever met.
Dude- when you go into an audit- YOU have to prove your deductions. Thus, if the audit ends early, the agent simply sends you a letter disallowing everything you haven’t verified. :dubious:
The woman’s diagnosis is schizoaffective, manic type. This basically means she becomes psychotic when in the throes of a major mood disorder. One of her many hospitalizations was precipitated by a call to the police from the Plaza Hotel. She had been staying there for two weeks planning her upcoming, very elaborate and totally delusional wedding. They suspected something was wrong the fiftieth time she asked the desk clerk to get the events manager on the phone at 3 AM to tell him a new idea about how to make the wedding more spectacular. She was in a full blown manic episode and spent several weeks in the hospital being medicated back to the land of reality.
After discharge, her private psychiatrist contacted all the credit card companies (to which she was in considerable debt) and explained about her illness. Once they understood the situation they wrote off the debts and stopped hounding her.
The IRS was quite another matter. During a manic episode she had developed grandiose delusions which prompted her to file a tax return claiming she had made a couple of hundred thousand dollars that year but didn’t have the money to pay it just now. The IRS really wanted their share of this delusional income and went after her big time. The psychiatrist contacted them by mail and phone repeatedly to explain she hadn’t worked in years and was subsisting on disability. They didn’t care. They wanted their money. It took over a year and countless phone calls and letters to get them to face the facts.
So, it took less than a month to convince the credit card companies, but I still think the IRS will take another run at her some day. They do not care how crazy you are. Send the money - NOW.
It sounds like Little Cloud’s post comes closest to answering what I believe the intent of the OP was, which was to ask how credit card companies and the IRS handle the mentally ill (ie not tax protestors, who may not be mentally ill, even if they hold completely unsupported beliefs, but people who actually have a psychiatry-acknowledged disease).
As it turns out, the answer appears to be just what I expected.
I doubt this. First- either you are mentally incompetent or not. If she was- then she couldn’t sign her own return, and it was be a void document if she mailed it in. If she is NOT mentally incompetent- then she is responsible for what she signs.
Next- by Law- if she wasn’t mentally incompetant- then the IRS can’t talk to her Doctor. In order to do so, he’d have to have a Power of Attorney. Privacy Act (not something the IRS dreamed of- Congress forced it on them).
But this also sounds fishy becuase most of these “IRS horror stories” were found to be baseless after the big Senatorial hearings.
Oh sure- I can believe that the IRS did exactly what the Law said they had to do- accept her return until it was shown she was Menatlly Incompentent and they spoke to someone who had a POA. But once they had both, it’d be done. Unless you want the IRS to believe anyone who calls them and says your crazy? :dubious:
The Doctor is also under certain Doctor/patient Confidentiality laws which means he broke the law unless she was incompetent.
Dr Deth – While I know nothing about the facts of the case, I think both you and little cloud are probably right. Like any bureaucracy, the IRS has to make sure they dot every i and cross every legal t (they don’t want another Senate hearing, after all). In that situation, it could easily take a year to do so, and more than one phone call and letter.
As you said, they don’t want to just take the word of whoever answered the phone (“You’re asking about the lottery winnings? Um… you see a crazy guy just made it up. Yeah, that’s the ticket. Never any money at all. Honest!”)
Heck, I think it’s a good sign that the IRS is working hard to get money.
Damn it, I pay my taxes, I want them out there making sure everybody else is paying their share.
And considering that the general reward for a gov’t agency being diligent about this is at best a meaningless award and at worst some attempted tax cheat millionaire getting his pet Senator on your ass, I’m kind of proud and amazed they work as hard as they do.
An old friend of mine got talked into one of those tax rebel groups. They had plausible sounding reasons, but those reasons didn’t mean squat in the court. My pal was in the middle of getting divorced when he went to tax court. The court not only attached his paycheck for as long as it took to pay the back taxes and fines, but it held up his divorce until he got square with the IRS. Between the tax payments and the package of waiting-for-divorce expenses, he was pretty much penniless for a long time. If his girlfriend (now his wife) had not taken him in, he would have been sleeping in his car.
You know, an obvious point that I think sometimes gets missed in these discussions is that income tax is a tax on, ahem, income. If you’re sleeping on your sister’s sofa, eating what you find in dumpsters, and working full-time on writing pamphlets that you leave under people’s windshield wipers, the income tax people are likely to ignore you simply because you have no income to tax.
I’ve often thought that this probably explains a lot of tax protesters who brag that they haven’t paid taxes in years, and the IRS hasn’t done a thing.
She wouldn’t have to be found to be non compis mentis. Once she told her therapist about the return, he could slightly modify the conset for release of information form that patients generally sign when they begin with a new therapist or pyschiatrist. I can see the IRS continuing to send letters etc for a year because it would take quite a while for all the proper forms and records to be processed. The therapist would have go through several layers of red tape before the IRS was convinced that the woman had no money. They would then initiate various procedures to change all the files on her income for that year from a few hundred thousand to zero, and to change the files on the owed amount from whatever it was to zero. My experiences dealing with various government agencies tells me that after a while, the situation had been officially dealt with but hadn’t reached everybody. At that point calls and letters were dealt with by 'Give me your fax number. I’ll fax you the completed and signed form 22-79T-HJ308. In that form, the IRS acknowledges that my patient had no income that year. I will also send you form 22-79T-HJ309. In that form, the IRS acknowledges that my patient owes no money for that year."
The credit card companies left the woman alone because the therapist was able to prove that she had no money, and that further collection attempts would cost more than they would ever get from her. Had the woman actually had money, Visa would not have cared how manic she was.
