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The IRS - Powerful and Incompetent

Posted by richrobinson 10 years, 8 months ago to The Gulch: General
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Our business recently received a letter from the IRS informing us that we had failed to pay 204.00 in taxes. The balance HAD to be paid by the 16th in order to avoid further interest and penalties and that the interest would continue to increase. If we were unable to pay we needed to contact them immediately. Another attached page explained how the penalty and interest would be calculated. A third page was attached explaining that they HAD received our payment and applied it to our account. The past due notice had already been prepared and we should simply disregard it. They apologized for the inconvenience. These letters were all in the same envelope. I can't believe somebody didn't think to just throw it away and not send it. I think this would be funny if they weren't so powerful.


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  • Posted by dukem 10 years, 8 months ago
    Another short example I encountered years ago (beyond the statute of limitations, or I wouldn't post this).
    I made an unknowing mistake on a tax return and discovered it 3 years later. The mistake was in my favor and shorted the government a substantial amount of money. I gathered the documents, sent them to the IRS, and asked what I should do. Received a response that my claim was denied as it was too far in the past. I sent another letter saying that perhaps they had misunderstood, and that this was actually not a claim, but a desire to be honest and pay whatever taxes and penalties were due. Got back another letter indicating my claim was denied because the incident was too far in the past.
    I have the two letters in my safe awaiting a knock at the door some day.
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    • Posted by sumitch 10 years, 8 months ago
      Similar, but not the same. We were audited and reported for interrogation as ordered with all of our receipts in hand. As it was, we did not put the mileage on the gasoline receipts we offered as proof of the correctness of the deduction. I made sure that was all the problem there was. I went back out into the car and penciled in milage on every receipt and came back in and again showed them the proof. They found this perfectly acceptable and dropped their complaint. This is the type of bozo we have working for the IRS. Lois Lerner et al are a completely different story as they have committed a crime.
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  • Posted by Kilroy 10 years, 8 months ago
    Some years back I had an interesting encounter with the IRS. I had an accountant prepare my 1040 and I sent it in for that year. I sent it in as usual and thought nothing about it. A few weeks later I got a call from one of my creditors that my check bounced. I couldn’t understand this as I had sufficient funds in that account. A call to my bank revealed that the IRS had seized (put a hold on) my account. A call to the IRS was next. I was informed by them that the seizure was because I had not attached the W2s to the 1040 and when that happens they charge the maximum. I protested that I had stapled them onto the 1040s just as I had done every year. They said ‘well they are not here now. Do you have any proof that you did that?’ ‘I have Xerox copies’ I said. ‘Fax them over,’ they said, and so I did. I called them back to see if they had gotten them and they had. They said ‘Oh, we found your originals rolling around on a cart here a little while ago.’ The following conversation went something like this:

    ‘Now that you know that I sent them in, please release the hold on my account.’
    ‘That will take one to two weeks.’
    ‘You mean that even though I had done nothing wrong you will hold my account for maybe 2 weeks?’
    ‘Yes.’
    ‘That’s not fair!’
    ‘Sir, fair has nothing to do with it. It’s the law.’

    It is that last line that I will remember always.

    In summary, it doesn’t matter that you did everything correctly, you can expect no help from the IRS. They won’t even call you to find out what the facts are, preferring to cause as much damage as possible first. They seized a bank account that had far more in it than taxes owed even without the W2s.

    If you want to know how incredibly corrupt that criminal organization was (and likely still is), consider the following:

    The IRS was proven to be a criminal organization when they were called before Congress for gross abuse back in 1997/1998. During this time person after person, business after business testified as to the illegal/criminal activities that destroyed businesses and lives. All that was accomplished was to elect a promise to be a ‘kinder, gentler IRS’ in the future. To my knowledge no IRS employee was ever punished and no person or business was compensated for the destructive activities of the IRS. Because the criminal thinking that was then in place in the IRS was not punished, it just went underground and it has surfaced again now in 2014/15. The same thing will happen this time unless a clear signal is sent that this kind of activity will not be tolerated. That signal will be the imprisonment and heavy fining of those responsible for such activities.

    It is often said that ‘the IRS is the most feared agency in the US.’ This should never be the case with the government. They should fear us. But when you are guilty unless you prove your own innocence, that they can freeze everything you own and imprison you, which is how it is now, you have to fork over many dollars to prove your innocence while the government can spend whatever it wants and only needs to say you are guilty with no proof, which you must then defend with an expensive lawyer. One way to fix this is to make the government pay for all expenses if they loose the case.

    The link below titled “A Brief History of IRS Political Targeting” is well worth reading and the VHS tape “IRS Horror Stories” is worth viewing as well.

    IRS Horror Stories:
    http://www.amazon.com/Investigative-Repo...

    General Accounting Office 1998 IRS Audit
    http://www.youtube.com/watch?v=TXVZMYte-...

    More horror stories:
    http://www.abolishirs.org/3_3.html

    A Brief History of IRS Political Targeting
    http://online.wsj.com/news/articles/SB10...
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    • Posted by 10 years, 8 months ago
      I have always supported a flat tax. I know we will probably never see anything like it because Republicans and Democrats both want the power to destroy perceived enemies. Frightening.
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      • Posted by Crushmore 10 years, 8 months ago
        RR. I agree with the flat tax idea. Along with the parties losing the power to punish their enemies. They would lose half their power period. The power to allow tax breaks for some behavior is what keeps their coffers full.
        What they spend on is one half of their power the other half is who pays what.
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        • Posted by $ jdg 10 years, 8 months ago
          The only way to take that power away is to put the tax code in the constitution, where it can't be tinkered with every year. Even then they might find a way.
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    • Posted by $ jdg 10 years, 8 months ago
      The IRS does some unfair things, but in the case of an unintended screw-up like that, the Taxpayer Advocate's office can help you. I'd at least talk to them.
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      • Posted by sumitch 10 years, 8 months ago
        The Veterans Administration is not any better. I was receiving a pension for my time in the Army during the 60's. For help that was the time of our disagreement with Viet Nam. I found a place to live that was over $1,000/month cheaper so moved there. The difference is that here we cook our own food but can buy it from the kitchen if we want. The other place changed for three meals each day weather you eat them or not. They were supposed to clean our apartments once a week. It took over a year to get them to clean mine.

        Then about two months later I stupidly wrote the VA and informed them that I had moved. They immediately dropped my pension without explanation. I tried calling dozens of times but could never get through due to the line always being busy. I wouldn't be surprised if they had just taken the phone off the hook as it were. I wrote innumerable letters asking why with no answer. The last few letters offered my email and phone and all but begged them to contact me and let me know what I had done wrong. They refused to make any attempt to contact me or to write and explain what the problem was.

        I contacted my Senators and my Representative and asked for help and they all had people on their staffs whose duty it is to help vets with problems. They sent out a form letter, got no response then advised me to work it out with the VA. That's equivalent to asking a judge to void a death penalty. Still, I went to the closest VA where a lady asked how I got there. I told her I had driven. She jumped out of her chair like an electric shock had gone through it and all but yelled "You can't drive". She then brought in a man so they could double team me. He advised me that I had to have a least two items to qualify for a pension but would not tell me what the items are. Apparently PTSD and a minor wound don't quality. Finally I got help by going to the American Legion and got an unbelievable amount of help and work done for me by them to try and find out what was going on. As of now, we are down to me having to pay them back what they had paid me since I had moved and they stopped my pension. Apparently the VA thinks that the place I moved from was assisted living while the place I have moved is not. The problem is as I see it is the place I moved from is not assisted living but that seems to escape the dolts at the VA pension office. Facts are something to be ignored or denied, not for consideration.

        Just a horror story to let you know that the IRS is not the only crooked bureau in the government. Apparently the VA does not agree that they are there to assist veterans. We've all heard about Phoenix and the criminals there and some may know that Texas is under investigation for much the same. Who knows how many more VA offices there are that are doing the same?
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  • Posted by term2 10 years, 8 months ago
    We should vote to abolish the IRS's draconian powers. They should be like ANY OTHER CREDITOR that has to sue to get payment. Imagine if all creditors could just levy and take anything you owned !! Its not fair.
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    • Posted by SaltyDog 10 years, 8 months ago
      We can't even rein in the EPA, and they're essentially tree huggers. How on earth would you get legislation passed to tamp down the organization charged with collecting the money?

      There was a congressman named Hanson some years ago, and he ended up writing a book called, "To Harass Our People". Google him up if you want to see what happens to someone who tries to oppose them!
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  • Posted by Herb7734 10 years, 8 months ago
    When I owned my camera shop a few doors down was an office supply store owned by my friend. Posted in a frame over the register was a letter from the IRS with the envelope it came in. The letter claimed he still owed 14 cents. The envelope had a pre-paid twenty-three cent bulk mail imprint. Those may not be the exact amounts, it was a long time ago -- but you get the idea that the postage was higher than the amount owed. So idiocy at the IRS is not a new phenomenon.
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  • Posted by freedomforall 10 years, 8 months ago
    Cui Bono.
    The way IRS employees are judged for advancement could be based on the number of notices that are sent out, and the looter employees have an incentive to send out as many notices as possible.
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    • Posted by plusaf 10 years, 8 months ago
      Yeah, I was going to try to point that out, but it looked like everyone was having more fun telling horror stories and expressing their disdain and upset...

      "Tell me how you're going to measure me and I'll tell you how I'm going to perform."... Old message to management... never acknowledged by them.

      If anyone stopped to inquire as to why the things happened, the answers might lead to a driving force that could be modified.

      I'd wager that the multiple-letter story was initiated by some spaghetti code that did Exactly What It Was Designed To Do, including print out and mail all of the redundant and irrelevant parts.

      Because someone programmed the computer to do so and nobody had any responsibility to go back and correct Stupid Programming Logic Errors.

      Heck, why should they?! The additional envelope probably helped some infinitesimal amount to keep some postal employee employed.
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      • Posted by sumitch 10 years, 8 months ago
        I would have thought that you could glean the disgust of people by their "horror" stories.

        Trust me plusaf, it's not "fun". Sorry to waste your time and bore you.
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        • Posted by plusaf 10 years, 7 months ago
          Sorry you didn't recognize the <ironic font> I was using.

          I'm quite disgusted with the way government agencies run at just about every level I've ever had to deal with them or read about them in the newspaper or see reports on TV.

          I'm not bored, nor do I consider any of this to be a waste of time, but thanks 'anyway' for your 'observation.'

          Read some of my other posts to Glean a Picture of 'how I really feel about the subjects' or hit my personal site at plusaf.com to Glean an image of how "transparent" I am about my positions, views and attitudes.

          And if you note the little $ next to MY name, you might also glean a tiny insight into me and my relationship with the ideas shared and commented on here at The Gulch.

          But if you also step back a few feet and look at the attitudes expressed in damned near every one of the other posts in this thread, you MIGHT notice that just about all of them are war stories about 'how bad life has been to me thanks to the bumblement' or some other bitching and moaning.

          None of which goes to uncovering Root Cause of why the hell folks like us are being punished by all those folks In Office who are allegedly there 'to help and serve us.'

          Now go reread through this thread and see how many posts even come close to 'looking for root cause.'

          Looking forward to your Objective Analysis...
          :)
          [note: minor use of irony in this post.]
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          • Posted by sumitch 10 years, 7 months ago
            Careful observation somehow missed your <ironic font>. I also notice that you became attached to glean after I used the word. My guess is that you want to play oneupsmanship rather than deal with what you said and your trying to justify it with your challenge to read all of your other comments and visit your site. You must admire the Clintons.
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            • Posted by plusaf 10 years, 7 months ago
              I used 'glean' all 3 times to mirror you and use a word you're obviously comfortable with... :)

              Me? One-upsmanship? Nah, never happen... more than a few times a day or per visit to a blog/comment site... just like many others here and elsewhere... heat and kitchens, y'know?

              And if, somehow, you got the idea that I 'admire the Clintons' you could not have possibly read OR understood any of the things on my site or in any of my posts.

              I hate Hillary. Bill was pretty good, though between him and Congress and Barney Frank, I believe they all set the fuse on the mortgage lending crisis and Housing Bubble. Fortunately for ME, I sold my Silicon Valley house about 3-6 months before the peak of that bubble, and for about nine times what I'd paid for it back in '79. Love those CA zoning laws that ruin the supply side of a market in an extremely desirable place to live. But, UNLIKE the CLINTONS, I'm a free-market libertarian capitalist, so if someone is going to do something stupid to the economy that I can take advantage of, I thank them all the way to the bank. And complain about their stupidity that takes money out of my pocket for 'no good reasons.'

              Me? Admire the Clintons? Surely you jest!
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  • Posted by $ rockymountainpirate 10 years, 8 months ago
    They were hoping you didn't read page 3.
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    • Posted by 10 years, 8 months ago
      I thought they could have at least sent them a day apart.
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      • Posted by $ rockymountainpirate 10 years, 8 months ago
        And waste a taxpayer provided Franked Envelope?
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        • Posted by sumitch 10 years, 7 months ago
          That reminded me of the franking account money that was being stolen by the congress. Funny they had taken the money but when caught they all anted up and were able to pay what they were stealing.
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          • Posted by SaltyDog 10 years, 7 months ago
            Now there's scandal that I hadn't thought about for a while! (I think that since the taxpayer must bear the burden for their free mail privilege, the congress people should be required to PERSONALLY sign each franked letter. Think of what we'd save, and what a boost to the economy when all of these pogues would have to buy Bic pens by the trainload! But I digress...)

            What the heck does 'franking' mean anyway?

            We need a Government-to-English dictionary. We also need to start a thread compiling a list of the malfeasences of these government miscreants, preserving the historical record for posterity!

            By George, I'm going to go start them right now!
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  • Posted by CircuitGuy 10 years, 8 months ago
    I get those too. If an entity generated some tax one quarter, the next quarter or year they assume you should have filed and send a bill. We got several of these on our household employees. We stopped using them when the kids went to school. It seems like I had to tell several agencies that we have no household employees and have no plans to. It is bad how they send these letters that say you totally messed up, and when you look into it you don't owe anything and you filed everything the law requires.
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    • Posted by 10 years, 8 months ago
      The bigger concern for me is that no one thought to not send this. It's as if mindless robots are doing things because that's how they do it. Nobody thinks.
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      • Posted by CircuitGuy 10 years, 8 months ago
        Yeah, they're either so disorganized and wasteful that they can't keep track of it. Or they're dumb like a fox and hope you'll just pay the $204 since an hour or two of a CPA's time would cost the same.

        I think it's mostly the former, disorganization. If they had a problem, though, with accidentally sending out an extra $204 to you, they'd be more likely to correct that.
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  • Posted by $ jdg 10 years, 8 months ago
    From the IRS' view it makes perfect sense to generate letters like this. They have an automated computer program that looks for "red flags" to complain about on your return and suggest "corrections." If you don't respond, the change goes through and they will collect, with penalties if you don't pay right away.

    It would be nice if the burden of proof for these things were pushed back on them. But that's not the system we have now.

    My state's tax agency does the same thing, but is wrong more often. And is also much more aggressive about collecting than the feds.

    Don't think you won't be affected if you haven't gotten these letters yet. They add new ideas to that program every year. The time to complain is now.
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  • Posted by $ MichaelAarethun 10 years, 8 months ago
    Would be hilarious if it wasn't so common.My rule is prepare for worst case situation times two. It's either reverse pessimism or reverse optimism. I expect the system to inexplicably fail. So far it hasn't failed in that expectation.
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  • Posted by Stormi 10 years, 8 months ago
    They are soooo efficient there. A coworker was informed they were going to garnish her wages, as her return was wrong, as she was divorced. No she was not. Her adult son in a different town had been divorced the year before, but she and her husband were many years still married. They insisted on the phone that, no, she was divorced. This went on for weeks, before they found someone had really messed up. So, I guess the IRS has the power to divorce and maybe marry as well?
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  • Posted by $ allosaur 10 years, 8 months ago
    I mailed my IRS taxes on April 13 one year back during the 90s.
    They sent a latter claiming I mailed late along with a lot of blather about penalties.
    It scared the heck out of me. I considered paying what the Nazis demanded just to get them off my back.
    What emboldened me to fight was that Congress was investigating the IRS for abuses at the time.
    (Yes, once upon a time Congress actually did its job).
    I had the kind of check book that had carbon copies of every check I wrote. I found the April 13 to the Treasury Department.
    I made a copy of the carbon copy and sent it with an angry letter that in part stated "you need to get your act together."
    I never heard from the IRS about that again.
    Since then I've wondered if the IRS computer randomly selects last minute mailers and tries to shake them down with phony "you were late" claims.
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    • Posted by $ jdg 10 years, 8 months ago
      My employer, a CPA, now has so many returns get "lost in the mail" that she routinely sends them certified-return-receipt if they can't be e-filed.
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      • Posted by $ allosaur 10 years, 8 months ago
        The very next year after that happened, I started to send my returns certified to both the feds and the state;.
        I remember a lazy cranky old woman behind a post office counter who complained about the extra work, though she used a "it's gonna get there anyway" tack
        She was not about to make extra money for her same ole' same ole' paycheck.
        Maybe paper returns with just plain stamps are getting lost by lazy Treasury employees who want everyone to go electronic.
        I have a way shrewder than me brother than me for a businessman who thinks sending a paper return ten days before April 15 will reduce chances for an audit.
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        • Posted by sumitch 10 years, 7 months ago
          I live in an apartment complex and each apartment has a mail box for the postal service to leave your mail in. I got an email from a buddy asking if I had moved because a card he had sent me was returned with the yellow USPS official sticker on it saying that I was not at home. I wonder how they knew that from just looking a my mail box which is three hallways from my apartment.
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    • Posted by $ MichaelAarethun 10 years, 7 months ago
      Send the return in one envelope. Send the check in another with the SSAN at the bottom. With a note saying, "Whoops!".

      Eithere that or do the return in Roman Numerals?
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  • Posted by woodlema 10 years, 8 months ago
    SAVE THAT LETTER, Make a Copy take it to the courthouse and RECORD IT!!!

    You may find 5 years from now that they screwed up and then you will be in MAJOR hot water. Having it recorded at the courthouse for a small fee will protect your ass like putting it in a vault. Unless of course your courthouse burns down.

    I would also send this to the News Media...
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