In an unabashed, brazen effort to generate a little interest in my books, I’m going to start doing what the Baton Rouge Advocate is doing with an LSU football book written by one of its reporters: I’m going to start publishing excerpts of a few of my books in the hopes a few of you will read the sample chapters and feel compelled to order them. (How’s that for sheer audacity and shameful pandering? Well, if Frump can be his own shill for his picture book, I can hawk mine, so there.)
Following is a sample chapter from my book It’s All TheIRS. It’s a book about a man who is erroneously hit with major taxes, penalty and interest that he’s convinced he doesn’t owe. He decides to fight back. I won’t tell you the ending but I will say that I have researched IRS abuse and have documented each of the cases I cite in the book (with the exception of the protagonist’s assessment, which is fiction. But all the others really happened to American citizens, earning the IRS the label of America’s only legalized terrorist organization.).
You may order your copy by clicking on the yellow DONATE button in the column to the right of this post to pay $25, which includes mailing, or you may sent a check for $25 to:
Tom Aswell, P.O. Box 922, Denham Springs, Louisiana 70727.
BE SURE TO INCLUDE YOUR MAILING ADDRESS IN EITHER CASE.
Enjoy:
“I’ve invested twenty years of my life with the IRS,” Fletcher said as they walked. “I was hired right out of college and it’s the only job I’ve ever had. I loved the work at first but then I started to see what was occurring and I guess you could say I developed a conscience. I tried to talk to my superiors about the hard line being taken, creating additional hardships where it wasn’t necessary. I saw businesses padlocked and closed down rather than giving the owners a chance to negotiate settlements of tax liabilities. It didn’t make sense to me. By closing them down, they were making sure the individual wouldn’t ever be able to pay his taxes, plus they were cutting off the potential for future taxes. It was a lose-lose situation.
“I asked why it was done this way and I got some pretty interesting answers.”
“Such as?” Ken asked when Fletcher paused and looked around.
“Such as the collections manager didn’t like this person, or they were going to make an example of that person. But more often than not, it was done for statistical purposes, to close a case. Performance evaluations were done on the basis of the number of cases closed. If a taxpayer was allowed to set up a repayment schedule or to negotiate, that necessarily meant the file had to remain open and that just couldn’t be tolerated.”
He paused to pick over some fresh vegetables. “We’ve got company,” he said without looking up. “FBI would be my guess, but don’t look. There’re two of them, about thirty yards behind us.”
Danny veered off to the right and, taking his time to check out surrounding tourists as casually as he could, he circled around until he was about fifteen feet behind the two dark-suited men. As he walked, he raised his camera and began clicking away. He’d taken about a dozen shots when one of the men looked back and saw him. Both men turned and approached the photographer as Tom and Ken started toward them from the other direction.
“Who are you and why’re you taking pictures?” one of the men demanded. Danny kept shooting and one of the men reached for the camera.
“I wouldn’t do that if I were you,” said a voice behind them. It was Ken, once again mustering his most authoritative bluster.
Forgetting Danny for the moment, they turned toward the voice. “What?”
“I said I wouldn’t do that.”
“Who’re you?”
“I just happen to be an attorney who knows the Bill of Rights like the back of my hand and you’re in serious danger of violating three or four of that man’s basic rights as an American citizen. But I’m sure I don’t have to explain that to you.”
Tom scribbled at a furious pace and Danny kept taking pictures to the obvious discomfort – and displeasure – of the two men who, like the three in the Café Du Monde earlier, suddenly realized they had business elsewhere and left without another word.
When they rejoined Fletcher, he was still looking at the produce.
“We had one case,” he said, picking up where he left off before the interruption, “where this young guy had just received his MBA and had gone to work for a computer company. He had three kids, one of whom had cancer, so he and his wife were thrilled that he got what looked like such a great job with benefits. He moved up in the organization and was soon given check signing responsibilities for the office’s day-to-day needs like utilities, rent, and supplies. He was one of several employees with signatory authority at the bank but he had no responsibility for payroll and tax obligations. That was reserved for the owners.”
Fletcher reached the end of one row and made two right turns and started back down the other side as the others trailed alongside and behind. Tom took notes and Danny, through taking pictures for the time being, watched for other unwelcome visitors.
“Then the company began to experience financial problems. Unbeknownst to our boy – I’ll call him John – the company’s owners had a past history of tax problems and they had already started setting up operations in another state. They did this by raking off cash and by transferring inventory and corporate assets to the new location without John’s or anyone else’s knowledge. They let John manage his office but told him payroll and taxes were being paid from the new office. He was still getting his paychecks, so it never occurred to him they were lying.
“One day an IRS collections officer – I won’t tell you his name, but his initials were Norwell Fletcher – dropped by John’s office. He was the senior ranking employee available to meet with me. I informed him that the company was delinquent in its payroll and withholding taxes. I had my marching orders, so I had no choice but to demand immediate payment or I would have to close down the office. The poor kid didn’t know what had hit him. He just went slack-jawed on me. He called the owners and they assured him there had been a mistake and that they’d straighten everything out.
“Well, they didn’t and a few days later they informed John that the company was folding and that he’d have to find employment elsewhere. He did. Got a great job with a big contracting firm with full benefits and a good salary. He landed on his feet without ever missing a beat.”
“What happened with the IRS?” Scott asked.
Fletcher dropped his eyes, smiled, and shook his head. “Well, it wasn’t pretty.”
“Like I said, he was in his new job, doing great, but then one day an IRS collections officer – not me – and a representative of the IRS Criminal Investigation Division were waiting for him when he got to his office. They told him he was under suspicion of diverting corporate assets and other actions that they said frustrated the collection of employment and withholding taxes. He was advised to get an attorney. His company immediately placed him on administrative leave, pending the outcome of the investigation.
John’s attorney and the collections officer met a week or so later and the collections officer told his attorney that John wasn’t the focus of the investigation, that they were after his former employer who had a history of tax evasion. He said the IRS wanted to prosecute John’s former employers on criminal charges and if he cooperated, the IRS would recommend leniency for any liability he may have had in the matter. John agreed to cooperate and insisted that his duties were only on the day-to-day business affairs of the local office. His attorney explained to him that anyone who is responsible for payroll tax compliance can be personally liable if he willfully failed to collect and remit the taxes.
“John reiterated his claim that he was not the one in the company who was responsible for payroll tax compliance. That duty belonged to the owners, who had assured him that the matter was being taken care of.”
By now, they were back at the Café Du Monde and after waiting several minutes, they managed to get a table in the open-air part of the café. They sat down and ordered more coffee.
“The IRS disagreed. They said since his signature was on file at the bank and he had the power to sign checks to pay for everyday operations of his office, he was as much a target as the owners. The leniency offer was suddenly forgotten as soon as he agreed to cooperate and he received an assessment of $750,000. In all my years with the agency, I’d never seen anything so blatantly unfair,” he said, turning to Scott. “Until your case came across my desk.”
“What happened with John’s case?” Scott asked. No one else had spoken since Fletcher had started telling his story.
“His attorney tried to reason with the agency. He told them the assessment was unreasonable and impossible to collect from the young family, that it would ruin them financially. He explained that his client’s youngest child was suffering from cancer. He reminded them they’d promised leniency and that his client had cooperated fully. The IRS turned a deaf ear. John and his wife made an offer in compromise that would have been difficult, but not impossible, to repay. It was rejected out of hand. The IRS was totally unreasonable.
“Then, a few years ago, the IRS tried to prosecute John for the tax deficiency, which by then had ballooned to over a million dollars. The presiding judge was aghast, but his hands were tied from a legal standpoint. The law dictated that John be held liable, even though the judge said the law was unjust and a travesty. ‘This man has been stripped of his assets and now is facing an un-dischargeable debt of more than a million dollars. My advice, not from a legal standpoint, but from a humanitarian standpoint, is for John and his family to leave for some more civilized country and try to start life all over again.’
“And that’s what he did,” Fletcher said. “He was forced to leave his own country by his own government for actions over which he had no control. The last I heard he was somewhere up in Canada.” He fell into silence and stirred his coffee absently as the others sat unspeaking.
“I fought ‘em,” he said finally. “I tried and tried to get ‘em to pull in their horns on this boy, but they wouldn’t listen. John’s case became an obsession with the IRS. They were determined to make an example of him and they did.
“Then you came along,” he said, looking up at Scott. “They were still drunk with power when your case came up and it was similar in some respects to John’s so they figured they had another slam-dunk. I argued with ‘em again, but they wouldn’t listen. They sent you and Ms. Kennedy those letters over a fake signature. Those were facsimile signatures; I hope you know that – that’s their tactic – to send out letters with fake signatures.”
“We’re familiar with them,” Ken said.
“When they sent them, they placed a copy in your files. I saw them and went ballistic. So now here I am, exiled to New Orleans where I can’t embarrass anyone in the agency.”
“O.k., now this is important to us,” Ken said. “Why did you fight them so hard on Scott and Lisa’s cases?”
“Because we knew where Kennedy was. There was no reason on earth not to go after him, but they wanted to get the two of you instead. I can’t explain why they did it the way they did, but I do know that they were fully aware of the whereabouts of Drew Kennedy all the time. They sure as hell don’t want me talking to you. That’s apparent from the presence of our five visitors today. They’re very upset with me and they don’t know what to do with me.”
“They’re gonna really be upset when they see the story,” Ken said.
“I hope so. You run the story; every word of what I’ve told you is true and I have nothing to hide. They can’t hurt me and they can’t hurt you if you don’t let them.”
“I think I have the next installment for my web page,” Scott said. Think I’ll run a couple of the photos of the feds, too.” Then he remembered something from his first encounter with the Atlanta IRS office. “By the way, why doesn’t James Pierson take phone calls?
Fletcher burst out laughing. “What’s so funny?” Scott asked. My letter was signed by James Pierson and I was given a telephone number to call. When I called it, I was told James Pierson doesn’t take phone calls.”
“He doesn’t.”
“Why not?”
“He doesn’t exist,” Fletcher said. “The IRS sends out deficiency letters to individuals and businesses over a facsimile signature of a fictitious name. It’s a code they use. When you call and ask for the person whose name is on the letter, they automatically know why you’re calling and how to route your call.”
“That’s subterfuge!” Scott said. “It shouldn’t be allowed. They should be required to sign a real person’s name on those letters. We’re entitled to that much. I’m really pissed.”
“That’s why I called you,” Fletcher said, smiling.
They listened to Fletcher for another hour as he told them what they could expect in the way of retaliatory actions from the IRS in the coming weeks.
“The first thing they did was to put a three-digit code on your IRS master file. The code can be either the number ‘148’ or ‘168,’” he said.
“What’s that mean?” asked Scott.
“It’s a special code that designates you as a tax malcontent,” Ken said.
“More specifically, a ‘148’ designates you as an illegal tax protestor,” Fletcher said. “It’s for anyone who’s suspected of taking part in tax evasion schemes or inciting tax rebellion. That designation virtually guarantees that you’ll be placed under intense scrutiny by the IRS. ‘Priority consideration’ will be assigned to your returns which means all your future tax returns will be flagged and screened by special auditors and agents. It also means, in practice, that you lose your taxpayer rights, including the opportunity to appeal.”
“Jesus, that’s sounds pretty serious. You think I’m a ‘148,’ then?” Scott asked.
“If you’re lucky. You could be a ‘168.’ That means you would be considered a ‘potentially dangerous taxpayer. Once you get that tag, there is no due process, no grievance procedure. A maximum-security prisoner would have more rights, more avenues of redress.”
“That would be pretty tough to hang on someone, wouldn’t it?”
“Mr. Tanner, any agent can convince a manager that a taxpayer is dangerous. I’ve seen taxpayers get a ‘168’ stamped on their file for just getting emotionally upset. Others have gotten the designation for simply attending meetings of tax protest groups when they were seen by agents who monitor meetings of such organizations.”
“They monitor tax protest groups? Isn’t that against the law or something?”
“Mr. Tanner, nothing is against the law where the IRS is concerned, even profiling. They operate with impunity. Once you’re labeled a ‘148’ or ‘168,’ there is no procedure for expunging the code from your master file. And from that point forward, when you deal with a revenue officer, he will have an armed escort.”
Scott was silent, stunned that a law-abiding citizen of a country founded on the principal of tax protests could be subjected to such treatment. What the hell happened to free speech?
“If an IRS employee sees a ‘148’ or a ‘168’ on your master file it means you will never get the benefit of the doubt. You’ll get no breaks and even years of good behavior won’t get you off the hook. And most of the time, you’ll never even know you’ve had your file designated.”
Scott and Ken looked at each other. It was Lisa who broke the silence. “Do you think there’s a chance we’ll have a ‘148’ or ‘168’ put on our files?”
“Oh, I don’t think there’s any doubt you already have, probably a ‘168,’” Fletcher said.
“That’s so damned unfair,” Sydney said. “The IRS tags us with a tax bill that’s not ours and we get labeled as dangerous tax protestors. Where the hell do they get off doing this to us?”
“That’s just for starters,” Fletcher said. “They’re gonna be watching your every move. You’ve already seen evidence of that today. They’ll be following you everywhere you go. They’ll try to shut your business down, put you out of business, and they’ll start levying penalties and interest like you could never believe. You owe $600,000 now. Before you can ask them their interest rate, it’ll jump to $750,000, then a million, and they’ll never offer you an explanation, a financial breakdown.
“They’re going to monitor your private telephone calls – your residence and business lines, so be damned careful what you say. They’ll open your private mail and if they get desperate enough, they’ll even burglarize your home and offices. Be extra careful of walk-in volunteers or customers; they may be plants, undercover agents, and they’ll be wired. If they can drive a wedge between you and Mrs. Kennedy or even between you and your wife or Mr. Bates, they’ll do it to get you to testify against each other.
“They’ll lie, misrepresent themselves, threaten, and even entrap you. If they do use informants, you won’t get the chance to confront them, question them, or cross examine them. They’ll seize property and money held by others but owed to you. They’ll even seize the property of third parties who owe the IRS nothing but who may be holding something for you. For example, if you have equipment stored in a warehouse, they can not only seize the equipment, but the warehouse as well. And they’ll do it.”
“You’re just trying to cheer us up, right?” Scott said.
“Let me tell you some stories,” Fletcher said, taking a bite from his beignet and washing it down with a gulp of coffee.
“I know of a case where they slapped a $16,000 delinquency on this poor guy. He set up a repayment plan where he would pay the IRS $250 per month. Eight years later, he’s paid them $24,000 and his balance is now $18,600. He’s trapped for life. Unless he wins the lottery, he’ll probably never be able to pay them back. If you get hit with a big assessment, you’d be insane to enter into a repayment plan with them, given the interest and penalties they impose. Hell, no one even knows what their interest rate is; it’s whatever they want it to be. Same with penalties.”
“What’re the options?” Scott asked.
“A bank. Borrow the money from the bank. They won’t charge anywhere near the interest rates the IRS does, and they don’t have penalties. Of course, with some people, it would be impossible to get the bank to lend them the money, so that would compound the problem.
“Another story. Three clothing stores in Colorado were audited. The auditor asked some questions about the stores that revealed his ignorance of retail accounting procedures. The stores’ owner told the auditor that based on what she could see of his accounting skills, he’d ‘be better off dishing up chicken-fried steak in an interstate diner in Texas.’ Beautiful quote, but ill-advised. Three weeks later IRS agents raided the stores, froze the bank accounts, and seized the entire inventory. Word was the IRS agents told customers that the owner was a drug dealer. They hit her with a $325,000 assessment, the equivalent of a financial death penalty, and even tried to seize her mother’s home. She demanded a fresh audit that subsequently showed she actually owed only $3400, but the IRS wouldn’t return her assets to her unless she signed a waiver guaranteeing she would not sue over the violations of her rights. Did I mention that the IRS will also try to blackmail you? She refused their ‘offer’ and she did sue over the wrongful disclosure of tax return information to the TV program Inside Edition. The clothing stores’ summer clothes were finally returned – just in time for Christmas. A federal judge eventually found the IRS liable for $325,000 in compensatory and punitive damages, plus attorney’s fees.”
He took another long drink of coffee and set the cup down. “I wanted this meeting so I could tell you all this. I wanted you to know what could happen if you continue to pursue the course you’ve laid out. “I also wanted to tell you face to face how important it is that you stay the course. What you’re doing is important and the stakes are extremely high. If you back down, the IRS will come out of this stronger and meaner than ever. You’re already marked with a three-digit code, so you may as well hunker down for a long fight.”
“Would you excuse us just a minute?” Ken asked.
“Sure. Take your time. I’ll be right here.”
Scott, Sydney, Ken and Lisa walked outside and stood in the hot summer sunshine talking back and forth for several minutes. Tom and Danny were not asked to join them. Fletcher watched their animated conversation. Finally, they returned to Fletcher’s table and stood in a circle around the IRS agent.
“What?” said Fletcher, looking up at the four smiling faces.
“Mr. Fletcher,” Ken said, “do you know anything about running a non-profit legal defense fund?”
Louisiana Voice 