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Greetings from the IRS: Infernal Retribution Service

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POSTED May 26, 2013 9:31 p.m.

Greetings.

I’ve only received two letters in my life that started with that word - one from the Selective Service and the other from the IRS.

The Selective Service letter was expected. The IRS one wasn’t.

I was 26 and I was being subjected to what I later was told was a full scale audit. Since I didn’t itemize and had more money than  necessary for my tax bracket removed from my paycheck than required I was at a loss.

It shouldn’t have surprised me. Several years earlier the superintendent I voted to fire as a member of the Western Placer Unified School District board had told several people in Lincoln that he was going to nail me and another trustee who lead the effort by reporting us to the IRS. He openly boasted that he was going to call the IRS hotline and report that he had paid myself and the other trustee $10,000 for some work that we had supposedly done but we hadn’t reported it as income. I dismissed it when I heard it knowing full well that I hadn’t done any work for the guy let alone accepted money from him. I also seriously doubted the IRS had a rat fink line. While I was right on the first point I was wrong on the second.

Both of us were subjected to full scale audits. Without going into the gory details, the IRS made my life a living hell for a little over 14 months. At one point they found $7,000 in advertising commission that I allegedly hadn’t reported five years prior. I did not sell advertising in the year they claimed. As luck would have it, The Press-Tribune had reported my expense reimbursements as commision for the year they sent me to Mexico City for three weeks, Provo, and Colorado Springs. Fortunately, The Press-Tribune business department was able to retrieve five years of expense reimbursement documentation which I photocopied and mailed off to Ogden, Utah with a bunch of other documents connected with a photography business I operated on the side that they demanded I produce with 30 days. The package weighted just over a pound.

When all was said and done, the IRS demanded I pay $73.78 not on taxes I did not owe nor on interest that I didn’t owe or even on penalties that I did not owe. It was for interest on penalties because I was told by an IRS auditors that I somehow should have known The Press-Tribune misreported by my business expensive reimbursement as advertising commission since it was coded wrong when  I received the checks.

I was advised by an accountant not to argue and just pay it so that the IRS could justify all of the effort they put into pursuing me.

During that time period, two of my friends arranged for me to date a lady named Jennifer. She had total class. She also was an IRS auditor who was up for promotion to become an agent.

We dated for seven months before drifting apart. During that time she had to go to Reno where she was part of an IRS team that was collecting data to create models to decide what would trigger audits of casino dealers. They targeted small, medium and large casinos. Her task was to watch from various dealers from behind ceiling mirrors to record how much in tips they made. The data they collected was used to create perimeters for audits. If a dealer from a certain sized casino reported salary and tip income that was below the model the IRS created they were flagged for possible audits.

I understand why the IRS has a hotline where people can report suspected tax fraud. I also realize they can’t differentiate between phony claims and real tax fraud without following up on all credible claims. They are just doing their jobs.

I also get why the IRS needs the authority to essentially tell a business that they are going to use them as part of a Guinea pig study to develop perimeters to determine tax compliance and who should be treated to an audit.

What I don’t get is where the IRS gets off on asking questions of people about what they are reading to determine their political views.

As the IRS scandal unfolds it is clear that they have no perimeters. It is political harassment because they didn’t  target all political groups just those that are conservative. I’m not naive enough to think this is new. I’m sure the IRS did the same thing targeting leftist or liberal organizations in the 1960s and 1970s.

But what really bothers me is the vast evidence that rich people and corporations that cobble tax shelters that are dubious don’t get anywhere near the scrutiny that the Tea Party and conservative groups have. In many cases it has been documented that hardworking honest IRS employees build a credible case that a tax shelter that is helping a big corporation or a rich individual avoid millions in taxes is a sham, only to have the plug pulled by higher ups.  Pulitzer Prize winning reporter David Cay Johnston has documented more than a few such cases in his books “Free Lunch” and “The Fine Print.”

The real crime here is that the IRS is used to punish those that big government doesn’t favor and give breaks to those that grease the skids to elect politicians.



This column is the opinion of executive editor, Dennis Wyatt, and does not necessarily represent the opinion of The Bulletin or Morris Newspaper Corp. of CA.  He can be contacted at dwyatt@mantecabulletin.com or 209-249-3519.

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