$10 an hour with 2 kids? IRS pounces

[Newsjock]

Source: Seattle Times

Rachel Porcaro knows she's hardly rich. When you're a single mom making 10 bucks an hour, you don't need government experts to tell you how broke you are.

But that's what happened. The government not only told Porcaro she was poor. They said she was too poor to make it in Seattle.

... "I asked the IRS lady straight upfront — 'I don't have anything, why are you auditing me?' " Porcaro recalled. "I said, 'Why me, when I don't own a home, a business, a car?' "

The answer stunned both Porcaro and the private tax specialist her dad had gotten to help her.

"They showed us a spreadsheet of incomes in the Seattle area," says Dante Driver, an accountant at Seattle's G.A. Michael and Co. "The auditor said, 'You made eighteen thousand, and our data show a family of three needs at least thirty-six thousand to get by in Seattle."

"They thought she must have unreported income. That she was hiding something. Basically they were auditing her for not making enough money."

... Driver quickly determined the IRS was wrong in how it was interpreting the tax laws. He sent in the necessary code citations and hoped that would be the end of it.

Instead, the IRS responded by launching an audit of Rachel's parents.

Read more: http://seattletimes.nwsource.com/html/dannywestneat/2010435946_danny06.html

[alfredo]

1. That sucks

[saigon68]

11. Yes its more "change we can believe in"

Shit like this is why people don't like the govment

[alfredo]

15. Especially the IRS.

[valerief]

21. Yeah, more beat the beaten. nt

[Dyedinthewoolliberal]

23. Bingo!

It's wxactly why people distrust the gov, especially the Revenue'ers.

[NYC_SKP]

43. I'm sure you've done more than just complain and chant "change we can believe in"

...or posting your reply, right?

You could write LTTEs or contact your senator or rep.

I hope you have.

TIA.

[dionysus]

93. no joke, 99% of his posts were almost identical to this;

"BRING EM ON CRIED BUSH THE AWOL CHIMPANZEE!!"

not that i disagree with that, but that's about it for content.

[NYC_SKP]

96. Actually, that's pretty substantial content.

Poster aspires to that level of worthwhile commentary.

:P

[Chulanowa]

45. Will that dastardly Kenyan muslim turrist stop at NOTHING?!

:eyes:

[SemiCharmedQuark]

46. She was audited in 2008. How does this have anything to do with Obama?

[demwing]

58. You're right- this is Obama's fault, clearly.

Why hasn't he stopped human stupidity? Why?

[fasttense]

62. According to the story it started a year ago. That would be December 2008.

The bushes IRS did this. I think President Obama has refocused these blood suckers. Unfortunately, these people got caught in the tail end of the bushes war on the poor and middle class.

While I was in the military (2002), I got audited for 3 years. "Thanks for your service," the IRS agent told me. I wanted to shoot him.

[Lefta Dissenter]

63. acckkkk!

Good thing the military teaches you restraint to go along with your weapons training!

(really, though, thank you for your service - and I promise I won't audit you) :hi:

[PatrynXX]

116. Yes it says 2006 Republicans called it welfare and demanded IRS raise the audits.

do'h

[TheFarseer]

127. the leaders in the tax office I work for part time -

are telling us to be very careful about child related credits this year because the IRS will be looking hard at kid credit fraud. I agree that we shouldn't want fraud in this program but I think there's bigger fish to fry.

[Sanity Claws]

97. It sounds like this started under the Bush administration

I wonder if she contributed to moveon.org or something like that. I'm thinking this audit may have been politically motivated because it doesn't make any sense.

[smoogatz]

107. Right. All Obama's fault!

And just getting him elected was supposed to fix everything, all at once!

[flyinzamboni]

92. It does suck - but is it the whole story?

The first thing I thought when I saw this story is how much of the money was on her W2 and how much was claimed in tips?
The story does not mention this part at all. And this seems to be one of the more important aspects.

The IRS goes after people who get paid in cash/tips, particularly if their income diverges from what is expected. If she was getting paid $10 per hour in salary for 1900 hours (47.5 weeks working for 40 hours per week), she would have made the stated income on salary alone. How much of this was declared tips? How much was salary?

The situation is really messed up - and does seem to result from a holdover of Bush Administration policies. But if this were never checked, you would find Paris Hilton claiming she only made $19,000 per year.

[Amonester]

99. Oh, pelleeze...

All 'Hilton' types should be closely monitored every f*ckin second of each year, but a single mother of two kids possibly 'hiding' a few hundred bucks in TIPS?? R U f*cking kidding me??

[xxqqqzme]

111. The tips, included in credit card amounts are reported.

I always try to leave my tips in cash - no record.

[babylonsister]

2. This is so disgusting, I can't even express my disdain. Why aren't

they picking on someone who might actually be defrauding the government? :grr:

[NoUsername]

40. Nah, can't do that.

Those defrauding the government would most likely be the rich bastards and we can't have them getting audited and maybe just possibly having to pony up a few bucks on all those millions or billions they pulled in. After all, everyone knows that paying taxes is strictly for the "little people." The rich shouldn't be bothered with such mundane tasks.

[SergeStorms]

59. The rich.....

have money stashed all over the place, hidden in places we couldn't believe. They have high priced accountants that hide money from the IRS and take every legal, and illegal, deduction possible. Can you imagine the amount of WORK it would take to untangle a rich person's income tax forms?
That's why they pick on the little people. They're much easier to intimidate and hassle. That way an IRS auditor can give the appearance of being busy without actually doing too much work. The government pays them, and actual work isn't in their job description.
The rich are just too damned difficult to audit. Can you imagine the work involved? :wow: Now, give an auditor a good old fashioned waitress any day. THEY'RE the ones that are bringing this country to it's knees, not declaring enough in tips every year! Why, they're just like the Taliban, they are! :sarcasm:

[The Wizard]

61. Bush's reason for not taxing the rich

and IRS audits was because they could afford lawyers and accountants making compliance difficult (all right, Bush never used the word compliance, too may syllables). Going after easy targets who couldn't fight back was their policy.

[Golden Raisin]

55. How long was it Madoff

operated before anyone in the SEC or IRS had a clue? But this poor (literally) woman is hunted down.

[wizstars]

72. It's very simple--she doesn't earn enough to use a loophole...

[MadMaddie]

3. I read this story this morning and was flabberghasted.

This woman is not allowed to claim her kids as dependents. Why are they attacking the working poor?

[villager]

4. Can she incorporate? They'll never touch a corporation...

But be a mere fuckin' citizen, however...

Ah, plus ca "change!"

[ProdigalJunkMail]

20. yep...that is why my corporation gets audited every other year... n/t

[villager]

106. Corporation too small? Not enough active PACs to fend off the IRS?

:shrug:

[Dont_Bogart_the_Pretzel]

88. or a Church...

They'll never touch a church either.

[Arctic Dave]

5. Meanwhile, millionaires get every tax loop hole imaginable to hide their income.

[Neecy]

9. and Corporations

[progressoid]

41. Yep. n/t

[kenny blankenship]

6. Lucky Duckies make the best ortolans

[NoQuarter]

90. I'll bring the armagnac!

[bluestateguy]

7. There is a way the Democrats could become the anti-tax party

Make it official policy that nobody making under $100,000 will ever be audited, unless there is overwhelming evidence of fraud.

"We trust the people to do their taxes as they see fit...blah, blah", and other such populist stuff. Would go over very well I think.

[Stumbler]

54. I like it! Let's go with your idea.

There's no reason a person making < $30k a year should be subjected to an audit, especially at a time when "defense" contractors are making a literal and figurative "killing" while America is at war abroad. Seriously, the wealthy can hire accountants to hide millions from the IRS, as well as well-qualified lawyers to defend them in court should they be suspected of fraud, but no-o-o-o-o!!!! Our gov't needs to make sure the filthy peasants are really, truly poor enough to be living in poverty, surviving on the food stamps, food shelves, and free clinics they "claim" to "depend upon" for their very "survival."

[Fumesucker]

8. Wait until the IRS comes after you for not purchasing private medical insurance..

This is nothing compared to what it's going to be like when the IRS becomes Aetna's enforcer.

[AzDar]

12. Fumesucker, that last sentence is so completely shocking, that it should stand alone as a thread

title.

'...When the IRS becomes Aetna's enforcer.'


Damn.

[Dragonfli]

13. The mandates will mean the End of the Democratic party with the working class

All the independents I work with or around voted for him because guys like me told them the Dems wanted to even the playing field for the working poor.

I asked around recently and I have found no one that is not pissed off about the thought of mandates they can't afford for crappy policies they don't think are worth a damn that have very high deductibles that also can't be afforded.

There will be a great deal of work for the IRS I am afraid, and once they start taking peoples food money and giving it to billionaire Insurance execs. The GOP will make a comeback among the working poor. The only exceptions will be the Current working poor Democrats that feel betrayed and will either not vote or turn to the green party.

They could have fixed health care, instead they are using it as an excuse to bleed an already poor working class dry.

Why is this a smart strategy?

[Fumesucker]

16. These people, and I use the term advisedly, live in a bubble of wealth..

Seldom coming into contact with the unwashed masses of working Americans.

They spend their days being feted and meeting with high priced lobbyists for the most part, they think $135,000 a year with a great bennies and a lot of perks is vastly underpaid.

Not to mention that there really is only one party with two not particularly far apart wings, the party of big money and the two wings play good cop bad cop with the working class.

[NoUsername]

42. "The two wings play good cop, bad cop with the working class."

That's it EXACTLY. It's nothing more than a dog and pony show. They used to at least try to put on a show but in recent years, it seems they don't even bother to do that. They have become more and more blatant about selling us out and, from their viewpoint, there will be absolutely no repercussions from doing so because hey, where else does the left have to go?

I saw someone (Lawrence O'Donnell perhaps?) commenting on this very thing during the run-up to the election. He said, according to the higher-ups in the Dem party he had spoken to, that's exactly the way they see things. IOW, they don't need to do jack-shit for us because the left doesn't have anywhere else to turn to. We are disposable. And as long as they think they way, expect them to continue their tack to the right and sell us out even further. Nothing will change as long as the progressives/left continue to vote for the Dems as the "lesser of two evils." That much we can be sure of.

(I might be able to pull up a link re: the interview I saw on MSNBC but I'm not sure I still have it and if I do, it will take some time. I'm royally swamped at work these days but if someone wants it, post up and I'll see if I can dig it up when I get a chance.)

[Usrename]

65. This will heat things up, that's for sure.

More criminalization of the working poor. Is locking up all of the poor a novel solution to poverty?

[Shandris]

112. Only if the novel is 'Atlas Shrugged'. :fume: N/T

[phasma ex machina]

76. +1 nt

[Ikonoklast]

86. Right -wing talking point.

Please link to a credible source that states the IRS will be the agency that penalizes citizens for not being in compliance with the proposed health care bill.

The IRS will collect fines imposed by other governmental agencies for failing to be in compliance, just like they do right now.

Flaunt the federal law, get caught, get fined, and the IRS does the collecting. 'Aetna' doesn't get involved, nor do they get a dime from any collection effort by the IRS.

But you know that.

[Xithras]

120. You can't be serious.

From the perspective of every normal person in this country, when the IRS comes after you, it's the IRS you're fighting against. Mental gymnastics claiming that it's not really the IRS, but "Agency X, via Department Y, under the authority of Law 25568.3 Subsection 96a" mean nothing to working class people.

When they get nailed, it will simply be "The IRS is fining me for not having health insurance". And then the Democratic Party loses a vote.

[Fumesucker]

128. Normally I'm considered a "purist" here..

It's a refreshing change to be accused of spouting "right wing talking points".

Thanks for making my day.

Edited for speling..

[Warpy]

10. The IRS has wasted millions auditing poor people for pennies

when their time might have been better spend auditing the real tax cheats in this country, the rich and their executive lackeys.

It's just more proof of class bias in this country, that top down conceit that only the poor steal and that if one is thrifty enough to patch together any sort of a living on shit wages, that person must be hooking or dealing drugs on the side.

Of course, it's also a tacit admission that wages in this country are depressed far below subsistence, but they'll never admit that.

Come the revolution, it's going to be a bloody mess out there, what with all the insurance honchos and IRS honchos and other executive lackeys up against the wall. Shakespeare was wrong. Lawyers are small potatoes these days and at the far end of that long line.

[Blue_Tires]

31. that's the irony of it all

the Maryland Dept. of Taxation hounded me to near insanity over $400 a few years ago...There was this 16-month timespan where I lived in three different states and mistakenly put some income that belonged to them on another state's return...I got calls, threatening letters, you name it -- And you will not believe how much backtracking I had to do to get proper forms and documentation (I was working a mix of PT, FT, and temp jobs back then...)

[eilen]

57. It's taken over a month for my dh to get any unemployment

because the State of Indiana keeps sloppy records and had his SSN recorded wrong, We paid his taxes for that state. We live in NY and apparently all the verifications. communications and corrections are done by ... good God in Heaven... US Mail. Does no one own a fax machine in State Government? Or Internet?

They sure cashed our tax check quickly though and NY was electronically paid.

[CubicleGuy]

50. Auditing the rich is a waste of IRS resources...

... because the rich can afford lawyers to protect their money. Poor people, on the other hand, are easy pickings for the IRS.

Predators go after the weakest in the herd, not the strongest.

[laughingliberal]

71. They spend more than they get back auditing the poor

Just look at this story. They wound up getting a little over $1,000 more from this poor woman and they spent far more than that.

[OneTenthofOnePercent]

78. Not true. Risk vs Reward... a stiff unenforced penalty is NOT a risk.

The point, ultimately, is to discourage others from tax evasion.
The IRS could care less if this lady cheated $1000 or was overtaxed $1000. Irrelevent.

Fact is, the IRS has expected income sheets and actively checks them as a deterrent to cheating the system.
I'm quite sure that the IRS makes much more in taxes from "the poor" that it makes auditing "the poor".
Think about it. They audit a few thousand poor people and collect taxes from a several million poor people.

If the IRS never audited any individuals, then how many people would cheat the system?
How many people would claim they are "poor" to avoid being audited?
Example: If you steal from your workplace it likely costs more to fire you and train a replacement than what you stole.
Should employees be allowed to steal a ream of paper with no consequence because it's cheaper than firing them?

[laughingliberal]

80. I was responding to a reply about the IRS going after the rich being a waste of resources

If it's a waste of resources to go after the rich, it is a waste to go after the poor. If it's meant to deter others from cheating on their taxes, then audit the fuck out of the rich. Good for the goose, good for the gander.

[OneTenthofOnePercent]

84. I'm sure they audit people pretty much the same.

If income level isn't up to par with what's expected for the area, I'm sure people get audited with regular occurence - regardless of tax bracket. I don't think it's a waste to go after the rich at all... even if they never actually nail somebody with all the loopholes. It's all a deterrence scheme.

You're right... Good for the goose, good for the gander.

[laughingliberal]

87. They are not auditing people the same. This, from the article:

Why did this happen? The IRS won't say, but Congress has been fighting for years about the earned income tax credit for the working poor.

Republicans have called the credits "backdoor welfare" and tried to cancel them. When they controlled Congress, they ordered the IRS to ramp up audits of people who claim the credit.

In 2006, credit recipients such as Rachel were more than twice as likely to get audited as the rest of the 140 million individual tax filers.

The Porcaros say they get that the IRS can't just audit the wealthy. Poor people commit fraud, too. But the intensity and duration of the IRS' "obsession," as Rob called it, as well as that it appears the agency was trolling for the working poor, remains a sore point.

http://seattletimes.nwsource.com/html/dannywestneat/2010435946_danny06.html

Let us hope with the Democrats in charge this might change. But I do note this happened in 2008 and the Democrats had control of the House and Senate since 2006.

[OneTenthofOnePercent]

85. dupe. delete.

[kestrel91316]

14. The IRS audited me for three years in a row. They couldn't believe that

I could live on so little, but between living uber-frugally, growing most of my own produce (and preserving it), frittering away a small inheritance, and using credit cards, I was in fact able to do so. Not all of us spend a mere 33% of our income on rent (in my case it was more like 75%, lol).

The IRS wasted a huge amount of time, money, and energy pursuing little old me. In the end, they got only about $1000 because of how I had accounted for credit card interest as a business expense.

[tblue37]

26. But don't vets make at least a reasonable living? nt

[NJCher]

17. Republicans at fault again: read the story carefully

Quoted straight from the story:

Republicans have called the credits "backdoor welfare" and tried to cancel them. When they controlled Congress, they ordered the IRS to ramp up audits of people who claim the credit.

So in other words, if you claim the earned income tax credit, you stand a higher chance of an audit. If no one specifically told them to roll back that policy, it is still in effect.


Cher

[Fumesucker]

19. Rolling back that policy wouldn't be "bipartisan"..

Not prudent to irritate the Republicans..

[Alcibiades]

34. Let's not forget where the EITC comes from

Signed into law by Ford and saw a big boost under Reagan, who considered it "the best anti-poverty program ever created." Ronald Reagan: too liberal for today's GOP.

:banghead: :banghead: :banghead: :banghead: :banghead:

[Thickasabrick]

18. They go after easy marks. My BIL hired a guy and got out of $80,000

Made me sick - if you have money, you pay less.

[lpbk2713]

22. Maybe she posted on a Dem message board.

:shrug:


It all started a year ago, when Porcaro, a 32-year-old mom with two boys, was summoned to the
Seattle office of the Internal Revenue Service (IRS). She had been flagged for an audit.


The wheels started turning when the corrupt and evil BushCo Regime was in power.

[Shagbark Hickory]

24. I'd be so outta here. If this happened to me, I'd leave to another country. The IRS would lose my $

[Lerkfish]

25. Meanwhile, 9.5 billion disappears into Blackwater hands at the start of the Iraq war

priorities, priorites.

[SOS]

70. Ah yes, the wise use of tax money

The 15-month proconsulship of the Iraq CPA disbursed nearly $20 billion, two-thirds of it in cash. Most of the money was flown into Iraq on C-130s in huge plastic shrink-wrapped pallets holding 40 “cashpaks,” each cashpak having $1.6 million in $100 bills. Twelve billion dollars moved that way between May 2003 and June 2004, drawn from accounts administered by the New York Federal Reserve Bank. The $100 bills weighed an estimated 363 tons.

Once in Iraq, there was virtually no accountability over how the money was spent.

Contracts were especially attractive because no work or results were expected in return. It became popular to cancel contracts without penalty. A $500 million power-plant contract was reportedly awarded to a bidder based on a proposal one page long. No plant has been built.

Money also disappeared in truckloads and by helicopter. The CPA reportedly distributed funds to contractors in bags off the back of a truck. In one notorious incident in April 2004, $1.5 billion in cash that had just been delivered by three Blackhawk helicopters was handed over to a courier in Erbil, in the Kurdish region, never to be seen again. Afterwards, no one was able to recall the courier’s name or provide a good description of him.

Paul Bremer, meanwhile, had a slush fund in cash of more than $600 million in his office for which there was no paperwork. One U.S. contractor received $2 million in a duffel bag. Three-quarters of a million dollars was stolen from an office safe, and a U.S. official was given $7 million in cash in the waning days of the CPA and told to spend it “before the Iraqis take over.” Nearly $5 billion was shipped from New York in the last month of the CPA."

[npk]

27. Damn. $10 an hour in Seattle is like robbery

I think I once saw a survey that put Seattle at the fifth highest cost of living city per capita in the US.

[tabasco]

28. I had a job offer from the IRS once when I really needed a job.

I said "fuck that shit."

[Vidar]

29. Audit the poorest & let the Wall Street criminals skate. Thanks, Obama.

[Alcibiades]

37. How is Obama involved in this?

She was audited in 2008, under an IRS run by a Bush appointee, whose term, sadly, does not expire until 2013.

The Wall Street criminals are going to skate, though, I'll grant you that.

[laughingliberal]

38. I do think the president can make his wishes known to the IRS in this regard, who they focus on

It is well known that Bush the 1st told the IRS to leave the wealthy alone. I do hope to hear the IRS is changing their focus soon.

[Kansas Wyatt]

74. That is correct, and Bush ordered them to go after everyone else.

Obama certainly can put an end to it. He could also order them to only focus on those above $100,000 a year anytime he wants.

[laughingliberal]

75. I sent the link to this article to the White House with an email asking if we can see the focus

of the IRS change a little.

[dflprincess]

104. And, given the deficit, it would make more sense to go after

those that might owe more. Auditing someone who doesn't have anything makes no sense no matter how you look at it.

[Starbucks Anarchist]

121. It happened BEFORE Obama took office.

I love the knee-jerk reactions around here. :eyes:

[DRoseDARs]

30. Three years in a row (and three visits to correct it) the IRS got my name wrong.

I won't post my first or middle name, but my full name is a very whitebread Anglo-Saxon name which somehow morphed into "Devir Ross" sans middle name. I can forgive people for Ross (plenty of people in person phonetically confuse Ross and Rose and actually there's historical linguistic reason for that) but the IRS has no excuse for screwing up my last name (three years in a row ... and being told to fucking correct it three years in a row) or mangling my first name which, phonetically, hasn't changed in thousands of years. There's dozens of ways of spelling it depending on what culture you're from and there's slight variation in the vowel stressing for the same reason, but "Devir" is not one of those spellings nor any of its pronunciations. Oh, and another year they had conniptions over my use of "-" for negative numbers instead of their apparently preferred "(" and ")". They thought I owed them $11 when they owed me +$200. Bloody hell.



Yeah, this poor gal's story doesn't surprise me in the least.

Edit: gal not guy.

[timefortherevolution]

32. Can someone please tell me why we're all just blogging and b((*&ing??

Why aren't we using sites like DU to take it to the streets?

I sense we are all at the ends of our ropes.

But I hear no one calling for all of us to demonstrate.

We're far worse off than we were in the 60's, although Vietnam was nothing to sneeze at,
but we have millions of americans facing homelessness, why is no one organizing us?

[Occulus]

51. The answer is complex, but there are legit reasons.

The first, obviously, is jobs. Ask yourself this: how many employers would threaten their employees with termination if, say, a national strike occurred? Given the number of jobless in this country (both the official unemployment numbers as well as those who are not collecting unemployment, have given up looking for a job, or are underemployed), how hard would it be for an employer to just fire everyone who participated in such a strike, full stop?

We're not demonstrating, number one, because all our employers have us by the short hairs. We'll be fired if we try to rise up, and with hordes of potential employees in some cases literally mobbing in the thousands for a couple hundred jobs, well, employers have been and will continue to treat their workers like the dirt beneath their feet until that situation changes. That has been going on for nearly a decade now.

Another reason we aren't rising up is related to employment: too many people owe too much money, to banks, credit card companies, for legal reasons, or for medical reasons. Someone who has a job and insurance, in today's climate, cannot jeopardize their income for any reason. I would love to quit my job and go back to school full-time, but for two of the reasons above, I simply can't, nor can I put the fact I have a job in any kind of jeopardy. I'm lucky, in that I get both sick leave and vacation time, but how many people would lose their jobs and their medical insurance if they were fired for being out of town for three or four days?

People literally cannot afford to "rise up". The cost/benefit ratio is based on far, far too big an "if we succeed", and it's far too personal a loss if such an effort were to fail. Now, were we to organize the unemployed, we might have a better chance. Were the unemployed to make their way to Washington and just stay there, our policiticans might- might- start to listen.

But what are the chances of organizing America's unemployed into a political force? How do we go about doing that?

[sasquatch]

33. Guys, this happened under Bush, not Obama

[BrklynLiberal]

35. Nice. Really nice. While the billionaires get tax breaks up the wazoo!!!!

[laughingliberal]

36. Outrageous! I just wrote the White House saying I certainly hope the

draconian Republican policies will be reversed with a Democrat in office.

[Captain Hilts]

39. The IRS often goes after the vulnerable. Such as my elderly mother. nt

[TicketyBoo]

44. The way a rich guy gets audited

is to be tapped for Secretary of the Treasury. He owed as much in taxes as she made in two years.

Still makes me gag.

[KillCapitalism]

47. Crap like this makes me sympathize with the tea baggers.

It really does, but I would never support those Rush/Beck/Hannity listeners.

Anyone want to organize a progressive tea party instead?

[newtothegame]

48. Lesson learned. What do we need? MORE TAXES. n/t

[raouldukelives]

49. Big cheats have big lawyers

The IRS knows that going after them could take years of legal wrangling. Much easier to grab the smallest kid in the playground by the ankles and shake out the change.

[Horse with no Name]

52. A friend of mine is barely scraping by

took a 40% paycut to keep his job. If you figure it out, he is probably only making a little over $11 an hour.
Apparently he owed some taxes from way back, the IRS pounced on him and left him with barely minimum wage.
Personally I find that deplorable. Just like this story. They always go after the ones who can't fight back. Always.

[wickerwoman]

123. Yeah, like all those poor bastards with secret Swiss bank accounts.

http://www.csmonitor.com/2009/0819/p06s05-woeu.html

How are they supposed to defend themselves?

I have a friend in the Coast Guard who went on an IRS seizure of a boat a few years back. The guy had $2 million dollars in krugerrands sitting in bankers boxes on the boat and in a public storage locker.

The IRS goes after everybody they can. Sometimes that means they go after rich people. Sometimes that means they go after poor people.

They're a cheap and easy target but I know a lot of IRS agents and they're all strictly professional. They can get fired in a heartbeat for the slightest hint of abusing their position. And the IRS is usually semi-reasonable (far more so than credit card companies) in letting you set up a payment plan.

I'm sorry your friend got whacked. That sucks. But everybody has to pay taxes and somebody has to collect them. To accuse the entire IRS of a vendetta against poor people just makes a difficult job harder (like accusing all cops of hating black people or saying the entire police structure is corrupt because some cops are racist shitheads).

[DFW]

53. It sounds like the IRS needs some consulting help

With efficiency like that, they'd go broke in the private sector inside of a week. What the hell do they
think the "R" stands for? Revenue! They are supposed to collect revenue so the Federal Government can
operate. This implies an efficient use of their time. Having some emotionally disturbed case worker
harass a hairdresser who lives with her parents over a period of months seems like a waste of the IRS's
time. Given the amount of time spent on pursuing her compared with how much they got for Uncle Sam out
of their efforts, it looks like the IRS case worker garnered about 2¢ an hour for the government. Seeing
as how their salary and benefits cost us taxpayers a hell of a lot more than that, I'd say the IRS case
worker (and supervisor who let it continue) owe the US Treasury some serious compensation for our
loss. Halliburton moves to Dubai, the USA "loses" $9 billion in cash in the Iraqi desert (yeah, sure),
yet the Federal Government has months to spend on harassing a hairdresser and her parents in Seattle?

It looks to me like some housecleaning is needed at Treasury, and I don't mean just at the top.

[Speed8098]

56. I know the feeling

I'm being audited for a few untaxed unemployment checks I received between jobs back in 06. I was at the poverty line then and I'm not far above it now but G*d forbid I make a few hundred dollars without paying the government it's due.

My mortgage was $2300.00 per month and the pre-tax maximum for unemployment was $405.00 per week. Needless to say, I fell behind on my mortgage at that time. Pay the mortgage or eat, we chose to eat.

Now I gotta pay. Go figure.

[twitomy]

60. Un-freakin believable!

And some people want goverment bozos like this to run healthcare?

Insurance companies suck due to their greed, goverment run bureacracies suck becasue of their incompetence.

[DailyGrind51]

64. Conservatives will love this example of "intrusive big government".

Maybe her parents are helping her out, so, who really gives a crap? I bet if they were sending her through Harvard, they would not even bother.

[LWolf]

66. I got audited for 2 straight years last spring.

I sent my '08 taxes in in February, and in March I received 2 notices: 1 for '06, one for '07.

My tax man has been meeting with them, and they've whittled the 7,000 they wanted down to about 1,000, and are still working on it.

Meanwhile, I get bills from them every month, which I have yet to pay.

There was nothing different about '06 or '07.

[teewrex]

67. I'm trying to make it with two kids at $9.31 an hour and it is tuff but

it can be done. People do it all the time. If the IRS thinks you can't make it then why did they come up with the Earned Income Credit? Fortunately I start a new job on Monday that makes $19 an hour so I can actually start living again.

[DollyM]

68. wait until they see ours, we won't make $8000.00 this year!

And much of that is in unemployment . . . yes, my 81 year old mother helps us, we would be out on the street if she didn't. Don't they believe that family can help financially? There isn't a law against that is there? I think a lot of us are living bottom of the barrel financially, what else can we do in these times. We can cut back an incredible amount and still survive.

[Jeff In Milwaukee]

69. Weird beyond belief....

The statutory requirement is that you have to provide more than half of your own support and more than half of your dependents' support. That means that if Rachel earned $18,992 on her own, she could receive $18,991 from her parents and still qualify as Head of Household. The combined amount is more that the $36K the IRS claims she needs to get by in Seattle.

What's more, I'm pretty sure that gifts from her parents would not be considered income.

I would think that while there ARE certainly people who try to cheat the system to qualify for earned income credit, it doesn't appear that this person was one of them. I don't know why the IRS chose such a dubious target.

[Hassin Bin Sober]

83. I be they were looking to see if her parents gifted her over the limit of 12k per parent.

Also, I assume a gift or gifts of that amount would reduce any earned income credit she may have taken.


I was once audited after changing careers to an all commission job from an all salary job. The first year I worked I earned 1/3 of my previous income but still paid the same mortgage payment. The auditor asked me for canceled checks to confirm that I paid the mortgage.

[Jeff In Milwaukee]

101. I've been searching....

A reduction to the EIC amount was my first thought, as well, but I can't fine ANYTHING that says that gifts must be included in the Modified Adjusted Gross Income for EIC purposes.

I'm a tax geek.

[Myrina]

73. They got in my kool aid in 2005 ...

... audited me back to 2003 (and now every year since) because short of mailing them my daughter in a cardboard box, I have sent them every piece of documentation possible to prove that she's my daughter, I had custody and that there was a state child support agreement in place that allowed me to claim her as a dependent. They still won't budge.

They won't even accept docs from a freakin' State Family Court Judge ?? Bastards. :(

There are companies and millionaires out there hiding hundreds of thousands of taxable income and they're making my life miserable over $900 (which has now turned into about $5k with the additional audits)? WTF.

[KansDem]

77. "There are companies and millionaires out there hiding hundreds of thousands of taxable income"

More like hundreds of billions!

Imagine how much tax could be collected on those 54,000 accounts of American tax cheats in Switzerland's UBS Bank alone! And that's not counting the rest of the banks in Switzerland, not to mention the Cayman Islands and Lichtenstein!

[placton]

79. if only the PRESIDENT

knew of this, I am sure he would do something.

[OneTenthofOnePercent]

81. Poor people require audits too... I don't see the outrage.

Risk vs Reward... a stiff unenforced penalty is NOT a risk.
The point, ultimately, is to discourage others from tax evasion.
The IRS could care less if this lady cheated $1000 or was overtaxed $1000. Irrelevent.

Fact is, the IRS has expected income sheets and actively checks them as a deterrent to cheating the system.
I'm quite sure that the IRS makes much more in taxes from "the poor" that it makes auditing "the poor".
Think about it. They audit a few thousand poor people and collect taxes from a several million poor people.

If the IRS never audited any individuals, then how many (not as poor) people would cheat the system?
What should the lower "claimed" income limit be to not get audited?
Boy, I wish I knew claiming a certain amount would mean I never get audited... :eyes:

[salib]

82. Another good reason to either return to the IRS only taxing the wealthy

Or some kind of VAT that does not pursue individuals like this.

Otherwise, people simply "hate taxes" because of "how the IRS treated me". The income tax was designed to try to tap into the gilded-class' income (and ultimately wealth) so that they could pay more of their fair share. Unfortunately, Reagan in particular, but JFK before him, reduced the top marginal rates, and FDR with WWII included the lower end (not wealthy). Both moves were equally devastating, and the moves during the Depression (to fund the New Deal) could easily be seen as paving the way for the the reductions on upper incomes later. Now, it is simply the way we fund Gov't, not a way to place the burden where it should be: the wealthy.

[BennyD]

89. This practice and/or procedure is designed to catch tax evaders, of which there are many! n/t

[Gman2]

91. You poor souls dont even GET the worst part.

They will not rest, until they get their pound of flesh. Like fed prosecutors. You cannot show them as fallible. Bad politically. So, they threaten all manor of persecution, unless the innocnet plead criminal.

[Hubert Flottz]

94. Somebody has to make up for the tax dollars that the rich people

with money stashed at UBS beat the government out of for the past hundred years.

[debbierlus]

95. Leave the people alone and go after the fucks who own everything

This is just MEAN.

Cruel.

Sick.

[NNN0LHI]

98. I am surprised they never checked up on my mother. She could stretch a dollar boy

When she pulled a nickel out of her purse you would think she was handling a manhole cover. She lived through the Great Depression. And she didn't forget it.

I know for sure she could get by on $10 an hour with 2 kids in the neighborhood described in the OP. Not only would she be getting by I know for sure she would actually be saving money.

I would bet on it.

I know my mother.

Don

[OneGrassRoot]

100. For once I encountered a kindler, gentler IRS....lol

I agree with the anger and disgust expressed here about how if the IRS focused on corporations and the extraordinarily wealthy -- the ones who can afford to pay others to find loophole after loophole to avoid paying -- we'd all be better off.

I've been self-employed for 16 years and for the last six years, after medical bills and a perfect storm of other factors led to bankruptcy, I've been paying my tax payments via installment, and am always therefore at least one year behind. If I had money to pay estimated taxes, I wouldn't be in this boat. LOL

Every year I stress about paying the one installment in time for the October filing when I obviously MUST file the next return. According to the rules, filing a subsequent return and having a balance owed to the IRS negates the previous installment agreement and they could demand everything be paid NOW.

I think, oh well, you can't squeeze blood from a turnip. Still, it is a nonstop huge stressor, and it's extra stressful every October through December when I await the next registered letter, have to call and set up the next installment agreement, and have to listen to the various rules and advice that I pay on time.

Of COURSE I would prefer to pay on time and not incur penalties and interest, but such is life. I'm doing the very best I can, like most of us.

Anyway, the tone is usually very businesslike, and always accompanied by warnings of all the bad things that can happen and how I really need to get up to date -- although I am NEVER late with my monthly payments.

This time, I was waiting for my registered letter concerning 2008 taxes that I just filed, but instead received my normal monthly installment bill.

I called to get the payoff amount for 2007, so I could start fresh and set up the installment for 2008; I planned to try to borrow the money for the balance of 2007, as everything is like quicksand now...more goes out than comes in and I am NOT an extravagant person. Don't do vacations, don't go out...I simply work and take care of my daughter.

Right off the bat, the very nice IRS phone rep told me to please reconsider borrowing in order to pay off the balance as 1) I can lump them together, the one installment doesn't negate the other any longer as it previously did; 2) their rate is 4% which is less than credit cards and other avenues; and 3) my standing with them is great because I have reliably paid every month as promised, the amount promised.

She said, yes, it would be best for me to have the funds to pay everything current and make estimated payments, but they "understand how tough it is out there now, especially for the self-employed."

I was grateful for a little compassion that day. It was a new experience for me from the IRS. :)

[tosh]

102. I, too, have seen this "kinder, gentler" IRS.

The story behind it is too long to post here and if I tried I would probably have an anxiety attack, LOL.

I truly want to believe that we are seeing the unwinding of the Bushco War on the Middle Class.

[OneGrassRoot]

103. ...

I hear ya. Here's a :hug: to avoid anxiety attacks. :)

[Liberal_in_LA]

109. great story

[Crabby Appleton]

129. +1

[AllTooEasy]

105. not condoning the IRS' behavior, but...

This is also how the IRS has caught REAL tax cheats who live in Beverly Hills while "making only $50K a year".

Unfortunately, someone with a brain should have responded more appropriately to this automatic trigger. I guess that's too much to ask of the IRS. Would have only taken 2 minutes.

Someone should be fired.

[Liberal_in_LA]

108. This article stuns me.

:wtf:

[JoeyT]

110. It could have been worse.

I'm surprised they didn't use the hidden income nonsense to send the DEA to kick her door in and shoot her kids.
I also like how they audited her parents out of pure spite. Then they'll wonder why people hate them so much.
"We're just doing our jobs!" doesn't cut it.

[AnneD]

113. A Modest Proposal.....

The IRS seize the children as her assets a,d sell them off. They can apply the money they get toward her back taxs. Sounds like a win-win to me. Kids become dependents and she gets her taxs paid.



Do I REALLY HAVE to post the sarcasm icon!

[kenny blankenship]

119. We could have the Federal govt. set up an Exchange for clearing these assets.

[RedCloud]

114. Words to make God cry "Basically they were auditing her for not making enough money"

[Nikki Stone1]

115. Even if Rachel were getting a little help, how does this compete with t/wealthy's offshore accounts

How much tax money would they get out of Rachel--another hundred? How much would they get if they went after real tax criminals?

[Nikki Stone1]

117. OK, the IRS got $1438 from Rachel--money to which they were not entitled in the first place

The money was $1,438 that Rachel the deduction for her children that she had to "pay back" because the IRS said that Rachel couldn't prove that she was supporting her children.


http://seattletimes.nwsource.com/html/dannywestneat/2010435946_danny06.html

....Rob and his wife, Patty, had to send in house blueprints, bank statements, old utility bills. Rachel was asked to prove her children were hers, as well as document the money she'd spent on her children's clothes, health care and so on.

They racked up $10,000 in accountant bills — $8,000 of which Driver is trying to recover from the IRS.

In the end, the parents were cleared. The IRS also backed off trying to reclaim Rachel's earned income tax credit.

But the agency insisted Rachel couldn't prove she was supporting her children — she didn't have enough receipts — so she had to stop claiming them as dependents. A few weeks ago she paid back $1,438 (plus penalties and interest!) on that issue.

Way to go, IRS. You did an investigation likely costing tens of thousands of dollars (counting both sides). To squeeze a grand out of a single mom who did nothing wrong....


....
Rachel says an irony of her year in tax hell is that the IRS is right about one thing — you can't get by in Seattle on what she makes. That's why she's living with her parents. To try to make a life in our shimmering city without relying on welfare, food stamps or other public assistance.

"We're an Italian family," she said. "We're surviving as a tribe. It seems like we got punished for that."

[kenny blankenship]

118. This is the dream of modern law enforcement: to have the authority to overrule facts

in assessing your criminality, forcing you to prove your innocence.

I was going to say this is the dream of the "Homeland Security Abteilung", or the dream of the Neocons, or the dream of national police state bureaucrats, or some such phrase connoting a secret-police agency connected to one branch of govt and one political party; but sadly it's all one masked, helmeted, wired-in, black-hooded anti-citizen apparatus since Bush took over. It involves and empowers all levels of govt, one level borrowing authority from the one above it, from sea to shining sea. We were headed that way even before Bush, but September-the-Eleventh-Forever-Syndrome(aka Septicemia) sealed the deal.

[d3m0l1sh3r]

122. IRS is a bitch

I think everyone knows that by now, lol.
But forreal, maybe send CPS at someone who doesn't even own a house for their two kids, but to audit their taxes, come on, people. We have better things to spend government resources on than auditing some poor family who hasn't probably done much wrong in their lives.

[concerned_citizen84]

124. Thought I'd share the story of someone I know

A good friend of mine is going through a torturous audit. He is in his late 50s, self-employed doing lawn maintenance services, and nets about $45,000 in sales which results in about $15,000 in income after expenses, so he is just barely scraping by. He is single (divorced) and has a 23 year old dependent autistic son living at home who he provides for. In February 2008 the IRS started auditing him. To this date they still haven't finished, and the whole experience has been a nightmare for him and his family.

Throughout the whole ordeal the conduct of the auditors has been very unprofessional and at times harassing. The first year, the auditor handling the case was hardly ever available to contact because she was taking time off from work for school, so fighting their initial accusations and getting the requested information to them took months and months. They denied receiving information that he did in fact send in, then accused him of refusing to send in said information. They accused him of withholding income and reporting bogus expenses, and said he owed them $40,000. He appealed and eventually got the amount reduced to $2,000.

After about a year they transferred the case to a different office without informing him, and opened an audit on two additional years records at the same time, which isn't supposed to be legal. During those years he had 3 people working for him part-time. The IRS disputed the wages that he wrote off and accused him of making up "phantom employees". He didn't have any way to fight the accusation because he never kept record of his payments to his employees, only the hours. Being such a small operation, he never realized the need to retain such records and I frankly don't know how they could expect him to keep record of every little thing. By now his health was going downhill due to the constant stress (this is someone who already suffers from generalized anxiety disorder and is on many meds).

In August 2009, one of his busiest months for lawns, the culmination of stress from the audits and exhaustion from trying to keep up with work nearly sent him to the hospital. He missed work for several weeks and had to hire someone to fill in. He wasn't sleeping, his physical appearance was going downhill, and he looked like he visibly aged about 5 years over that summer. Being low income and unable to afford health insurance, he was limited for options. Fortunately he could get psychiatric treatment through the VA medical center, but this was an hour's drive away, and often had wait times of up to a month to see a doctor. They wouldn't admit him into the emergency treatment center because he wasn't "suicidal or a threat to others". He contemplated going to the stress center at his local hospital and paying out of pocket, but this would cost him about $5,000 a night, IIRC.

His son, who had been getting help through social workers and counselors to learn independent living and social skills, was so worried about his father that he became severely depressed and almost suicidal, and this severely impaired his progress towards living independently. His father is literally the only person he has - his mother is unstable and moved out to live with an alcoholic/drug user.

Eventually, he was able to get on the right combination of sleeping pills and started getting about 6 hours of sleep a night instead of 1-2 hours. His health has stabilized somewhat since then, and things are now going a little better for him and his son, but the audit continues. The IRS maintains that he owes $20,000 for making up fake employees, and eventually it will probably go to court. I just hope he can find a way to prove them wrong, since he didn't keep much for records.

Despite this whole years-long ordeal, he remains very progressive with his political views. He realizes the core of the problem isn't big gubmint libruls wanting to raise taxes, it is the conservatives who cut taxes for the rich so the poor have to pay.

Sorry this was so long, but I felt it was worth contributing.

[old mark]

125. I have been audited once in my life - several months after I wrote a very insulting letter to

Newt Gingrich.
I was then a middle aged adult returning to college, tried to save money by doing my own taxes, gave myself a deduction I shouldn't have, a few hundred dollars that I repaid at once. The IRS was very snotty about it, as if I had secret bank accounts...I didn't even have any regular bank accounts.

mark

(NOTE: NOT OBAMA'S FAULT!!!!!)

[zoff]

126. There is a special place in hell for these people.

But karma will kick in sooner.