Main menu

Playing Against Cheaters (Part I)

(originally launched into cyberspace on 01/30/2003)

Dear List Subscriber,

Once upon a time I played high-school football. (I was a mediocre
second-string cornerback/safety, so don’t expect any impressive glory
stories.) Every once in a while we’d hear rumors that a team we were about
to play had a tendency to cheat. Last time I checked, the rules of football
applied the same to BOTH teams in any game. But some teams ignored them
whenever they could. (Gosh, I wonder what this could be analogous to.) The
point is, you had to play differently when you knew the other side was going
to cheat. For example, when you hear the whistle blow after a play, don’t
relax yet because the cheaters like to make late hits. In theory there
should be no need for having to know how to play against cheaters. In the
real world, know it or you will get a knee in the crotch.

The IRS "cheats." Constantly. It cheats in so many ways, on so many
occasions, that going up against them and expecting them to play fair is a
really bad idea. No doubt at least most of you have heard about some of the
nasty things they do. You should be insulted, angered, and outraged about
what they do, but you should NOT be surprised. The IRS is a team who
cheats, and the refs almost always let them get away with. We have to
combat the IRS KNOWING that they lie, cheat and steal constantly, rather
than just playing by the rules and whining about it when they DON’T play by
them. (That whining may be justified, but it doesn’t accomplish much.)

The following link shows the testimony from a former employee of the IRS
Collections Division to the Senate Finance Committee from a few years ago:

The whole thing is worth reading, but I’ll mention a few choice quotes here.
First, here’s a quote that shows that this isn’t some "tax protestor"

"Enforced collection of unpaid axes is a necessity. As a result, the danger
of taxpayer abuse is both inherent and inevitable. Many taxpayers will feel
they have been abused simply because they do not like the fact that they are
being compelled to pay their fair share. We understand that "comes with the
territory" when enforced collection of taxes is part of one's every day

So this isn’t just talking about people not like having their stuff swiped.
It’s something far worse. It continues:

"[D]oes the IRS cover up occurrences of abuse? The answer is, yes! If the
true number of incidences of taxpayer abuse were ever known, the public
would be appalled. If the public also ever knew the number of abuses
"covered up" by the IRS, there could be a tax revolt."

This next comment confirms what I often harp on: you shouldn’t expect the
IRS higher-ups, or Appeals, or any other part of the government, to actually
make the IRS obey the law:

"Why do we not know of these "covered up" abuses? The answer is simple. The
IRS protects itself by management support of employee actions whether those
actions are right or wrong. This acceptance of abusive actions by management
is the root cause of taxpayer abuse."

I’ve lost track of how many times some low-level IRS paper-pusher blatantly
disobeyed a procedure or regulation that was SITTING RIGHT IN FRONT OF THEM,
saying that their bosses said that what they were doing was okay. (Right,

"Sadly, some employees repeatedly do not follow proper collection policies
and procedures and thereby repeatedly abuse taxpayers. There are several
reasons why this occurs:…
3. When management condones the abuse, the Revenue Officer believes the
mistake is acceptable and is free to repeat the error again…
5. Revenue Officers capitalize on the taxpayer's inherent fear of the IRS
and the intimidation that they can inflict on taxpayers without any
consequences for their improper enforcement."

And further…

"[O]ccasional frontline employee errors in judgement, violations of the
Internal Revenue Manual and lack of understanding of policy statements are
to be expected. However, what is not acceptable is frontline management
support of these mistakes. What is unconscionable is upper management's
support or tolerance of frontline management errors."

The testimony includes a bunch of examples of routine law-breaking that the
IRS engages in, such as:

"When a levy is served prematurely, even when the IRS admits that the levy
was improperly served, the routine IRS response is that when the taxpayer
provides additional information, the IRS will "consider" releasing the levy.
When the information is provided, the IRS adds insult to injury by not
releasing the levy. The IRS cannot seem to grasp the concept that when it
makes a mistake, it should reverse the error immediately, no matter what the
consequence to the IRS."

These are CHEATERS we are playing against, and we have to know that and act
accordingly. And not just the low level, but the management and the

"A Revenue Officer, with IRS District Counsel concurrence, can serve what
are termed, "nominee" liens and levies, against third parties whom the IRS
"believes" are in possession of assets belonging to the taxpayer. The IRS is
not required to provide documentation to the taxpayer… The IRS basically
has the attitude "Sue us to prove that we are wrong.""

I know this sounds familiar to many of you. Their standard approach to
people who are showing them what the LAW says about what is taxable is: Well
we disagree (but we won’t say exactly why), so cough up the cash, and if you
want to then sue for a refund, you can do that. Ain’t that nice? Here is
another fine example:

"I have witnessed Collection Division Branch Chiefs, Assistant Division
Chiefs, Division Chiefs, Problem Resolution (PRO) employees, and even an
Assistant District Director, violate or ignore Internal Revenue Manual
procedures and Treasury regulations simply because they wanted to punish a

Say it isn’t so!

"I have seen more violations of IRS procedures and policies than I can

Yeah, me too.

"The most appalling aspect of the foregoing examples is that in most every
instance, IRS management supported the erroneous actions of the Revenue

Got it? They have APPROVAL from above to be law-breaking thieves. Don’t
forget it, and don’t expect anything different. Well, at least we have
other offices that are supposed to stop such nasty abuses! They will save
the day!

"The Problem Resolution Office (PRO) is responsible for protecting the
taxpayer from IRS abuse. But having appealed many taxpayer abuses to the
PRO, I have found them to be utterly useless."

Oh well. Guess not. In case you wonder why, you might like this:

"PRO employees are typically Revenue Officers who came from Collection
Division and who may very well return to the Collection Division after
spending some time in the PRO."

Sort of like having all the cops in your neighborhood be former carjackers…
soon to return to that line of work. Does that make you feel secure? Some
additional interesting testimony comes from the former official historian
for the IRS, which can be seen here:

She spells out how the IRS illegally destroys tons of records about what it
has done, so there is no paper trail to prove guilt. She goes so far as to
say that "[t]here were virtually no records of IRS actions throughout the
twentieth century in any of the repositories where one would normally find
federal records," including in the National Archives. When she filed a
complaint about it, the IRS did their usual retaliation routine against
"whistle-blowers" (falsely accusing her of various things, threatening to
arrest her, etc.). I like this summary she gives: "In essence, the response
of the IRS to question about anything and everything is, "Trust us. We're
doing the right thing. We just can't tell you what that is because we're
protecting American taxpayers." And here’s another juicy tidbit:

"As taxpayers, why would we ever question the one agency that can truly bite
back? Our fear of suffering a personal attack from the IRS generally keeps
most of us in check. Our fear of being audited has allowed the IRS to
theoretically eliminate any potential smoking guns by trashing its own
records. This ensures that it can never be held accountable for its actions.
How can you prove any wrongdoing when the evidence is already destroyed?"

Come to think of it, I can’t think of ANY case I’m familiar with where the
IRS obeyed the law, and I don’t even mean correctly determining which income
is taxable; I mean even the basic procedural stuff. They lie, cheat and
steal in almost everything they do. A letter I sent to John Ashcroft a
while back summarizes some of the institutionalized injustices. Here is the
link for it:

In my own case, just off the top of my head, here are a few things they did:

* They "lost" my amended returns (claims for refund) THREE TIMES, though
they were all sent via certified mail (so I can prove they received them).

* They stonewalled for two YEARS trying not to give me the Examination

* When I said I would represent my wife, they LIED and said I couldn’t.
Even after I showed them their own Treasury Circular 230, and after they
accepted the Power of Attorney giving me the right to represent her, they
STILL illegally tried to talk to her instead of me (for the intimidation
factor… which failed anyway).

* Despite being given the questions in advance, they could not state the
specifics of their OWN position. (That by itself is only mildly annoying.)
But then they REFUSED to send the issue for "technical advice," even after I
cited their own manual telling them it was required.

* They then BYPASSED my right to appeal their refusal to request "technical
advice," even after I gave them a copy of the regulation REQUIRING it (26
CFR § 601.105(b)(5)). (I filed a complaint to TIGTA about this; TIGTA
referred it back to the local office, and there was never another peep about
them doing anything about the complaint.)

* They eventually sent out a formal denial (at the Examination level) of my
claims for refund, WITHOUT ever addressing the issue or stating the
specifics of their own position (despite promising that they wood).

* After I requested appeals consideration, the Examiner said that Appeals
REFUSED to hear the case, alleging that I was refusing to comply with the
tax laws based on moral, religious, Constitutional or similar grounds.
(Anyone who is familiar with my case knows that that accusation is idiotic.)
The Examiner ignored my inquiry about WHO at Appeals had made that decision.

That’s where my claims for refund stand. Keep in mind, it is now almost SIX
YEARS since those claims were filed. That is how long they have been
dragging their feet, and I have yet to see anything resembling "due

The point is, they cheat. They cheat to get people’s money. They cheat to
get injunctions to shut people up. They cheat to avoid having to process
claims for refund. I’ve watched a whole lot of individuals and
organizations play the game by the IRS’ rules, and then be shocked when the
IRS (and the courts) didn’t play by the rules. I hope by now most (if not
all) of the people on this list understand that the rules DO NOT MATTER to
the other side, as long as the higher-ups APPROVE of the law-breaking (which
is almost always). They don’t CARE what the law says, if they don’t think
there will be PERSONAL consequences for their actions. They know the higher
ranking thieves approve of their tactics, so they keep doing them. This is
true of the IRS paper-pushers, of their managers, of the Appeals Division,
of the supposed "taxpayer advocate" offices, of the Tax Division of the DOJ,
of the Tax Court, and of the real courts. (The Tax Court is a glorified
administrative hearing, not a Judicial Branch court.)

If you think being right about the law will stop the IRS, think again. If
you are focusing on some administrative or judicial remedy to obtain
justice, don’t get your hopes up. In short, if you plan to play by THEIR
rules, and agree to accept whatever THEIR "referees" say, you might as well
give up now. Send them all your money. Send them your kids. Bow down and
kiss their feet.

If that’s not for you, then get ready to play like we’re PLAYING AGAINST
CHEATERS. Because we are.

(The follow-up to this message, hopefully tomorrow, will discuss an
anti-cheater game plan.)


Larken Rose
This email address is being protected from spambots. You need JavaScript enabled to view it.