Held Hostage by the IRS (The Whole Story)

(the following is the back-story to my Christmas poem about the IRS. I guarantee you, if this is happening to ME, this is happening to millions of Americans as well!  This was previously written in 3 parts but I’ve now combined it to one unbelievable story.)

 

The things that have happened to me alone, are enough to put someone over the edge. After a motorcycle accident in 2000, I was left on a hospital emergency room’s girny for 10 hours with an open fracture of my tibia. What transpired as a direct cause of that, is unimaginable, from being given the wrong blood type, to a wrong antibiotic that left me in respiratory arrest. 21 surgeries and untold stress on me and my family can’t trump what happened to us in 2006.

We filed our tax returns on time as we always had, and within a few months received a notice from the IRS that we owed $636,000 in “back-taxes”. Floored, I made countless telephone calls to the IRS to try and resolve the issue (which HAD to be an error!) and after finally getting someone who would help me, I was told we had to file another (amended) return with additional information. Not being sure, and wanting to make sure we did it right this time, I brought our tax information to Jackson Hewitt at a local office. No particular reason I picked them over H&R Block or anyone else. It was a random call on my part….and a bad one at that. Weeks and $300+ dollars later, our returns were “properly prepared” (we were told) and handed to me with pre-printed envelopes to the IRS and explicit directions to mail each one, separately….which I did.

MONTHS later, after calling and calling to see that this was done and over with, we received a new notice that said we now we only owed $80,000! Floored, I began calling the IRS and begging to “talk to someone” who would actually help us. After finally getting someone on the phone, I was told that the problem was because they had received our 2005 amended return, but not the 2006 even though they were mailed on the same day, at the same post office and mailbox….but I figured, ok…..**** happens. I sent another copy of the 2006 and again waited patiently again for months, for any kind of acknowledgement from the IRS.

The next thing I received was another notice….this one for $86,000! (now including Interest and Penalties!) Once again, I mailed another copy, and the same thing happened. It was as though someone was taking my returns and destroying them.

After a year, and them telling me they never received 4 copies, I mailed a copy via USPS Certified Mail (FedEx was not an option since it was going to a PO Box!). This time I was assured SOMEONE would receive it, right? 2 months later nothing. After only 2 weeks, it was showing that it was received by someone at the IRS. I felt good in that alone. When not receiving anything from them (and I gave them plenty of time!) I started calling, every day, and every day would be told that it was “in process”. It wasn’t until I finally demanded a supervisor’s assistance, did I actually talk to someone who seemed to have a clue as to what was happening. She (A Mrs. Washington) claimed that it was once again, lost! When telling her that I sent it “Certified” and had the receipt, I was told (while she chuckled!), that I could have sent ANYTHING….even an empty envelope for all they knew. I was pretty much told that Certified Mail was a waste when dealing with the IRS. After going ballistic on Mrs. Washington at the mere suggestion that I was attempting to “deceive” them all these times, I asked her where her office was, and told her that I would personally DRIVE AND DELIVER the next copy of this return! She literally laughed and said “you can just fax it to me” and gave me what I was assured, was her personal fax number. I promptly typed up a cover letter and faxed it, along with the 10 pages of the return. The fax was confirmed “delivered”, and now it was time to sit back and wait…..again. In the meantime…..the notices continued coming, and continued to get larger as they kept adding penalties and interest.

Over 2½ years have gone by now trying to solve this one issue and we were now receiving threats from the IRS of wage garnishment and tax liens.

Part II

To the left, is a piece of paper that was inserted into every piece of correspondence that we received from the IRS. I wanted to puke, every time I opened the envelope.

Over 2½ years have gone by since being notified that the IRS insisted we owed $636,000. We were able to knock that down, but the truth of the matter was, no matter how you did the math, when it was all done and said, the IRS owed US money. Getting someone to understand that, was impossible because of some government clerk’s inability to do their job.

I was finally told that the only people who could help me at this point, were The Taxpayer Advocate Service. I had never heard of them, and you probably haven’t either, but they’re another brain dead division of the IRS who they (the IRS) claim, are the only ones who can re-open something that has been deemed……done. So….back on the phone again I went.

After making me think they were a sympathetic ear to our plight, they promised to help. Once again, I was faxing twenty something pages of tax returns to someone who I somehow knew in the end, would just piss me off more. I was right. For over 8 months, I heard “Well Mr. O’Neill….nothing yet on your case, but we’ll call you on <insert date here> and follow up. If nothing else….they were punctual in calling on the days they said they would call, but in the meantime….**** was hitting the fan in Elgin.

I had just got back from driving over 5000 miles in about 2 weeks time. I came home to find a ton of mail….some looked “official”, but it turned out to be BS solicitations from Tax Attorneys across the country. I was floored….what “list” did we end up on now and more importantly, HOW? It turned out that while I was gone, the IRS filed a $78,000 Tax Lien on our home. Now……it was getting real. The nightmare we’d been living for 2½ years, just became a terror dream, and the worst part was that they were wrong. They were hoping we’d just fold up and cough up $78,000 and call it a day, but that wasn’t about to happen.

Now it was January 2010. Our brand new Senator, Mark Kirk, had just taken Barack Obama’s former Senate seat and so I threw a hail-Mary pass in form of a fax-letter, in a desperate plea for the new Senator’s help with this IRS ordeal. I didn’t know what else to do. My wife and I were quite distraught and all I could think about right then, was the man who was driven so crazy by the IRS, that he flew his airplane into one of their offices. While extreme…..I could almost understand it if he went through the process we were going through. When the government is about to take away everything you worked for, because of an error on their part, and no one will listen to make it right, I can see how someone might be driven to insanity…..not that it was right, though.

Joseph Stack, the government quickly stated, was a “radical” and his blog posts were deemed “His Radical Right-Wing Manifestos”! Well…I haven’t read them, but THIS blog right now, could be considered an “Anti-government, Anti-IRS manifesto”……but for good reason. I think his case should have been looked into a little more by the media rather than just being dismissed as some nutball with a airplane and a grudge. God forbid someone actually blame the IRS for causing something like that!

Getting back to the story…..just two weeks after faxing Senator Kirk begging for help, I actually received a reply. It was a letter asking me to sign “privacy” forms giving him permission to look at my files. I was floored. It was literally the guy’s first daysitting in that office when I faxed him. He’s got things to do that we just couldn’t imagine, and he actually read my letter. I was impressed, and grateful so I quickly faxed the signed forms back, that night. I couldn’t believe it…..the ball was rolling again.

Also, the day I returned from my 5000 mile drive, I was sitting at my desk when a silver 4dr. sedan pulled up in front of the house, with 1 person in it. I somehow knew in the back of my head who he was though. He got out and walked up to my door. He identified himself as an IRS Revenue Agent and said that he had to follow up personally and make contact with people, after property liens were placed. Mind you, there were no notices that they did this, by either the IRS or Kane County, where it was filed. They just did it.

He seemed like a decent guy…young, obviously pretty new to his job. I should had gone up one side of him and down the other when he said who he was, but I saw this as opportunity knocking. To end this once and for all. I calmly explained the situation while we talked on my front porch. He smiled and said “yeah….this happens a lot. I don’t know why this is still done this way because it causes nothing but problems but no one will ever change it”. I thought that an odd statement coming from an IRS agent but maybe this guy was legitimately going to help? I ran in, copied all the amended returns once again (2005 & 2006) and handed them to him. He said it might take a while, but he’ll be in touch letting me know what was going on.

8 months after having contacted the Taxpayer Advocate Services, and being contacted by Revenue Agent Larry Jackson, nothing was happening. A few days after a response by Senator Kirk however that he (or his assistant) were looking into my problem, both Agent Jackson and the Taxpayer Advocate Service Service reported “activity” on my account transcripts, but wouldn’t say what was happening. I was beginning to lose my patience, and I think I held my cool pretty good up to now.

I was beginning to criticize the Taxpayer Advocate Service Service in my letters to Senator Kirk (which apparently were being cc’d to the Supervisor at the TAS), something the supervisor I’d been dealing with, let me know right away that they weren’t too happy about. I then received a phone call from her stating that we were about to receive a letter from the IRS about an unreported item from 2008 that they now wanted $2300.00 with interest and penalties (we had cashed out an annuity, and didn’t know that should have been income, even though it was money WE paid in!), and that they wouldn’t remove our tax lien until this was paid! Mind you…..we now had the amount they said we originally owed, down to just over $11,000. A whopping difference of $625,000! We paid the $2300….within a week, which is what I told her I would do. We didn’t delay or make any excuses. I figured this would be a “good faith” act on my part AND bring the total they now said we owed under the $10,000 mark. Something I was told earlier by the TAS, was the point at which they would release the lien on our home. Here, it was also reported in the Wall Street Journal with the headline “IRS EASES DEBT RULES“.

The next thing I know, I received a copy of a letter sent to Senator Kirk by the Supervisor at The Taxpayer Advocate Service, Karen Mills, stating that “I had agreed to make payments to the IRS for the balance owed and that his (Senator Kirk’s) involvement in the case, was done. This was an outright lie, and she knew it was. They (TAS) were getting heat for not handling my case well, and obviously a lot of it. In my last phone calls to them, I was asked if I would notify Senator Kirk’s assistant, Andrew, that “all was good and I no longer needed the Senator’s help.” I immediately saw this for what it was. A cheap “save their ass” move that they thought I would buy, hook- line and sinker. It didn’t work, and when they realized it, was when that letter went out, hoping that the Senator would then bow out and leave me to be eaten by the IRS. I immediately called out Ms. Mills on her total lie to the Senator and demanded that from then on, all contact be fax or mail. I was not about to let some overpaid government employee lie to a Senator after all I’d been through. It was uncalled for especially given the amount of time it took to resolve ONE simple tax issue. Now it was time to prove this bitch wrong on every level. While she sent her goofy little spreadsheets with made-up numbers, I spent a month researching every check we’d written to the IRS since 2004. Then I found a CPA in Elgin, Craig Mason (www.elgincpa.com).

I went into Craig’s modest office in downtown Elgin, optimistic and carrying a box (in a shopping bag) of IRS notices, correspondence to and from the Senator and the TAS. We talked about 30 minutes and he agreed to take on the task of proving them wrong on the last $9200.00 they said we absolutely, without a doubt, owed. We then agreed to terms and I left him to do his thing. Keep in mind also, I did not know Craig, or of him. He was a random (but great!) choice to make in this battle. But I knew we truly were in the final stages of solving this issue once and for all.

Within a month, Craig had worked numbers, and communicated with the Taxpayer Advocate Service Service on my behalf, and he and they finally came to the agreement that we were in fact owed, by the IRS, $315.25! I was astounded, and when asked if I would agree to that, I calmly said “F*** YEA!”. THEN, unbelievably, within a few weeks, we received another check from the IRS for over $900.00 for an overpayment made. We had maintained from the beginning, that we were owed when it was all said and done, about $1400.00 from the IRS. Ms. Mills from the Taxpayer Advocate Service Service maintained that, that number was an error. We were less than $200.00 off on our calculations. The IRS’s error was $637,000 and caused us over 4 years of sleepless nights and endless frustration, and without so much as an apology.

Part III

The moral of this story is, no matter how well you do your taxes, no matter how honest you are when you do them, this clusterf*** could happen to you. If I were elderly, and had no one to help me, I would have had no choice but to either pay the bill (or lose my home) or be forced to use the services of some fly-by-night IRS Attorney, who would gladly help for a mere 30% of whatever the tax-bill was. That would have been $180,000 to help with something that never should had happened in the first place. I absolutely sickens me that this IS happening to people right now. I cannot be the only one who the have done this to.

This entire event has now ruined both mine and my wife’s credit bureaus. The IRS putting the tax lien on our property in the first place, knocked us into the dirt, credit score-wise. Even now that they were wrong, all along, all they did was “release” the lien. It’s still on our bureaus making it look as though we attempted to defraud the government of tax dollars, when in fact, that was the farthest thing from the truth.

Putting 3 kids through college is a task in itself these days, without the added nightmare of our government intervening with some numbers they pulled out of their collective asses. Now, we’re unable to even obtain a loan of any kind (even using the equity in our home!) because it looks to creditors like were caught doing something we shouldn’t have. The IRS has issue no letter of apology, no supporting documentation whatsoever that that lien was BS from the beginning.

They (The IRS) dropped the bomb on us….for no reason, and now we’re being forced to live in the ashes. It’s not fair.

Reference: Held Hostage by the IRS (Part I)

Reference: Held Hostage by the IRS (Part II)

Reference: Internal Revenue Service

Reference: IRS Taxpayer Advocate Service

Reference: Illinois Senator Mark Kirk (who we will forever be grateful for, for his intervention)

Reference: Craig Mason, CPA – Elgin, Illinois (www.elgincpa.com)

Reference: Full Story in PDF Format
Bill O’Neill – Elgin, Illinois

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My personal opinion on why this happened in the first place?

This is a scam written into the IRS codes years ago to make the Country’s net worth seem a lot larger than it really is.
This whole ordeal was the result of a stock company reporting stock “sales” to the IRS that I’d made, but not reporting the offsetting “buys”. (I was a horrible trader for the short time I did it)

The result was this, when the IRS continually “misplaced” our amended returns containing the Schedule D needed to offset the taxes. My ordeal dragged out for over 3 years. In those 3 years, on the books of the IRS, it falsely reported us as a “receivable” to the tune of $636,000. The longer they dragged it out…the better it looked on the books. Some people I’m sure, just roll over at some point and pay them! Some….(Joseph Stack comes to mind), choose an extreme out. I’m sure Mr. Stack thought he would get a little more attention than he did, and I will be looking more into that event as time goes on because we all know, especially after the 1996 Olympic bombing, after accusing Richard Jewel, a man that should have died a hero, but didn’t….that the government will lie to us in times of duress, and tell us anything to keep us calm.

We need to abolish the IRS…or at the very least, simplify the tax code once and for all.