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Is IRS and States Resorting to Extortion To Collect Bogus Penalties?

If I puled these stunts, the Feds would haul me off to prison for extortion.

The Feds and States pull these stunts and its called “Enforcement of Tax Laws & Statutes”.

Does the year 1913 have any significant historical event you can recall? I would have said World War I if I had to guess, and did not already know the answer as a veteran. The IRS did not exist, nor did a Federal Income Tax System, until that year. The politicians at the time sold the public it would only be for the top few percent, the millionaires. Does that sounds familiar? Yes, I believe it is one of those lies touted by Mr. Obama during the 2008 presidential campaign and subsequent 2012. I believe he is still at it, and I am confident that millionaires will come out with tax breaks no one can decipher and middle class will get slammed. Not a surprise the middle class has shrunk significantly over the past 30 years.

Maybe I missed a class or two in college on business law, but I am pretty sure a law has to be lawful, and a penalty means there was an actual infraction of a law, before the law could be enforced or penalty assessed. They know a percentage of small business and individuals alike cannot afford to hire a Certified Public Accountants at $300+ an hour to fight a $250 penalty. Oh by the way, I forgot to mention our trusted politicians kept their promise and have not raised taxes. They instead multiplied the average penalty by a factor of 400% and send them our to everyone, regardless of facts or any real infractions. Shame on you Mr. President, Shakespeare’s rose by any other name, is synonymous with your 400% increase in penalties, and stills a tax by any other name.

Intent to seize your property or rights to property!

The government has turned Christmas into an everyday event sending our nasty letters like the one my client got below stating “Intent to seize your property or rights to property”. This is the second time I have butted heads with the IRS over the same matter and for the same client. We were successful in getting the IRS to abate the penalty because when confronted, they don’t have a case or leg to stand on. This is a David and Goliath routine which has turned out to be 20% of my 14 hour work day, fighting bogus, baseless claims. I don’t charge my clients for the work because I feel bad, and times are tough. But all that work and no fees are killing my CPA Firm financially. After all, it’s not the client’s fault, nor mine. A lot of people will just pay it out of fear. Bottom line, no matter who pays, there is a common devastating outcome, this administration under Mr. Obama is killing small businesses forcing them into bankruptcy and putting people back on the unemployment line. Way to go !!!!!

So a fair and just government, for the people, of the people, to protect against enemies foreign and domestic is unfortunately the past. The good old days before the real estate bubble, stock market crash, bank collapses, 17 Trillion National Debt, Obama Care, President Obama himself, a pathetic excuse for a Congress and House, and what you may find the most controversial of my abbreviated version of the decline of America, is the “Patriot Act” after 9/11. When the people of this great nation agreed to give up just a teeny weeny piece of their civil rights in exchange for our governments protection from the “BIG BAD TERRORIST” it marked the beginning of the end of the United States as we knew it, and many fellow Americans think and feel the same. But where is the out cry from the masses? I have no more right to complain than the next guy. After all, besides this blog, I am not picketing the White House. Then again those who revolt in a peaceful manner these days like the Tea Party or Wall Street Occupiers, what every you think of their politics or views, either get the lynch mob (IRS) to harass the hell out of innocent not-for-profit folks (IRS Scandal # 1…more to come I will bet anything) or torn to shreds by the media like the Wall Street Occupiers.  I am not commenting on the their political views, but at least they are off their couch doing something. The cost of opening your mouth these days, can be high and the government can throw you ship you off to Guantamo (Gitmo) for no reason stating simply asserting their right to so under the Patriot Act and your rights, which by the way you gave away after 9/11, guess what, they’re gone.

By the way, when did they media start having an opinion, and therefore shaping public opinion? They should shut up, keep their personal opinions and commentaries out to themselves, and get back to “REPORTING”. Most of what they say anyways is so blatantly stupid and obvious. I don’t need some someone regurgitating what a politician just stated, and then giving it their spin. You go Bill O’reilly, keep the spin out of the news.

My father used to ask, as he would during those father-son moments when he was trying to educate me on life, son “how does an ant eat an elephant?” The answer was so simple, son “the ant eats the elephant one bite at a time, as long as it takes?” Governments through out history regardless of political beliefs have used the same tactic on a mostly unsuspecting population by diverting their attention to less important matters, to do their dirty work with the least number of eyes on them. The magicians dressed up as political officials acting like clowns have made a mockery of the democratic process and the Office of the President no more important than a puppet. While they focus your attention on the Mexican border and all those illegals coming over here to pick your tomatoes for a couple of bucks a day, the politicians with your attention diverted are eating away at the proverbial elephant. Given the state of affairs and disarray this country is in, I would by anything that ant is obese now, like 70% of the American Public. Don’t get me started on the crap the FDA approves for our consumption and label it as as “food”:

The following is an excerpt of my daily ritual of defending the innocent. I feel like Robin Hood sometimes. If you get a similar letter, fight it. The more we give, the more they will take. For those whole like to read history, look at how past great empires like the Romans who lasted the longest (~800 years I believe) self-destructed. The tactics the Roman politicians used back then, minus the skirts they wore, is practically a copy and pastes of what today’s politicians are doing to our great nation. We won’t make it to 300 years, much less 800 at the clip we’re moving towards bowing our hat to the new kid on the block.

Copy of Letter to IRS Dated 8/19/13.

The aforementioned client retained our firm last year to provide a variety of Professional Accounting Services. Among the first issues we tackled was a civil penalty imposed by the service for allegedly filing form 1099 late for the calendar year ended December 31, 2010. My client, in fact, did not file late. Form 1099’s was mailed in a timely manner to an address provided to my client by an IRS employee orally.

The IRS employee erroneously gave my client the wrong address when calling 800-829-1040. Either the forms were a) not received b) received by the service and never forward c) misplaced or some combination thereof. The package containing the 1099 forms was never retuned to the client. Accordingly, they assumed they were in full compliance (This was for the year 2010).

I personally called the IRS Practitioners hotline last year around the Sept 2012 time frame. I respectfully requested the penalty be abated referencing IRC 6404(t) & Treas. Reg. 301.6404-3 both regarding erroneous “Oral Advice from IRS”. In addition to the two aforementioned statutes, I further stated, and the IRS employee confirmed, that they were also eligible for relief under RCA – FTF as prescribed by First Time Abatement (FTA) as described in paragraph 20.1.1.3.1Part20 of the penalty guidelines. The gentleman who I spoke to, after reviewing my client’s records, graciously greed to abate the penalty.

To everyone’s surprise all was silent until my client started again receiving threatening notices again starting in June 2013 (a full 9 months after my oral communication with the agent referred to above). I called the IRS Practitioners hotline again on July 30, 2013 and spoke to three different employees. Two of whom are referenced above (I have omitted their identities for the purpose of this blob). Besides the rude, obnoxious and condensing behavior of the agents, which took me completely by surprise, they all claimed that the IRS has never accepted request for penalty abatement over the phone. I have been practicing for nearly 25 years and I will attest that is either a) a bold faced lie b) the truth, but the IRS never applied its own policies c) a new policy or enforcement of an old policy. Nonetheless, I have successfully solved many issues over the phone with the IRS and was stunned and insulted at the blatant attitude and non-yielding position that the  “IRS has never accepted these request via phone”.  It was no surprise by that point after two agents and a supervisor that a record of my conversation with the IRS in Sept 2012 did not exist.

The gap between your previous communication with the client with regards to this matter between my call in Sept 2012 and June 2013 is highly suspicious. It is an unfortunate trend we have seen in our practice by having to deal with the same issue multiple times. Between the State of Florida and the IRS, we spend 20% of our day responding to baseless claims for penalties. This spike in baseless claims by Federal and State agencies is very transparent to the public at a desperate attempt to raise revenue, no matter what the cost or whom it hurts. Please keep in mind, that crushing small businesses (whom employ 70% of the work force) with undue hardship of defending these attacks, or worse paying penalties under duress of asset seizures, will cause business closures and a spike in unemployment. This will inevitably reduce the governments over all tax-base. Increased unemployment will far out weigh the cost to the government, vs. a few bucks you pick up now and the11 from people or small business to scared to stand up for their rights.

Accordingly, I am hereby respectfully requesting that the aforementioned taxpayers penalties be abated based on the same IRS and Treasury tax regulations stated in the above paragraphs.

Respectfully,

Gustavo A Viera CPA

 

 

About 

Gustavo A Viera is the managing partner of Gustavo A Viera, PA. His experience spans more than 25 years. He started his career in public accounting at PriceWaterHouseCoopers where reached the level senior audit manager. His Fortune 500 experience includes positions as CFO – Latin America Region for both Hewlett Packard and Telefonica of Spain. Gustavo also writes a blog twice a week that addresses trending accounting and tax issues. He is an SBA Advisor and teaches workshops for aspiring entrepreneurs. His offices are located in Palmetto Bay, Coral Gables and Brickell Avenue in Miami FL, and is admitted to practice in the State of Florida as a licensed Certified Public Accountant. Gus welcomes questions and he can be reached at Gustavo A Viera PA 15715 S Dixie Hwy. Ste 409, Miami Fl. 33157, 2332 Galiano Street, 2nd Floor, Coral Gables, Fl 33134 or 1111 Brickell Avenue11th Floor Miami, FL 33131 Telephone 786-250-4450.

About the Author

Gustavo VieraGustavo A Viera is the managing partner of Gustavo A Viera, PA. His experience spans more than 25 years. He started his career in public accounting at PriceWaterHouseCoopers where reached the level senior audit manager. His Fortune 500 experience includes positions as CFO - Latin America Region for both Hewlett Packard and Telefonica of Spain. Gustavo also writes a blog twice a week that addresses trending accounting and tax issues. He is an SBA Advisor and teaches workshops for aspiring entrepreneurs. His offices are located in Palmetto Bay, Coral Gables and Brickell Avenue in Miami FL, and is admitted to practice in the State of Florida as a licensed Certified Public Accountant. Gus welcomes questions and he can be reached at Gustavo A Viera PA 15715 S Dixie Hwy. Ste 409, Miami Fl. 33157, 2332 Galiano Street, 2nd Floor, Coral Gables, Fl 33134 or 1111 Brickell Avenue11th Floor Miami, FL 33131 Telephone 786-250-4450.View all posts by Gustavo Viera →

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