Vague but better than nothing....

To rest in the unknown - ah, there's the image for dealing with the IRS and remaining sane. Be prepared to lose it all, including your most deeply held childhood beliefs, and accept - nothingness.

But in the meantime, a few helpful insights from a IRS employee that actually knows something, and is willing to SHARE that info - that's right, Cheryl, of the tax advocacy office:

Going to appeals means another IRS person will get all my submitted stuff, and "one-on-one," I'll be able to "talk them through it." As opposed to what I imagine happened with the initial request based upon the agent's complete ignorance of my ex's deposition ("Oh, you mean the form he completed, yes, I reviewed that...." No, my dear, I mean the 67-page sworn deposition taken a year ago for our upcoming divorce trial.....). Clueless.

I can also request that this conference be face to face. Good chance I'd have to go to Covington Kentucky, but that would make for an interesting aspect of this story. And I think it would be very helpful too - remind this upcoming IRS person about to come into my life that there is real human being being the paperwork and the voice on the other end of the phone

"eternal postponements" and little gold fishes

Last weekend I finished reading my first novel by Columbian author and Nobel Prize winner Gabriel Garcia Marquez. I know, should have read him earlier. So little time in this life for art, unfortunately. Maybe that's what retirement is for.

Anyway, there's a couple of lines and phrases in One Hundred Years of Solitude (I don't know how to underline yet in this blog), that reminded me so much of what this 5+ year IRS ultramarathon quest has been like.

This scene is about one of the main characters, Colonel Aureliano Buendia, who has finished a long war:

"With them he waged the sad war of daily humiliation, of entreaties and petitions, of come-back tomorrow, of any-time-now, of we're-studying-your-case-with-the-proper-attention; the ware hopelessly lost against the many yours-most-trulys.... the other war, the bloody one of twenty years, did not cause them as much damage as the corrosive war of eternal postponements."

In time it took to get divorced and get through the IRS audit, tax collection and innocent spouse circus (which isn't even over yet), I trained for and finished three marathons, took prep courses and completed an ADN and get my RN license, trained as an ICU nurse, and - had a baby.

As cheapstreet said in a message posting: "I think many people are so very afraid of doing anything wrong because they are so 'invested' in their lives. With the cars, the houses and their net worth tied up in 'currency of normalcy' that they do not even want to think of how close they are to it all falling apart. Don't want to think of how they too could be caught in the gears of the tabulating machine of the IRS..."

A currency of normalcy - my life has been anything but. My fiscal life is owned by others, or I should say in the care of others. How's that for losing your independence.

Or, as I think of it at other times, it's complete freedom.

Either way, I was one of those people afraid of doing anything wrong - so afraid I thought I'd be a tax cheat if I didn't say my ex was cheating and dragging me into it.

So, to remain and silent, and maybe complicit, or speak up and end up here. Either way, it's life I guess. How else can you put it. Trick is to not end up shut up in a little room making little gold fishes, bitter and stuck in solitude, for the rest of my life. That's what happened to Colonel Aureliano...in One Hundred Years of Solitude. Good book. I recommend it.

On to appeals!

I sent my "statement of disagreement" about the "preliminary" denial of innocent spouse relief today. Was going to send it certified mail, as I'd sent every bit of correspondence previously. But then thought, why. More money to spend of this sinkhole?

I'll send a copy to the tax advocate, and she can send a copy to the good ole folks in Covington, Kentucky if somehow, they don't receive it.

Through this all, since I got in contact with her about two years ago, my tax advocate has been invaluable. The only person connected with the IRS I have any esteem for. She is amazing. For she is an IRS employee, but she is:

(I know you will all think I've been drinking when i write these words, but I haven't....)

Honest. Efficient. Responsible. Knowledgable.

I know. Shocking.

I still can't believe it. Cheryl Hamman in Springfield. I would still probably be getting very rare fowarded letters about things done three months prior if it weren't for her.

Thank you Cheryl!

The curse/gift

In the news, leaking over to front page, beyond the financial pages where most of this stuff lives, is the fact that another big company is making up its own rules with collaborators in order to line the pockets of the bigwigs.

From Reuters newswire: NEW YORK (Reuters) - Partners of private equity firm Blackstone Group LP (BX.N: Quote, Profile, Research) may have devised a way to avoid paying tax on $3.7 billion raised largely in the firm's initial public offering last month, a regulatory filing shows.

Under the plan, laid out in a U.S. Securities and Exchange Commission filing ahead of Blackstone's IPO last month and first reported by the New York Times on Friday, investors in the newly public company are required to return certain tax benefits to Blackstone's partners.

The company expects these benefits to total $863.7 million over 15 years, the filing said.

The Times said Blackstone partners would get back about $200 million more than the $553 million they paid in tax. The paper did not explain how it arrived at those figures.

Check out "Enron: The smartest guys in the room." We watched it and couldn't believe this company stood for more than 20 years. But then, it had the backing of the Bushes, senior and junior. This country, which means the IRS, awards criminal activity when it's shaped in intricate accounting practices and some higher-ups are getting kick-backs.

Why was the Soprano's series so popular and ran for 8 years (two presidential terms, coincidentally) on HBO? Because the politics and policies of the mafia are so integrated in corporate life - (minus of coarse the physical violence and murder) that it's taken as normalcy. Collusions are insidious and de facto now.

What this means for most of us - if you're the little guy, you're the busy work. The IRS views cases like mine as fodder for their job security. The agents I deal with are not getting the kick-backs from mega deals like the Blackstone Group's or what Enron use to generate. But without those agents, the directors and managers couldn't keep our eyes turned toward the busywork - they mess with the little guys' lives so we don't have time to question, to explore and investigate.

Instead, we put our heads down and drone on in the daily busy bee work environments - in a way as the agents do in their IRS unit hives.

I was thinking maybe on some of these posts I come across too negative. A friend in Ohio said she was worried that I still have so much heartache related to my ex. My heart's been permafrosted, after all the trauma of the past year (physical and mental) so it's safe. And sometimes I wish things where finacially rosy and I could investe like normal people, have good credit again (I had excellent credit until the IRS put the lien on the luxury vacation home....). But everyone wishes otherwise.

What gives me the positive spin on this is multifold:

I'm thankful for what I have - freedom and fodder for somethings worthwhile to write about. I've wanted to be a writer since 10th grade high school. Tried and tried for years, but didn't have the material with the accompanying edge to give me the fire and passion.

So, I am thankful for my experiences with my ex - firstly because of my son, and secondly - for all this. Without him, I wouldn't have been given a front row seat to every common American's worst nightmare in government - entangling with the IRS gulag. And now I'm going to write about - and get it published. I'm not stopping til this is accomplished. I used to train for and run marathons.

Now, instead of my legs going for a prescribed number of miles, as you do in the 5-month paint-by-number type of training plan that is so popular (and works!), I'm going to push my fingers for x-number of pages every day. Not so great a benefit to my cardiovascular system. But for my psyche and long-standing-unfulfilled dream of being a published author, and for others who follow me down this path, it's wonderful - this so called curse/gift of my ex.

So, if I do seem to have heartache in some of these postings, it's literary: it's there so others know they are not alone (CS Lewis). Or to shine a light for some. Or entertain for others. Hopefully, what I will write, at a minimum, will give a glimpse of life to anyone who's wondered what an audit and years-long IRS stalmate are like.

Forging ahead

I'm no so worried about the appeals process. According to the IRS form titled "Your appeal rights and how to prepare a protest... I don't need representation at my appeals conference. But then again, like I trust IRS literature! Hah.

I worry though, seriously, about tax court. There is no way I can afford a tax attorney. In late winter of 2003 I saw Ted Sinars, a tax attorney on LaSalle Street in Chicago. He was a partner in the firm. I got in to see him through a neighbor in Michigan who worked for Ernest and Young accounting in Chicago. Mr. Sinars was very kind, but basically told me I'd need $5,000 to start, and there was no guarantee of anything. He didn't charge me for that meeting. It was a different world from the attorney's offices I'd been in around Kankakee - the secretary came out to take my coat when I got there, offered me coffee or a drink while I was waiting. Beautiful waiting room with original artwork. You get the picture.

Mr. Sinars gave me the name of an enrolled accountant - a cpa who was qualified to go up against the IRS in tax court. He was in some western Chicago suburb, that I drove to in icy rain about 3 weeks later, and who charged me $250 to tell me he could represent me but he wasn't sure of the outcome. A framed cartoon, enlarged, dominated his waiting room - it was the sketch of a patient on a gurney, IV poles with fluids reading "Savings" "Business earnings" and "Kid's College Funds" going into him. A tube coming from his body and draining into a large vat with the letters IRS. The patient says: "You gotta help me doc. They're draining the life out of me!!!"

At the time I thought money wasn't equal to life. I still believe that. But now I realize the IRS can drain something more important from you - hopes for the future. I have no idea what kind of retirement I can even hope for, as I'm looking at a $210,000 tax debt, plus my attorney's fees, plus possible garnishment of wages in the future with my rinky-dink IRA valued at around $10K. How do I try to save for my kids' college educations? How do I own property, as I live in a rented house, drive a car in my parents' names - I'm living like a financial fugitive. Have been for years - and I'm still not used to it.

That's the true cost of what I've become entrapped in - by marrying and trusting the wrong person, and signing my name to tax returns two years out of a six year marriage - I've become a person without any financial solidarity. A loser - especially in this country of wealth and prosperity, where you are what you own.

I don't believe that - but sometimes I dream of moving to a simplier place - Mexico. Simple and cheap. I'm a nurse - my skills are transferrable. At this point, that's close to my current retirement plan. The Peace Corps has taken volunteers as old as 89. They give medical care and free room and board. I checked. I qualify (without inputing my age) because of my nursing skills.

I guess I can take comfort in the fact that I'll be useful - maybe.

And maybe this blog too will help other naive fools like my former self to NEVER, EVER try to be an honest American taxpayer and report what you know is fraud. You'll just sink yourself. As Shelley Davis noted in her book: whistle-blowers are persecuted.

Remember the three monkeys: hear no evil, see no evil, speak no evil.

For me it's too late. I'm going to tell the truth. Outside of putting me in prison, I have little to lose.

"Unbridled Power"

Brought up too nice - that's what my brother says about us siblings sometimes. What I know about me is that I can be too gullible, too accepting, too blind to the time-tested truths in common colloquialisms about something, someone, someplace. I don't think my parents had anything to do with it.

I always thought if you told the truth, it would set you free. Really. I know. Pathetic. Disgusting. Idiotic. Naive. I ate up that George Washington crossing the Delaware River with the freezing troops in blankets and without shoes, and beating the bullying British. I loved the colonial era, the simple majesty of our declaration of Independence, Thomas Jefferson's ideals and words, Thomas Payne's protests, Thoreau's Walden.... why? I have no idea.

But maybe some of us are hardwired for that - to think that the world really is a just, good place where truth and justice prevail eventually. Of course I've wised up, especially in the past five years. Wished I'd done it at age 10.

The headlines of late have proved, in a very concentrated manner, just how ludicrious that type of thinking is, just within the context of our country. What's the best way to navigate today, in terms of national sentiment? Cynicism. Scepticism. Doubt. Denial. Hope tempered with a pre-emptive stance of assumed disappointment down the pike.

A book I found that was published in 1997 by Shelley L. Davis. "Unbridled Power: Inside the Secret Culture of the IRS." I just got it from the library yesterday, so I've only read 10 pages but note this:

Davis writes: "It is the story of inept and clubby IRS executives who have forgotten what their job really is, what public service really means. It is the story of how unethical behavior thrives in the highest ranks of the IRS bureaucracy. It is the story of how the IRS runs from its past, evades its responsibilities, coddles criminals, lies to Congress, retaliates against whistle-blowers, and squanders the billions it receives in taxpayers' funds on incompetant management schemes, cushy off-site management seminars in top-notch resorts, and computer systems that don't work and cost plenty. It shrouds all these actions in a culture of secrecy that makes disclosing what goes on inside its marble halls a federal crime."

This was written by a former employee of a decade of the IRS. Before my divorce I pretty aware of newly published titles, my radar was "on" for anything about the IRS.

Makes me think I was made to miss this one, made to go down this path. Destined to sit here tonight and write this?

(Is the above statement another way to make a postive thing out of a miserable situation? That hardwired tendency toward looking to the bright side... is it just another name for survival of the psyche? Ie. Denial?)

The index of this book has nothing about Innocent Spouse. One of my goals in this blog is to explore Innocent Spouse, it's history, the facts about it and statistics of how many get is. I'd love someday, to visit that little IRS site in Covington Kentucky just reserved for the Innocent Spouse experts. Wonder what type of spouses these folks make. Innocent. What a word. By the time a human reaches the age of 15, the word innocent conjures a smirk. If I don't get it, then am I the converse..... a Guilty Spouse? Guilty of marrying the wrong person and getting trapped... that much I'll agree to. Of intending the cheat the government - never.

Now I'm going to google Shelley L. Davis' name.

A beautiful day off

The form the IRS gives you to file an appeal (form 12509 - Statement of Disagreement) is one page with about an inch of writing at the top ("Purpose of form.....) and then many many lines. Like all Innocent Spouse forms, there usually isn't enough room to explain your answer. It's constricting - the horizontal lines running across the page, if you turn the page 90 degrees, those lines go vertical. Well, there you have the bars of a prison, the white page they're on is endless freedom beyond them.

I'm trapped on the lines. It reminds me of "on the ropes" - the phrase my attorney once told me early in the divorce and my position in it. When my ex was hording everything - our son, both homes, everything. "You've got to take a few punches," he explained, during the five year long fight. In the third year, I began to understand the phrase, after winning a few rounds (hearing) myself.

On those lines I have to try and explain my very human situation, yet again, in inhuman language and according to accounting-like, legal definations. Hardest of all - to prove I did not know something (that's a whole blog in and of itself.....)

When I submitted my initial request in 2002, it was lost for three years. I submitted a new one in 2005 - and more than a year later got a follow up questionnaire. The documents and written answers I supplied totaled more than 100 pages.

For a change, I think on this form I'll be brief. Like most of what you do, as an honest taxpayer with the IRS, is wait and fill out formalities. This is another formality - til I have to put together the official appeal.

Or, maybe they can just turn me down outright? Who knows. Really, I doubt many people outside the Innocent Spouse division in Covington Kentucky, know. And those that do, well, let's just they require lots of money in order to get them to share their knowledge with you. More money than I have, as most honest taxpayers arent' wealthy.

But I have a day off today from computer nursing, so I think I'll mentally take the day off too from IRS work. I have two weeks left to file this form. And the longer I wait, the more time my ex has to sell the house in Michigan - although he overpriced it by $200,000 in my opinion.

What I've learned by going through all this, since I don't have counsel and each agent either doesn't inform you of anything, or gives you incorrect information, misinformation , or a mixture of both sprinkled with a pinch of truth and useful info, is attempting to get Innocent Spouse relief stops seizure action. Also filing for a CDC hearing. An offer-in-compromise. Any type of action. So, even in this not great real estate market, I think it's better to get the house sold, so hopefully everyone with liens on the house will get paid. Lord knows if the IRS gets it, they'll auction it off at just enough to pay themselves and the bank holding the mortgage. There are three attorneys before me at this feeding trough.

On a more human side of this, and there is a human side to this on my blog, as opposed to the machine of the IRS, I'm tired. I'm so tired of huge organizations and their little well-versed know-it-all cogs spouting off their limited speciality just be hear themselves pontificate and lord their power over you. It's not the IRS, it's the system really. Everywhere you look. Healthcare, banking, governments at all levels, credit card shopping, book publishing, sales, even marathons like the Chicago. Blowing huge quantitles of people through every day to extract the most amount of dollars to line the pockets of a few at the top. Trick is, I've found, it not to let their experience make you - make you're own experience out it. Twist your mind to make it interesting, challenging, fun even.

Yet the sad thing is, those know-it-all cogs in their $70,000 a year salaried jobs, judge and jury for all the rest, the gatekeepers between the upper echelons and most honest taxpayers, well, let's just say they're clueless. Just as I was. Until all the fall-out from my recent divorce and started settling in around me. And I realize now how trapped I am.

As a positive person, I realize this is a gift: Won't we all, at the end of our lives, end up trapped, in a dying body, with no way out to avoid the reality of the situation?

As the wise blogger I'm in contact with reminded me: Death and taxes - that's all that's guaranteed.

Even those those conmen and others predisposed to cheat on their taxes have to face death eventually. So, the gift: Placed in another nebulous situation, with no clear end in site, or one that may end with me being in so much debt I can never begin to dig my way out, there is ultimately the only thing left that, as to those on their deathbeds, can give me freedom. My mind. Meditation. Going to that place of peace, always available, simply by not thinking and just being.

It's a beautiful day - I'll take my baby daughter for a walk now.

Working on an appeal

I've started writing my appeal - if it is denied, then I can go to tax court.

I've checked out attorneys and cpas that are certified to practice in tax court. Lots of money necessary to tap into these guys. It's the same old case of if you need justice in this country, you'd better be rich.

I have this fantasy of representing myself in tax court - and I just may have to. I know I could prepare well - it's just a matter (isn't it always) of time. Trying to learn a new computer system for my job, trying to be a good mom of two kids in two very different age groups with their own set of developmental issues, trying to keep up a house and keep everyone in it happy - sounds like such a traditional female whine doesn't it.....

Except for the tax court thing. Hah!

But could I really get into that.... that's the thing. Between doing this blog, imagining and working on the book of it, and the intricacies of the legal system AND tax world - fascinating stuff. Then, on top of it all, last weekend just by chance, I met an ultra-runner. He spoke about all the great places he'd been, and how he does the runs, including Badwater, which is 150+ miles.... Got me interested in running again - another thing that eats up time.

Oh well. As they say, you can sleep when you're dead! (But as I always wrongly think, does the lack of sleep hasten death? Sure. But that's thinking too much as usual).

"Dear Taxpayer,......"

Yesterday I got the letter specifically telling me why I should not be entitled to Innocent Spouse relief. Here it is, as Vivian M. Fox, Operations Manager, Innocent Spouse, details it in her letter to me (Dear Taxpayer,..... - that's hysterical, the "dear" part!)

"We propose to deny relief under IRC section(s) 6015(f) because you did not show it would be unfair to hold you responsible. You did not prove, that at the time you signed the return, you had reason to believe the tax would be paid. Also, the documentation you provided does not prove economic hardship."

There you have it. In my next few posts, I'll begin to decifer the words of these statements. For example, "that at the time you signed the return..." does that mean year 2000 or 2001. Or, as the agent Ms. Harvey told me, after saying it was both returns, changed her defination of "return" to the "audit report" I signed in 2002. That report, that agent told me, by signing, only confirmed that I acknowledged the changes made to the returns.

It's smoke and mirrors. I don't believe the "contact person", basically the judge and jury on this, Ms. Harvey, even looked through the more than 100 pages of documentation I gave her, including explanation of life with my ex at that time concerning finances. Would not be "unfair" to hold me responsible. I had nothing to do with my ex's business or tax preparations, don't hold a degree in accounting or an MBA, and signed b/c for the previous five years he'd been pressuring me to - and so much more. Also, what does economic hardship have to do with anything. Anyone who knows me know I live in luxury and splendor .... Got to go for now.

Waiting for action

A wise blogger told me that to wait for any large organization to make an abrupt move is to wait in vain - it's not going to happen. The behemoth of the IRS lumbers along at it's own pace because it doesn't have any incentive to do otherwise.

After the field audit report, the total debt my ex and I were held to was roughly $140,000. Now, almost five year later, it is approx. $210,000. Not only are there no forces compelling the IRS to close this case, it actually makes their return on the numerous employees "work" more profitable to let it ride with interest and penalties compounding daily.

Keep in mind there is a luxury second vacation home languishing as a joint asset that was valued at $470,00 in 2005. More than enough equity to cover the debt and then some....More on this stuff later.

In keeping with the Innocent Spouse angle, here's a cute little bon mot for you, when it comes to IRS agents being informed employees doing their jobs: I had one agent who did not know the difference between injured spouse and innocent spouse in terms of IRS law.

It's amazing. This world, where layabouts thrive and prosper. Amazing.... rewarding idiocracy and indecision.....

A little about IRS personnel

I don't know how many US citizens actually come into contact with IRS employees. Before the summer of 2002, my contacts were zero. But it was an eye-opener, just my first encounter with the field auditor.

Let's look at my sad little stereotypical idea, prior to the summer of 2002, of what an IRS auditor was: conservative in thought and appearance (Brooks Bros suits), professional and businesslike, focused and authoritative.

Here's what I witnessed: agent E Collie (aka "B" on some correspondence) - sleeveless button down shirt, a little tight. Clear plastic high heel sandals. Blonde, yet mousy in temperment via questions (lots more on this another time for those of you who may want a little preview about where a field audit goes). Evasive in answers. Prone to diverge into domestic life chitchat about her children with the POA accountant of my ex-husband while I sat there, amazed at the new info I was learning about my then-husband's business (no, it wasn't a corporation - it was a sole proprietorship - hmmmm, what does that mean.....).

Since "B" of the Cinderella glass slipper-like slingbacks, I've been privledged to work with another three wonderfully knowledgable agents - an Mr. R. Smooth, a Miss DS Jefferson, and a Miz Ellington. I've noticed that they all do a lot of stuff with their first names - either just abbreviate them, as if this is important for them for some reason, or they won't reveal them, as in the case of Miz Ellington, who refused to tell me when directly asked. And a tax advocate - the only one with what you could call human characteristics that she can communicate. And now, since Thursday, a tax examiner, Miss M Harry from "northern Kentucky", (she was loath to tell me the town, Covington) who was judge and jury on my innocent spouse appeal, yet didn't know what deposition I was talking about (the 67-page document I submitted with a slew of other documents - makes me wonder just how she perused my case) and her supervisor, JJ Jones, more on him later. By the way, this week I'll be trying to make contact with the head of the Innocent Spouse Division, Vivian Fox (what a glamorous name there, I picture a lot of red lipstick, maybe a 1940's noire attitude) - just to find out stats that the other two fonts of knowledge I dealt with were clueless about: how many people apply for innocent spouse protection, and how many get it.

I'll be introducing you to all these wonderful personalities. I take great notes. I ask good questions. Hell, I've been at this for almost five years. This is as much a story about slogging through the black hole of the IRS as it is about me - and how I've changed - since the start of this.

Me, before and early on in the audit: Helpful, worried, afraid to make a wrong comment, offering the agents information I thought would be helpful - for I had done nothing wrong. I had nothing to do with my ex's business. The truth is the truth. Let it shine, right?

Me, now: As Jack Nicholson's character says in "Something's got to give" What version of the truth would you like? Unafraid - I have nothing in my name now - nothing, really, except for a less than $10,000 rollover IRA. I rent. I drive a borrowed car. I have at most times approximately $100 in my checking account. I got an extension for my 2006 tax return b/c I thought I might get the innocent spouse and get the $500+ refund owed to me when I submit it. I could use it. Forget it. Why file.

The IRS had ruined my credit with a lien for more than $200,000 - all the while my ex sits in one or the other of the two formerly marital properties, one a huge home worth approx. $175,000 and the other, currently up for sale for $695,000 just a few blocks from Lake Michigan.

Here's some news for all of you: THE IRS DOESN'T SEIZE PROPERTY. Only very rarely. They'd rather let the debt increase with penalties and interest.

I know I'm all over the place, but there's so much to tell from the audit front, when you've been there almost five years. More on all of this later........

Denied innocent spouse

After requesting innocent spouse relief more than 4.5 years ago, yesterday I found out of my request was denied. I will transcribed my phone conversations with the tax examiner and her manager in this blog, along with previous communications that I have had in my quest to get innocent spouse relief since October 2002.

I'm a journalist, of the muck-raking sort, by nature, although circumstances have forced me to pursue other avenues of employment. Also, a fear of being a rabblerouser, a troublemaker, or repercussions from getting too involved - either in my efforts to extract myself from this now $200,000 IRS debt, as well as my recently finalized divorce/custody battle that lasted almost five years - those things forced me to silence.

Now it's time to tell those friends who find themselves embroiled in the similar circumstances what I've found what works with the IRS, and what doesn't work. I want others to know they aren't alone, or not to go down the same wrong paths. There are few CPAs that know of cases that continue this long - most reasonable folks extract themselves quickly - with an offer-in-compromise or by paying.

This is also a way I won't have to tell the same news, over and over, to friends and family. So, here we go. Dealing with the past as well as the present.