LarkenRose, IRS Crooks and Rick Santorum

[AFTP]

http://www.youtube.com/watch?v=xOhCP9Lx ... ploademail

If he’s telling the truth, the IRS are crooks.

[Pottapaug1938]

If.

[AFTP]

Seems odd to get fined 5k for asking for a meeting you're entitled to doesn't it?

[The Observer]

Seems odd to get fined 5k for asking for a meeting you're entitled to doesn't it?

Depends on how one asked for that meeting. Was the request built around frivolous language? Did it make outlandish and unsupported claims? Did it distort the truth or tell outright lies?

Remember, we are only getting one side of the story - and that is from a person convicted for essentially not telling the truth.

[Cathulhu]

Since IRS is bound by confidentiality laws (people go to jail for unauthorized disclosure) this creates a situation where the tax denier can say anything they please on youtube, and IRS cannot answer--except when they prosecute and put liars like Larken Rose in prison where they belong. At that point, the court records are public information, but IRS personnel are advised not to discuss specific cases, and there's this code of conduct paragraph titled "unauthorized media contact" that limits every word said.

If you're stupid enough to believe a convict like Larken, how is it you aren't heavily invested in dinars and helping out the Nigerian prince?

[notorial dissent]

If we’re talking about Barkin’ Larkin, as we obviously are here, then the assumption of sweet innocent him, is just so much fantasy.

He is currently having problems with some of his claims about whether or not his “employees” were actually employees or independent contractors, and from what I remember reading, he, instead of just providing the necessary information that would have simply resolved the whole thing, he started making his usual collection of nonsense responses, for which he has garnered the current collection of penalties, and will undoubtedly garner some more as things move along to their inevitable end.

The really ironic thing here is that I’m not sure but what he wasn’t at least technically in the right this time around, as far as to the employee status, but thanks to his big mouth and over blown ego has managed to shoot himself in the foot yet again.

[AFTP]

If he owes 300k and doesn't have it or any property to take, are they going to put him in jail again?

[LPC]

My understanding is that the IRS is trying to collect employment (i.e., Social Security and Medicare) taxes from the Roses because the transcriptionists they employed were "statutory employees," and not independent contractors, by reason of IRC 3121(d)(3)(C), which defines “employee” as including any individual who performs services "(C) as a home worker performing work, according to specifications furnished by the person for whom the services are performed, on materials or goods furnished by such person which are required to be returned to such person or a person designated by him."

And I'm not sure that Rose is being treated any differently than any other taxpayer, because the IRS takes the collection of employment taxes very seriously, and doesn't usually give taxpayers much notice or opportunity to be heard other than a collections due process hearing (which was enacted in part because the IRS was acting too quickly to collect employment taxes that weren't actually owed).

Now, why Rose would be threatened with a $5,000 frivolous position penalty is a little odd, because a dispute over whether someone is or is not a statutory employee doesn't seem like a position that the IRS would have identified as frivolous in their public notices (although Notice 2008-14 did identify "An employer is not legally obligated to withhold income or employment taxes on employees’ wages" as a frivolous position). But employee v. independent contractor issues can be tricky, and the IRS can't treat every such dispute as frivolous.

Ultimately, it would depend on what Rose put in his letter.

On the ultimate question of whether the IRS hasn't pointed Rose to section 3121(d)(3) or whether Rose is just being an idiot, I suspect that he's just being an idiot.

[LPC]

If he owes 300k and doesn't have it or any property to take, are they going to put him in jail again?

If the failure to collect and pay over employment taxes was "willful," then Rose could be prosecuted and convicted. It was one of the crimes for which Dick Simkanin was convicted.

However, I think it would be fairly difficult to prove to a jury that Rose was aware of the statutory employee definitions and willfully chose to ignore them.

[JamesVincent]

If he owes 300k and doesn't have it or any property to take, are they going to put him in jail again?

If the failure to collect and pay over employment taxes was "willful," then Rose could be prosecuted and convicted. It was one of the crimes for which Dick Simkanin was convicted.

However, I think it would be fairly difficult to prove to a jury that Rose was aware of the statutory employee definitions and willfully chose to ignore them.

Even with his background of ignoring everything?

[Dezcad]

http://www.youtube.com/watch?v=xOhCP9Lx ... ploademail

If he’s telling the truth, the IRS are crooks.

Has Larken become a house painter? It seems he spilled some paint all over his shirt.

[wserra]

However, I think it would be fairly difficult to prove to a jury that Rose was aware of the statutory employee definitions and willfully chose to ignore them.

Rosie might well help out with that.

[Dezcad]

Seems odd to get fined 5k for asking for a meeting you're entitled to doesn't it?

Depends on how one asked for that meeting. Was the request built around frivolous language? Did it make outlandish and unsupported claims? Did it distort the truth or tell outright lies?

Remember, we are only getting one side of the story - and that is from a person convicted for essentially not telling the truth.

After watching the whole video and reading the above, I found one thing interesting.

Larken shows the IRS letter stating that he submitted a frivolous request and informing Larken of a potential penalty.

What was missing?

Larken fails to show his "request" to the IRS, which he clearly has and could have easily shown as he did the IRS letter.

Why didn't he show his request? No doubt, because it was, in fact, frivolous.

[ArthurWankspittle]

After watching the whole video and reading the above, I found one thing interesting.

Larken shows the IRS letter stating that he submitted a frivolous request and informing Larken of a potential penalty.

What was missing?

Larken fails to show his "request" to the IRS, which he clearly has and could have easily shown as he did the IRS letter.

Why didn't he show his request? No doubt, because it was, in fact, frivolous.

Has Larken had any previous warnings off the revenue about frivolous requests or returns? Because that could go to explaining why he has the warning about a potential penalty.

[The Observer]

After watching the whole video and reading the above, I found one thing interesting.

Larken shows the IRS letter stating that he submitted a frivolous request and informing Larken of a potential penalty.

What was missing?

Larken fails to show his "request" to the IRS, which he clearly has and could have easily shown as he did the IRS letter.

Why didn't he show his request? No doubt, because it was, in fact, frivolous.

Of course. Larken also glossed over several other issues that would have been relevant to explain if he wanted to be totally honest about what had occurred:

(a) DId he receive any correspondence indicating that the IRS wanted him to answer questions about the business and the employer-employee relationship issues?

(b) Did he receive an audit notification letter?

(c) Did he receive a letter that proposed an additional/deficiency assessment based on the determination that he and his wife had misclassified the employees?

(d) Did he attend such audit and cooperate with the auditor and provide all necessary documentation supporting his position? Did he provide any documentation that the auditor requested?

(e) Did he timely and properly contest the audit as specified in the audit deficiency notice?

(f) Did he timely appeal the audit to the court system?

(g) If he did not recive proper and timely notice of his audit deficiency, did he provide proof of this or accurately challenge the notice process to the settlement officer for his CDP appeal?

(h) Did he improperly try to contest the basis of the assessment in his CDP?

He either doesn't explain these issues at all or only makes passing reference to them without any facts. He wants us to believe that somehow this audit happened without the Roses being contacted by the IRS at all. By his passive-aggressive position on these issues, it leads to several possible scenarios:

1a. The Roses were notified of the IRS' interest in the employer-employee relationship of the business and failed to act on it or to respond. Larken essentially blew off the auditor and told them he wasn't going to work with them. The IRS proceeded to complete the audit and proposed assessment.

1b. The Roses were notified of the IRS' interest in the employer-employee relationship and Larken spent time pushing frivolous arguments and using stall tactics against the auditor. The IRS ignored Larken's invalid arguments and proposed assessment.

2. Larken attempts to contest the audit by contacting the auditor's manager with the same stale arguments and phony interpretations of what the law says. Manger rules against the Roses and approves the deficiency proposal.

3. The Roses fail to contest the deficiency proposal in IRS Appeals and court. I don't recall seeing any court case showing the Roses filed suit. At this point, Larken is dead in the water, assessment-wise. Why didn't he contest? Because I bet he already knew that he and Tess had employees and he couldn't show otherwise. How was the IRS able to show that he had employees if he didn't cooperate? Most likely they interviewed those employees who received 1099 statements from the Roses and interviewed the clients of the Roses' business to get a detailed picture of how much involvement and direction the Roses were giving in the day-to-day management of the employees. That information alone would show a great deal of support for the IRS' contention that the Roses had employees and not independent contractors (I suspect that the IRS was tipped off by one or more of the Roses' employees who weren't happy that they were paying the self-employment tax on their returns and wanted Tess on the hook for this).

4. Larken opts for the option of trying to do a back-door appeal of the assessment through the CDP appeal process when the notice of lien gets filed or he gets the final notice and intent to levy letter. A lot of protesters have tried this approach in the past which is a bogus attempt to circumvent the true purpose of the CDP process; we have all seen numerous cases here where the federal judges have shot these guys down and assessed the frivpen.

Larken misquotes a statute in his video in trying to create the belief that the CDP meeting allows him to challenge the assessment. In truth, if he could show that the notice of the deficiency had been flawed, he could permissibly do so and get the assessments abated. However, Larken didn't do so and did not offer any proof in his video that such a thing happened in his case. The only options open to Larken in the CDP process at that point would have been to show how the notice of lien or the levy would cause a financial hardship and to prove that he and Tess were unable to pay. And the odds are that Appeals would have probably ruled in their favor and reported the case currently uncollectible. Instead, Larken apparently did what so many of his pointed-head cohorts did and try push through with bluff, lies and and an overdeveloped sense of infalliability. Thus the frivpen.

Has Larken had any previous warnings off the revenue about frivolous requests or returns? Because that could go to explaining why he has the warning about a potential penalty.

Most likely so, and during the CDP process is where it would have happened. Appeals will provide notices to the taxpayer that advises them that the position they are putting forward is frivolous and could result in the penalty being assessed.

Finally, the latter portion of the video convinces me that Larken is heading down the same road as Ed Brown and Bob Hurt. It is apparent that Larken really wants to see some violence in play against the IRS.

[Paul]

It was a collections due process hearing, which means he probably had no right to challenge the liability itself. 10 quatloos says his "request" was a bunch of typical Rosian BS about how he didn't owe the tax. 10 more says he was probably told that he can't challenge the liability and he responded with twice as much BS about why he didn't owe the tax, and only then (or after a later iteration) was he threatened with the friv pen.

[notorial dissent]

Somewhere out there there is, or at least was, a video of Barkin’ Larkin going off about this and how abused and put upon and sorely tried he was, and about how the IRS was misapplying the rules to poor sweet innocent him, and how he’d done everything he could to show them the error of their ways, and what all he was going to show them etc. I made the mistake of watching part of it some months ago when this first materialized, and there was some discussion about it at the time.

I’m guessing by this that they weren’t persuaded, considering his credibility I’m not in the least surprised, but considering that he started out the discussions with a chip on his shoulder, I didn’t really expect it to go very far even if he had good documentation and back up. This isn't news so much, as just the inevitable result of Larkin's hubris.

[The Observer]

I recall that, and I think I also recall that there were several good explanations given here by others that justified the determination made by the IRS that the Roses had employees, based on reading between the lines of Larken's rant in his video.

So we again can chalk all of this up to Larken having another one of his tantrums about not getting his way, not being allowed to make up his own rules, and not being able to dominate the conversation. I can imagine that playing Monopoly with this guy would result in a five hour argument about how he should be able to collect money from the bank when he lands on the "Free Parking" space.

[Quixote]

(c) Did he receive a letter that proposed an additional/deficiency assessment based on the determination that he and his wife had misclassified the employees?

IRS would not have mailed such a letter. Employment taxes are not covered by the deficiency procedures. The employer does not receive a 90 day letter and the assessment can not be contested in Tax Court. An administrative appeal is possible, but it is not always clear to the employer when or how to appeal. It was proper for Larken to contest his liability in a CDP hearing. Given his track record, and his attitude in the video, I doubt he made a serious attempt to contest it, and instead tried to baffle them with bullshit.

[Cathulhu]

The sad part would be the employees. The main reason that employment taxes have a different and slightly faster track than income or excise taxes is because of the classic case: employer withholds tax and fica, etc, on the paycheck, then turns around and uses the money to pay a vendor, "we have cash flow problems!". The tax deposits are due and don't get made because nobody is standing on the employer's chest reminding him it isn't his money. The 941s don't get filed because then the IRS will expect payment. The W-2s are issued because the employees want to file their taxes. They claim their withholding and, depending on timing and whether the employer is still in business, are either given a notice explaining there is no withholding and they owe money because the W-2 was false, or given a refund that is later reversed. (These invariably involve a specialized auditor making determinations in each specific case.) If the employer did withhold and the employee can prove it, the tax gets assessed against employer and the employee may get their refund. But not without a huge hassle. I worked on a couple cases of this nature; I'd never work for Larken Rose!