not the sharpest nail in the shed

[userfriendly]

Hi All, I"ve been watching this board for some time and now it's time.

It's taking alot to admit this but here it goes, I have been scammed, scammed by the codebusters, they are now called paralegal research advocates... I started 4 years ago and now it's caught up to me, ouch....deep deep dog dooo....

I've been thru the decoding, doing the rebuttal letters, done some consulting w/prefered services, you name it, I've probably been thru it, I'm now getting levied and facing some hefty fines and penalities, it never really felt right but I kept sending the rebuttal letters anyway...

I am in the process of filing for back years and coming clean, and was hoping to to seek some advice or guidance. Has anyone been thru this, I found what I think is a good tax company that can help, they are called FSI, they appear to be on the up and up.....if anything good comes out of this I hope this gets out to people even considering this...I'd love to report paralegal to the IRS but im not sure what good it would do...

thanks for reading this

[gezco]

Hi All, I"ve been watching this board for some time and now it's time.

It's taking alot to admit this but here it goes, I have been scammed, scammed by the codebusters, they are now called paralegal research advocates... I started 4 years ago and now it's caught up to me, ouch....deep deep dog dooo....

I've been thru the decoding, doing the rebuttal letters, done some consulting w/prefered services, you name it, I've probably been thru it, I'm now getting levied and facing some hefty fines and penalities, it never really felt right but I kept sending the rebuttal letters anyway...

I am in the process of filing for back years and coming clean, and was hoping to to seek some advice or guidance. Has anyone been thru this, I found what I think is a good tax company that can help, they are called FSI, they appear to be on the up and up.....if anything good comes out of this I hope this gets out to people even considering this...I'd love to report paralegal to the IRS but im not sure what good it would do...

thanks for reading this

Sorry to hear about your troubles. Hopefully, someone will read your post before drinking the codebuster’s kool-aid. You know, you could report said paralegal to the IRS as a non-filler and tell them about what he/she charges. They might give you a little reward, or at least you would get a little revenge.

[jg]

There is a circular 230 disclaimer on the site; but not much about the qualifications of the representatives.
At http://www.fsitax.com/pr_thomas.php

Tax law veteran joins FSI Tax Corp
Columbia, MD – January, 18, 2006 – Maryland-based FSI Tax Corp™ recently hired tax law veteran Nicole Thomas as the Licensed Taxpayer Representative responsible for all of the company’s most challenging cases including Offer in Compromise, high dollar installment agreements and all business clients.

from http://washingtondc.craigslist.org/doc/ ... 44476.html

Local Tax Attorney--IRS and State Tax Debt Representation

--------------------------------------------------------------------------------
Reply to: nicolerthomas@comcast.net
Date: 2007-07-30, 1:02PM EDT


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[The Observer]

I am in the process of filing for back years and coming clean, and was hoping to to seek some advice or guidance. Has anyone been thru this, I found what I think is a good tax company that can help, they are called FSI, they appear to be on the up and up.....

The best rule you can apply when considering having representation before the IRS is "if it sounds too good to be true..." Be wary of lawyers, CPAs or enrolled agents who promise that they can settle your tax liability for "pennies on the dollar". Firms that promise they can make liens or levies disappear are also promising pie in the sky. Reputable firms are those that will ask you a lot of questions about your situation beforemaking promises about what they can do.

Be sure to independently check out the accreditation/licensing of the firm's members to verify that they are able to represent you before the IRS. Many tax preparers will advertise as being able to represent you before the IRS, but that is not the case. Unenrolled preparers typically will not receive the time of day from a revenue officer if they lack enrolled agent status, meaning that you wasted your money.

While some firms will require money in advance before taking you on as a client, be sure that you understand what they are charging and what you will be getting for the money you pay. And don't think going into this that somehow your tax liability will go away with the best representation. The bottom line is that you legally owe the liability and that means typically you are going to have to pay in some form or manner (installment agreement, offer in compromise or in full). If the IRS verifies that you are not able to pay, they may decide to defer collection until such time that you can pay, so be prepared to suffer with the filings of notices of federal tax liens, future contacts from the IRS and the harm to your credit rating.

While bankruptcy may be an option, rules governing discharging of the taxes are complicated. Be sure that your firm has experience with bankruptcies before allowing them to file a bankruptcy for you. Too many taxpayers have jumped into a chapter 7 only to find out that many of their tax years were not elgible for discharge and thus wasted time and money. With the recent changes to the bankruptcy code, getting a discharge is harder and more expensive; you are more likely to end up converted to a chapter 13 plan if the court finds you have the ability to pay some or all of the taxes.

[Quixote]

I am in the process of filing for back years and coming clean, and was hoping to to seek some advice or guidance. Has anyone been thru this, I found what I think is a good tax company that can help, they are called FSI, they appear to be on the up and up.

Before looking for help, you should determine the extent of your problem. Many people assume that getting back in the system requires them to do something special. Often, it means just doing what they should have done in the first place, file the returns. In sounds as if the IRS has filed SFRs. If an SFR has been filed for a tax year, the return you're filing for that year will be treated as a amended return.

Many non-filers discover that they don't have a net tax liability. SFR returns are almost always wrong. That is especially likely if you are married with children. (The tax code has become very family friendly.)

Even if you owe money, filing the returns is the first step. Almost all collection alternatives require that the taxpayer be in compliance, i.e., that all his returns have been filed and that he is paying estimated tax payments or has sufficient withholding to cover his expected current liability.

Once all the returns have posted, write to the submissions processing campus where the returns were processed and request abatement of any penalties for late filing. If you are going to be paying off the earliest year soon, request abatement of the late payment penalty, too. If not, wait until you've paid the tax off on the earliest period before asking for abatement of the late payment penalty.

I would be interested in knowing if an IRS employee would consider "I was conned by detaxers" to be reasonable cause for late filing or late payment.

[webhick]

I would be interested in knowing if an IRS employee would consider "I was conned by detaxers" to be reasonable cause for late filing or late payment.

That would be an excellent incentive for the detax victims. Once you've been conned, I imagine that it's completely devastating trying to figure out how to fix this gigantic mess.

Also, does the IRS have a pamphlet or something called "I've been Conned by a De-Tax Scheme. How do I fix this?" If they don't have one, they should. It should start:

Step 1. Stop beating yourself up. You're not the first person to fall for that garbage and you won't be the last.
Step 2. File your tax returns for the affected years (or amend if you had filed erroneously).
...

Hey, isn't this something we should have on this site?

[Demosthenes]

Step 1. Stop beating yourself up. You're not the first person to fall for that garbage and you won't be the last.

I'm fairly certain that the IRS thinks a considerable amount of self flagellation and maybe even some blood letting is appropriate for tax protesters.

[webhick]

Step 1. Stop beating yourself up. You're not the first person to fall for that garbage and you won't be the last.

I'm fairly certain that the IRS thinks a considerable amount of self flagellation and maybe even some blood letting is appropriate for tax protesters.

Good point. I've heard about the crap IRS agents have to put up with. Specifically, I read something that John posted on LH about his dealings with the agents. It was, IIRC, some kind of transcript of a conversation he had at an IRS office. I felt really bad for the IRS employees.

Regardless, the pamphlet shouldn't reflect the frustrations of the IRS in dealing with TPs (otherwise, most ex-TPers would probably not get past the first paragraph). But, it would be nice if there was a step in the there about sending an apology to the agents you annoyed.

[The Operative]

Step 1. Stop beating yourself up. You're not the first person to fall for that garbage and you won't be the last.

I'm fairly certain that the IRS thinks a considerable amount of self flagellation and maybe even some blood letting is appropriate for tax protesters.

Yes, but what about ex-tax protestors that have grown some brain cells and are now prostrative and begging for mercy?

[ErsatzAnatchist]

But, it would be nice if there was a step in the there about sending an apology to the agents you annoyed.

Kind of like one of those 12 Step Programs where you have to apologize to everyone you have hurt as a result of your addition?

[The Operative]

But, it would be nice if there was a step in the there about sending an apology to the agents you annoyed.

Kind of like one of those 12 Step Programs where you have to apologize to everyone you have hurt as a result of your addition?

I didn't know that poor math was something for which one had to apologize.

[webhick]

But, it would be nice if there was a step in the there about sending an apology to the agents you annoyed.

Kind of like one of those 12 Step Programs where you have to apologize to everyone you have hurt as a result of your addition?

I like that. I came up with some titles.

• "Twelve Steps to Digging Out: A Guide for The Ex-Tax Protester"
  (I know, serious)
• "Shifty Burned Me Bad, And The Old Fart Stuck Me With The Bill"
• "Patching the Code: The IRS Wants Those Erroneous Refunds Back Now"
• "I've Got a Little 14th Amendment Citizen in Me and He Needs to File His Returns"

[John J. Bulten]

I read something that John posted on LH about his dealings with the agents. It was, IIRC, some kind of transcript of a conversation he had at an IRS office. I felt really bad for the IRS employees.

Now that you mention it, I probably should apologize to the guy for mistakenly thinking he had any ability or comprehension to do anything the law required the IRS to do. I'll apologize as soon as I can find out his real name.

userfriendly, welcome, but you're probably not interested in us minority report types advising you to research and obey the law as written, so I won't bother to link the LH website and forum (where you can learn more about the tax law at no charge, unless you want to buy the eminently reasonable text Cracking the Code by Pete Hendrickson). If you are interested in WHY the IRS would be sending hundreds of "Those [allegedly] Erroneous Refunds" to his readers year after year, of course, let me know. But in this case my general advice would be to file completely, truthfully, and correctly, and report everything as income which the Statutes, Code, and Regulations reveal to be income. Quixote said it well too:

I am in the process of filing for back years and coming clean, and was hoping to to seek some advice or guidance. Has anyone been thru this, I found what I think is a good tax company that can help, they are called FSI, they appear to be on the up and up.

Before looking for help, you should determine the extent of your problem. Many people assume that getting back in the system requires them to do something special. Often, it means just doing what they should have done in the first place, file the returns. In sounds as if the IRS has filed SFRs. If an SFR has been filed for a tax year, the return you're filing for that year will be treated as a amended return.

Many non-filers discover that they don't have a net tax liability. SFR returns are almost always wrong. That is especially likely if you are married with children. (The tax code has become very family friendly.)

Even if you owe money, filing the returns is the first step. Almost all collection alternatives require that the taxpayer be in compliance, i.e., that all his returns have been filed and that he is paying estimated tax payments or has sufficient withholding to cover his expected current liability.

Once all the returns have posted, write to the submissions processing campus where the returns were processed and request abatement of any penalties for late filing. If you are going to be paying off the earliest year soon, request abatement of the late payment penalty, too. If not, wait until you've paid the tax off on the earliest period before asking for abatement of the late payment penalty.

I would be interested in knowing if an IRS employee would consider "I was conned by detaxers" to be reasonable cause for late filing or late payment.

A Guide for The Ex-Tax Protester

I think it's much safer to protest ex-taxes, don't you? That 1894 income tax was thoroughly and woefully unconstitutional, it doesn't apply to me and I'm NOT going to pay it, even the Supreme Court agrees with me!

[Famspear]

John J. Bulten wrote:

I think it's much safer to protest ex-taxes, don't you? That 1894 income tax was thoroughly and woefully unconstitutional, it doesn't apply to me and I'm NOT going to pay it, even the Supreme Court agrees with me!

(sigh....) Yeah, that 1894 income tax doesn't apply to me either. Unfortunately, the income tax imposed by section 1 of the Internal Revenue Code of 1986 DOES apply to me, to John Bulten, and generally to all other U.S citizens and U.S. residents. And ALL Federal courts agree with me on that. Unfortunately for John, neither the United States Supreme Court nor any other Federal court has ever ruled that the individual income tax under the 1939 Code, the 1954 Code or the 1986 Code does not apply within the fifty states, or that the gross amount of compensation for personal services is not income, or that only government employees, etc., etc., are subject to the tax. John's putative guiding light, Peter Hendrickson of "Cracking the Code," is a very dim bulb indeed, with a prison record for a tax conviction as his sole credential to pontificate about taxation.

[Imalawman]

Its post like John's that make me wish we banned all TP's from posting on here. But I know, it'd be pretty boring. All we can do is point out how absolutely stupid anyone would have to be to follow his advice. Its never worked in any trial I've even been in with CTC people and it won't work for you.

[Famspear]

John J. Bulten wrote:

If you are interested in WHY the IRS would be sending hundreds of "Those [allegedly] Erroneous Refunds" to his readers year after year, of course, let me know.

Yeah, and you can save yourself the trouble of asking John, because John will intentionally give you an incorrect answer. The reason the IRS sends out hundreds of erroneous refunds, of course, is that the refund claims are fraudulent and the IRS doesn't catch them until after the money is paid out. (As any seasoned tax practitioner knows, the IRS is systemically incompetent in many ways.) That's why many of the doofus tax protesters who follow this "Cracking the Code" scheme are in trouble with the Internal Revenue Service now, and that's why Peter Hendrickson is in trouble now.

[webhick]

I read something that John posted on LH about his dealings with the agents. It was, IIRC, some kind of transcript of a conversation he had at an IRS office. I felt really bad for the IRS employees.

Now that you mention it, I probably should apologize to the guy for mistakenly thinking he had any ability or comprehension to do anything the law required the IRS to do. I'll apologize as soon as I can find out his real name.

Wrapping an insult in an apology isn't much of an apology in my book. But then again, I take it that wasn't the point of your response. It appears to me that you don't feel as though you owe them any kind of apology.

A Guide for The Ex-Tax Protester

I think it's much safer to protest ex-taxes, don't you?

Would 'A Guide for The Former "Tax Protester"' be better? Actually, it would be. Thanks for pointing out the ambiguity of my phrasing. (not being sarcastic here)

[Famspear]

Earlier, in response to something John Bulten said, I wrote:

The reason the IRS sends out hundreds of erroneous refunds, of course, is that the refund claims are fraudulent and the IRS doesn't catch them until after the money is paid out. (As any seasoned tax practitioner knows, the IRS is systemically incompetent in many ways.)

Here's a little war story to illustrate what I mean by systemic incompetency at the Internal Revenue Service, and how easy it is to generate an erroneous refund.

Several years ago I worked on a case for a corporation after the corporation had filed bankruptcy. I was not the legal counsel or accountant for the corporation prior to the bankruptcy. Prior to bankruptcy, the corporation had operations in two states (let's say New York and California, for example). The company had payroll in both states -- very large payrolls -- and the operations in each state were simply separate divisions of the one corporation.

Instead of combining the payroll of the two divisions and filing one Form 941 each quarter for the entire corporation's Federal payroll taxes, each division made its own tax deposits and filed a separate Form 941. The problem was that each division was filing for the ONE corporation -- both under the same Federal employer identification number (EIN). Each quarter, two separate returns were being filed under the same corporate name and EIN.

I believe this procedure was incorrect. For one corporation and one EIN, only one Form 941 should be filed for any given quarter. The payroll information, the tax deposit information, etc., for both the New York and California operations should have been combined on ONE return.

Don't ask me how long the separate filings went on, or why it didn't get caught quickly.

At any rate, shortly before the bankruptcy, a final payroll was made at each location. The California people made their deposits and filed their Form 941. The New York people made their deposits -- but for some reason did not file THEIR Form 941. The tax that WOULD have been shown on the unfiled New York return was over $500,000, and New York had made tax deposits for that amount.

Can anyone guess what happened?

Of course. The IRS showed credits on its books for $500,000 for the tax deposits, but no offsetting debit of $500,000 for the tax shown on the (unfiled) return. But the IRS did show a return on file -- the California return.

What did the IRS do? Well, of course, the IRS computer said to itself, hey I have a return on file, but the credits (tax deposits) exceed the debits (assessments for the tax shown on the return) by $500,000. So the IRS simply issued a $500,000 refund check to the company (in a very short period of time), without asking any questions (One question might be: Why the heck are you filing two separate Form 941s for the same company under the same EIN???). Of course, the payment of the erroneous refund zeroed out the 941 account.

THEN the company filed bankruptcy.

THEN somebody at the company filed the Form 941. THEN the IRS posted the debit for the tax shown on that return, putting a $500,000 debit balance in the account.

THEN the IRS started collection activity (during the bankruptcy).

Meanwhile, the $500,000 refund check lay around somewhere, uncashed.

The short story is that an employee, without permission from the bankruptcy Trustee or the court, handed the uncashed $500,000 refund check back to the IRS.

The Trustee later learned of the unauthorized turnover of the refund check, and did not object. Everything was fine in the end.

I don't remember the details of the time line on all this, but I would just like to hold this story up as an illustration of how taxpayer incompetence and IRS incompetence, in tandem, can generate a HUGE erroneous refund check in a short period of time.

How much more so are erroneous refunds possible in the case of relatively small amounts -- especially where the taxpayer is engaging in deceit.

--Famspear

[John J. Bulten]

Its [sic] post [sic] like John's that make me wish we banned all TP's from posting on here. But I know, it'd be pretty boring.

See, userfriendly, in what esteem I am held. And what an amusing pile-on I have power to provoke by wiggling my right pinky (over the Enter key).

As I previously stated, I do not respond here to every straw-man or false representation of my or Pete's positions, so one should not assume the forum regulars to be correct simply because I don't answer. I will comment, though, that Pete's old-news plea-bargain for failure to file is fully described at his site, and he has not advocated failing to file in the past 15 years.

Famspear, did you intend to wrest this thread mercilessly off the topic of helping poor userfriendly, and drag us all into one of your pet arguments about "the gross amount of compensation for personal services"? Everyone knows that compensation is includable in calculating gross income.

Anyway, like I said, userfriendly should file completely, truthfully, and correctly. Since everyone knows that not everything that comes in is income, each receipt should be compared to the statutory fact tests to determine whether it is actually income. For instance, payments received for working should be compared against the fact tests for statutory "wages" given in sections 3121(a) and 3401(a) and dependent subsections. Some payments for working, like payments for ag labor, are simply not statutory "wages" or "income". Would anyone dispute that?

Webhick, I apologize.

[Famspear]

John Bulten wrote:

Famspear, did you intend to wrest this thread mercilessly off the topic of helping poor userfriendly, and drag us all into one of your pet arguments about "the gross amount of compensation for personal services"? Everyone knows that compensation is includable in calculating gross income.

Anyway, like I said, userfriendly should file completely, truthfully, and correctly. Since everyone knows that not everything that comes in is income, each receipt should be compared to the statutory fact tests to determine whether it is actually income. For instance, payments received for working should be compared against the fact tests for statutory "wages" given in sections 3121(a) and 3401(a) and dependent subsections. Some payments for working, like payments for ag labor, are simply not statutory "wages" or "income". Would anyone dispute that?

John, I don't think userfriendly is going to fall for your verbiage.

Userfriendly, you should know that John Bulten loves to mince words, to bob and weave. John cannot accept that the words "includes" and "including" are words of expansion and not of limitation -- so he simply admits that they're words of expansion and then interprets them to be words of limitation. Based on prior posts, John would try to convince other people that the Federal income tax does not apply to ordinary workers in Oklahoma, or Florida, or wherever he lives now, because he cannot find a court case that specifically states that "Oklahoma" is a state for purposes of section 7701 of the Internal Revenue Code. John would have you believe the totally false idea that for a receipt of income, each receipt should be compared to an imaginary set of "statutory fact tests" to determine whether it is actually income. He would have you believe the totally false idea taht payments received for working should be compared against the fact tests for statutory "wages" given in sections 3121(a) and 3401(a) and dependent subsections. John would have you believe the false idea that some payments for working are simply not statutory "wages" or "income".

John is trying to sell falsehoods.

The question John has been considering is: In the event he is ever indicted for tax crimes, will he be able to convince the jury that his putative "Bulten Beliefs" about taxation rise to the level of genuine good faith beliefs based on a misunderstanding caused by the complexity of the Internal Revenue Code?