Meet the tax defiers

[Famspear]

"Meet the tax defiers" -- the title of an article by Brian Faler at politico dot com, April 15, 2014, at:

http://www.politico.com/story/2014/04/t ... html?hp=f2

[LightinDarkness]

Truer words have never been spoken:

“It’s driven by the culture of mistrust of the government,” he said. “There are a lot of people in this country, I think, who are only too happy to believe the government is massively deceiving and plotting against them.”

I was a political science major in college, and in graduate school I'm in a discipline that has a lot of overlap with it (public policy). One of the most interesting articles I had to read was "The Paranoid Style of American Politics." Its old, but a classic, for anyone who is interested:
http://studyplace.ccnmtl.columbia.edu/f ... -to-40.pdf

The take away is, basically - in American political and social life, being nuts is socially acceptable (and a good avenue to rise to power in politics!). American culture (inherent distrust of authority) and ideology ("American exceptionalism" and the like) has made bizarre levels of paranoia and distrust of government not only commonplace, but applauded in some circles. On a comparative basis I am not aware of any other country that has institutionalized government conspiracy theories/paranoia like we have. Other countries do have their pet flavors of craziness, thats for sure, but for them its "the Freemasons" or "the Jesuits" and not the government.

The fact that the IRS has battled tax deniers for so long and - despite loss after loss, jail time, and countless fines - new people still get involved in this stuff every year...is a testament to how acceptable being nuts is in our society.

The craziness, by the way, is bipartisan. Each side has their favorite pet conspiracy theories. While tax deniers and the like tend to lean right, the left has its own fair share (ZE ROTHSCHILDS!).

[operabuff]

There's this quote from Nathan Hochman, who I thought was smarter than to say something like this:

"The government wins more than 90 percent of those cases, says Hochman, who worked on the Snipes case for the government."

How about, the government wins 100% of the civil cases, but occasionally fails to get a criminal conviction. (I'd think that even the percentage in criminal cases was more like 99% than "more than 90".)

[fortinbras]

The IRS most certainly does not win 100%, nor I think as much as 90%, of its tax cases. I know tax lawyers whose fees are entirely contingent on how much they save their clients (what the client gets to keep compared with how much the IRS originally wanted), and their fees are keeping them living Very Comfortably.

But in the sort of cases that these tax protesters bring, where they repeat arguments that have already been tried and failed a thousand times, the IRS wins more than 110% - it wins the civil case and then goes on and gets a criminal conviction. Using the arguments from Cracking The Code and Vultures in Eagles Clothing and the like is a surefire way to lose.

[operabuff]

When Hochman is talking about "those cases" he is referring to the tax protester cases. That's why his saying only "more than 90%" is troubling - it implies that the protesters have a chance to succeed with their arguments, which they don't.

You've also got your civil and criminal cases backwards. If there is going to be a criminal prosecution, it will take place first, followed by a civil case.

(As far as non protester cases go, statistics can be deceiving, but it's pretty safe to say that the IRS doesn't win anywhere close to 90%. The one statistic that the IRS publishes - revenue protected - shows that out of $13 billion at issue in the Tax Court in 2013, the IRS protected only a bit more than $1 billion. http://www.irs.gov/uac/SOI-Tax-Stats-Ch ... k-Table-27 There are a lot of reasons why this comparison is not especially helpful. One being that it is skewed by the big cases - the largest 1% of cases usually contain about 99% of the dollars at issue in Tax Court.)

I imagine that Hochman was doing his best - he can't say 100% because of the few criminal cases where tax protesters have gotten off, Kuglin, Cryer, etc. But when you see it on the page, it doesn't convey the right message.

[Pantherphil]

I do not think it is productive to try to assess "wins" and "losses" in the context of many civil cases. I have "won" many cases in Tax Court in the sense that the initial assessment against my client was eliminated or reduced but in many of those cases the IRS did not "lose" the case. These were cases where my client had failed to file returns or failed to respond to IRS requests for audit information in a timely fashion and an assessment was made by the IRS on the best information available. I like to think that in these cases both sides "won" because the correct result was achieved.

[Famspear]

When Hochman is talking about "those cases" he is referring to the tax protester cases. That's why his saying only "more than 90%" is troubling - it implies that the protesters have a chance to succeed with their arguments, which they don't....

When I first saw the article, my first reaction (as a former broadcast news reporter) was that Hochman may have been misquoted or, to put it more precisely, possibly mis-paraphrased by the reporter.

Of course, in my years as a reporter, I never made any mistakes like that.

[operabuff]

I do not think it is productive to try to assess "wins" and "losses" in the context of many civil cases. I have "won" many cases in Tax Court in the sense that the initial assessment against my client was eliminated or reduced but in many of those cases the IRS did not "lose" the case. These were cases where my client had failed to file returns or failed to respond to IRS requests for audit information in a timely fashion and an assessment was made by the IRS on the best information available. I like to think that in these cases both sides "won" because the correct result was achieved.

Which is one reason why the IRS doesn't publish W/L statistics.

[KickahaOta]

When I first saw the article, my first reaction (as a former broadcast news reporter) was that Hochman may have been misquoted or, to put it more precisely, possibly mis-paraphrased by the reporter.

Of course, in my years as a reporter, I never made any mistakes like that.

That was my first thought as well, having been on the receiving end of a similar sort of interview in another subject area.

You're talking to the reporter about some situation. The reporter asks 'How often does X happen in this situation?' You nearly answer 'X always happens.' But you catch yourself, because there's the one-in-a-million case where that doesn't happen. So you say 'It nearly always happens.' But the reporter doesn't want that answer; it's wishy-washy. The reporter wants a number, because numbers are solid. So the reporter says 'More than 90 percent of the time?', because to the reporter, who's not familiar with the subject area, anything more than 90% seems pretty much interchangeable. And you say 'Oh, yeah, absolutely.' And the reporter writes that up as a quote: "'X happens more than 90 percent of the time,' said KickahaOta." And you wish you'd been more emphatic, because it makes the probability sound way less certain than you meant it to. But in your mind, you never expected that answer to be one of the sound bites coming out of the interview.