Schiffites struggling to survive

[Demosthenes]

We're still hanging in there, however as of this month, all our savings is gone and we're not sure how we'll pay our mortgage and utilities. We have enough from my levied pension to pay for food and some paltry things, but that's about it. Xxxx and I both have job interviews tomorrow. His interview is 200 miles from home so if he gets the job, he'll only be able to come home on weekends. My interview is in town and doesn't pay much, but something is certainly better than nothing. I'm keeping my fingers crossed.

The IRS said they will commence the seizure process on our home, cars and other property (whatever that includes) if we don't submit 1040s by Feb 26th. Xxxx and I are going to try to sue the IRS to make them SHOW CAUSE to make them prove the legal validity (NOT) of the liens and levies they have against us. We're using the TX, NJ, and FL cases to try to write our suit. Do you know anyone who has tried this?

Well, I need to get back to my research as we need to have that suit filed o/a Feb 26th to try to preclude any seizure. Take care and God bless!

That Irwin Schiff, what a hero. Today is his 80th birthday, by the way.

[webhick]

Nothing left in savings, heavily levied pensions, jobless, IRS wants return by Feb 26th. Their story sounds vaguely similar to something posted on the LH forum a short time ago.

[Gregg]

That Irwin Schiff, what a hero. Today is his 80th birthday, by the way.

Is he too old to be spanked? With a car axle maybe?

[AFTP]

Or should I just stop trying to make sense of it all?

The cool aid causes TPs to be irrational to say the least.
They believe strongly that they are right and the IRS is in violation of the Constitution.

This conjures thoughts of the Founding Fathers who risked all to fight for freedom and they think they should emulate their dedication and sacrifice.

Unfortunately their motivation is misplaced.

[gottago]

I know I am asking a possibly stupid question, but wouldn't it be easier for those people to just file the damned 1040s, swallow some pride and work with the IRS so maybe they can stay in their home and pay back the IRS on a monthly basis?

Or should I just stop trying to make sense of it all?

As one of "those people" who has done everything you suggested, I can tell you that after 1 1/2 years of trying to resolve my own situation that it is not that easy. While we are "currently not collectible" there is no sign the IRS is willing to "work with us" since we do not have the amount of money coming in as in previous years and can not come close to paying on a monthly basis what they "calculate" we "should" be able to. Turned down for a second mortgage due to the multiple NOFTLs in place. I have started working occasionally for a home care company but it is only "per diem" (when they call me) and a few hours per week sometimes. Better than nothing, I guess. Spouse works 50-60 hours per week but not making much. OIC (probably ) rejected, no more $$ to pay attorney to "refile" it, looking at possibility of bankruptcy. I think the tax resolution attorney firm "business" would be an excellent "scam" to research...

On a brighter note, I did get our 2007 taxes done and filed last week. We will get a $300 refund which will (I assume) be applied to our liability, which should cover about a week of the interest

I wonder if Irwin Schiff, even for a moment, ever stops to reflect on the sheer number of lives he fucked up while peddling his crap. I hope so.

[webhick]

I think the tax resolution attorney firm "business" would be an excellent "scam" to research...

Agreed. A client was telling me about a commercial he saw on TV. Roni Lynn Deutch. Client doesn't have tax problems, thankfully, but he thought Deutch was scammy. I looked her up. She appears to have violated some consumer protection laws in NY and had to shell out $200k in restitution. There's lots of stuff on the internet about her scamming people, so that put a smile on my face. Aside from the false advertising laws, there really should be something stopping these people from preying on desperate people.

I wonder if Irwin Schiff, even for a moment, ever stops to reflect on the sheer number of lives he fucked up while peddling his crap. I hope so.

Sadly, I don't think he does. Unless of course it's the twisted version where he's thinking about all the people he's "helped". It's times like this that I like to think there's a God and that he will eventually put people like Schiff on a bad acid trip and beat them with an albino skunk until they stink so bad and freak out so wildly that they become someone else's punishment in hell.

[.]

looking at possibility of bankruptcy

I'm not a lawyer, but, based on previous discussions by the lawyers here, it appears that one needs to be careful about the timing of any bankruptcy. I mention this only because some of your problems were from fairly recent tax years and were only recently assessed. I imagine the last thing you would want to do is go through BK and have the tax obligations survive it.

IIRC, 3 years beyond assessment is generally necessary for any particular federal tax obligation to be dischargeable. The new BK law may or may not have changed how taxes are treated, I haven't seen it discussed.

In any case, some of the lawyers here with experience in BK law will probably be happy to give you some general guidelines about timing and possible pitfalls.

[Demosthenes]

I wonder if Irwin Schiff, even for a moment, ever stops to reflect on the sheer number of lives he fucked up while peddling his crap. I hope so.

He doesn't. He's working on a new detax book in prison.

[Joey Smith]

Financial Darwinism

[ErsatzAnatchist]

The rules regarding discharging taxes in bankruptcy are complex and became more complex when the laws changed. Their are multiple time periods (3 years from date return was due, 2 years from date return was actually filed, at least 240 days from date of assessment) that must pass and these time periods can be tolled (do not run) during certain periods, like when an OIC is pending. To complicate matters, their are tax liens on your property. The rules also vary between chapter 7 and 13.

If you want to consult a bankruptcy lawyer, be sure you ask how much experience the lawyer has in dealing with tax problems in bankruptcy case. This is an area where an expert is needed. Your average consumer bankruptcy attorney may not be up to dealing with this issue.

As a practical matter, if you are in currently uncollectable status, why not let the 10 year statute of limitations run on the debt? I know this problem is causing you stress, but maybe just waiting it out may be a good idea.

[Prof]

The rules regarding discharging taxes in bankruptcy are complex and became more complex when the laws changed. Their are multiple time periods (3 years from date return was due, 2 years from date return was actually filed, at least 240 days from date of assessment) that must pass and these time periods can be tolled (do not run) during certain periods, like when an OIC is pending. To complicate matters, their are tax liens on your property. The rules also vary between chapter 7 and 13.

If you want to consult a bankruptcy lawyer, be sure you ask how much experience the lawyer has in dealing with tax problems in bankruptcy case. This is an area where an expert is needed. Your average consumer bankruptcy attorney may not be up to dealing with this issue.

As a practical matter, if you are in currently uncollectable status, why not let the 10 year statute of limitations run on the debt? I know this problem is causing you stress, but maybe just waiting it out may be a good idea.

To rephrase or elaborate, without intending to give advice about any particular problem or situtation:

1. A tax lien is not affected by a bankruptcy; so, even if the tax itself is discharged as a personal obligation, the lien still attaches to and is effective against the debtor/taxpayer's property. In other words, the lien becomes a non-recourse or in rem obligation.

2. The basic rule is that taxes are dischargeable if the return was due (with any extensions) more than three years prior to the date of the petition. Tolling periods, etc., extend the three year period and these extensions can be complex.

3. If late returns are filed, the late return must be on file at least 2 years before the tax is dischargeable.

4. The revisions to the statute eleminated the "super discharge" in chapter 13 and made late filed returns in chapter 13 subject to the same rules as in chapter 7 (i.e., in chapter 13, before the amendments, late filed returns were not treated as priority claims in chapter 7 but were non-dischargeable in chapter 7 if less than 2 years old; since only priority taxes were "not dischargeable" in chapter 13, late filed return obligations were "dischargeable" in chapter 13 -- and I am not using discharge in the literal sense; a chapter 13 cannot be confirmed unless all priority claims are paid in full, which is a more technical explanation).

5. Debtors are not not eligible to file unless all tax returns are current/made current within a short period. LooserHeads have a problem.

6. As to the discharge of penalties, treatment of interest accruals in and out of bankruptcy, treatment of "sec. 941" taxes (failure to render taxes withheld from employees), negotiations with the local US Atty's office or the IRS, it is absolutely essential that the debtor hire a bankruptcy lawyer who knows what she is doing. I do NO TAX WORK because my partner, who is an accountant by training and was with the tax function at the old Arthur Young firm, really knows what he is doing.

I know this is a merely an elaboration on the prior posting, which was very helpful, but I hope it adds a little to the discussion.

[Dezcad]

If you want to consult a bankruptcy lawyer, be sure you ask how much experience the lawyer has in dealing with tax problems in bankruptcy case. This is an area where an expert is needed. Your average consumer bankruptcy attorney may not be up to dealing with this issue.

I wholeheartedly agree with this statement. Also, make sure to look at 11 USC 523 (a)(1)(C) which prohibits the discharge of taxes:

with respect to which the debtor made a fraudulent return or willfully attempted in any manner to evade or defeat such tax;

If you do file Chapter 7 bankruptcy, I would suggest that as the debtor you file an adversary proceeding against the USA to get a judicial determination for the dischargeability of the tax debt. Otherwise, you may still fight out the factual issues underlying the tax debt with the IRS after the bankruptcy. But then again, as mention in EA's post, a competent bankruptcy attorney who has dealt with tax issues is invaluable.

[Imalawman]

As a practical matter, if you are in currently uncollectable status, why not let the 10 year statute of limitations run on the debt? I know this problem is causing you stress, but maybe just waiting it out may be a good idea.

Well, IIRC, the ten year limitation is only if the IRS allows the lien to expire without refiling it. As a practical matter it probably isn't re-filed very often, but that's a long time to go without the IRC coming by occasionally to make sure you don't have anything they can take. I can't imagine this would be a viable option.

[gottago]

As a practical matter, if you are in currently uncollectable status, why not let the 10 year statute of limitations run on the debt? I know this problem is causing you stress, but maybe just waiting it out may be a good idea.

Well, IIRC, the ten year limitation is only if the IRS allows the lien to expire without refiling it. As a practical matter it probably isn't re-filed very often, but that's a long time to go without the IRC coming by occasionally to make sure you don't have anything they can take. I can't imagine this would be a viable option.

This is what worries me the most--I guess at some point if our money situation does not change they may decide to take my house (it is owned by me only) if we can not come up with some funds to pay them. In 10 years we will be in our 60's...

Really, before I would do the bankruptcy I will attempt another OIC in the future once the refiled returns for 02 and 03 have been processed (waiting since June) but will not make the mistake of hiring another dipstick attorney firm. I don't know if seeking advice from an enrolled agent would be any better or just doing it on my own. I just think in this situation it is hard to think very far ahead.

[gottago]

At any point did you and/or your husband ever think, "gee, this sounds too good to be true?" From the sound of it, the folks in the original posting are starting to ask that question and are asking it fairly early on. I cannot remember the chronology of events from your earlier postings, but as I recall, you figured out something was terribly amiss when the IRS talked of putting their brand on your flanks. As I recall, your hole was not as big as Tommygun's and his hole kept him from working the field in which he was trained.

I though Tommygun was still able to work as a chiro after he was convicted (or whatever the proper term is). That is one advantage to being self employed--you still have the ability to make the kind of money needed to pay them. I do not know all the particulars of his situation.
If I still had a job I would be willing to pay as much as possible just to end this. Four or so hard years would be much preferable to the *uncertainty* I live with now.

I told my husband for YEARS that he needed to pull his head out and do whatever it took to fix this. He was quite stubborn--I think the experience of going (and especially to see me going) to jail in 2005 finally woke him up. However, regrets do not solve the problem and as of this moment a solution is not clear. He sincerely wishes he had never met Schiffty and never gotten us involved in this.

[.]

He was quite stubborn--I think the experience of going (and especially to see me going) to jail in 2005 finally woke him up. However, regrets do not solve the problem and as of this moment a solution is not clear. He sincerely wishes he had never met Schiffty and never gotten us involved in this.

Steve Swan, another 'follower' who acted on the BS was convicted and went to prison. He also sued Schiffty.

After being sued, Schiffty said this about Swan:

His lawsuit is nonsense. Steve's been a crybaby and a mooch his whole life. I've been filing zero-income tax returns for 13 years, and no one's come for me. So no, I don't feel sorry for him. He made his bed, now let him sleep in it.

Nice touch, eh? He's right there for his marks.

Of course, they not only came for him, they got him. For the third time.

You might want to write Schiffty a nice little note telling him how you feel about what he promulgated and peddled to the unsuspecting public to enrich himself.

You can get the a$$hole's FCI address from the BOP site. I doubt he gets much mail, he's sure to read it.