How Lindsey Springer became a tax protester

[Famspear]

I have been having a few brief online chats with someone who is a supporter of Lindsey Springer at another web site. I wrote this the other day (using my “Larry Williams” pseudonym):

……I note that a "Lindsey Kent Springer," has a prior record with the Federal Bureau of Prisons. The Bureau shows a "Lindsey Kent Springer" (# 02580-063), white male, released on March 13, 1989.

The register number 02580-063 matches the register number for the Lindsey Kent Springer currently in custody, so I assume we're talking about the same person.

Do you have any information on why he was in the federal prison system back in the late 1980s? I know he was incarcerated for contempt of court, but that years later -- around 1998…..

The Lindsey Springer supporter responded with this information, which might explain how Lindsey Springer became a tax protester:

As far as I can tell, this is an incident that occurred many years ago when Lindsey was part owner of an auto repair shop.

Anyone who's ever been around used automobiles knows that odometers are sometimes rolled back (or simply don't register the correct mileage) and VIN numbers are sometimes missing.

That's what happened here.

Lindsey "accepted" an automobile at auction that was later found to have the VIN removed and odometer rolled back (not sure whether it was North Carolina or Oklahoma) and was in custody for a short period of time.

It was also this association that started his battle with the IRS. The auto repair shop went bankrupt, and Lindsey was stuck with a bill for unpaid withholding, as a corporate owner.

As a young man (with a mother in accounting), he didn't understand, and to make matters worse, the IRS kept sending notices to the wrong address, and he was denied due process.

Later, every time he opened a bank account or tried to have something, the IRS seized it. Regina Carlson gave testimony at trial that one time they took everything but the baby clothes.

She was expecting a second child at the time.

So, this mysterious release [from the Federal Bureau of Prisons in 1989] has to do with the missing VIN and odometer tampering, and it [the violation] could include transport between States.

Judge Friot [at Springer’s recent federal criminal tax case] refused evidence of it at trial and mentioned it at the sentencing hearing, saying, "The prior conviction has no bearing on the sentence here."

... paraphrase, of course

Knowing the man [Lindsey Springer] personally, I can say that part of the problem was the aggressive nature of IRS collections, during the early years, and what I consider a failure of the Courts to address the issues that concern him most.

The Tenth Circuit stated August 31, 2009, that they had not addressed the merits of his PRA claims, and that's really all he's ever asked.

I understand there are differences of opinion, but he is not the "beast" portrayed by the government and their apologists. Neither is he the "lawless" person Judge Friot indicated.

I have seen the documents the IRS sent to the "correct" address one month, and less than 30 days later, sent a notice of lien to the "wrong" address (denying due process), and not 30 days later, sent a notice to the "correct" address. That's whipsaw!

And, regardless how you feel about his PRA claims, he's not been treated well by the government. He was not, and is not, a predator, as claimed by Judge Friot.

I personally know of hundreds of People Lindsey helped straighten out their lives with the IRS.

He ought not to be treated as an ogre.

I know that's far more than you asked, "Larry," and I suspect it will not change your opinion. I am content to let the appeal decide.

I responded:

Thanks. Whether I agree or disagree, I respect your opinion on this.

This individual is well aware that I do disagree with much of what he/she has written, but for some reason I sense that refraining from being too argumentative is what I should do here right now.

[Famspear]

Lindsey Springer's supporter wrote:

It was also this association [part ownership of the auto repair shop business] that started his battle with the IRS. The auto repair shop went bankrupt, and Lindsey was stuck with a bill for unpaid withholding, as a corporate owner.

As a young man (with a mother in accounting), he didn't understand, and to make matters worse, the IRS kept sending notices to the wrong address, and he was denied due process.

Later, every time he opened a bank account or tried to have something, the IRS seized it. Regina Carlson gave testimony at trial that one time they took everything but the baby clothes.

That rings true.

From Daniel B. Evans:

My own observations of tax protesters lead me to believe that the actions of tax protesters are driven by emotional or psychological needs that are more complicated than simple greed, and that the “arguments” they present to the IRS and the courts are really nothing but elaborate rationalizations (or delusions) that they have constructed in order to avoid a reality that they are unable to accept [ . . . . ] An unhappy encounter with the government [ . . . ] can lead to a belief that the government is broken, corrupt, or otherwise dysfunctional, which can then lead to a fixation on the federal tax system as symbolic of that dysfunction. In the case of almost every persistent tax protester, there is some personal, financial, or legal trauma or crisis that precedes the tax protester’s obsession with the tax system.

--from Daniel B. Evans, The Tax Protester FAQ

http://evans-legal.com/dan/tpfaq.html#why

[Demosthenes]

He stole his employees' withholding but thinks that the gov is the bad guy.

It rings true.

[Famspear]

He stole his employees' withholding but thinks that the gov is the bad guy.

It rings true.

Yes, my sense is that Mr. Springer has had a very difficult time accepting personal responsibility for his own actions. Maybe some of the IRS notices did go to the "wrong" address, and certainly the Average Joe American could be completely baffled by the intricacies of the law governing the way the IRS conducts its collection activities. But most Average Joes do not respond by going on what appears to have been a long-term project -- covering perhaps parts of two decades -- to "get rid of the IRS" or however it is that Springer has described his crusade.

Further, if you want to "get rid of the IRS," there are legitimate political avenues in which to channel your efforts. Springer obviously went far beyond any rational limit of legitimacy.

My sense from watching Springer's videos and reading the record in his court cases is that we have here another individual who simply refuses to accept court rulings -- who refuses, I think, to even accept that the courts have indeed ruled against his specious arguments (such as the OMB control number/PRA argument).

[The Observer]

As a young man (with a mother in accounting), he didn't understand, and to make matters worse, the IRS kept sending notices to the wrong address, and he was denied due process.

I have to wonder if Lindsey had any idea how to apply for due process properly and how to contest a trust fund recovery penalty properly? For one thing, if he was not properly noticed about the proposed assessment, he could have appealed that issue and secured an abatement of the penalty; he still would have had to contend with the underlying issues of the assessment if the IRS proceeded to re-assess the penalty and if the assessment statute had not expired.

On the other hand, it may not have mattered at all if Springer was diving into the koolade vat before actually trying to reason with the IRS.

[Demosthenes]

The Tenth Circuit stated August 31, 2009, that they had not addressed the merits of his PRA claims, and that's really all he's ever asked.

Except he was a tax denier before the PRA scam emerged.

[Gregg]

And the missing VIN number matter is also kind of a big deal. I am a city boy, with a minimal knowledge of cars, but even I know where the VIN plate is and that a missing VIN plate raises all sorts of red flags.

If Springer was a used car dealer, then he should have definitely known where the VIN plate is located and if it was missing, never, ever purchase that vehicle.

I would bet real money that he ran a shifty, shady enterprise, got popped on the VIN plate violations and then resorted to being a tax cheat to keep his less than reputable business afloat.

I could also be wrong.

I have spent most of my life in the car business, third generation Ford and all, and know quite a few new and used dealers, which require a license in most states, in fact, in a lot of states, you have to have a license to be a salesman at a car lot, new or used. As to VIN plates and Odometer Affidavits....
It's more than a big deal, if he was a car dealer and didn't know better, it's akin to a lawyer not knowing it's a boo boo to tell the prosecutor what your client told you in confidence. Adding in the Odometer funny business is like passing notes of what you told to the prosecutor to the members of the jury, and adding in open court that you think your client is guilty, too. And no legitimate auction will touch a car with any question of a VIN plate missing, nor will they deal a car with a questionable mileage affidavit. It's all computerized now and CarFax makes it almost impossible to cheat on cars less than 10-15 years old anyhow. These are things any non legit car dealer knows about and any legit dealer would have nothing to do with. I don't know the details, but I suspect the story has a lot of spin on it and if the details came out it would be ugly. Most of the horror stories you hear about used car dealers have some basis in fact somewhere. (brake fluid in a burned up automatic transmission will give it 200 miles more, I happen to know for a fact)

[Thule]

Lindsey "accepted" an automobile at auction that was later found to have the VIN removed and odometer rolled back (not sure whether it was North Carolina or Oklahoma) and was in custody for a short period of time.

Any idea why he claims Lindsey "accepted" this car. I get this image of a midnight auction at an undisclosed location, and big bruisers with tire irons explaining to Lindsey that this is literally the car of his life:)

His story just fails to fly.

[Famspear]

Getting back to the point made by Springer's friend about Springer not being treated well by the government, let me tell you about something I was dealing with just this week.

I have a tax practice, as a certified public accountant, and I have a client who is a bankruptcy trustee. He received about a dozen notices from the Internal Revenue Service this week, asserting that a particular company (for which he serves as trustee) supposedly owes over $200,000 in payroll taxes for tax periods during which the company wasn't even operating (had no payroll and of course no payroll tax liability).

Why did this happen?

What the IRS sometimes does -- when a company stops operating -- is to ASSUME that the company is still operating, then "make up" some tax liabilities on behalf of the company, based on estimates of payroll during the time in which the company WAS operating. The IRS assumes that if the company never checked the box on the last payroll tax return (Form 941) for "final" return or "final" wages paid, that the company must still be operating. (And sometimes the IRS doesn't even notice that the last return actually DID have the "final" box checked.) The IRS then sends bogus bills to the company, and the company (in this case, the bankruptcy trustee for the company) has to go through the hassle of letter-writing, etc., to explain to the IRS that the tax notices are erroneous. Sometimes, the company has to correct the record by filing tax returns for the periods in question, to show zero payroll and zero payroll tax, so that the IRS will finally agree to correct the record.

Now, I would agree that this is heavy-handed, egregious conduct on the part of the IRS. But I don't think that there is someone, an actual person, at the IRS who is sitting down and saying "Hey, let's screw somebody today; let's send out some fake tax notices."

I can certainly understand how people get frustrated with dealing with the Internal Revenue Service. But as a tax practitioner, I have to deal with this kind of thing much more often than the average business owner or individual, because dealing with the IRS is essentially a big part of my work day.

There are some bad practices that are part of the "system" at the IRS, but it doesn't mean that some specific government worker is acting with malice when these things happen.

The problem is that Joe Average Taxpayer often does not understand this. Joe Average is understandably upset when he receives obviously incorrect tax notices and the IRS has not made even a minimal effort to determine whether the notices are correct before sending them. I think there is this sense among some people that the IRS, as a government agency, can get away with practices like this one -- mailing tax bills on flimsy or non-existent evidence -- whereas an honest taxpayer wouldn't dare be doing such a thing.

EDIT: PS, as a practitioner, I have dealt with this kind of thing for years. Dealing with these kinds of notices is an aggravation and a waste of time, for which the practitioner sometimes cannot get paid.

[The Observer]

What the IRS sometimes does -- when a company stops operating -- is to ASSUME that the company is still operating, then "make up" some tax liabilities on behalf of the company, based on estimates of payroll during the time in which the company WAS operating. The IRS assumes that if the company never checked the box on the last payroll tax return (Form 941) for "final" return or "final" wages paid, that the company must still be operating. (And sometimes the IRS doesn't even notice that the last return actually DID have the "final" box checked.) The IRS then sends bogus bills to the company, and the company (in this case, the bankruptcy trustee for the company) has to go through the hassle of letter-writing, etc., to explain to the IRS that the tax notices are erroneous. Sometimes, the company has to correct the record by filing tax returns for the periods in question, to show zero payroll and zero payroll tax, so that the IRS will finally agree to correct the record.

And what should the IRS do with a company who has a record of having requirements to file returns for employment/unemployment returns and stops filing. Assume that they no longer have to file returns? You can easily see how thousands of employers could delay paying taxes exploiting that assumption.

You might suggest that the IRS should contact the company and inquire about their filing status. But what if the IRS never gets a response? Are they to assume at that point the business probably doesn't have to file returns? Or has gone out of business? Or does the IRS just wash their hands and write another taxpayer off to the underground economy?

There are a number of times the IRS finds out that bankruptcy trustees are unaware that a petitioner has failed to file returns for one reason or another. Sometimes the petitioner lies to the trustee. And there are a number of times when the petitioner has used bankruptcy to delay the inevitable. I don't know what happened in your client's particular case, but if he didn't get verification from the business about their filing status and the taxpayer is not responding to the IRS notices being sent about whether a return is due, then to blame the IRS for trying to ensure that payroll taxes are being paid is not accurate. And whether it is a hassle for the trustee or not, it is still part of his duties in ensuring that the petitioner is going to come out of bankruptcy with clean hands.

After all, the law does allow for the IRS to file and assess taxes under IRC 6020(b) and the taxpayer gets a 60 day notification to contest the filing before it gets assessed. Why didn't the business (or trustee) respond to that? It is the final step of due process. Ignoring it was just another way of telling the IRS to go ahead and make their day.

[Famspear]

And what should the IRS do with a company who has a record of having requirements to file returns for employment/unemployment returns and stops filing. Assume that they no longer have to file returns? You can easily see how thousands of employers could delay paying taxes exploiting that assumption.

You might suggest that the IRS should contact the company and inquire about their filing status. But what if the IRS never gets a response? Are they to assume at that point the business probably doesn't have to file returns? Or has gone out of business? Or does the IRS just wash their hands and write another taxpayer off to the underground economy?

The IRS should make at least a minimal effort. I simply don't see that happening in some cases. I have worked hundreds of these cases. If the IRS sends a letter and does not get a response, that would be one thing. But my experience has shown that the very first letter the trustee receives is a bogus assertion of tax liabilities, sometimes in cases where the IRS has received notice of the bankruptcy. Where the IRS has notice of the bankruptcy, all IRS letters should be going to the trustee, not to the prior address of the debtor -- and systemically somebody somewhere at the IRS knows that very well.

Where the IRS has no notice -- and this would be the case in Chapter 7 where the IRS was not listed as a creditor, I can see more of a problem.

In Chapter 11, the rule used to be that the IRS had to be notified of every single case. I don't know whether that's still the rule, or if it is the rule whether it's being followed consistently.

There are a number of times the IRS finds out that bankruptcy trustees are unaware that a petitioner has failed to file returns for one reason or another. Sometimes the petitioner lies to the trustee. And there are a number of times when the petitioner has used bankruptcy to delay the inevitable. I don't know what happened in your client's particular case, but if he didn't get verification from the business about their filing status and the taxpayer is not responding to the IRS notices being sent about whether a return is due, then to blame the IRS for trying to ensure that payroll taxes are being paid is not accurate.

Again, if the IRS is aware of the bankruptcy, then the trustee should be receiving all the notices. That is simply does not seem to be happening on a consistent basis, at least in my experience.

And whether it is a hassle for the trustee or not, it is still part of his duties in ensuring that the petitioner is going to come out of bankruptcy with clean hands.

I'm going to have to respectfully disagree -- in part. In a Chapter 11 where a trustee has been appointed, the assumption is that the debtor will eventually emerge and continue.

But in chapter 7 cases, the debtor entity (corporation or partnership cases are what I am talking about) is being liquidated. In most Chapter 7 cases, there are no operations and no payroll, and the corporate or partnership shell will simply go out of existence after the case is closed. No competent business man is going to continue to use a corporate or partnership shell after a chapter 7 case has been closed. When the trustee pays wage claims at the close of a case, we insure that the trustee files the 941, the 940, the W-2s and any state unemployment tax returns that apply.

After all, the law does allow for the IRS to file and assess taxes under IRC 6020(b) and the taxpayer gets a 60 day notification to contest the filing before it gets assessed. Why didn't the business (or trustee) respond to that? It is the final step of due process. Ignoring it was just another way of telling the IRS to go ahead and make their day.

Obviously, your experience and mine are different. I have worked hundreds of these cases, and my sense is that the IRS is NOT issuing notifications in at least some cases prior to assessing taxes.

By the way, the IRS has never had a comprehensive system for dealing with the intricacies of bankruptcy taxation.

Example: For cases commenced prior to October 22, 1994, the IRS used to take the position (I can't remember if it was a national position or not) that the automatic stay did not apply to assessment of taxes incurred during administration of the case, citing the point that 11 USC 362(a)(6) applied only to pre-petition claims.

Wrong argument.

For taxes incurred during case administration, the relevant provision is 362(a)(4), which applies to any act to create, perfect, or enforce any lien against property of the estate (with no limitation as to whether the tax in question is pre-petition or post-petition). The assessment of a federal tax under IRC 6321 is, fundamentally, an attempt to create a lien. True, the lien does not arise until after the taxpayer has failed to pay in response to the post-assessment notice and demand, but the creation of the lien relates back to the time of the assessment.

In 1994, the law was changed to allow the tax collector (whether IRS or other authority) to assess the tax without having to ask for and obtain relief from the stay, but the assessment under the changed law does not create the IRC 6321 tax lien with respect to property that remains part of the estate. See 11 USC 362(b)(9)(D), effective for cases commenced on or after October 22, 1994. In other words, if the trustee files a return showing a tax incurred during case administration, the IRS can assess without violating the stay, but no tax lien arises with respect to property of the estate. Instead, the tax is afforded administrative status under 11 USC 503: priority unsecured.

In other words, all those assessments of federal administrative expense taxes (such as taxes incurred by corporate bankruptcy estates during case administration) in cases commenced prior to October 22, 1994 were technical violations of the automatic stay -- and I don't think very many IRS employees were aware of that.

I have been dealing with the IRS on bankruptcy issues for a long, long time. I got off the main subject, but my point is that some of what I have heard the IRS is supposedly doing procedurally does not conform to the reality I have seen over the years. Bankruptcy in particular is an area where the Service in my view has long needed some direction, which perhaps could come with help from the Chief Counsel's office.

EDIT: I believe under Rule 2002(j) of the Federal Rules of Bankruptcy Procedure, the IRS is supposed to be notified of each Chapter 11 case. Of course, in Chapter 11, the assumption that the debtor continues to operate and incur payroll tax liabilities is a reasonable one. And in most Chapter 11 cases, no trustee is appointed.

There is no blanket rule that the IRS be notified of Chapter 7 cases (99.9% of which are straight liquidations) -- where a trustee is always appointed, and where the blanket assumption that the debtor continues to operate and incur payroll tax liabilities would be patently unreasonable.

Thus, I grant that the IRS has a difficult job here.

[notorial dissent]

While I am generally prone to giving people the benefit of the doubt, I have yet to see anything in Lindsey Springer’s long and checkered career to indicate any level of honesty or forthrightness. What I do see is a long history of lies and deceit, and downright out and out, on going fraud. So, I am disinclined to believe the version of how he got the way he is being presented. I’m equally certain that he has all sorts of excuses and explanations, but when it finally comes down to it, he is basically dishonest through and through, that is why and how he got where he is today. To date I have yet to see anything resembling an honest statement come from the man, so I do see where this deserves any more credence than anything else he has put forward. As to whether he actually believes some of the nonsense he spouts, I have no idea, but appearances are that he is a con man who found a patter that works for him and he will stick to it until he finds something better.

[Famspear]

Per a review of a document filed in Springer's appeal to the United States Court of Appeals for the Tenth Circuit, I have confirmed that Springer does have a prior federal conviction for odometer fraud. I have updated Dan's dossier on Springer accordingly. The intro now reads:

According to the court record in his most recent federal criminal tax case (page 39 of Volume III of the court transcript of the Sentencing Proceedings on April 23, 2010, in United States v. Springer, case no. CR-09-043-SPF, U.S. District Court for the Northern District of Oklahoma), Lindsey Kent Springer has a prior federal conviction for odometer fraud. According to the Federal Bureau of Prisons, U.S. Department of Justice, Springer was released from federal custody on March 13, 1989 (Federal Bureau of Prisons, register # 02580-063).

http://tpgurus.wikidot.com/lindsey-springer

The transcript is from the trial court, but the copy I downloaded is an attachment to a document filed at the Court of Appeals.

The current version of the federal odometer fraud statute is codified at 49 U.S.C. chapter 327 (sections 32701 through 32711 of title 49 of the United States Code). These provisions used to be found in title 15 of the U.S. Code. I have no detail on specifically which section or sections Springer was convicted under.