Disaffirmative Action

 

I have a little time today, and need a break.  So, what to blog about?

 

The guilty plea of William Rapfogel, former CEO of the Metropolitan Council on Jewish Poverty, to stealing about $5 million from widows and orphans?  A religious Jewish boy misbehaving.  Notwithstanding my contentious issues many years ago with the Met Council, back during my college days, I'll pass on this one (for now at least), other than to thank Willie and his co-codefendants for giving me some belated vindication.

 

New York City Comptroller Scott Stringer's latest Report on "The Growing Gap:  New York City’s Housing Affordability Challenge," which whines about how the cost of rental housing is rising faster than income?  Hey, Scotty, for many years, you and your liberal ilk before you took pains to make sure that New York City provided top dollar welfare payouts, and you continue to give all kinds of entitlements and lagniappes to illegal aliens, criminals, those who refuse to hold down jobs, and everyone else.  So the resulting population increase (notwithstanding the city's abortion rate) increases the demand for housing relative to the supply, thereby driving up the cost relative to income.  This is Econ 101, nothing to blog about.

 

The Treasury Inspector General for Tax Administration's latest report that the IRS has given monetary rewards to employees who have disciplinary problems and tax filing issues?  Hey, when I was with the IRS I had neither disciplinary issues nor tax filing issues.  Howcum I didn't get anything in addition to my salary?  This story already has legs; I have nothing to add other than to state the obvious:  The policy of administering cookies for bad behavior and electric shocks for good behavior goes a long way towards explaining the IRS's dysfunctionality.

 

So what to blog about?  I'll blog about Kareem Potomont.  He's the gangster thug who fired a weapon at one of his rivals, but in the process, one of the fired bullets struck and seriously injured Gama Droiville, a 13-year-old innocent bystander.   I note the quote from Potomont's lawyer, Audrey Thomas, who said that Potomont "said was forced to leave high school in the eleventh grade due to gang pressure."

 

THAT is the problem.  Those social groups commonly associated with success in America have long pressured their youth to STAY in school.  Back during my adolescence years, I had certain behavioral issues in school.  One evening, my father came to me to express his displeasure at one particular incident, noting that he had heard about it from a neighbor.  I said something to the effect of "Why is it any of her business how I behave in school?"

 

An uncle of mine, who ended up doing much to prod me onward towards the straight path of success, chimed in, "When you disrupt the educational process, then it is everybody's business!"  I wouldn't say that my behavior immediately reformed over night, but Uncle's words did stick with me, have remained to this day, and did positively influence me.

 

Gangs pressuring people to drop out of high school?  That is the antithesis of affirmative action!  It is DISAFFIRMATIVE ACTION!

 

More Profitable than it Appears

Yesterday's Tax Court opinion in the case of Potter v. Commissioner, T.C. Memo  2014-18, is rather instructive:

"In December 2006 IRS special agents engaged in an undercover investigation of Potter's Pub, posing as buyers interested in acquiring the business. Petitioner assured the agents that Potter's Pub was much more profitable than it appeared. He explained that he deposited in the corporate account only enough of the business revenues to cover its expenses and that he wired the balance of its revenues to his personal bank account in Florida. These wire transfers were structured in amounts less than $10,000 to avoid reporting obligations by the bank to the IRS.  In reality, petitioner told the agents, Potter's Pub grossed more than $1 million annually and he took home between $ 400,000 and $520,000 each year. Petitioner showed the agents clandestine sales ledgers for 2003 and 2004 that supported the gross receipts he claimed, acknowledging that it might have been unwise to maintain documentary evidence of his skimming."

Understand that this is the civil side of John M. Potter's tax problems with the IRS; he already had been sentenced to 18 months for tax fraud in a plea bargain to avoid trial.

First of all, he violated the law.  And he got caught.

Secondly, he lived a high lifestyle with two vacation homes, all while reporting minimal income.  Had he only skimmed five or ten thousand a month and reported all of the remaining income, then his lifestyle would likely not have raised any particular suspicion.

Thirdly, he left an electronic trail with the wiring of funds.  If he were dealing solely in cash and kept it all in cash in his cookie jar or under his mattress, it would have been somewhat more difficult to trace.

And, of course, his big downfall was falling for the IRS special agents' ruse as prospective purchasers of the business.

Pigs get fat, but hogs get slaughtered.

Real Threats! (Or Not?)

So now the media is reporting that Lois Lerner and Steve Miller, key figures in this Internal Revenue Service controversy, have supposedly been the subjects of death threats.  My gut hunch, without the benefit of any further information, is that those aforenamed individuals did in fact receive some sort of verbal threats.  And if indeed such threats were made, then the perpetuators of those threats should be sent to the slammer.

This does not in any way constitute any manner of support or sympathy for Ms. Lerner or Mr. Miller.  It is very likely that they each knew more than they have thus far admitted, and that they still are sitting on some even more info regarding even more egregious details of the IRS's questionable deeds and omissions.  If they have committed crimes, then they certainly should be properly punished.

Nor can be ignored the value in alleging threats for the purpose of discrediting the alleged threatener.  It would play well into the agenda of certain political interests if certain people, Tea Partiers and otherwise, were made to look like irrational madmen/women.  Accordingly, one cannot totally dismiss the possibility that the alleged threats were (A) exaggerations of utterances (e.g., some passerby on the street, recognizing Lois or Steve, shouted "Go to Hell" to them); or (B) perhaps fabricated entirely.

Meanwhile, law and order need to prevail (if there still are such things in Washington any more), and the alleged threats need to be investigated and, if founded, decisively acted upon.

During my own time with the IRS, I was, to the best of my knowledge, never the target of any threats of violence.  The closest thing to any threat of violence I ever had was when I went on a field audit involving a certain organized crime figure, and some man, in all likelihood a Mob bodyguard, greeted me, escorted me to the office where I would conduct the audit, and told me to let him know if anyone made any threats to me.

I shortly thereafter learned that my experience in that regard was not unique.  Seems that the Mob likes to keep its disputes with the IRS off the public radar screens, and, with the ambiguities of the financial transactions and the ability to magically make money appear when needed, is usually well postured to settle its IRS cases early and quietly.  This is possible only if there are no criminal tax charges pending.  And threatening the tax man or tax woman is one sure way to turn a civil tax dispute into a criminal tax prosecution.

By ensuring the physical safety of the IRS guy/gal, and getting an early agreement in the case, the Mob's affairs stay out of the public eye, the IRS guy/gal chalks up a closed case for their statistics, and (at least in my day) everyone involved can rest assured that the particulars of the matter will be the topic of no further discussion.

And of course, when I left the IRS for private practice, I made sure to send out announcement cards to all of the lawyers, accountants and enrolled agents with whom I had cases.  I would later get a few referrals from them.

The Holocaust as an Excuse

What was Jack Barouh's rationale for tax-cheating? He blamed it on the Holocaust!

Barouh's parents fled the Nazis, and that experience, Jack claims, led him to hide his assets in a UBS Bank Account in Switzerland in case the Nazi regime returns.

Jack got some jail time instead of the home detention his attorney had requested.

I shall not now get into the psychological issues regarding Holocaust survivors, other than to say that they can be very, very difficult people to deal with. Ditto for their children. But there are plenty of survivors and children of survivors who are far, far more grateful to the United States, where they found life and freedom, than Jack Barouh. The one who comes to mind is a woman I once had the challenge of supervising, an Auschwitz survivor who could easily have gone out on a mental disability, but who insisted, from sheer gratitude, upon remaining employed by the U.S. Government. And I knew another woman, whose family got out of Beograd just 3 weeks before Hitler's army marched in and started killing the Jews and others, who had the brains, beauty and personality to work anywhere she wished, but who, out of similar gratitude, remained employed by various agencies of the U.S. Government (including the IRS).

I personally know plenty of other Holocaust survivors and children of Holocaust survivors who are/were employed by the Internal Revenue Service. They certainly are not buying Jack's explanation. Nor, for that matter, am I.

Taxman or Taxwoman, Part 2

This Blog's posting of 24 January 2006 commented on the Internal Revenue Service Office of Chief Counsel's Memorandum Number 200603025, which in turn opined on the deductibility as a medical expense of a taxpayer's gender reassignment surgery costs. Few of us tax cognoscenti doubted that the matter would eventually be brought to court by the taxpayer involved, and though Chief Counsel Memoranda and similar taxpayer-specific IRS pronouncement are always sanitized of taxpayer identification information, the taxpayer's identity was one very ill-kept secret amongst the tax practitioners and pundits.

Yesterday, the U.S. Tax Court released its opinion in the case captioned O’Donnabhain v. Commissioner. To synopsize this very lengthy opinion:

The taxpayer, born of the male gender and named Robert Donovan, decided to become a woman and, to that end, changed his name to Rhiannon G. O’Donnabhain and underwent so-called gender reassignment surgery. Donovan/O’Donnabhain claimed, as a medical expense deduction on his/her tax return, the not inconsequential health care bills associated with the latter. The IRS disallowed the deduction, Donovan/O’Donnabhain disputed the IRS's decision in the Tax Court, and the Tax Court ruled that the medical expenses for the "gender reassignment surgery" were deductible, but that the doctor bills and associated expenses for the breast augmentation were elective cosmetic surgery and thus not deductible.


My take on it:

The Court's ruling was correct and appropriate.

I personally believe that this so-called "gender identity disorder" diagnosis is, at best, a misguided politically-correct classification concocted by the medical profession.

And, it follows, that I am not too keen on having the taxpayers subsidize this so-called gender reassignment surgery (which is mutilation, plain and simple).

The failing in this case was with the medical profession, which went into the tank for certain sinister forces by treating a mental disorder as a physical one. This, in my view, is analogous to treating appendicitis not by removing the inflamed appendix, but by excision of the intestines which are inflaming the appendix. The American Medical Association's perversion of its craft sets dangerous precedent.


But the IRS should not be engaging in medical practice or medical diagnosis or the dispensation of medical advice. This means that the IRS should not issue blanket prohibitions as to what is or is not medically necessary for any given patient. This, I believe, is a far greater evil than this "gender identity disorder" hoax, which must be laid at the feet of the medical profession.

[The pro-homosexual lobby has already begun to claim this tax case as a victory for their abominable agenda. Take my word for it, or google it; I do not now wish to glorify their nefarious agenda by linking to any of their many postings on the case.].

As for Robert Donovan / Rhiannon O’Donnabhain, it is noted that he/she (a) seems to have been prompt and candid with discharging his/her tax return reporting and filing duties; (b) seems to be a reasonably well-functioning employee in the workplace, and seems to have been so even as he/she was transitioning from male self-identity to female self-identity; and (c) seems to have left no basis for any hint or suggestion that his/her past service in the U.S. Coast Guard was anything other than honorable. In the final analysis, Donovan/O’Donnabhain is more by far a victim than a wrongdoer.

Publisher's Pitfalls, Part 2

As alluded to in the 26 July 2009 posting, my personal access to the publication Yated Ne'eman is not firsthand, and, because the publication does not have a website as such, there is almost always a time delay between the time the paper hits the streets and the time I get to read it. I now have the 31 July 2009 edition physically in my hand.

The aforementioned 26 July posting speculated as to how Yated Ne'eman would handle the story of the big bust in New Jersey, which stung certain rabbis, and expressed a confidence that Yated would handle the story quite well in light of the various attending issues, probable repercussions, and operative dynamics.

How did Yated Ne'eman handle the story in the 31 July edition? With pieces that essentially said that not enough information is known, and therefore, we should not jump to conclusions. This might seem, at first blush, to be a cop-out, but one of the articles details some recent events, including but not limited to President Barack Hussein Obama's recent loose cannon uninformed comments regarding a certain arrest in Massachusetts, events where people jumped to conclusions without having sufficient information.

All in all, I would say that my confidence in Yated Ne'eman's handling of the Big Newark Bust story was not misplaced.

But, out on the other Coast in Los Angeles, there was an actual guilty plea by the Spinka Rebbe in another tax evasion and money laundering scandal. The "other side of the story" is no longer missing to any significant extent. What is Yated Ne'eman's take on that one?

I haven't yet read the 7 August edition of Yated Ne'eman, but they now have their work cut out for them on this matter. And, given Yated's coverage of the Newark case, there is every reason to expect Yated to pull a passing grade on this latest development in the Spinka case.

One thing that works in Yated's favor is that Rabbi Weisz, the Spinka Rebbe, has already made public acknowledgment that he has erred, and seems to be accepting responsibility for his wrongdoing. In addition to making the story easier to report, this also makes it easier for the Judge to accord the Rebbe a modicum of mercy in the sentence, which is to be imposed this coming November.

A Publisher's Pitfalls

As this post is being written, a big scandal is unfolding regarding some New Jersey politicians, and also some rabbis. I shall not comment extensively on it at this time, other than to note that (A) the defendants are presumed innocent until proven guilty; (B) if indeed the defendants participated in the bad acts as charged, then I vehemently disapprove of such acts; (C) if indeed the defendants are found guilty or plead guilty, then there will and should be significant consequences visited upon them; and (D) even if the defendants are eventually exonerated (as I do hope will happen), the arrests and indictments are a signal to the religious Jewish community that it must go beyond damage control, and change what have become popular notions as to what is and is not acceptable behavior.

In prior posts, including the one from 5 April 2009, this blog has had occasion to mention a publication known as Yated Ne'eman. [Actually, there are two such publications, one in Israel and one based in Monsey, New York. They formerly were connected; now they are divorced but still sleeping together.]. Yated Ne'eman presents some cogent viewpoints not found in other media. In any given week, several people read Yated Ne'eman before I get hold of a copy, and I now have read the 17 July 2009 edition.

As mentioned in the prior post, Yated Ne'eman has what they would like to think is a strict policy against publishing photographs of women. Again, this is a decision I respect, given the social values of the niche of Yated's primary market, the insular religious Jewish community. Nevertheless, I now note an ironic, and, I find, comical malfunction of this strict policy. The front page of the 17 July 2009 edition carries a photo captioned "The Senate Judicary [sic] Committee is holding hearings this week for the confirmation of Sonia Sotomayor to serve as a justice on the U.S. Supreme Court. See Page 90." The photo was procured from Getty Images.

Any other publication would feature a photograph of the nominee, Sonia "SoSo" Sotomayor. But because Judge Sotomayor is a woman, Yated did not place her photograph on its front page. Instead, the photo features the Judiciary Committee itself, and a whole group of photographers with their lenses trained ahead to a spot behind the photographer, where Judge Sotomayor is obviously seated. So instead of a photograph of Sonia, there is a photograph of photographers photographing Sonia, so that Sonia is totally out of the photograph.

This is amusing enough. But if one looks at the very left side of the photo on the front page of Yated Ne'eman, it seems that one of the photographers in the press pool is a w-o-m-a-n, whose lens is directed towards the Committee. We see the side view of her head, but her face is mostly obscured by her straight long black hair. But the woman's entire arm, up to the shoulder, is exposed by clothing which, in the social groups that typically read Yated Ne'eman, is deemed immodest, provocative, and even whore-like. Given Yated's penchant for not showing a woman's face, and given the mindset of Yated's core readership, the depiction of a woman's arm above the elbow -- on the Front Page of Yated Ne'eman, just below the top banner -- is nothing short of a hilarious irony!

The 24 July edition of Yated has obviously been published. I have not yet seen it, but eagerly await its arrival in my hands to see if there is any mention of reader criticism of the Sotomayor photo without Sotomayor.

The Sonia photograph without Sonia will now be among the least of Yated Ne'eman's consternations. Yated now has to report the Jersey scandal to a readership that has a well-ingrained reflex for defending their own (as do I), and a distaste for negative comments about their own, as well as an aversion to the public airing of internal controversies. The mere mention of the scandal will touch many sore spots of Yated's readership, and non-mention of the scandal would severely impair Yated's credibility.

But, given Yated Ne'eman's past stances in other matters of controversy in the insular religious Jewish community, I do expect Yated to meet the challenge quite well. We shall see!

Andy Cuomo's Little List

I have never particularly been gung-ho for ex-New York Governor Mario Cuomo, nor for his son, ex-Kennedy in-law and now New York Attorney General Andrew Cuomo. Having said this, it now must be acknowledged that Andy Cuomo is the public official who, perhaps, is coming through this AIG executive bonus brouhaha looking the best, and on that particular score, he has my full applause and admiration.

His 17 March 2009 letter to Congressman Barney Frank, excepts of which have been quoted in the media, is very telling, and is available at Andy's own official website here.

There is little I can say that has not already been stated by Andy Cuomo. I will observe, however, the following:


A. As this post is being written, Edward Liddy, AIG's Chair & CEO who was installed in his position by the US Government, is now being grilled by the House Financial Services subcommittee.

B. Everyone who is anyone in Washington is now expressing outrage, shock and revulsion at the bonuses. This, of course, is in response to the popular sentiment; many of them were the very ones who set up the current AIG bailout scenario in the first place.

C. Operationally speaking, the simplest resolution to this political problem would be for all of the recipients of the AIG bonus bonanza to simply return their bonuses (or, as a face-saving ploy, be allowed to retain, say, $100,000).

D. Recall that during the recent move to fill Hillary Rodham Clinton's seat in the Senate, Andy Cuomo effectively stepped aside so as to avoid a mudslinging contest with his ex-cousin-by-marriage Caroline Kennedy. There is little doubt that Andy has higher political ambitions, but he wisely recognized that a better opportunity is likely to present itself in the future, and that he can build upon his public good will by kicking butt in his current position as NY AG.


One thing Andy can do in order to motivate the AIG bonus boys to return their remuneration is to announce that he is furnishing the list of them to the Internal Revenue Service and to the New York State Department of Taxation and Finance, for whatever actions the respective taxation authorities deem appropriate.

Unlike Treasury Secretary Tim "Tax Cheat" Geithner, Andrew Cuomo still has the moral authority (or at least the appearance thereof) to play that card.

Two More Slow Learners

Henry and Patricia Langer are slow learners. They have just lost their case in the United States Tax Court because they failed to substantiate the deductions claimed on their 2001 tax return.

The Internal Revenue Code is notoriously complex, convoluted and confusing. But one key rule in taxation is that the taxpayer must substantiate all claimed deductions. This can be done in various ways. For example, a contemporaneous automotive mileage log can substantiate deductible business miles driven. Accordingly, I maintain a mileage log, with the odometer readings at the various points of my daily itinerary. The log is consistent with my appointment calendar, and also with the gasoline purchase log, and also with the mileage readings when my car is serviced (which are noted by the automobile dealer, a disinterested third party).

The totality of Henry and Patricia's substantiation of items such as entertainment expenses, gifts for Patricia's piano students, business meals and travel was their own self-serving testimony, without any back-up documentation such as mileage logs, et cetera. And much of Henry's oral testimony only dug him in deeper. One of the claimed expenses was "A crystal vase costing $2,635 purchased to cheer Mr. Langer up after the events of September 11, 2001" because he likes fresh cut flowers. Folks, you don't have to spend $100 a seat to see Jackie Mason on Broadway; the comedy is almost as good in the Tax Court, which you can go in and watch for free.

But before you start waxing too empathetic for Henry and Patricia and their misunderstanding of the requirements of the Internal Revenue Code, note that this wasn't their first time in court to dispute their taxes. Patricia's business taxes for 1993 and 1994 were in the U.S. District Court for the District of Minnesota. In 1992, Henry and Patricia had an earlier Tax Court dispute over their 1984, 1985 and 1986 tax returns, in which they also failed to provide substantiation for their verbal assertions. Their 1983 income tax return was the subject of an even earlier Tax Court dispute in 1990, again with unsubstantiated testimony. One would think that by the time they did their 2001 tax return, Henry and Patricia would have learned to keep records.

And if you still feel sorry for Henry and Patricia, and their cluelessness as to the need to keep business records, consider that until at least May 1990, Henry was employed as an IRS Agent.

The best that can be said about the Langers is that they are model slow learners.

Iron Bars do not a Prison Make

President Bush has signed H.R. 7802, which is now Public Law No. 110-428 [The GPO has yet to post it, but give them a week or two or three.] We now have on the books the Inmate Tax Fraud Prevention Act of 2008.

Background: There are significant restrictions as to when, to whom and how much information from taxpayers' tax returns may be disclosed by the IRS. This is a good, nay, vital requirement, because nobody in their sound mind would file a tax return with the IRS if they thought the info on the tax return would become public information. But there are circumstances where tax return information must be disclosed, and so, Internal Revenue Code Section 6103 sets forth the particulars. [N.B. The version hyperlinked in this post, on the GPO website, is NOT the latest version, but if you look at it you will get an idea of Section 6103's general scheme, and general prolix verbosity.].

It seems that it is possible to outsmart the IRS by filing a tax return claiming a refund when no refund is actually warranted, because the IRS sends out the refund checks before auditing the tax return. This in and of itself is not so bad, BUT, there the criminals out there not only cheat on their own tax returns, but file false returns in the name of other people as well.


Taking it a step further, prisoners can and do successfully file false tax returns from the security of inside the prison walls. From Florida prisoners alone, there were fraudulent returns of over $4 million filed (at least that is what the IRS caught). A South Carolina inmate admitted at a Congressional hearing that he filed over 600 returns for himself or other inmates, face value approximately $3.5 million, approximately 90% of which were "successful."

More disturbing still, according to this South Carolina inmate, is that most of the money goes to the illegal drug market, and, he paid protection money to the Muslims in the prison to ensure his personal safety.


And so, President Bush has signed into law the Inmate Tax Fraud Prevention Act of 2008. In addition to a little rider that protects the pensions of retired federal judges for their widows and other surviving relatives, the Act adds Section 6103(k)(10) to the Internal Revenue Code, which permits the IRS to disclose tax return information on Federal inmates suspected of tax return fraud to the Federal Bureau of Prisons.

To which I say "Bravissimo!!"

But:

(A) The provision currently sunsets after 2011; and

(B) The IRS still cannot disclose the info to State prison officials, effectively leaving people like the South Carolina inmate out of the IRS's reach.

It is not a totally bad thing that Congress is proceeding with caution in tinkering with the disclosure provisions of Section 6103. But I hope that this obviously experimental legislation proves to be successful enough to warrant the removal of the sunset provision, and its expansion to include state inmates within the sweep of the statute.

Sex Subsidy Disallowed

The New York State Division of Tax Appeals has upheld a New York State income tax audit of the tax returns of one William G. Halby. Seems as though Mr. Halby wanted the already overtaxed New York State taxpayers to subsidize his sexual activities.

The Tax Appeals Determination in Matter of William G. Halby, DTA Nos. 821494 & 821810 (18 September 2008) is a good read. One sample paragraph is set forth below

"For the 2002 tax year, petitioner claimed a medical expense deduction of $105,271.00, after the 7.5% limitation on federal adjusted gross income (AGI). Included among the medical expenses claimed was an expense of $111,364.00, of which $40,588.00 was categorized on an attachment to Schedule A on petitioner's federal return as 'therapeutic sex' and $70,776.00 as 'massage therapy to relieve osteoarthritis and enhance erectile function through frequent orgasms.' Also included as part of the medical expense deduction claimed were the sums of $658.00 for medical books, videos and periodicals and $2,173.00 for 'pornography to enhance sexual performance in lieu of taking Viagra.'"

Read the whole thing here.


My question: It specifically indicated on the taxpayer's FEDERAL tax return that he was claiming these relatively large dollar value deductions. The New York people threw a flag on the play. How did this ever get by my ex-colleagues at the IRS?

Updates & Chag Sameach

Once again, a dearth of posts has resulted from me going through a busy period, exacerbated by the Passover preparations for the upcoming Pesach holiday (redundancy intentional; this posting can now be hit by a search of either term). A few updates are in order.


(A) Big Dipper update: During the past month since the Big Dipper Update # 8, the issue has only spread and intensified. NY AG Andrew Cuomo, who is certainly not oblivious to the prospects of making political hay, has issued two press releases during the past week [here and here] announcing various expansions of his probe into the matter. Expect to see some criminal indictments, and maybe, just maybe, some dollars returned to the New York State public treasury.

(B) The Wisniewski case posting from 9 July 2007 (the one where the kid's parents sued the school for expelling him for making death threats to a teacher): The U.S. Supreme Court has denied certiorari, which means that the suspension stands, and the kid (who is now an adult) does not get exonerated for the death threats. Aaron Wisniewski's only hope is for him to accept accountability for his actions. But with facilitative parents who do everything to externalize the blame which rightly rests upon his shoulders, he really doesn't have too much of a chance.


(C) The Passport Snooping post of 23 March 2008: As mentioned, State Department employees get away with doing things that IRS employees can't even daydream about doing. Along such lines, the removal of an IRS employee Shirley C. Albritton for snooping, which was upheld by the Merit System Protection Board, was affirmed by the Federal Circuit Court of Appeals.



The hour draws late, and the holiday will soon be upon us, thus giving me and my wife approximately 2 days to finish our preparations. As usual, I look forward to it, but, as usual, it will take a lot out of me.

Wishing everyone a happy & kosher Passover!

Stupid Acts

Been busy with some interesting (and somewhat remunerative) adventures, which likely will continue to curtail my blogging posts.

I tell my students that when cases go to court, more often than not they are there because somebody did something stupid -- and that the stupid act was not necessarily done by the losing party (or even a party to the lawsuit).

With that in mind, the case of Bishop v. Commissioner (T.C. Summary Opinion 2008-33) from the United States Tax Court is noted. Here, the abused ex-wife was granted innocent spouse relief from joint and several liability for the taxes on the joint income tax return.

What caught my attention, though, was the following background regarding her ex-husband (denoted in the case as the "intervenor") who unsuccessfully opposed the motion, thus being saddled with the entire amount of the taxes:


"Intervenor has a college degree in accounting, and during the years at issue worked as an auditor for the Texas Workforce Commission. He now performs auditing services as a consultant on an hourly subcontract basis. He was previously a revenue agent who conducted income tax audits for the Internal Revenue Service (IRS). In 1994, intervenor was indicted for bribing a public official in 1992 and 1993. He pled guilty to the charges. On January 6, 1995, U.S. District Court Judge H.F. Garcia entered the judgment in the criminal case, which imposed a special assessment of $50 on each of two counts and a fine of $1,000 on each count and sentenced intervenor to 28 months of imprisonment in the custody of the U.S. Bureau of Prisons. He was released from prison in 1997, at which time he rejoined his wife and children. Sometime thereafter he began working as an auditor for the Texas Workforce Commission."


Let's get this straight: He did Federal prison time for bribing a public official, and then the Texas Workforce Commission hired him as an auditor?

He may be a loser, but what does it say about the shmucks at the Texas Workforce Commission?

Power of Prayer

This is absolutely hilarious!

The Americans United for Separation of Church and State sicked the Internal Revenue Service on the First Southern Baptist Church of Buena Park and its pastor, Wiley Drake. So what does the Reverend Drake do? He implored his congregation to engage in "precatory prayer" against AU and its leaders. So far, so funny! But now, AU is actually unhinged about it!

Understand that I have no brief for FSBC of BP, nor for Rev. Drake. I have my deep religious differences with Rev. Drake, and with the Southern Baptists in particular. But neither do I support AU. Their true agenda goes beyond their purported "live and let live" message.

I consider it most comical -- and most telling -- that those who purport to push what amounts to an atheistic agenda are so intimidated by the prospect of Rev. Drake and his congregation praying to G-d for retribution against them.

Do any Voodoo practitioners out there care to get into the act?

Does the Rabbi Keep a Kosher Kitchen?

.


"When the pie was opened the birds began to sing,
Wasn't that a dainty dish to set before the king!"



The news from Los Angeles is a big tax evasion and money laundering bust which has ensnared Naftali Tzvi Weisz, the Grand Rabbi of Spinka in Boro Park. The details of the bust, including whether or not Rabbi Weisz is or is not innocent or guilty, are not particularly relevant for the purposes of this blog posting. All of the suspects are presumed innocent until proven guilty, and such presumption will pertain to this posting as well.

Imprimis, there are a number of rabbis who are known as the Grand Rabbi of the Spinka hassidim. Thus, Rebbetzin Sarah Bluma Horowitz, the Spinka Rebbetzin who died in a tragic traffic accident in the summer of 2006, was married to a different Spinka Grand Rabbi (and she might still be alive today had she been wearing a seatbelt, but that's a whole different ball of wax).

Assuming, again, that the Rabbi is in fact innocent and will ultimately be exonerated from these charges, the very fact of the indictment and arrest are problematic. I have taught my son to respect rabbis (though, like his father, he does question them from time to time), and I want people to know that the Torah is a good thing and that my religious Jewish lifestyle is a good thing.

Even if the Rabbi is exonerated, the very fact of his arrest and indictment has complicated my life, even though I am not connected with the Rabbi's religious institutions, do not live in the Rabbi's neighborhood, and indeed, do not recall ever meeting him. From my days with the various government agencies, the rule was (and still is) that avoiding impropriety is not enough; the very appearance of impropriety must also be avoided.

And, of course, the enemies of the Jewish people will also try to get some traction out of this one.

I have read the 40-page Indictment instrument (which does not seem to be posted anywhere, but which was graciously e-mailed to me by the Public Affairs Officer in the U.S. Attorney's office). Seems that there is an unindicted co-conspirator, one "R.K.," who seems to be cooperating with the prosecution. Most social groups view snitches with at least some degree of negativity; in the religious Jewish community this degree of negativity rises to the level of disdain and revulsion. Is "R.K." singing in return for lenity? Very likely! But, from a prosecutorial standpoint, the question must also be asked as to just how credible a witness he might make. My take on it: Excellent chance that if the matter goes to trial, "R.K." will be put on the witness stand and will sing his song of sixpence before the jury. But "R.K.'s" testimony will likely not be the prosecution's sole (or even chief) evidence. From the transactions described in the Indictment, there likely will be a confirmatory paper trail.

In the Spring of 2004, the IRS sent out numerous signals that it would soon be paying enhanced attention to tax-exempt organizations. Then IRS Commissioner Mark W. Everson, in his testimony before the Senate Finance Committee, gave hints that churches and similar religious organizations would thenceforth no longer be sacrosanctly immune from the IRS's scrutiny.

The first sentence of the US Attorney's press release announcing the indictment reads as follows:


"The Grand Rabbi of Spinka, a religious group within Orthodox Judaism, was arrested this morning along with several associates charged in an indictment that alleges a wide-ranging conspiracy to defraud U.S. government agencies, to operate a underground money transfer system and to launder money through an Israeli bank."


And of what relevance, many are now asking, is the fact the people involved may be Orthodox Jews? Isn't that first sentence grounded in some sort of bigotry?

My take on it: No! The fact that the defendants are Orthodox Jews is only incidental. But the fact that it involves religious organizations is paramount!! The press release is sending the metamessage that religious groups can no longer find refuge in their religious observance from the requirements to obey the tax laws!

Of no less significance than the first sentence in the US Attorney's press release is the last sentence in the document: "The case is part of an ongoing investigation being conducted by the Federal Bureau of Investigation and IRS-Criminal Investigation."

"Ongoing investigation?" I very strongly anticipate some additional blackbirds to come out of the pie.

I certainly hope that the Rabbi is exonerated in the proceedings to follow, but am not willing to make book that such a state of affairs is in fact the case. Let the legal process move forward, and let the chips fall wherever they may.

Little Old Man from Pasadena

As blogged here on 9 November 2005 and 16 December 2005, the All Saints Church in Pasadena was under audit by the Internal Revenue Service, the issue being whether, by dint of a single sermon by a guest preacher, the Church engaged in partisan political activity in violation of its tax-exempt status.

The IRS has closed its investigation of the Church, and the Church's attorney, Marcus Owens, now questions the procedures (or lack thereof) used by the IRS in the course of the audit. Having once been in the employ of the Service, I share Marc Owens's concern over the lack of accountability within the IRS (which Mr. Owens, having once occupied an IRS position far higher than my own, must also personally appreciate).

Now that the audit has been closed, Marc Owens's letter seems to be the ceremonial first ball in a brand new ballgame. There may well be repercussions on account of the IRS's laxity with the statutes and regulations.

I certainly have no affinity for the All Saints (Episcopal) Church as far as its religion or politics go. They are idiotarian moonbats, plain and simple. My concern is the behavior of the IRS.

Is the IRS justified in revoking the tax-exempt status of a church on account of a single sermon by a preacher? To that question, I will answer, with broad shoulders, a definitive "Yes!"

But if indeed the IRS seeks ensure that tax exemptions are only accorded to those entities which qualify, and which follow all of the rules (including the ban against political activity), then they have very fertile ground to plow in many American mosques, whose fare regularly entails preaching far more subversive and dangerous than the anti-Bush sermon heard at All Saints.

The IRS should stop picking on a little old man in Pasadena, and get down to the real business of the real tax money.

Tuberculosis Vaccine for CBP

As an invited witness at a hearing on Wednesday 23 May 2007 before the House Ways and Means Committee, Colleen M. Kelley, the President of the National Treasury Employees Union, attempted to stop the IRS from farming out the collection function to private debt collectors, and spoke extensively about the effectiveness, diligence and competence of the IRS workforce. I'm 100% behind her on that score. While nobody actually likes the IRS, most rational people understand the necessity for collecting the taxes. And during my time with the IRS, I certainly never encountered any IRS employee of any rank or position who had any misconceptions whatsoever regarding the intended function of the IRS. Social unpopularity comes with the job.

Understand that the real test of an effective union is how well it can protect the rights of its membership after the contract has been negotiated and is in place. Federal employees are not permitted to strike, and their salaries and benefits are largely determined by Congress, and not at the bargaining table. But the unions can make a big difference in the quality of work life, and in job security. Queen Ranavalona of Madagascar forbade her subjects to appear in her dreams, under pain of death, and similarly, Federal supervisors and managers have often destroyed employees' careers, reputations and lives based upon little more than unsupported speculations in their fictive imaginations regarding the employees' alleged wrongdoings. This is especially true at an agency such as the IRS, where there is a culture of secrecy, and the Personnel Management people take a laissez faire attitude towards the actions of management. NTEU helps to level the playing field for the non-supervisory employee.


Shortly before Colleen Kelley's testimony at the Ways & Means hearing, the NTEU was designated as the representative union for the employees of the Bureau of Customs & Border Protection. This, of course, was a feather in Kelley's cap, and was also good news for the CBPers, for the NTEU is probably the most effective union representing Federal employees, and, while by no means devoid of the leftist partisan politics typical of labor unions, does not reek of the leftist stench quite as much as most other unions.

But with the triumph of winning the representation battle come the burdens and responsibilities of representing the employees who are members of the bargaining unit. And so, Colleen, as president of the NTEU, has been infected by Andrew Speaker's case of tuberculosis. Specifically, the CBP inspector who disregarded the warning and allowed Speaker to cross the border at Champlain, N.Y, is now one of Colleen's boys, and the NTEU must now defend him in whatever disciplinary actions may be taken against him. Quite appropriately, neither the NTEU nor Colleen Kelley are publicly discussing the case.

The Andrew Speaker affair has all kinds of interesting -- and troubling -- angles and perspectives. As it implicates the NTEU, I see it as follows:

"The unidentified inspector explained that he was no doctor but that the infected man seemed perfectly healthy and that he thought the warning was merely discretionary, officials briefed on the case told The Associated Press." Unlike the IRS, the CBP does not have a definitive collective sense of what its mission really is. There is now pressure on CBP to get all of its employees on the same page of the script with regards to its purpose an mission.

And what better way to do that, than to make an example of the poor, clueless shmuck who perfunctorily let Speaker into the country with his TB infection? CBP is now erecting the gallows for a public hanging. How well the NTEU controls the damage while, at the same time, keeping its hands reasonably clean, is now Colleen Kelley's big test.

IRS, Illegal Aliens and Disney

Well, folks, amidst a very occupied and draining schedule, I am posting again, thus sparing the life of one more kitten to exacerbate my allergies.

As previously reported, IRS Commissioner Mark Everson has stepped down and is now heading the American Red DoubleCross. Kevin Brown is now minding the store at the IRS as Acting Commissioner. He has already hit the ground running.

On 7 May 2007, Commissioner Brown appeared at the National Press Club to announce the IRS's partnering with the United Way in the UW's "Financial Stability" initiative; specifically, to "provide education and outreach materials related to the Earned Income Tax Credit (EITC)."

While I certainly applaud the IRS's taxpayer education outreach efforts, my training and experience inside and outside the IRS cause me to be more than a little bit skeptical:

A) The IRS's organizational culture, for all of its shortcomings, is specifically geared towards COLLECTING taxes, not dispensing charity to the poor. Whenever the IRS gets involved in anything external to its real mission, there is the risk of a clash between its organizational culture and its collateral objectives. While public education is certainly a worthwhile objective and indeed, to a certain extent vital to the IRS's mission, the IRS is not really the best organization to educate the public.

B) For that very reason, it certainly makes sense for the IRS to engage a human service oriented organization such as the United Way to perform the public education function. The IRS is engaging expertise to do what it effectively cannot do, much like some Jewish households have been known to engage a "Shabbos Goy, a Gentile who can turn on or off the lights and do other work on the Sabbath which a Jew is prohibited from doing [N.B. In my own household, we use $10 electric timers instead of Shabbos Goyim. One advantage of this is that we don't run afoul of the largely unenforced laws against hiring illegal aliens. Besides, the electric timers are cheaper than the Shabbos Goyim.].

But this, too, has its pitfalls. The IRS has, for the past few years, been engaged in a crackdown on the nonprofit organizations. Now the IRS is in bed with an organization it must regulate. What sort of controls, checks and balances are in place?


C) Speaking of illegal aliens, the EITC is a windfall for illegal aliens, notwithstanding Congressional efforts to keep the illegals from sticking their hands in the till. Accordingly, the IRS is effectively participating in a scheme to instruct illegal aliens to tap into the EITC as a source of income, thus supporting them with our hard-earned tax money.


D) The partnering of governmental agencies with private sector entities certainly has great positive potential, but there is a downside, especially where there is a quid pro quo (or appearance of a quid pro quo). The Library of Congress has a "Coca-Cola Fellowship" to subsidize the scholarly study of advertising, and Coca Cola got its share of advertising in the Library of Congress building during the ceremony where Coke donated its archives. And when booksellers such as Barnes & Noble partner with public libraries, at what point does the purveyor of books exercise too much say-so over the public library's collection development policies? Why, even the rights to the public library's vending machines are a valuable commodity!

With due regard for the public benefit that comes of such collaboration between the governmental agency and the private sector, one must beware of the slippery slope towards the disneyfication of government. And before you say that I'm way out over the left field foul line, note that the process of Disneyfication has actually begun to occur at the U.S. Postal Service! Make no mistake about it: Disney definitely benefits from each of those Mickey Mouse stamps you buy.