TaxScam: How IRS Swindles You and What You Can Do About It
The Nature of the Beast
The Internal Revenue Service thrives on outrage. Injustice is the life-blood of the so-called “income tax.” From time to time, someone exposes the crimes of I.R.S. From time to time, there are hearings in Congress. Not only do our friends at I.R.S. not fear such exposure; they welcome it. It feeds the terror they want you to feel. Are you aware of any basic change--just one--such exposure has inspired? On the contrary, the more terrible our friends at I.R.S. are shown to be, the better they like it. So it is that every year in February and March, you read a new crop of stories about victims whom I.R.S. is throwing into prison for so-called “tax crimes.” You are not reading real journalism. You are reading press releases prepared by our friends at I.R.S. As your reporter sets this down, they are preparing the roster of the Class of ‘88.
In any other controversy, from Watergate to Abscam to Iranamok, the Prostitute National Press superficially covers all the issues at tedious length. Every day, you hear speculation by certified pundits about who didn’t know what, and when he didn’t know it. Eventually, the weight of detail produces stupor. When the issue is income tax, however, the media behave like the Nazi press when Dr. Goebbels “requested” that something be printed. All you need do is look at the coverage, to see the biggest transformation of lions into lambs since Isaiah. Everything calculated to inspire fear is broadcast. Everything involving unafraid Americans winning victories is suppressed. Not a word is ever printed about what the law really says. Not a word is broadcast about the details of the Reign of Terror.
Since horror stories in a book about the income tax are obligatory, and since your obedient servant is exactly that, here are some horror stories, stories they haven’t told you.
Our friends at I.R.S. assessed a $500 penalty against Charles P. Streich, of Elwood, Illinois, allegedly for filing a so-called “frivolous” W-4. Mr. Streich, it should be said in passing, was married and had three young children, including an infant who was ten months old, when I.R.S. hit the fan. He was also a veteran of the Vietnam War, during which he won a Bronze Star, a National Defense Medal, A Navy Unit Commendation and a Vietnam Campaign ribbon. Then he worked at Caterpillar Tractor, in Joliet, Illinois, for ten years. He had been on layoff for more than a year, on June 14, 1983, when an old, unmarked, green car, containing five people in plain clothes, pulled into his driveway.
The five were I.R.S. agents, but they did not identify themselves. Mrs. Streich started screaming. Her four-year-old, Johnny, mysteriously developed a bloody nose. Charles Streich noticed that at least one of the unidentified strangers was armed, and this was a neighborhood in which there had been numerous incidents of violent crime. In just the few months prior to this I.R.S. invasion, there had been four multiple murders.
Mr. Streich armed himself with an AR-15, just in case. Even the Special Agents themselves testified that he did not point it at them, but Mr. Streich was arrested. At the trial, his semi-automatic AR-15 showed up with M-16 parts; our friends at I.R.S. presumably had arranged for someone to alter it. Victim Streich was convicted of assault and possession of an unregistered machine gun.
Every aspect of the government’s case reeked of criminality. The law under which the I.R.S. agents tried to collect that $500 penalty was the Economic Recovery Tax Act of 1981, the $500 penalty provision of which took effect on January 1, 1982. The trouble is that Mr. Streich had filed the W-4 at issue during 1981, before the law took effect.
Andrew B. Spiegel, Mr. Streich’s attorney, wrote as follows in the appeal: “Under what has become known as TEFRA, Congress empowered the I.R.S. to act as judge, jury and executioner by allowing I.R.S. personnel to determine whether a particular form is false, whether the $500 civil penalty is warranted and if so, whether the I.R.S. should seize a person’s wages, automobiles, bank accounts or other property to satisfy the $500 penalty. Each of those determinations was made without a judicial determination and without a judicial hearing, the right to confront witnesses, to have a trial by jury as required by the Seventh Amendment or to have a day in court.”
Yet, Mr. Streich wound up convicted of two felonies, because unidentified I.R.S. agents had arrived in an unmarked car to enforce a law that didn’t yet exist, and would be illegal anyway; while the government agents who had committed the felony of manufacturing evidence--the doctored rifle--were not charged.
Along these lines, a San Francisco man says our friends at I.R.S. grabbed his $1,300 mortgage check, changed it and cashed it. How could they do that without reading his mail? Victim Donald Thurow owed no taxes, and our friends at I.R.S. never claimed he did. A story printed in The Washington Times on April 28, 1987 tells us this: “Mr. Thurow mailed his mortgage check to California Federal in Los Angeles last July 2. After being notified that his payment was late, Mr. Thurow discovered that his check had cleared the bank on which it was drawn, Hibernia. The check had ‘Internal Revenue Service’ stamped on the payee line--over Mr. Thurow’s handwritten ‘California Federal.’” At last word, Mr. Thurow’s lawyer, Montie Day, of Oakland, had filed suit to get the money back. What would the government do to you if you stole a check from the U.S. mail, rewrote it to yourself and cashed it?
Suppose you thought someone owed you money, so, to put pressure on him, you held someone else’s children hostage. What would the government do to you? The answer is that you would be thrown into a jail so deep, your family would have to visit you in a diving bell. Day after day, the media would explain, rightly, what a bad man you are.
On November 28, 1984, at about 4 p.m., a couple of cars containing seven or eight armed I.R.S. agents from Detroit arrived at Engleworld, a day-care center in suburban Allen Park. They brought a locksmith, who changed all the locks, so that no one but the agents could get in or out. Isn’t this a violation of the fire laws, especially where children are involved? Meanwhile, the agents hustled most of the twenty children into Room C, sealed it and put a table across the door. When the unsuspecting parents and grandparents arrived to get their children, they found our friends from I.R.S. sitting at the table, demanding that they sign Notices of Levy and pay what they owed Engleworld--so that the agents could confiscate it to satisfy the day-care center’s alleged $14,000 tax liability. The agents made clear that, until they did so, the parents could not have their kids.
Did you hear about this outrage on the network news; on the national wires; in the big magazines and newspapers? Neither did we. The Prostitute National Press bombed again.
Sue Stoia was one of the parents. She went to Engleworld to pick up Catherine, her seven-year-old daughter. According to a story by Greg Kaza, in the Wyandotte News-Herald, of January 16, 1985, Mrs. Stoia said this: “They indicated you could not take your child out of the building until you had settled your debt with the school, and you did that by signing a form to pay the I.R.S. What we were facing was a hostage-type situation. They were using the children as collateral.”
Catherine Rawson was another Engleworld parent, coming to get her daughter, Carla, nine. Mrs. Rawson says the agents demanded payment “on the spot.” The children “were crying. It was apparent they were extremely afraid over what was occurring. I’m extremely resentful that they subjected these children to the kind of action you would only be subjected to in a police state. In retrospect, I’m sorry now that I let them intimidate me as they did.”
Marilyn Derby was the Director of Engleworld, and was our guest on our radio talk show. She said this: “It was a very scary situation, like the Gestapo was here. Children were crying. Parents were trembling. I told one woman whose hands were shaking that she shouldn’t sign anything she didn’t want to. She signed anyway.”
No one at I.R.S. was punished. For all we know, the raiders were rewarded. Engleworld was closed. The victimized parents no doubt innocently spread word through the community about what I.R.S. will do to you if your day-care center allegedly owes taxes.
The reader may wonder what your reporter would have done as an Engleworld parent. Among other things, we would have called their bluff and told them to keep our children. We suspect the situation would have degenerated into a sequel to “The Ransom of Red Chief,” especially after a couple of grocery bills.
End of the beginning of Chapter One of TaxScam
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The incident above, from TaxScam, was the basis of a scene from my novel, The Name of the King, concerning the nefarious activities of Sidney H. Bloberg, Revenue Officer, Collection Division, Internal Revenue Service, and many other things. To order TaxScam, click Here.