Wednesday, August 29, 2007

Overt Lawlessness: A Good Sign

By Larken Rose

Sometimes I wonder why the IRS still bothers to pretend that what

it does is administering the law. Off hand, I can't think of ANY
law or procedure which I HAVEN'T seen the IRS blatantly ignore.
Here are just a few of the things the IRS has done wrong, just in
the cases I'm personally familiar with (and this is just off the
top of my head):

Failure to give Examinations meeting (26 CFR 601.105)
Failure to give Appeals meeting (26 CFR 601.106)
Failure to give Collections Due Process hearing (26 USC 6330)
Refusal to allow recording of meetings (26 USC 7521) (Even the Tax
Court chastised them for that one.)
Demands for sums known to be grossly inaccurate (aside from the
question of what income is taxable) (26 USC 7214)
Repeated use of the outlawed "tax protestor" term (Section 3707,
RRA 1998) (Even TIGTA reports that this is still happening every
Failure to comply with Freedom Of Information Act (5 USC 552)
Making assessments not conforming to the law (26 USC 6203)
Executing levies without giving notice (26 USC 6331)
Outright refusal to process claims for refund (26 CFR 601.105)

The list goes on and on. Take, for example, a few of the things
done by the IRS bureaucrat currently on my case (Mr. Ted
Tsarouchis). For those who don't know, in order to avoid extra
YEARS of imprisonment, Tessa and I filed back returns prior to my
sentencing, falsely reporting our income as if it were taxable
(when we know it isn't). Having paid off most of the hefty alleged
liabilities (by mortgaging our house to the max), I then applied
for an "installment agreement" with the IRS to pay off the rest.

Agent Tsarouchis responded by demanding payment in full, failing to
inform me (as instructed in IRS procedures) that if I paid down the
balance to below $25,000, I would qualify for a "streamlined"
installment agreement. After I found that out myself and paid the
balance down below $25,000, Agent Tsarouchis then refused my offer
for a "streamlined" agreement, saying he thought I could pay the
whole thing. This was AFTER I quoted to him the IRM saying that for
"streamlined" agreements, it doesn't MATTER if the IRS thinks the
person can pay off the whole thing (IRM, Section

Then he again demanded payment in full, and failed to tell me about
GUARANTEED installment agreements. I found out myself that when a
liability, NOT including interest and penalties, is below $10,000,
the IRS is required by law to grant an installment agreement if it
meets certain criteria (IRM, § In our case, the
(alleged) principle had long since been paid off completely, which
the agent well knew, yet the IRS not only didn't tell me about such
guaranteed installment agreements, but DENIED my proposed
agreement, even when the law specifically and clearly required them
to grant it, and they knew it. (During all of this, the amount they
alleged I owed would wildly fluctuate by thousands of dollars,
without any hint as to the reason.)

Finally, after rubbing their faces in the law over and over again,
they granted what 26 USC § 6159 said they HAD to grant me in the
first place. So now they get $600 a month from me--which is less
than a third of my original (probably overly-ambitious) offer to

Bizarrely, with the installment agreement in place, the IRS then
sent Tessa a letter, saying they had never received a return for
2003, and demanding around $40,000. So we sent them the IRS' own
letter, showing that an installment agreement was already in place
for that year, which of course meant they DID have those returns.
Nope, they ignored our letter, and went ahead and filed a Notice of
Deficiency, double-billing Tessa for what we paid off a year ago.
Fortunately, at this point I think that one is almost resolved

In all of this, had I not known where to look, or had I not gone to
the trouble of finding out what THEIR rules say, what would have
happened? I would have been illegally extorted and robbed. And even
when I did demonstrate that they were blatantly violating the law,
to the point where they finally caved (after months of
stonewalling), what will happen to the IRS folk who ignored the law
in the first place? Absolutely nothing.

In fact, in the cases I'm familiar with, I have NEVER heard of any
IRS agent being punished, or even reprimanded, for refusing to obey
the law. As an IRS whistle-blower explained at congressional
hearings, IRS management knows of, allows, and even CONDONES
illegal actions by IRS agents. In fact, in October of 2004, the
mainstream press broke the story that the IRS wasn't even firing
IRS employees who were failing to file their own tax returns,
though the law (Section 1203, RRA 1998) REQUIRES such firings.

Sorry for the long-winded complaint, but there is a point to all
this (other than me whining about the IRS' behavior). The law
DOESN'T MATTER to these people. And it doesn't matter to Congress
or the courts, either. They pretend to care what the law says, just
enough to keep up the facade that their extortion tactics are in
some way legitimate. But that facade is getting more and more

As a result, efforts to find some magic words or some fancy
procedure which will suddenly make the IRS be nice are a waste of
time. If a person here and there finds a way to avoid being
extorted, that's great. But those in power don't even care about
the most basic laws and rules--they violate them constantly--so
what reason is there to think that there could EVER be a reliable
"procedural" solution? There isn't a procedural solution to the IRS
any more than there is a procedural solution to the Mafia or a car-

I still occasionally get comments from people rebuking me for
expecting the "system" to do the right thing in my case. For the
umpteenth time, I have NEVER expect the system to do the right
thing, and I was saying that long before I ever went to trial. I
did, however, have some small hope that a jury of "regular"
Americans might do the right thing. In some cases they have--e.g.,
Tommy Cryer, Joe Banister, Vernice Kuglin--in others they didn't.
My goal was, and is, quite simple: I will do things the right way,
the government will lie and cheat, and whether I win or lose, I
will publicize their behavior.

The number of ways in which "the system" lied and cheated in my
case could fill a book--and in fact, it DID fill a book, which is
now in the editing stage. But, as always, my goal is NOT to give
advice on how to combat the system, nor is it to complain about
what they did to me--it is to make public how these people behave,
and what they are, for all the world to see.

Oddly, the blatant lawlessness of the IRS may, in a twisted way, be
a good sign. History shows that people don't usually fight back
against government misconduct until it's really dang obvious.
Furthermore, it is a sign of panic and desperation when a
"government" starts being openly fascist, and "forgets" to keep up
the show of due process, justice, rule of law, etc. For a lot of
people, the true nature of the IRS--as extortionistic terrorists,
rather than "tax collectors"--is becoming more and more obvious.
And public opinion and education is still a very potent weapon, and
one which those in power are scared to death of. So don't stop
telling the truth.


Larken Rose



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