Monday, June 10, 2013

IRS Abuse of Power Part 2 - Our Struggle

After writing the blog about the trouble we are having with my father and  the IRS (read it here), I have been overwhelmed by the response. People have offered encouragement and tips, expressed outrage, and have even shared their own IRS horror stories. I am so grateful to all of you who have commented, shared my blog on Facebook and Twitter, and sent me private messages of support.

What I didn't talk about in the last blog is our attempts to resolve this issue with the IRS. When my dad moved in with us after finding out about his terminal neurological disorder, I helped him apply for disability. Not long after he started receiving benefits, the IRS put a levy on his social security benefits and started taking $300.00 a month. We didn't know about his tax problem at the time, so my brother and I sat down and talked to him about it. He said the original tax bill was somewhere around $50,000. We found out that he sent them a check for $25,000, but could not afford to pay the entire amount. Due to his medical condition, he had started to make bad business decisions and had trouble keeping track of his finances including things as simple as balancing his check book.

I told him that the tax bill needed to be taken care of, so if the IRS was taking $300.00 a month, that would help pay it off. After that first year, the IRS increased the amount they were taking to 70% of what my dad was getting, causing some financial problems for him, and also for my husband and myself since we were having to pay more of his care costs.

In the meantime, my brother called the IRS to find out what was going on with dad's case. They asked him fill out a power of attorney which was standard and then fax it to them while he was talking to them the next time. We got the necessary paperwork and filled it out putting my brother and myself on the power of attorney to be able to act on dad's behalf. This was in 2007.

My brother called the IRS back and faxed the paperwork while he was talking to them on the phone as they requested. They only gave us minimal information even with the power of attorney and said it would take several months to process it, so we needed to call back. We told them we needed all the paperwork concerning our father's case, so we could get the matter resolved. They said we would have to wait until the power of attorney was processed. We waited several months and called back. They had no record of our power of attorney, so my brother faxed it again and sent them certified copies by mail, but we got the same story every time we called. This nightmarish circle continued for over a year. No matter how many times we mailed or faxed powers of attorney, they were never recorded or approved.

We decided to get a certified tax specialist involved who is actually an Enrolled Agent -- a CPA who has to take a special test administered by the IRS. These people can act on your behalf with the IRS. She was very experienced and accepted my father's case. When she contacted the IRS to get his paperwork, she ran up against the same problem. No matter how many times she sent in a power of attorney, it kept disappearing. They never registered her power of attorney. She eventually dropped our case.

We have continued in that same circle with them saying they want us to fill out a power of attorney and expense/earnings report, but they never get approved or processed, and you can NEVER speak to the same person twice. This last year, my brother lost his mind on the IRS person he talked to, threatening a lawsuit, and they started sending the paperwork. It still took a year and numerous phone calls to get all of the paper work we needed to take to the new CPA.

On the last report we received, we were relieved to see that my brother was finally listed as having power of attorney. When they pulled this last trick and started taking 100% of my dad's funds, leaving him with no money to live on and no money for us to move him into the facility he needs for his care, my brother called to try to talk to them about this issue. The person he talked to told my brother that he didn't have power of attorney. My brother told him that he did, and that he was listed on the paperwork we received from the IRS as having power of attorney. They IRS employee said that he didn't and hung up on him.

I tried to call since dad was here. I could have him talk to them and tell them they could talk to me. When the IRS employee got dad on the phone, she started grilling him for information until he got so upset and confused he turned red and couldn't talk. I took the phone from him and tried to explain to the woman that they were taking 100% of his benefits and that he needed care. I told her I had a letter from UC Davis explaining his medical condition and his need to be placed in a care facility. She said she didn't want to see it because it wasn't important. She directed me to fill out a power of attorney, and threatened to hang up on me for being upset and raising my voice.

It has finally dawned on us that they don't want to resolve the issue as long as they can keep taking his money. The people you talk to at the IRS are not authorized to resolve anything. They are there to gather information and try to get more money. Their offer to resolve tax problems is just a bunch of smoke and mirrors to keep you running around in circles filling out forms they never process while they continue to take your money. You have to hire professionals to actually fight them, but they don't leave you any money to pay for it. We were told to contact the tax advocate who helps when the IRS is not cooperating. They told us to fill out a power of attorney.

What started out as a $50,000.00 tax bill that my father paid $25,000.00 towards has ballooned out of control. With interest and penalties assessed by the IRS, they now say he owes almost $250,000.00. When we figured out the money they have taken from his disability benefits and the $25,000.00 check he sent them, he has paid close to $100,000.00. The $250,000.00 is what they say he still owes for a grand total of about $350,000.00 for that initial balance of $25,000.

The IRS has a list of tax payers rights including this one -- it is your right not to pay more than you owe. I figure that keep that list in the garbage can along with all the powers of attorney. 


  1. Omg, Michelle. :( I can't imagine what you guys are going through. Hugs and prayers for you and your family. With everything going with your dad, you shouldn't have to be dealing with greedy bastards like that.

    1. Thanks Mireille <3 It has been such a struggle. We had no idea at the beginning of this ordeal that it would spiral into such a nightmare. My poor father...I can't tell you how angry this makes me. I wanted to share because I didn't know that the IRS had so much power, and I wanted to warn other people. I knew they had a lot of power, but I had no idea they could take every penny you have to live on. It is truly scary.

  2. WOW! I have to say that the only thing that surprises me in this whole tragedy is that your family hasn't resorted to violence! How incredibly frustrating.

    I have a couple of ideas that might help that you might not have thought of yet. I would suggest you gather ALL your paperwork, even notes you took during phone conversations, and then contact every single elected official in your district, from dogcatcher to state and US senators and congressmen. They like to resolve such issues for constituents because it generates goodwill and votes.

    Also contact public advocacy agencies, like your Council on Aging (can't remember the actual title) and I believe there's an equivalent agency for disabled people. They might be able to assist you in finding a way to provide the care your dad needs.

    Write a book about the entire ordeal and do a media/internet blitz that proceeds will go toward obtaining justice. Government conspiracy theorists will eat it up.

    At the same time, contact every single state and national level news outlet. Not just TV, but print and internet as well.

    Often when a story like this receives national attention, it draws offers from professionals qualified to settle things to actually do the work pro bono. Getting a favorable settlement for people like your dad is the best advertising and they can't buy it.

    I hope that helps a little, and that you get this taken care of right away.

    Prayers for best of luck!

    1. I think this is excellent advice Kenra! I can't believe you're having to deal with this and have been dealing with it for so long! Is there a local IRS office you can physically go to and talk to someone, or do you have to talk to them on the phone? I don't know how they can legally do this to someone, it's abhorrent! Hugs darlin, to you and your family. I hope you can find a resolution and get this settled soon.

    2. Thank you both so much! Unfortunately, you have to talk to them on the phone, and there is no such thing as talking to a supervisor. We were told the tax advocate was the way to go, but they didn't help at all.

      I have had several people recommend contacting politicians and news media, and I think I may have to do that. I didn't want to bring a lot of attention to my father since all of this is a little overwhelming for him. If we can't get this resolved with the current CPA, I am going to be a screaming it from the rooftops, I can tell you that. We have kept notes and we have the stack of powers of attorney we have sent over the years, including our original one from 2007.

      A friend also recommended adult services, so I am going to be calling them tomorrow. They may be able to offer some in home services for him and even pay for some of his care until this matter gets resolved.

      I am so grateful for all the wonderful ideas and advice :) Thank you again!

  3. Thanks for sharing useful information. Indeed IRS Settlement was a big pain and it almost screwed my future, poor credit score and all worse that can happen. Still i was lucky to find few experts that helped in my irs debt settlement, were experts and help me in IRS settlement quickly. I was helped, hope you will too.

    1. I'm so glad you were able to get your matter settled. Thanks so much for the info!