The Grumpy Old Lady has a good day!

I have to admit I’ve been grumpy lately.  Could be all the smoke in the air.  Could be the rash of bad news I’ve gotten lately regarding friends and family.  Could be that I’m just turning into a grumpy old lady!

Josie Jameson and the Stone Witch

Jennifer Hotes,  Author of the Stone Witch series

So yesterday when my friend Jennifer – who has to be the nicest lady on the planet (check her out here) – decided to feature a review of my book Willful Avoidance on her blog, the news couldn’t have come at a better time.  This was a hard book for me to write and promoting it has left me, well grumpy.  Who wants to read a book that has, at its core, a battle for innocent spouse relief?  Ugh, right?

So, dear friends, please forgive this grumpy old lady for a bit of blatant self-promotion, here is her review:

As an author myself, I know how much time and love it takes to craft a novel which makes me feel all the worse for wolfing down JT Twissel’s latest book in a matter of hours. Within the first chapters I came to care about Maya and her uphill battle against a horrible ex-husband and the IRS. Grounded in reality, her story was dramatic, funny, tragic and wonderful.
What I appreciated most is that Twissel didn’t write what the readers wanted to read, but instead wrote the organic journey of Maya with all her ups and downs. The result is a book with a story you could chew on and with twists that kept me reading late into the night! An added bonus of this book was coming away with a rudimentary understanding of our tax laws. Twissel, you’re a sneaky one. Have you ever thought about teaching the subject at the university?
Willful Avoidance spans multiple genres. Mystery, Thriller & Suspense, Legal, Women’s Fiction, Humor, Literature & Fiction, Contemporary Women, and Political – there’s something to entice every reader.
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One of Jennifer’s drawings – titled appropriately “The Old Lady” – it does kind of look like me!

Here is the link to Jennifer’s website.  If you have a sec, please check it out! Thanks!

Confronting the BOE

This is the last in a series on the battle for relief from an unfair tax debt which forms the core of my currently out-of-print book titled Willful Avoidance.


After I applied for a hearing in front of the Board of Equalization, I had to wait six months to hear back from them.  When I did, my feelings were mixed. Along with their confirmation of a court date (yeah!) was a copy of the State Franchise Tax Board’s rebuttal to my appeal (ick). It was eleven pages of dense posturing that made no sense even to my lawyer. And, I was required to submit my own rebuttal which led to a seemingly endless round of rebuttals. When all the rebuttals were rebutted up the wazoo, finally the day came for me to learn my fate.

The following scene takes place outside the courtroom before the hearings were set to begin and is written from the perspective of the clerk for the Board of Equalization who, in real life, I got to know rather well during all those rebuttals.


From Willful Avoidance

The battle was about to begin: the Invincible Tax Men versus the Appellants. Each side would have their moment in the ring, unless an Appellant cried “uncle” after arm-bending, threats and promises for leniency were made in last-minute deals. Fully versed on all new laws and decisions, the Tax Men had the home court advantage. The Appellants, especially the small-scale divisions with no direct plan (just an overwhelming belief in the humanity of their story) had little chance. But it all rested ultimately in the hands of the judges, the mighty BOE, now sharpening their pencils (metaphorically) as they prepared to play Solomon. On this day they would need to appear kindly but judicial, full of wisdom but not easily conned. All opinions rendered were, of course, of public record and therefore available for scrutiny by the voting public.
The hall outside the boardroom held all the merriment of a morgue. Four or five groups stood in nervous circles negotiating with FTB lawyers. They rattled their sabers quietly, in hushed tones as though at any moment one of the illustrious members of the BOE came through the boardroom door.
The appellants for the two cases Roberta knew were doomed to fail already sat in the back of the boardroom confidently. Their summaries were astonishingly brief, they had no exhibits to speak of, no legal representation, just some sort of rambling notion that they were in the right or that their current economic condition would get them out of an FTB debt. One appellant had even sent his cousin to plead his case because he couldn’t get off work. That would be a costly mistake. At nine thirty she walked over to the two groups still remaining in the hall. One was the Ravel Stone & Gravel gang with the Very Important lawyer.  The other, a woman and two men, one of whom Roberta knew quite well.
It was time to go into the boardroom, she explained to both groups. “Even if your case isn’t scheduled until eleven, the board requires all litigants to be in attendance for opening remarks. After the board begins hearing cases, you can move your negotiations out to the hall again. But,” she cautioned, as Ravel Stone & Gravel sulked away, “keep in mind that the BOE rarely needs the allotted thirty-five minutes to decide a case. After they hear one case, they continue right on to the next one without taking a break. If your case is called in court and you do not respond, you will lose your chance to appeal.”
“What would we do without you, Robbie?” Mark Slattery chuckled, putting an unwanted hand of her shoulder.
“Cut the bull, Slattery.” He flirted with her as young men often do with women they consider mother figures, only Slattery wasn’t that young, and Roberta wasn’t that old.
“You must be Maya Bethany,” she said, reaching over to shake the hand of the woman standing across from Slattery. She was a gentle-looking woman with wavy auburn hair pulled back into a ponytail, soft grey eyes, and the high cheekbones of someone of Slavic descent. Other than a hint of lipstick, she wore no makeup and she’d dressed conservatively in slacks and a crisp, white blouse. Bravo, Roberta thought. It was the perfect look—neither flashy nor too casual. Over the past year she felt she’d gotten to know Maya Bethany, having read her appeals to the board in equal parts horror and admiration. And now, here she was. Almost exactly as Roberta had imagined.

 

Off to See the Wizard

This post is the fifth installment of a series about the innocent spouse relief provision of the IRS Tax Code.

NotheBOE

When I first found out about the Board of Equalization I felt like Dorothy in the Wizard of Oz.  Somewhere in the valley fog between the coast and mountains of California was a wonderful group of human beings just waiting to save me from a crushing tax debt with a wave of their magic wands!  I couldn’t wait to plead my case, to tell them what I’d been through, and to have them severely chastise the evil taxmen who’d been hounding me unmercifully.   

th-1

“I’m so glad there’s a Board of Equalization – I’m sure they’re absolutely lovely people!”

Of course, I had a ton of apple strudel in my noodle. 

From the book Willful Avoidance (written from the POV of an exasperated tax attorney) 


“The Board of Equalization? What is it?” Maya asked.
“It’s a them. You vote for them every four years.” It was amazing to him how many people had no idea how tax laws were enforced and adjudicated. No idea. Living each day blissfully ignorant and apathetic about tax laws that could destroy them for the slightest of infractions. Voting every four years for a representative to the Board of Equalization with no idea why, their bios and statements of policy and intent ignored or used to line bird cages. “Among other things, the Board of Equalization is the court of last resort for the taxpayer. There are five members of the board. Four are elected separately—from each of the four different districts of California,” he explained. How much of this did she really want to know, he wondered. Despite her many insecurities and her tendency to overdramatize, she seemed intelligent, “The fifth member is always the state controller. He or she generally serves as the chairman of the board.”

Frodo

“I will take my case to the Land of Mordor and plead with the Evil Sauron to free me from an unfair debt.”

As in the story, quickly and without a hint of ambiguity, my lawyer informed me that there was no wizard hiding behind the curtains in Sacramento. Just a group of politicians who probably wouldn’t even read my twenty-six pieces of evidence but instead hand the appeal over to a first year law student to read and summarize.  The more he went on about their procedures and possible conservative biases the more I felt like Frodo from the The Lord of the Rings.  

Next: Confronting the Board of Equalization.

Images from bing.com

Secrets of a Kick Ass Tax Woman

So your spouse has left you holding the bag for an enormous tax burden, what do you do? 

For those of you new to this blog, this post is continuation of a series about innocent spouse relief which is a provision of the US Income Tax Code that provides for relief from a shared tax burden.  It was my misfortune to have to apply for this relief and so I’m sharing the sad truths I discovered as well as tips on how to survive.

 Let’s recap what’s been covered:

  • Fresh from the Trash Bin – the tax man tells you your tit’s in the ringer and there’s no way out but you have no idea why.  You’ve been a dutiful wife and done as your husband asked.

    The ideal innocent Spouse Candidate

    The ideal innocent Spouse Candidate

  • Five Deadly Sins in the Eyes of the Taxman – according to the IRS, you shouldn’t have been a dutiful wife in the first place.
  • Three Easy Pieces – the three requirements for even filing for innocent spouse relief.

In desperation you may be tempted as I was to try the following first:

1.) Divorce your husband hoping that the tax man will clear you.

This does not work, friends. But it will make you feel better and, if you are like I was, a stay-at-home mom who had to go back to work at minimum wage jobs, it will make you look more pathetic to the IRS which is a good thing.  The more pathetic and stupid you look, the better your chances.

2.) Beg for mercy from the taxman.  

Ha!  If you’re lucky, your case will be assigned to a kind-hearted agent willing to help you file for innocent spouse relief. Keep in mind, tax collectors receive their bonuses and promotions based on how much money they bring in and not on their compassionate treatment of taxpayers.

 As luck would have it, the IRS agent who heard my case, helped me file for relief.  However, the state of California made it clear that I’d better hire a lawyer if I didn’t want to have my house seized and my income attached.   

Mockingbird

The ideal lawyer but alas, most attorneys don’t like to go to court and would much rather get a settlement ahead of time.

If you think a tax attorney will plead for complete relief from an unfair tax burden, forget it.  They will urge you to work out a settlement.  They will tell you it’s not wise to fight because, you see, in the court of tax law you are guilty and must prove your innocence.  But they will help you to understand the requirements for innocent spouse.  Trust me, unless you’re a lawyer, reading provisions from the tax code will drive you insane.

I’m sure you’re wondering what the actual process for requesting innocent spouse relief is.  Here goes:

  • First you complete a form (8857) that lists your assets, your income, and debts.
  • Next you get three of your long time neighbors to write letters attesting to your meager and miserable lifestyle during the year in question.  (Good luck to you on that one.  Most people are very squeamish about getting involved with the tax man in any way, shape or manner) 
  • Last you provide proof – as much as you can get ahold of – that your spouse hid information about finances from you.  I had twenty-six letters from my divorce attorney. I called them “The Exhibits A-Z.”  

Finally bundle up the whole shebang and sent it to the taxman. Then wait for their response.

If the answer comes thusly:

It is clear that appellant has failed to 
meet her burden of overcoming rebuttable
 correctness of respondent’s determination.

This is taxman speak for “your appeal has been rejected.”

Do not despair, as I did, it need not be the end.

Next – The court of last resort...

ValleyView

No, the court of last resort is not a heavenly intervention!

The Three “Easy” Pieces

MrsCleaver

Back in the days when women wore a strand of pearls and high heels to make dinner. “My husband takes care of all our financial affairs!”

This post is a continuation on the dreary subject of taxes, specifically something called Innocent Spouse Relief, a law enacted to protect women from enormous tax debts incurred by their husbands.  It was established at a time when most women worked from home, allowing their husbands to take charge of finances.  As you can imagine, it’s changed over the years because there just aren’t that many stay-at-home moms.

Currently there are three “requirements” which anyone filing for Innocent Spouse Relief must satisfy.  On the surface they sound relatively straight forward but they’re not.  And the tax man is very strict about these waitressrequirements – if they don’t think you’ve satisfied all three, your appeal will go unanswered. It’s like that famous scene from the movie Five Easy Pieces….  No substitutions! 

The first condition is that you filed a joint tax return with your spouse.  Now this may sound like a silly requirement  because if you were leery enough of your spouse’s financial shenanigans to file separately, why would you need innocent spouse relief?

The complications arise if you live in one of the nine  “community property” states in America where all property acquired during marriage (except for gifts and inheritance) is considered jointly owned and thus both spouses have a 50/50 liability for taxes due no matter who brought in the majority of the loot.  According to TurboTax, most people filing separately are going through a divorce, however, they warn that if your divorce is not final by the end of the tax year you’re still considered married by the IRS no matter how long you may have been separated. Thus, filing separately in a community property state is not guaranteed to protect you should the taxman throw one his famous penalty flags. Plus, if you file separately you lose your ability to file for relief should your soon-to-be ex flee the country leaving you holding the bag. 

brando

Godfather, please make my husband come clean. Break his legs if you need to!

The second condition addresses knowledge and, my favorite bug-a-boo, the duty of inquiry.  How much knowledge did you have of your ex-husband’s financial situation—and how much you should have known—based on your education and experience and on the lifestyle you were enjoying. As I mentioned in the previous post, the IRS position is that it’s your duty as a prudent taxpayer to get the information you need from your spouse in order to understand tax returns before you sign them, using whatever means at your disposal.  Works best if you’ve got buddies in the Mafia.    

richwoman

Honest Mr. Taxman – I had no idea my husband made so much money! Excuse me while I shuttle off to Bermuda for my spa treatments!

The third condition is the one that sinks most appeals.  For me, it was the easiest to prove but apparently many women drive around in Ferraris, shop on Rodeo Drive and winter in Aspen all the while unaware their husbands have money. Then, after being confronted by the taxman, they try to claim innocent spouse relief.  I have to point out that the tax man  doesn’t care if at the time of the appeal you’re working a minimum wage job, living in a trailer park and supporting three kids.  If, during the year covered by the tax return, you and your spouse lived a very lavish life style you cannot apply for innocent spouse relief…. 

Next, Secrets of a Kick Ass Tax Woman. 

*All the images on this post are from Bing.com

Five Deadly Sins in the Eyes of the Taxman

Taxman

From Bing Images

At one time I owed over $100,000 to the State Franchise Tax Board. They threatened to take my house and bank accounts and to attach my meager wages, leaving  me and the kids out on the street. They even verbally threatened my sixteen year old daughter over the phone because her father had dissolved her college savings plan and they expected her to pay the taxes due (six thousand dollars!). By that time I’d divorced my husband, leaving me with a mortgage, two children and a dog and cat to support on a minimum wage “temp” job.

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Box full of appeals – the exhibits A through Z

The State Franchise Tax Board, affectionately known as SFTB, is the agency responsible for collecting taxes on your income for the state of California where I live.  Not all states collect income taxes.  Some states have found other ways to get necessary revenue.  For example, Nevada has no income tax because taxes on the gambling industry fill the coffers.  The petroleum industry is Alaska’s sugar daddy. They are apparently so desperate for workers and women to keep those workers happy that they provide a yearly stipend for families. However, everyone wants to live in California, so, instead of getting paid, we pay.

For the year the state claimed I owed over $100,000, I’d had no income: no salary, no interest payments, no dividends, no property sales, no inheritance.  I was a housewife, a Make-a-Wish volunteer, girl scout leader and all around soccer mom.  So you might ask, what sin had I committed?

Well, as it turns out, I had inadvertently committed all five of the tax man’s deadliest of sins.

Sin Number 1:  Trusting your spouse.

Every taxpayer in the United States has what our government calls the “Duty of Inquiry.”  And what does this mean, you might ask?  This means that if your spouse hands you a tax return and orders you to sign it, you must say the following:

FarmerWife

“You mean, I’m not supposed to obey the old coot?”

“I can’t just sign this, honey.  It is my duty as a US citizen to affirm the validity of every, single line item on this return.  Failure to do so would be a crime.  A crime called Willful Avoidance.  And I’m sure you don’t want to be married to a criminal, do you Honey Bunches?

Hubby:  “Don’t you trust me?  Didn’t you vow to love, honor and obey me?”

As you can probably guess, refusal to sign every document your husband puts before you might cause a bit of stress in a marriage, particularly if the secretive spouse belongs to one of those religions in which the husband is always right. However, trust between spouses is not something your government condones.  Even though the politicians rail on about the sanctity of marriage and all that family values crap, it is written into tax code that prudent taxpayers must disobey their spouses should one or the other attempt to hide taxable assets. 

Sin Number 2: Believing a spouse when they say “It’s my money.  I earned it and can do with it what I want.”

No, no, no!  Not so fast!  According to the tax man, even if your

Woman peeking into her husband's secret money chest. It's not a Pandora's box - it's your money too, according to the tax man.

Woman peeking into her husband’s secret money chest. It’s not a Pandora’s box – it’s your money too, according to the tax man.

spouse had all his income going to an account you did not have access to, or, in some cases, knew nothing about, you are as responsible as him (or her, let’s not be sexist), for whatever the heck he’s doing with “his” money so you better know where it is and what he’s doing!

Use whatever methods at your disposal to get your spouse to reveal his assets.  Tie him to an ant-hill! Hire a hit man!  Call 911!  Oh yeah, that’ll work.

Sin Number 3:  Believing you’re innocent until proven guilty.

football

No innocent spouse relief for you! (image from Bing)

There is one court in the United States where there is no presumption of innocence.  The tax court.  I’ve had this explained to me by not one but two lawyers and I still don’t completely understand, but it here goes…  The amount you owe is computed based on the many articles of The Code which is the tax man’s Holy Bible.  Once it’s spit out by one of their super computers, penalties and interest begin to accrue and if you don’t respond, they come after you with the assumption that you are guilty.  The so-called Innocent Spouse Relief is a misnomer.  What it really means is that after a long, drawn out often humiliating battle, the tax man has granted you either full or partial “relief” from a tax debt.  But you are still guilty as hell because of all that duty of inquiry crap. One lawyer told me to compare their decision making process with that of a referee deciding whether or not to toss a penalty flag during a football game.  Comforting thought, hey?

Sin Number 4: Thinking government service attracts compassionate people willing to go the extra mile to help you out (the Jimmy Stewart complex)

I’m sure there are many people who go into government service for altruistic reasons however, for most it’s a nine-to-five job with benefits and a retirement package.  People who uphold the Holy Tax Code are particularly lucky in that they aren’t expected to make any decisions. The Code makes life easy. If a taxpayer says:

MrSmith

From Mr. Smith goes to Washington.  Love the expression on his face!  What???

“Can’t you see that I’m just barely making it, that I’m not defaulting the government?”

The tax collector can respond with a clean conscience: “I’m only upholding the Code.”

It’s not that they don’t care about their fellow human beings, or give to charity or volunteer but they have sworn to abide by a complex set of rules mandated by the Congress.  You know, those family values folks who’ve decided trusting your spouse is a crime when it comes to the revenue stream paying their salaries, their retirement, etc.

I have to admit that I did run into one particularly lovely agent (a woman) who helped me get Innocent Spouse Relief from the federal government however that didn’t help me at all when dealing with the henchmen hired by the state of California.

Sin Number 5: Thinking you can win a battle against the tax man.

They want you to believe it’s impossible to win a battle against them but it’s not.

Next, the three “simple” requirements for Innocent Spouse Relief and why they’re not so simple.