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.
413-Fir-Color-197x300

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

I waited six months to hear back from the Board of Equalization. Six month.  When it finally arrived in a thick packet, along with their willingness to hear my case (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 which I was required to write a rebuttal to. Suffice it to say, a year and a half later I finally had my day in court.

The following scene from Willful Avoidance 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.


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. Mark Slattery, an attorney better suited for Vegas than Sacramento.
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?” Slattery chuckled, putting an unwanted hand of her shoulder.
“Cut the bull.” 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. And now, here she was. Almost exactly as Roberta had imagined.

 

Off to See the Wizard

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

This is a continuation of a series of posts on Innocent Spouse Relief, a provision enacted to relief people from the the burden of an unfair tax debt.  If you should find yourself faced with needing to file appeal with the tax board and you feel like you can satisfy all of their requirements, then:

  • Complete a form (8857) that lists your assets, your income, and debts.
  • Beg 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) 
  • 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 send it to The Franchise Tax Board.  They will assign an attorney to review your appeal and get back to you.  In under a year, if you’re lucky.    

Do not be surprised if you get the following response:

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

From the actual letter I received.

This is taxman speak for “your appeal has been rejected.”  Remembered they assigned an attorney to basically defend their position.  They going to say “whoops, we made a mistake.”

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!”

In the last post, Five Deadly Sins in the Eyes of the Taxman, I talked about how easy it is for innocent people to find themselves in the crosshairs of the tax man.  You just have to commit the deadly sin of marrying and trusting the wrong person.  However, because the tax code was written at a time when most married women worked from home and weren’t considered smart enough to understand finances, there was a provision added that allows a spouse to claim relief from a shared tax debt.  All they have to do is prove their incompetence. 

The ideal innocent Spouse Candidate

As you can imagine, it’s changed over the years. 

In 1986 there were three “requirements” that had to be met before the tax review board would even consider an appeal.  On the surface they sound relatively straight forward but they’re not.  And the tax man is very strict about these requirements – if they don’t think you’ve satisfied all three, your appeal will go unanswered. 

  1. The first condition is that you filed a joint tax return with your spouse for the year in question. If you filed separately thinking you’d be in the free and clear should your husband’s shenanigans come to life, think again. To the IRS, until the divorce is final, you are jointly responsible for community property or income acquired during your entire marriage. If you filed separately during the year in question, to the IRS that means you knew your husband was defrauding the government and didn’t turn him in.  NO RELIEF FOR YOU!

 

brando

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

  • The second condition addresses knowledge and 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. If you can’t prove that you’re too uneducated and inexperienced to understand finances, then NO RELIEF FOR YOU!  However, if as a prudent taxpayer you can prove that you did everything in your power to get the information from your spouse but failed, then you might have a chance.

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 questionable tax return, you and your spouse lived a very lavish life style NO RELIEF FOR YOU! 

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.

Box1

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.

The year in dispute, I was a stay at home mom with no income.  A Make-a-Wish volunteer, girl scout leader and 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.”  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.