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.
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:
“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
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.
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:
“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.