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KC Johnson on Report Claiming Seligmann Owes Taxes; Detroit News Says IRS Lien for $6.5 Million
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Topic Started: Feb 25 2011, 08:58 AM (7,216 Views)
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MikeZPU
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Feb 28 2011, 08:51 PM
Post #46
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- nyesq83
- Feb 28 2011, 08:11 PM
 ABOUT ME Robert W. Wood is a prominent tax lawyer with a national practice. A partner with Wood & Porter (www.woodporter.com), he is admitted to practice law in California, New York, the District of Columbia, Texas, Montana, Arizona, Washington and Wyoming. He is Certified as a Specialist in Taxation and Qualified as a Solicitor in England. Named among the best tax lawyers in America, Wood is a Fellow of the American College of Tax Counsel and consults with clients in tax matters nationwide. He serves as an expert witness, speaks nationally to professional groups, and hosts The Legal Broadcast Network’s Tax Channel. The author of over 30 books and hundreds of articles, Wood is most well-known for advising litigants on the tax treatment of settlement and judgments. His book, Taxation of Damage Awards and Settlement Payments (4th Ed. Tax Institute © 2009), is in wide use by lawyers, judges, mediators and courts nationwide. He has advised plaintiffs and defendants in airline disaster, toxic spill and catastrophic injury cases, landmark whistleblower, fraud, trade secrets and patent litigation, celebrity divorce and palimony cases. He has advised on the tax consequences of marquis antitrust, civil rights and wrongful conviction cases, SEC restitution, and environmental contamination litigation. He has also had significant victories litigating tax cases, including invalidating a long-standing provision in the Treasury Regulations. He can be reached at wood@woodporter.com. Once again, working 30+ years in the area of tax laws, this expert doesn't mention the draconian fine/penalties AND interest the IRS charges on an unpaid tax bill, that would have mounted precipitously over nearly a four year period. If that is factored in, the $6.5M tax bill does NOT equate to a $20M payout.
What is going on here? How could this expert not even mention this?
http://www.irs.gov/taxtopics/tc653.html
Generally, interest is charged on any unpaid tax from the due date of the return until the date of payment. The interest rate is determined quarterly and is the federal short-term rate plus 3 percent. Interest is compounded daily. If you file on time but don't pay all amounts due on time, you'll generally have to pay a late payment penalty of one-half of one percent of the tax owed for each month, or part of a month, that the tax remains unpaid from the due date, until the tax is paid in full or the 25% maximum penalty is reached. The one-half of one percent rate increases to one percent if the tax remains unpaid 10 days after the IRS issues a notice of intent to levy.
Edited by MikeZPU, Feb 28 2011, 08:53 PM.
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Quasimodo
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Feb 28 2011, 08:52 PM
Post #47
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- Baldo
- Feb 28 2011, 08:16 PM
So Mr. Woods should know better not to open his mouth without finding out the facts. Just another effing mouth who has to say something.
Above he should know Tax Liens are not always about reality! Maybe if enough reporters find they have been burned by a false, planted story, they'll a ) be slower to fall for such tripe in the future; and b ) get mad enough to write about how they were used.
(OK, I'm an optimist...)
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Quasimodo
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Feb 28 2011, 09:02 PM
Post #48
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- Quote:
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Once again, working 30+ years in the area of tax laws, this expert doesn't mention the draconian fine/penalties AND interest the IRS charges on an unpaid tax bill, that would have mounted precipitously over nearly a four year period. If that is factored in, the $6.5M tax bill does NOT equate to a $20M payout.
You're right; there could be another way for the $6 million debt to have accumulated.
But would that assume that Seligmann was notified that his taxes were delinquent?
Or that there was some deliberate action on his part to conceal his tax obligations?
Would the lien be the very first thing the IRS does--four years after the fact?
I find the entire embroglio to be curious.
(What penalty is there if a revenue officer participates in a scam, defamatory scheme, or attempt to pressure a litigant in a civil lawsuit? )
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MikeZPU
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Feb 28 2011, 09:53 PM
Post #49
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- Quasimodo
- Feb 28 2011, 09:02 PM
- Quote:
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Once again, working 30+ years in the area of tax laws, this expert doesn't mention the draconian fine/penalties AND interest the IRS charges on an unpaid tax bill, that would have mounted precipitously over nearly a four year period. If that is factored in, the $6.5M tax bill does NOT equate to a $20M payout.
You're right; there could be another way for the $6 million debt to have accumulated. But would that assume that Seligmann was notified that his taxes were delinquent? Or that there was some deliberate action on his part to conceal his tax obligations? Would the lien be the very first thing the IRS does--four years after the fact? I find the entire embroglio to be curious. (What penalty is there if a revenue officer participates in a scam, defamatory scheme, or attempt to pressure a litigant in a civil lawsuit? ) Exactly -- I'm just arguing that I can't believe so-called tax experts are equating a $6.5M lien to a $20M payout, not factoring in the draconian penalties and interest that the IRS charges, which would have mounted precipitously over a 3 year period. The IRS doesn't care if you claim you didn't know you had to pay taxes -- they initially slap you with the maximum they can hit you with in terms of penalties and interest to scare you into paying up. You're allowed to file an appeal as to why you didn't pay it. But what the IRS almost always does, is deny your appeal, and then tack on more interest and penalties that accrued during the appeal process period -- I have first hand experience with this (more info below.)
I believe that Reade paid his tax bill -- I am just arguing against the equating of a $6.5M lien to a $20M payout.
As a side note, I find it very difficult to believe that the IRS supposedly just caught this.
Around 30 years ago, I made about $1000 doing some programming for a professor. Eventually, I got a 1099 misc income form. Since it wasn't a W2 form, I didn't include that income when I filed my taxes. In less than a year, the IRS caught it and sent me notice to pay up with some hefty penalties and interest fees. When I tried to claim ignorance, they denied my appeal and tacked on more penalties and interest -- it was really scary how quickly the total bill mounted. I quickly paid it all.
Now, if 30 years ago -- when computers were in an infantile stage -- the IRS caught my little $1K miscellaneous income in less than a year --- how is it possible in this day and age to not catch a multi-million dollar tax bill for well over three years?
Edited by MikeZPU, Mar 1 2011, 12:51 AM.
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Quasimodo
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Feb 28 2011, 10:08 PM
Post #50
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FWIW, an anonymous POSTER COMMENT at DIW:
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I am a retired IRS Revenue Officer, 1995, so some changes may have been made.
First the Tax Lien is improperly prepared. The lien should show the address of Seligmann or where he has assets. If Weiss's name is on the lien it should show that it is in care of, if he has a properly executed Power of Attorney for Tax matters. As it is shown, this lien could also attach to assets of Weiss Pllc in New York if that is where he is located, which I assume is his office address. The lien would also attach to any assets that Seligmann may have in New York. But as I recall he was a resident of New Jersey.
The amount of the lien would also include interest from April 15, 2008 until the assessment date shown on the lien. Additionally, a fraud penalty or negligence penalties, if warranted would also be included.
In my opinion the lien filing and recording has been screwed up by the IRS.
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Quasimodo
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Mar 3 2011, 10:10 AM
Post #51
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(PURE SPECULATION here, probably the result of too much of a sugar rush...)
It may be that the Seligmann lien document was "created" by someone hacking into the IRS files.
They didn't have info on Seligmann's assets, so these were not entered; nor did they figure out an amount of interest due, etc. IOW, they could have made up the simplest document possible--a standard form--and placed Seligmann's name on it with no real further specifics. And they could use the name of an accountant which might have appeared on other Seligmann family documents.
Hence, there is the name of that accountant, and a general sum (guessed at, or KNOWN, by the creator of the fake document); but nothing else.
That document is then placed where it will be generated, and a reporter tipped to it (or else it is simply placed where it is sure to be found),
and the fake STORY is swallowed by the gullible press.
And best of all, unless one tracks down the hacker, there are no fingerprints on it to point to anyone as the perpetrator.
If so, this would not be the first time hacking has been used to plant phony stories about the lax players.
If this rates as a cyber-crime--creating fake government documents; illegally using (forging) the signature of a real IRS officer on a document; hacking into government files; etc.
then it should rate an investigation by the FBI
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Quasimodo
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Mar 3 2011, 10:27 AM
Post #52
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If hacking WAS involved; and if the FBI does NOT investigate, identify the perpetrator, and charge him/her appropriately,
then what that says is that altering public records and inserting false information about someone is NOT considered a serious crime
(and let the hacking world be appraised of that fact, and we will be off to the races...because then all public records will become fair game)
That's what's at stake (assuming hacking was involved)--not just the records of one taxpayer.
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chatham
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Mar 3 2011, 10:43 AM
Post #53
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I agree with the IF's.
a couple of questions.
Why was it, the blog, posted with an afternoon time date while most all the other posts have early morning and late morning time dates. Very few that I saw were early afternoon or late afternoon blogs. Are the later day posts tips?
Does a tax advisor's name appear on a tax document? Or is it just the tax preparer's name on the document, with the proper Seligmann signatures.
The IRS can be hacked. And again, there is a connection between Duke (Durham) and the IRS via the former Under Secretary for Domestic Finance. But IF the connections are real, would anyone need to hack into the system to plant false data that turns into false accusations?
Edited by chatham, Mar 3 2011, 10:44 AM.
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kbp
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Mar 3 2011, 11:13 AM
Post #54
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I keep looking for what may be a simple answer, which keeps leading me back to the possibility that the 1099 form (page 5) could have reported the total of all 3 settlements as having been paid to a single recipient. The tax amount they claim to be due would have to have been for an amount, one in which the IRS declared as income, that is about three times as much.
Even if that by chance would be the answer to the problem of the amount the IRS claims is owed, I'm still left wondering how the agent, along with all the others I'd expect to be involved with a SEVEN DIGIT JACKPOT, would not catch a clue by checking it against the returm he had reported it on.
Having been through 3 audits myself, I suppose the situation will be another 'prove you're innocent' confrontation he must face. Once, in an audit, I did have a small battle explaining the trail of a large sum that was transferred through numerous accounts, for the interest banks had reported on the 1099's made it look like those accounts all had a fair sized sum in each of them that year until I showed the actual statements. (note the "large" and "fair sized" sums in my world are much smaller than they are for this topic!)
Edited by kbp, Mar 3 2011, 11:15 AM.
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Quasimodo
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Mar 3 2011, 12:49 PM
Post #55
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For background info:
- Quote:
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1. When you pay or settle a tax debt, how long does it take the IRS to release the lien? What is the procedure for doing so?
Answer: The statute says that they have 30 days to release the tax lien. See Internal Revenue Code 6325. That's how it's supposed to work but in reality they often overlook it and it doesn't get done. If this happens then a taxpayer can contact the Lien Desk by phone ( 800) 913-6050 fax (859) 669-3805. If you look at a copy of an actual Form 668(Y)(c) Notice of Federal Tax Lien you will notice a bold black box about half down the page on the left hand side. It says that if the lien is not refiled by the refile date in column (e) then the lien is releaseable on its face. That sounds complicated but what it means is that if another lien wasn't filed before the dates in column (e) then the lien is no longer enforceable. This sometimes complicates matters because the IRS is often reluctant to issue a release for an expired lien.
[The date on Seligmann's form is 9/8/2020 I don't know if IRS practice is to permit a lien to remain current for 10 years, or not. But see below. The date of assessment is 8/9/2010. (The numbers 8 and 9 are just reversed?).I don't know enough about tax practice to know if this is peculiar... ]
(snip)
5. What if you find an old tax lien on your credit file, believe you paid it but don't have records anymore? What is the procedure for investigating it with the IRS?
Answer: Similar answer to question 4. You will ultimately have to check with the IRS to see if the liability has been paid. It's important to note that there is a 10 year statute of limitations for the collection of the tax. The ten years begins to run from the assessment of the tax and there are many exceptions to this rule and circumstances that can cause the statute time to be extended (sometimes very significantly). This is another situation that is best left to a professional to decipher.
(snip)
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Quasimodo
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Mar 3 2011, 12:52 PM
Post #56
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For background info:
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http://www.irs.gov/pub/irs-pdf/f12277.pdf
Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien (as based on Internal Revenue Code Section 6323(j)
"The notice was filed prematurely, or not in accord with IRS procedures."
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Quasimodo
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Mar 3 2011, 01:14 PM
Post #57
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THIS IS REALLY NOT HARD TO DO...
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Quasimodo
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Mar 3 2011, 01:16 PM
Post #58
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And the nasty part of it is that if this is treated as if it is a real lien, then local sheriffs can be sent to seize property; probably to include bank accounts, cars, etc.
IOW, it can be a real pain.
And try getting the federal government to respond quickly.
It really comes under the "harassment" and "dirty tricks" department.
And it needs to be investigated.
- Quote:
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5.12.2.8 (02-01-2007) Place for Filing of Notice of Federal Tax Lien
It is important that Notices of Federal Tax Lien be filed in the proper jurisdiction to protect the governments' interest amongst other creditors. State law dictates the place of filing.
Individuals:
Real Property - file the NFTL in the recorder's office for the county where the real property is located;
Personal Property (tangible or intangible) - In general, file the NFTL at the recorder's office for the county where the taxpayer resides at the time the NFTL is recorded because that is where the property is deemed to be located.
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Quasimodo
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Mar 3 2011, 01:38 PM
Post #59
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- Quote:
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https://irscollectionlaw.com/public_html/HTMLsupport/5.12.2.html
Government Documents:
5.12.2 Lien Filing Requirements
Purpose and Effect of Filing a Notice of Federal Tax Lien (NFTL).
The purpose of filing the NFTL is to protect the Government’s right of priority against certain third parties, typically a purchaser, holder of a security interest, mechanic’s lienor, or judgment lien creditor (For additional information see IRM 5.17.2, Federal Tax Liens).
Note:
The NFTL is not a negotiating tool and is to be used only in accordance with IRM 5.17.2 and 5.12.
5.12.2.2 (05-20-2005) Creation and Duration
A Federal Tax Lien (FTL) is created by statute and attaches to a taxpayer’s property and rights to property for the amount of the liability. This is the "statutory" or "silent" FTL. See IRC 6321. The following must occur for the FTL to arise:
An assessment must have been made.
A demand for payment must have been made.
The taxpayer must have neglected or refused to pay. (As a matter of IRS policy the taxpayer is normally given 10 days from notification to pay the amount due.)
5.12.2.3 (05-20-2005) Taxpayer Contact
The Service is required to make reasonable efforts to contact the taxpayer before filing a NFTL. The efforts to contact the taxpayer are to advise that a NFTL may be filed if full payment is not made when requested. Issuance of the statutory assessment notice and the balance due notices sent during the collection process will constitute reasonable efforts. Publication 594 (IRS Collection Process), CP 501 (Balance Due - Reminder), CP 504 (Balance Due - Urgent Notice), and Letter 1058 (Final Notice - Intent to Levy), advises the taxpayer that a NFTL may be filed. Also the ACS letters LT-39 (Reminder Notice) and LT-11 (Final Notice of Intent to Levy and Your Notice of Your Right to Hearing) warns taxpayers of possible NFTL filing.
While the notices sent in the notice stream are sufficient for filing a NFTL, generally when a NFTL has not been previously filed the revenue officer’s determination with respect to the filing of the NFTL will be done in conjunction with the initial contact or initial contact attempt. Contact (request for full payment) may be made by:
field contact (preferably).
telephone.
mailing a notice or letter to the last known address (when appropriate).
(snip)
5.12.2.5 (02-01-2007) Lien Filing Approval
Revenue officer group managers will note their review and approval of the lien filing in the ICS history for revenue officers below the GS-9 level or they may assign the lien filing responsibility to a revenue officer at the appropriate grade level.
Liens filed by Dyed Fuel Compliance Officers below GS-9 will be reviewed and approved by a designated Examination manager.
When a manual (ICS generated) NFTL is prepared, managers will sign the NFTL for revenue officers below GS-9 or the NFTL may be signed by a revenue officer at the appropriate grade level.
In all cases document the case file.
5.12.2.5.1 (02-01-2007) Approving the NFTL Determination
A determination to file a NFTL by revenue officers below GS-9 must be approved by the manager prior to the NFTL being filed.
If authorized by the group manager, GS-9 and above revenue officers may approve the NFTL determination for revenue officers below GS-9 and initiate the ICS NFTL request.
5.12.2.5.2 (03-01-2004) The Manager’s Review Process
Managers of revenue officers below GS-9 are required to:
review the taxpayer’s information
verify the balance due, and
affirm that the lien filing is appropriate given the taxpayer’s circumstances, considering the amount due and the value of the property or rights to property.
In all cases, revenue officers must document the following information:
A summary of any information the taxpayer provides that may affect the decision to file a lien.
If the taxpayer provided information, the employee is to explain their review of the information and findings; and
Verification that the amount is owed, e.g., the balance has been checked on IDRS.
5.12.2.6 (06-01-2007) Preparing the NFTL
The correct and timely preparation of the NFTL is the responsibility of the person assigned the balance due account.
(snip)
NFTLs must show the taxpayer's last known address. Employees will not include SSN's in the street address field. The word "Local" will be used ONLY if it is part of the street name. "Local" alone is not sufficient for mailing purposes. Further, a city, state and zip code, must be input to the appropriate data fields.
(snip) IF
the balance due has the name of a third party, i.e., accountant, attorney, etc., and a NFTL is being filedensure that the address on the NFTL is the taxpayer’ s. A NFTL should never show the name and/or address of a third party or the names of corporate officers. When dealing with "c/o" be sure that the name and address on the NFTL is that of the taxpayer.
(snip)
Revenue officers at the GS-9 level and above have the authority to issue Form 668(Y)(c). The employee’s name and identification number should be typed in the lower portion of the form and the title inserted in the appropriate block.
Signatures are not required. However, documents generated by the ALS have facsimile signatures.
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Quasimodo
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Mar 3 2011, 01:41 PM
Post #60
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IF
the balance due has the name of a third party, i.e., accountant, attorney, etc., and a NFTL is being filed ensure that the address on the NFTL is the taxpayer’ s. A NFTL should never show the name and/or address of a third party or the names of corporate officers. When dealing with "c/o" be sure that the name and address on the NFTL is that of the taxpayer.
IE, Either the Seligmann document is therefore improperly made out;
or else it is a fake.
If it is improperly made out, then who made the (obvious) error? Has this person ever made out such forms before? If so, was this document approved by a manager in this form?
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