For almost 40 years, Carole Hinders has dished out Mexican specialties at her modest cash-only restaurant. For just as long, she deposited the earnings at a small bank branch a block away — until last year, when two tax agents knocked on her door and informed her that they had seized her checking account, almost $33,000.

The Internal Revenue Service agents did not accuse Ms. Hinders of money laundering or cheating on her taxes — in fact, she has not been charged with any crime. Instead, the money was seized solely because she had deposited less than $10,000 at a time, which they viewed as an attempt to avoid triggering a required government report.

“How can this happen?” Ms. Hinders said in a recent interview. “Who takes your money before they prove that you’ve done anything wrong with it?”

The federal government does.

Using a law designed to catch drug traffickers, racketeers and terrorists by tracking their cash, the government has gone after run-of-the-mill business owners and wage earners without so much as an allegation that they have committed serious crimes. The government can take the money without ever filing a criminal complaint, and the owners are left to prove they are innocent. Many give up.


"The IRS turned over to congress most of Lois Lerner’s emails. You rarely hear that in news reports; they turned over most of her emails, including ALL of the emails from the period that congress is most interested in: the months preceding and the months during the last [2012] presidential campaign.

How many of Lois Lerner’s emails have been turned over to the House of Representatives?

The answer is 67,000 emails, but America mostly does not know that because the news media simply doesn’t have the time to add a sentence about those 67,000 emails in their IRS scandal stories.

Another fact rarely included in the news reports of the IRS news scandal is that not one Republican political group that applied for 501c4 status was denied 501c4 status. Not one Republican application was denied. The one political organization that managed to somehow get denied 501c4 status was a liberal organization called Emerge America. For most of the American news media that remains one of the secret facts of the IRS scandal.”

[Excerpts from The Last Word with Lawrence O’Donnell]

TIGTA Report – IRS Needs Better Strategy for Obamacare Medical Device Tax

A new report released today by the Treasury Inspector General for Tax Administration (TIGTA) says that the IRS needs to improve its strategy for ensuring accurate reporting and payment of the Medical Device Excise Tax that is included in the Affordable Care Act.

Apart from all the tax credits and other tax law changes included in the ACA, the most controversial one is perhaps the Medical Device Excise Tax.

This is an excise tax of 2.3 percent of the sales price for medical devices sold starting from January 1, 2013.

Manufacturers, producers and importers of medical device goods are now responsible for collecting the tax and filing Form 720 as their quarterly federal excise tax return.

Estimated revenues from this tax were pegged at $20 billion for the period from fiscal year 2015 to 2019.

TIGTA’s review found the number of forms 720 filed and the amount of revenue reported were much lower than expected.

TIGTA’s analysis of 5,107 forms 720 that were processed for the first half of 2013 identified discrepancies totaling almost $117.8 million compared to what the IRS toted up from the forms.

TIGTA says the IRS is trying to come up with a compliance strategy for this tax, but the agency is apparently still unable to identify the medical device manufacturers registered with the Food and Drug Administration who need to file Form 720 and pay the medical device excise tax.

“While the IRS has taken steps to educate medical device manufacturers of the medical device excise tax during implementation, it faces challenges to definitively identify manufacturers subject to the medical device excise tax reporting and payment requirements,” said J. Russell George, Treasury Inspector General for Tax Administration.

As if identifying the companies that need to pay the tax wasn’t hard enough, the agency went ahead and stiffed $706,753 out of businesses through 219 failure-to-deposit penalties for the first six months of 2013, which was supposed to be a designated penalty relief period.

The IRS then backtracked on 133 of these penalty assessments, but left the others stand. When TIGTA notified the IRS about the remaining 86 penalty assessments, they were also reversed and the IRS wrote them apology letters.

TIGTA included several recommendations in the report for the IRS, including that the agency continue refining its compliance strategy for identifying noncompliant manufacturers, establish a process for verifying the tax amount for paper-filed Forms 720, and initiate correspondence with taxpayers for obtaining missing taxable sales or tax amounts.

The IRS agrees with TIGTA’s recommendations, and is planning to develop alternative strategies for identifying the medical device makers and ensuring compliance and payment of the medical device excise tax.

Read the full TIGTA report – Download (pdf)

Photo credit - will1ill/flickr

IRS penalizing pot shops for paying federal payroll tax in cash

(Cannabist) Legal marijuana businesses without bank accounts are unfairly assessed a 10 percent penalty on federal employee withholding taxes they are required to pay electronically but are forced to pay in cash, according to a lawsuit challenging the practice.

That’s because the Internal Revenue Service requires all businesses to pay the quarterly tax by bank wire, an impossibility for hundreds of medical and recreational marijuana shops nationwide that are unable to obtain banking services.

And rather than waive the penalty for cash-only businesses paying the tax on time, the IRS advised the companies to avoid the assessment by using techniques that amount to money-laundering, according to a petition filed in U.S. Tax Court.

Read more

New Lois Lerner emails reveal disdain for Conservatives: "TerRorists...A**holes"


Just when I thought my opinion of Lois Lerner couldn’t get any worse, we recover one of her emails.  Released today by the House Ways and Means Committee, the email makes it clear that Lois Lerner despises Conservatives.

from House Ways and Means:

Washington, DC – Today, Ways and Means Committee Chairman Dave Camp (R-MI) sent additional evidence to the Department of Justice (DOJ) regarding the April 9, 2014 criminal referral letter which laid out evidence of possible criminal wrongdoing by former IRS employee Lois Lerner uncovered through the Committee’s investigation.
In releasing the letter, Camp stated, “Despite the serious investigation and evidence this Committee has undertaken into the IRS’s targeting of individuals for their beliefs, there is no indication that DOJ is taking this matter seriously. In light of this new information, I hope DOJ will aggressively pursue this case and finally appoint a special counsel, so the full truth can be revealed and justice is served.”

In the letter to DOJ, Chairman Camp revealed:

Lerner had a bias against conservatives:

A newly discovered email exchange from Ms. Lerner’s official IRS email account, dated November 9, 2012, directly demonstrates Ms. Lerner’s deep animus towards conservatives, which she refers to as “—-holes.” Lerner further illustrates her disgust with conservatives, even suggesting they will ruin the country. In her email, Lerner states: “So we don’t need to worry about alien teRrorists. (sic) It’s our own crazies that will take us down.” This email shows that Ms. Lerner’s mistreatment of conservative groups was driven by her personal hostility toward conservatives.

Lerner used her personal email for official business, including taxpayer information:

The Committee also found that Lerner used her personal email for official business, including confidential return information. The Committee believed that further investigation, using resources available to the Department of Justice, could reveal whether there was unauthorized disclosure of taxpayer information in violation of the law. A newly discovered email from February 22, 2012 shows an exchange between Ms. Lerner and an IRS IT professional regarding a “Virus on Home PC.” In the exchange, Ms. Lerner indicates that she kept work information on her home computer, some of which may have been lost. She further states that her computer may have been “simply hacked because my password was too simple.” This exchange further raises concerns that taxpayer information may have been leaked.

read the rest

Here’s sample of the emails:


And here’s a link to the entire batch of emails released today.  They go on to show what a smug elitist she really is. 

No Excuses: IRS has used 3rd party email archiving since 2005


The Obama administration have been hiding behind the story that Lois Lerner’s hard drive crashed and caused two years worth of emails to vanish.  However, a single hard drive crash can’t eliminate an email by itself.  Emails are stored on servers, on the recipients computers, and the IRS even mandates that all email be printed to comply with the Federal Records Act.

Now, on top of all those separate reasons, the IRS also has had a 3rd party email archiving service contracted since 2005.

from Reason:

The Internal Revenue Service (IRS) said it can’t provide emails sent between 2009 and 2011 that were requested by congressional investigators because of hard drive crashes.

The agency said that emails stored on dead drives were lost forever because its email backup tapes were recycled every six months, and employees were responsible for keeping their own long-term archives.

The IRS had a contract with email backup service vendor Sonasoft starting in 2005, according to, which lists the contract as being for “automatic data processing services.” Sonasoft’s motto is “email archiving done right,” and the company lists the IRS as a customer.

read the rest

Check out this tweet from Sonasoft:


The only reason Lois Lerner’s emails are currently unavailable is because the Obama administration doesn’t want them to be found. 

Here’s something else worth remembering: Lois Lerner also used unrecorded personal emails to bypass record keeping