How the Empire Strikes Back
Roberts, Paul Craig, The Washington Times (Washington, DC)
Are there any government agencies that are not corrupt? Do lawmakers have the ability to tell the difference between good laws and laws that are harmful to the basic institutions of civilized society, such as the family? It is difficult to answer these questions in the affirmative.
No sooner had the Senate Finance Committee finished its hearings on IRS abuses than new ones came to light. Forbes magazine reports that Ruby Coram, 71, received a $2.8 million settlement from her insurance company when the dishonest doings of an agent left her husband without coverage when he went down with his tugboat off the New Jersey coast five years ago.
Her lawyer, working on a 45 percent contingency fee basis plus expenses, got $1.28 million. Mrs. Coram paid the IRS $600,000 on her $1.52 million share, leaving her with $920,000 to take care of herself and her daughters. Now the IRS is demanding another $200,000. The tax-abuse agency is trying to force Mrs. Coram to pay income taxes on the lawyer's share, too, even though he paid the taxes due on his share. Moreover, there is a federal court decision, Cotnam vs. IRS, that ruled that residents of Alabama, Mrs. Coram's state of residence, can exclude their attorneys' contingency fees from taxable income.
The IRS says it doesn't care what the federal court ruled. The tax abusers are sticking Mrs. Coram with the Alternative Minimum Tax, which doesn't allow deductions from income for lawyers' fees.
Hollis Hallford, 74, is another IRS victim. He lives on $680 a month in Social Security, and the IRS wants his home to pay taxes, penalties and interest on a nontaxable 1993 insurance settlement. The IRS claims that the money was for punitive damages, which are taxable. But the insurance company settled without admitting wrongdoing and no punitive damages were awarded. Bullies are bullies, and the tax abusers know that Mr. Hallford spent his money on his deceased wife's medical bills and has none left with which to pay a lawyer to fight the IRS.
It is the same no matter which agency one examines. The Justice Department has turned loose on Medicare providers 375 FBI agents trained to misrepresent as fraud simple mistakes and befuddlement by health-care administrators confronted with 45,000 pages of Medicare-reimbursement regulations.
The purpose is to raise revenues for the government. …