August 10, 2011 - Phil Hodgen

Yet another OVDI victim’s story

I posted a call for people willing to stand up and go public about themselves and their experience with the IRS.

This is an important thing. The IRS needs some sunlight.

To be specific what I would envision is a video (over the web) interview between you and me. Your face could be obscured, or you can be visible. Your choice. Your name — optional or fictional. Your choice. We’d do it over Skype and record it.

The following story came from a comment to that post and it is important enough so that it deserves a full post. Here’s the comment:

The axe hasn’t fallen yet, but if it does after Aug. 31 you might have yourself a youtube video…

I’m 25 yrs old, earn less than $15k/yr as a writer, and just learned
I might be several years of income in debt to the US govt 🙁 My
fiance is trying to help me straighten this out (I can’t even think
about the problem without crying).

I’m a dual citizen who grew up and went to school in Canada and moved
to the US a couple years ago. When I was in my late teens, my parents
put $80k US in a Canadian bank account in my name to pay for my
education. Now I want to do an MFA degree, but I’m afraid to touch the
remaining money. I want to marry my fiance but we’re afraid that if we
do the IRS will take his savings too. My life is on hold, and I’m

My fiance was hoping I’d qualify for OVDI FAQ #17, but he says I
didn’t report my interest correctly in 2008, made some other mistake
in 2009, and before 2007 I thought of myself as a Canadian and didn’t
even file 1040s.

Here’s the catch: my fiance checked all my past taxes and discovered
that even including the interest correctly in 2008, I’ve always made
less than the standard deduction, and wouldn’t have owed any
additional taxes even if I had reported the Canadian account’s
interest correctly. He thinks I therefore, depending on the
interpretation of “tax liability” (is it pre or post deductions?),
might still qualify for OVDI FAQ 17.

Does this mean I have no “unreported tax liability” and can send in
my 6 delinquent FBARS and be done with it? Or does the fact that I
messed up my 1040’s (albeit in a way that doesn’t change how much
taxes I owe) mean that I would get in huge trouble? Should I file the
6 FBARs, or just stay quiet and hope for the best?

I have promised myself that all ad hominem attacks on the IRS Commissioner cease forthwith. So don’t expect any here, or in the future. But this story highlights broken systems, broken perspectives, and a broken bureaucracy. I suspect that there is an internal threshold at the IRS that makes cases like hers “too small” to worry about. If so, why the sadism from the IRS,[1] gratuitously, deliberately, and gleefully putting people like this woman to tears?

I’m not sure whether that was an ad hominem attack or a colorful figure of speech. I’ll let it stand.

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