For those who think taxation is about soaking the rich...

[Seagoon]

Hi All,

Came home today for lunch and my wife was near tears. She handed me a certified letter from the IRS indicating that we owed them over $8000 and that they wanted the money NOW and that they had put a lien on our account.

How did we get in such a state? Well, way back in early 1997 I decided to quit my high paying computer job and start seminary so that I could be a pastor. My wife moved her job to Sun Microsystems in PA. In April of 1998 we took a bit of a hit in taxes because I was no longer earning, and we had used our savings in the move and the first year of seminary (my Seminary education ended up costing us a little over $30K).

Well I don't want to bore you with lots of details but our tragic mistake was in attempting to graduate from seminary without a host of school loans. To do that, my wife sold off her Sun stock options. Bad idea. This was considered a Capital Gain and massively taxed. We paid off the school bill, but after having our first child and getting flooded out of our apartment, we couldn't pay the taxes in April. We ended up not only in debt to the US Gov't but also paying heavy penalties. We were also in debt to the State of PA which wanted their own "bite."

We worked out a payment plan with the IRS to pay off the 14K we now owed them and borrowed money to pay off the state. So instead of being free and clear, because we had sold stock to pay our bills, we ended up in debt. We have been struggling to make the payments to the US Gov't for the past 4 years (in addition to our yearly tax bills). We got some relief from current taxes when my wife quit working outside the home, but that didn't help us in paying the back taxes on our "Capital Gain." Late last year our denominational medical plan collapsed, and we were forced to switch to a private (and much more expensive plan). No matter how we ran the numbers, the pay-off plan we had worked out with the IRS (when my wife was still working) had become impossible to pay at its current rate. She wrote and asked them if we could renegotiate the payment so it would be over a longer period of time. Their kind response? NO, in fact, pay it all now, get loans to do so. My wife tried to explain that no bank in their right mind would give someone with a lien a loan but apparently they meant "sell plasma, knock over a convenience store, get the kids to make sneakers in Mexico, we really don't care, just git me mah money sukah, daddy needs some more pork."

Now, my take home pay, after medical, taxes, and the like is around 20K. I live in a rented house, and I drive old cars. The only thing I do have is a salary and an underfunded retirement plan. If you seriously think our current tax system can't make the life of even a virtually penniless pastor and his family miserable, think again. I will do all can to pay, because I understand that there are no exceptions to the Romans 13 clause instructing me to pay my taxes. But I'm crying out for relief from this stupid, confusing, and confiscatory system. I couldn't think of a better disincentive system if I tried. Please, please, please support the fair tax, or the flat tax, or anything...



- SEAGOON


PS: This is also a heads up that I'm probably going to have to cut the $14.95 a month I pay for AH2. So If I do go, please know its not because of dissatisfaction with the game.

[straffo]

I don't understand ,when you where at the seminaire you were not earning money ?
If yes shouldn't it have lowered your tax ?


Btw seminaire  for a roman catholic is free   (if I'm not wrong)
it's a joke man

[Sandman]

I'm thinking you need a lawyer. I sure as hell don't know the answer.

[boxboy28]

Seagoon   im very sorry to hear that................ some things in this world just aint right!

[Curval]

Seagoon, I'm sure there is some sort of relief you can get.

E-mail me at:

mrwolf_riaz  at  yahoo  dot com

I've got a few contacts that might be able to give some free advice.

[BTAirsol]

Seagoon I'm sorry to hear about your financial set back. Help will come, keep praying for guidance, for that person to help you move on. Remember from every cross there is a resurrection. Your family is in our prayers.

[Charon]

I'm thinking you need a lawyer. I sure as hell don't know the answer.

The IRS knows that Seagoon is not likley to be able to afford significant legal expense, that's why they typically target him (and others in a similar situation) instead of those who have the resources and can fight back.  Big thing in Congress about that a few years back, obviously nothing but hot air on TV.

My best and good luck.

Charon

[Sandman]

It's probably true of most cases. Those that really need lawyers cannot afford them.

[Chairboy]

Crud!  I'm sorry to hear that, Seagoon, and I hope you can find a solution.  This sounds terrible, have you consulted an accountant?  I know it might be difficult rationalizing the extra cost of an accountant at this stage, but sometimes they can do miraculous things.

[Seagoon]

Hi Sandman,

Yeah, we are in the process of contacting a tax lawyer now. I don't doubt we will be able to clear it up and get a new payment plan worked out eventually, but not without considerable effort.

I'm trying not to grumble and complain, but I'm tired of being in hock to the US Government merely because my wife was a good worker and we tried not to go into debt. Ah, well.

Straffo,

No in Seminary I couldn't earn money by working and still expect to pass Greek and Hebrew.

Our Income Taxes were indeed lowered when my income was taken out of the picture, but over here in the US we have something called a "Capital Gains Tax" which means that when you convert an asset into cash, you are taxed by the Government at 28% regardless of your income. Additionally we paid a State Capital gains tax of around 3% and then a local county tax (if you can believe it).

Additionally, we ended up in the situation of paying taxes for the previous year when our income kept declining from year to year. In other words from '97 onwards, we were always paying taxes with less money than we'd had the year before. The answer to this is of course to save, so you have the money you need to pay the taxes in April, but we were living from hand to mouth.

Regarding seminaries being free, some of the larger denominations do indeed offer a free or almost free ride to their students, such as the Roman Catholic Church and the mainline Presbyterians.

Students from smaller conservative denominations like mine though, will end up paying for Seminary as you would any post-graduate education. The majority of guys in my class ended up getting school loans to do this, and consequently ended up graduating in debt and expecting to go into a low-paying profession.

- SEAGOON

[Siaf__csf]

Very sorry to hear this Seagoon. What you should have done was to pay all the taxes immediately from the profit and then budget the leftover money.

You just made a huge blunder in finance, the system can't be blamed for that, can it?

Anyway I hope someone can find assistance for you, the government values money more than your family or its future. It's never a good idea to mess with the IRS.

[Seagoon]

Originally posted by Siaf__csf
Very sorry to hear this Seagoon. What you should have done was to pay all the taxes immediately from the profit and then budget the leftover money.

You just made a huge blunder in finance, the system can't be blamed for that, can it?

Siaf,

Unfortunately, much of the money went to paying off our previous tax bills, and then to expenses we didn't know we were going to incur (we hadn't budgeted for a tropical storm for instance). Also, to tell the truth, I'm terrible at math and don't really understand the system at all. I used Turbo Tax that year and it came out with the wrong numbers (even then, we didn't have enough to pay our tax bill). Had we not had income tax to worry about, we could have paid the Cap gain, and vice versa.

Yeah, if you want to get down to it, the problem is that I'm too stupid to be able to live in modern America, I can figure out the finances of the 19th century, (you work, you get paid, you pay for the things you buy) but apparently can't figure out how the 21st century's work ( get paid, pay taxes on your income to the federal, state, & local governments, pay for the things you buy, pay taxes on the commodities you buy to the State and Local government, continue to pay taxes on the durable goods you now own, pay taxes on the goods you sell, pay taxes in order to live where you are, pay to educate your children AND pay taxes in order to send other people's children to bad schools, pay taxes for the privilege of dying, pay taxes on what you want to leave your children and so on (I proabably missed many other taxes, but then again, thats my problem all along isnt it?)

The last line of Braveheart seems a little hollow to me at present...

[Mighty1]

I would find a CPA to give you ideas.

My wife deals with this kind of crap all the time (She's a CPA here in Indiana)and she says the lawyers don't always tell their clients the best way to deal with the IRS.

[RTR]

Seagoon, my heart goes out to you. I have just been through something very similar with revenue canada (our form of IRS).

It's unfortunate, but they don't really care that you used that money to put shoes on your kids feet and food in their belly's. They want the money.

They need the money more than you because a new mop for the government employed janitor, who washes the floors in the  gov offices, costs a few thousand dollars once it's an approved purchase. It is important to note that this is really important.

My saving grace was that I own my own home (or the bank does rather), and I was able to refinance and pay off most of what I owe. It will take me the better part of a year to get totally free and clear, but it is happening now.

You will get through this, and it is wise that you are taking it to a lawyer. My best advice to you is once it's all said and done, get some assets.

If at all possible buy a home, even if it is too small, or not quite what you envisioned living in. It is a valuable asset and gives you some options you currently don't have.

Seagoon, once again my sympathies sir. Take heart, it will get better.

Lastly, don't cancel that account right away. You have always stepped up to the plate to help those in need in our little community, and I have a funny feeling that you won't need to worry about your account for a while.

cheers,

RTR

[g00b]

I find the IRS and our whole tax system to be absolutely ludicrous! Why should I (we) have to pay a 3rd party to tell us how much money to give the government? They already have all the information. Why isn't there simply an IRS website you go to, punch in your SSN and a pin number and it tells you what you owe? I actually think it's borderline criminal. Essentially they are hoping for errors in their favor, but they'll audit you when the error is in your favor

Plus as you found out, it's sometimes better to be poor. Or at least arrange your assets to look that way. Declaring bankrupcy may actually be an option in your case. I know several people that made out like bandits by declaring bankrupcy after the dotcom crash.

I also know a few people who simply don't pay their taxes, including this guy, who likes to fight the government:

http://www.santacruzsentinel.com/archive/2005/January/30/local/stories/16local.htm

He claims that he hasn't payed taxes in 30 yrs. Not sure of the details, or if in truth, I support not contributing anything at all to the government coffers. They do occasionally render userful services

g00b