Are your assets really yours? Well, that may depend on how well documented you really are. You could be seriously questioning that now that you’ve passed the April 15 tax deadline gauntlet.
Raisin farmer Marvin Horne of Kerman, California (just west of Fresno) now owes the United States Federal Government nearly $700,000 in fines and penalties in addition to nearly half of his raisin crop, or 1.2 million worth or raisins. Why? Because of a Depression-era law called the AMAA (Agricultural Marketing Agreement Act) that required some farmers, including raisin farmers, to simply turn part of their crop over to the government.
For free. No compensation other than some U.S. government marketing help of highly subjective value. And in addition to any taxes they might normally owe on profits of their farm.
Horne complied, until 2002, when the government attempted to claim 47% of his crop. He then decided that enough was enough.
The government has pressed their case, and Horne, at this point, has hired legal counsel and vows to fight the government. “If we lose, we’re bankrupt. We won’t have a pot to piss in. No. I don’t want to even think about it. Would you?”
President Barack Obama, in his State of the Union address January 20, 2015, proposed a new tax on banks to basically discourage them from “high-risk” investments. This tax would, if passed, most certainly be passed to account holders, who ironically have money in their bank accounts that has already been taxed.
The IRS, applying a law crafted to give them the tools to nail terrorists, racketeers and others, have also used this law to seize cash out of bank accounts of innocent individuals. The case of Carole Hinders, a Mexican food cook in Iowa, was one in which the IRS accused her of no crime. She merely had made deposits of less than $10,000 at a time, which sent out triggers to the IRS under the law. The IRS seized the $33,000 in her bank account, requiring her to fight them to get her $33,000 back.
A common issue in the small-business turnaround field is a very simple one: DOCUMENTATION. And a common lesson I find I have to teach to my clients: “He who is best documented wins.”
If you find yourself at odds with a creditor who claims you owe money you think you don’t owe, whoever is best documented in the case generally wins. Interestingly, those who are not as well documented are more likely to capitulate, and pay, in the face of the documentation presented by their adversaries.
The government is different only in that they use law as their documentation and justification of seizure. Other than that, if you owe the federal government $7,000 in taxes, and they say you owe them $9,000, and you lack the documentation to prove you owe only $7,000, you are most likely going to overpay the government. Because they were more “documented” than you were.
The lesson to learn: The United States Federal Government has many tools at their disposal, not the least of which is archaic law, to seize assets you may think right now are yours. KEEP YOURSELF PROPERLY DOCUMENTED. Know the law, and know your numbers.