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Filing Taxes Like A Pro And Beating The IRS At Its Own Game

13 Apr

Filing Taxes Like A Pro And Beating The IRS At Its Own Game

Beating The IRS

I wrote to you in a recent issue about the Supreme Court case Bittner v. United States, which was recently decided in a 5 to 4 ruling.

It seems, however, that not only is it tax season in America, it’s also tax season at the United States Supreme Court.

The highest court in the land has also heard arguments in another tax case. From Bloomberg:

“The question for the court in the case, Polselli v. IRS, is whether the Internal Revenue Service has to tell account holders it has demanded [bank account records from a bank] when trying to collect on someone else’s taxes. Taxpayer rights groups and business advocates have urged the justices to rein in the agency…”

The case involves one Remo Polselli, who came to owe the IRS over US$2 million.

Tax authorities believed Polselli could be deliberately hiding his assets to avoid paying the tax liabilities. They thought he could be transferring assets to his wife or others…

So, the IRS sent summonses to multiple banks, including where Polselli’s wife and his law firm had accounts… They didn’t give the wife or the law firm notice that they were doing this.

The National Taxpayers Union states plainly the main issue at stake:

“Remo Polselli owes the IRS US$2 million. All agree on that point…

“Upon hearing from the banks, Ms. Polselli and the law firms rushed to court to quash the summonses, but the district court dismissed the case, saying they had no right to notice from the IRS… The main question [before the Supreme Court]: must the IRS give notice to third parties that their finances are being investigated and allow the chance for the third parties to object in court?”

In the earlier Bittner case I mentioned, the Court ruled in favor of an expat who had failed to file the correct tax forms, and against the IRS—meaning the expat was made to pay a much-reduced fine…

It set a precedent for this conservative-majority court, suggesting it was willing to clip the wings of the IRS.

Depending on how the Polselli case goes, we could see another clampdown on IRS overreach…

"Strong Arm" Tactics

For decades, the IRS has relied on strong-arming taxpayers with authoritarian tactics.

Feared worldwide these days… by banks and financial institutions as well as ordinary citizens from California to Switzerland… the U.S. Internal Revenue Service has become the hunting dog for politicians unable to balance the nation’s checkbook.

Outlandish fines, loss of travel, and even an orange jumpsuit can await anyone who makes even an unintentional error with a tax filing.

Make no mistake: as an American, you must file your taxes every single year of your life, no matter where in the world you live or how long you live there, with few exceptions.

The U.S. tax code has around 2,500 pages. However, you have to add in the IRS regulations, rulings, and clarifications, which add up to another 9,000 pages. Tax professionals use CCH’s Standard Federal Tax Reporter to help them understand the actual code. That publication is more than 70,000 pages and is updated monthly. That’s a lot of obligation and liability.

That’s a lot of chances to miss something on a tax form… Too many.

Then, even if you do everything right, and no matter where in the world you’ve made your money, the IRS is standing by still, ever eager to bite off its pound of flesh.

Fighting Back

During oral arguments in the Polselli case, the justices were apparently much more aggressive in in how they questioned the IRS than in how they questioned Polselli’s lawyers… which might give some indication of how this case could go.

A decision is expected this summer. The conservative court may once again rule against the IRS, and try to reign in its powers.

Still, we’re a long way from the IRS being abolished, the goal of the Fair Tax Act, which Republicans introduced to Congress when they came to power this year…

We can dream about what the world would be like without the IRS… But it’s just idle dreaming. That Act will never pass (and if it did, President Biden would veto it).

Long story short: you still have to file your taxes this year. And if you haven’t done it yet—the April 18 filing deadline is fast approaching.

The good news is, me and my team are here to help. As a former IRS Enrolled Agent, I make it my mission to show you every “loophole” and advantage you can use to reduce your bill…

I once even schooled an IRS agent on the agency’s own rules—and DOUBLED my refund.

I want to help you get the best deal on your taxes possible…

Learn what my team and I have discovered about U.S. taxes here—before it’s too late.

Stay diversified,

Lief Simon
Lief Simon
Editor, Offshore Living Letter