Fri, Feb 07, 2003
30 Years and 1300 Pilots Finally Expose IRS
Subterfuge
The Ninth Circuit Court of Appeals (San Francisco) ruled last
week that two IRS attorneys committed "a fraud on both the
taxpayers and the tax court," as they ginned up a phony case
against nearly 1300 pilots.
In the 1970s, when interest was a deductible expense, a lot of
pilots looked for tax shelters; some found one particular one, that
the IRS decided to attack. The IRS simply denied the legitimate
deductions the pilots claimed, and then tacked on the customary
interest and penalties, threatening to bankrupt many families. The
Tax Court upheld the pirate agancy, not knowing that, "...the two
IRS attorneys had secretly cut a settlement deal with two of the
pilots," as reported by Monica Perin, in the Houston Business
Journal.
The
rest of the 1300 or so pilots had agreed to go along with whatever
the Court decided. The IRS, in order to get cooperation of two
pilots, changed their tax returns, so that those two conspirators
came out even, after their attorneys had been paid. The rest were
simply railroaded.
If the case had gone in favor of the crooked IRS, one pilot
said, "I would have lost my house, my car, everything. No one can
pay 25 years of penalties and interest." As it is, he lost a lot of
money, in legal fees alone; not to mention, he had assets tied up
for 30 years.
There is no word on whether the IRS will do anything to the
crooks in their midst, or whether those frauds will face any legal
action whatsoever; but at least the IRS has finally apologized
-- to the 9th Circuit Court.
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