IRS' Recently Announced Leniency Only Applies to Obama's Cabinet Picks

American Scofflaw
The sad case of Grammy-winning blues singer Koko Taylor, who is 80 years old and in poor health:

Her income has dropped precipitously, her expenses haven’t, and she has little savings or other hard assets besides a house in a Chicago suburb that Zillow.com figures is now worth only $280,000.

Nevertheless, the IRS says Taylor must pay $400,000 in back taxes, penalties and interest. Otherwise, she faces the possibility the G-men will grab most of her income, including royalties and Social Security, and maybe even her home. The feds rejected her offer to take out a reverse mortgage on that house and pay $200,000 plus up to 50% of any future net revenue, moves that would allow her to remain in her residence and live out her remaining time with her second husband.

The Tax Court yesterday held that the IRS did not abuse its discretion in refusing to accept her proposed offers in compromise, upheld the IRS's tax lien and levy against her, and upheld the IRS's refusal to abate tax penalties. Taylor v. Commissioner, T.C. Memo. 2009-27 (Feb. 5, 2009). In its conclusion, the Tax Court appeared to take a swipe at Tom Daschle, Tim Geithner, Nancy Killefer, and Hilda Solis:

Both petitioner and respondent repeatedly commented on petitioner's stature as a beloved and well-known professional singer as support for their respective positions in these consolidated cases. We disagree with both parties insofar as they contend that a taxpayer's celebrity status is somehow relevant to what this Court must do in deciding whether the Commissioner's collection action may proceed. Every taxpayer, no matter how famous or notorious, has a legal obligation to honestly report and pay his or her income tax liability each year and is entitled to fair enforcement of Federal tax laws. ... Respondent gave petitioner ample opportunity to rectify her failure to pay estimated tax when due and considered petitioner's collection alternatives in accordance with applicable administrative and legal requirements.

Larry Summers Is Full Of It

American Scofflaw
Treasury Secretary Henry Paulson blew it, Ben Bernancke blew it and now it looks like Lawrence Summers and David Axelrod, Obama's top economic advisers, are about to blow it big time. The horse is long since dead but the flogging continues.

“The focus isn’t going to be on the needs of banks; it’s going to be on the needs of the economy for credit,” Lawrence Summers on Face the nation, 19th January. In the same segment, both he and David Axelrod agree that Paulson's use of the first $350 Billion of the TARP money was a failure..

"The point is to get credit flowing again to businesses and families across the country -- that hasn’t happened with the expenditure of the first $350 billion"

The proposal ? Set up an "aggregator" or " Bad" bank in to which Wall St. can pour it's toxic waste or keep it on their balance sheets while being guaranteed by the taxpayer. Looks like the focus is going to be on the banks after all. The fact that the banks would be unloading more than a trillion dollars in worthless junk, paid for by the taxpayer, does not seem to Summers and Axelrod as a particularly bad idea.

Tax Scofflaw Geithner Update

American Scofflaw
Remember, don't try this yourself on April 15th, 2009

Bernie And I Will Reveal All

American Scofflaw

It is clear that market makers are accessories to a scheme that is much, much bigger than Madoff. I don’t know, of course, more than you, but…I think he has in fact indicted himself to cause prosecutors to investigate the entire corrupt system.

The key players in this scheme are 20 or so mega-billionaire hedge fund managers, who operate with a supporting cast that includes not just market makers, but also smaller hedge funds, rogue prime brokerages, corrupt lawyers, dishonest journalists, bogus one-man credit rating agencies, dubious index trackers, bribed “experts,” skalawag statisticians, compromised professors, private investigators, crooked financial researchers, captured government regulators, hustlers, felons, thugs and mafiosi.

The mega-billionaires masterminded their scheme in the 1980s, and ever since, they and their progeny have been working together – raiding and destroying public companies for profit. In the rubble of these attacks (there are hundreds of examples) one can almost always find evidence of unrestrained naked short selling (people selling things that they do not possess – phantom stock, phantom bonds, phantom mortgage backed securities, phantom CDOs, all manner of phantom derivatives).

This is the organized exploitation of our national clearing and settlement system – a system that fails utterly to ensure that traders actually deliver that which they have sold. If the SEC and FBI are looking for a “Ponzi scheme” of “epic proportions” – this is it.

Mr. Madoff surely knows something about this scheme. Market makers (Madoff’s operation was among the better known) are exempt from rules prohibiting naked short selling. They can sell stock that they have not yet borrowed or purchased, so long as they are legitimately “making a market” (i.e. maintaining liquidity) — and only if they intend to settle the trade soon after. In practice, however, billionaire hedge fund managers have rented market makers’ exemptions to manipulate markets with phantom securities – a blatant crime that is rarely prosecuted.

While Mr. Madoff is talking to the SEC and the FBI, I am going to begin telling you more about the scheme that is bigger than Bernie. Soon, I will name those 20 mega-billionaires, their supporting cast — and the man who is their guru. The evidence is pouring in – there is much to reveal.

My Fascist economy

American Scofflaw

It's is NOT "The Government's Money", it is YOUR money and when the bailout was ramrodded through Congress, we were all told that the money was to be used to buy up defaulted mortgages so that we could go back to buying homes.

Then we find out that the money, YOUR money, $700 billion of it, is being given to the banks and they can pretty much do whatever they want with it. Which means that loans to We The People, who were forced to cough up $700 billion (that is $1700 per household, BTW) will not see any benefit from this bailout after all. The banks are holding onto the money.

Folks, we have been HAD. While the DOW is down today, it is not down consistent with the massive liquidations required to cover $360 billion in Lehman Brothers credit defaults. So, what must be happening is that the $700 billion of YOUR money handed to the banks is being used to cover these losses.

In other words, Wall Street made a killing in the bull market with derivatives, and now that the market has turned bear, We The People get the losses.

When profits remain private, but losses are socialized, THAT is a fascist economy!