Even winners lose with IRS

You win some and you lose some.

Unless it’s the IRS you’re playing with. Then you lose even when you win.
That’s what the winner of a major suit against the Internal Revenue Service has discovered.

“I won a large judgment last year, but in the last 10 months, I’ve learned that the IRS has an unofficial ‘no pay’ policy” says Carole Ward. “When and if they lose, millions are spent to prevent restitution to claimants.”

The New Mexico resident’s nightmare of becoming “the most high-profile victim of IRS abuse in the decade” began with a laughable first step. Ward said she considered a Colorado Springs based “revenuer” unqualified for her duties. “Dishin’ up chicken-fried steak,” is where Ward thought the agent belonged. And the outspoken Ward said just that.

It’s not nice to joke with the FEDS.

Less than four weeks after this “joke” was made, the contents of the family’s businesses — a chain of three children’s stores in Colorado — were seized by armed agents.

“I was framed as a drug dealer,” says Ward. Signs detailing fictitious criminal activity were placed on the property. All bank accounts were frozen.
But then something out of the ordinary happened. Something that should have meant a happy-ever-after ending to the case. A subsequent agency audit revealed the charges and the seizures to be blunders. The IRS offered to give everything back if Ward agreed not to sue.

She didn’t go along.

Ward, a media savvy former small newspaper publisher, then contacted press representatives nationwide and considered her legal options. When the IRS was finally forced to relinquish the property, “Inside Edition” captured the moment on film.

But unfortunately her lawsuit was filed after crucial statutes of limitation on reclaiming legal fees had expired.

Even though Ward won, she has yet to collect a dime. Post trial IRS legal maneuvering to deny attorney fees has kept the case sewn up. “The government wants trial lawyers suing big-business, small business, any business but government business as usual,” says Ward.

There has been little movement to speed up the proceedings. And according to Ward the judge in the case hasn’t even ruled on the first post-trial motion. This is crucial since interest on the judgment will not accrue until all post trial motions are exhausted and appeals begin. “That could be years from now,” according to Ward. “This is how they beat down winners, making losers of us all.”

So what’s Ward’s perspective on recently touted IRS reform? Suspicious would be putting it mildly.

“Every couple of years some retiring senator or congressman holds inflammatory hearings and the country is so shocked,” she says. But Ward believes that such efforts have been little but window dressing. She says they lead to a false perception of real reform. “Stories like mine hit the front pages and Joe Schmoe, whose paycheck falls out of the sky each Friday, thinks all is right with the republic,” she says.

Ward advocates numerous changes to current law, including reform of the rules governing claimant’s attorney fees. But she believes the IRS Restructuring and Reform Act of 1997 “restructures but won’t reform” the Revenue establishment. She feels that much of the problem with “criminal behavior within the agency” lies with management attitudes. And that includes enforcement quotas for agents. “Most normal people don’t last in the job (as an IRS agent)”, she says.

What are some of her other ideas for real reform?

“If all judgments against the IRS were paid from their own budget, you would see an immediate effect,” Ward answers. And there’s more. “I have suggested the interest paid on all judgments against governmental agencies be equal to or exceed interest paid by delinquent taxpayers.”

It should come as no surprise that Ward’s legal costs are considerable. But not all costs of the ordeal her family has been through can be measured in dollars. “The unintended victim here is my 75-year old mother,” says Ward. “She mortgaged her only possession so we had money to withstand government blackmail.”

The situation deteriorated from there. “Last year, her roof caved in and she had no money to fix it,” Ward explained. “When she left the house, vandals broke in and stole her things. She has been moved to a senior facility.

Ward hopes that negotiations with the IRS towards a settlement may provide funds to restore her mother’s life. But she says she is fearful that the events related to the bogus property confiscation may have stretched the elderly woman’s will to survive to the limit.

Although Ward’s story of her clash has been told many times in both print and broadcast media, she says most coverage has missed the point. The coverage, she says has focused on the fact that she has handled her dispute with the tax collecting agency “the right way” — through the proper channels. But Ward is distressed that most in the dominant media will not report about the IRS that “they never pay” even when caught in outrageous wrong-doing.

How does Ward sum up her opinion about a political system that would allow this to happen all because of a sarcastic comment?

“Hamilton, Jefferson, Washington and Adams never envisioned a republic wherein a democracy is reduced to two wolves and a sheep voting on what to have for dinner,” she says. “I’ve been the entree and I assure you it has changed the direction of my life.”