7 years of hell at hands of IRS

Seven years after its unannounced raid on his home, the
Internal
Revenue Service is still demanding that an Alabama
inventor fork over $2 million it says he owes in back taxes.

The problem: Robert C. MacElvain,
a retired engineer as well as inventor,
hasn't got $2 million and, according to Vicki Osborn, a forensic
accountant in Colorado Springs, Colo., who is helping him with his case,
he doesn't owe it anyway.

"If anything," Osborn told WorldNetDaily, "the IRS owes Mr.
MacElvain more than $2 million since the actions lodged against him were
based on massive fraud and misrepresentations to the court."

In 1993, MacElvain, then in his mid-60s, had his home and property
confiscated by the IRS, claiming he hadn't filed a return since 1980 and
owed $2.2 million in taxes.

"It wasn't true," says Osborn, "but the agents told the judges that
it was. [Federal District] Judge Ira DeMent even sentenced him to prison
for three years based on what he was told by the agents on the case.
Virtually everything they swore in that courtroom was a lie. There
wasn't any truth to it."

Raided without warning

For over 40 years the MacElvains had lived quietly in Eufaula, a
historic town 90 miles southeast of Montgomery on the Alabama-Georgia
border. Their home is a one-story, 19th-century house they bought "years
ago" and restored themselves. They have two grown daughters.

Inventor and engineer Bob MacElvain

MacElvain had invented the diamond-bit Hydra-Drill in the early
1960s, which revolutionized deep rock mining. He and his brother formed
a business for manufacturing the new product. From careful investing of
the royalties, he became a very wealthy man. He also worked as a
geologist for the State Geological Survey in Tuscaloosa for a number of
years.

"He utilized in a brilliant manner the laws Congress enacted to
minimize his tax impact," Osborn says. "Not a single action he took was
unlawful."

On the morning of Jan. 21, 1993, the day following President
Clinton's inauguration, IRS agents -- armed with a writ of entry sworn
out the day before -- swooped down without warning on the MacElvains'
home and began confiscating their property.

In an exclusive interview, Robert MacElvain recalled the events of
that day and the one following for WorldNetDaily -- events he said were
"burned into our consciousness and will probably be there for quite some
time."

MacElvain didn't hear the agents when they arrived, he said. It was
raining and he was in the attic fixing leaks in the roof. Alone
downstairs, Mrs. MacElvain heard knocking at the front door, and when
she opened it found herself facing a small but threatening group of
people. They identified themselves as being from the Internal Revenue
Service and stormed into the hallway.

"I'm a little hard of hearing, and at first I didn't hear my wife's
voice," MacElvain said. "When I did, I couldn't make out any words, only
I could tell she was in distress. I climbed down [the ladder] and found
her in a state of shock, surrounded by a squad of six or eight what they
call special agents from the IRS. They had picked up a local policeman
from the police department. He was uniformed and armed, and I knew the
others had guns."

MacElvain said the agents were unmasked and didn't brandish their
weapons, but "it was intimidating to say the least."

"I was shocked out of my bootstraps to see them in our home," he
said.

"The agent in charge was a woman -- her name is Fran Keith; she had
all but ripped the anniversary ring from my wife's hand," MacElvain
recalled. It was a diamond ring he had given his wife on their
twenty-fifth wedding anniversary in 1980.

"Lynne told me later that was the first thing she demanded," said
MacElvain. "She really wanted that ring. Lynne was terrified and handed
it over. If I had been there and seen that, I think I would have gone
insane. I couldn't have stood it."

The agents shoved papers in the MacElvains' faces, he said, saying
they were authorized to seize the house and its possessions for
"underpayment of taxes," and ordered the couple into a back room to wait
for hours while their home was torn apart. Swarming through the rooms,
the agents tagged every object down to the girls' old dolls and the
family Bible. Silver, jewelry, antique furniture, knickknacks --
everything the MacElvains had acquired over the years. From that moment
on, it was the property of the federal government.

Deputy sheriff laughs

At one point, MacElvain called the Barbour County Sheriff's
Department for help, but the deputy who answered the phone found the
situation funny.

"I told them the IRS hadn't any right to do what they were doing, and
the guy I talked to said, 'If it's the federal government, they can do
whatever they want.' Then he laughed."

Movers arrived the next day, packed everything up and hauled it away
in a van. MacElvain's car, a 1990 Hyundai, was towed to a holding yard.

Mrs. MacElvain herself tried unsuccessfully to stop the federal
action. At noon the second day, her attorney phoned the house and told
agent Keith that she should cease the seizure and leave the premises as
Mrs. MacElvain had filed for Chapter 11 bankruptcy. Since the house and
possessions were in fact in her name, continuing the action was a
violation of federal bankruptcy law and there should have been an
automatic stay. Keith phoned her supervisor and after a lengthy
discussion the supervisor ordered her to continue the seizure.

The MacElvains were allowed to continue living in their home. The
following year a family member bought it from the government so they
would have a roof over their heads. Two weeks after the raid, the IRS
sent a copy of the inventory. According to MacElvain, "Some items of
substantial value never made it to the inventory, much less to the
auction -- like the household silver flatware."

The household property was sold at auction for $65,000 the following
November -- a mere pittance against the $2.2 million the Revenue Service
said were owed in back taxes, plus penalties and interest. A relative
managed to buy the family Bible.

Matters might have settled down then, but the IRS had other plans.

In 1989, MacElvain and a partner had bought Fulton Iron Works, an old
factory in St. Louis that manufactured heavy-duty equipment, in
particular, sugar cane presses. They had between them 30,000 shares of
common stock in the new corporation. At his partner's request, MacElvain
was holding his partner's shares for him temporarily.

At 5 p.m. on Feb. 18, 1993, just a month after their property was
seized, the IRS tacked a notice on the MacElvains' front door announcing
that the stock and the factory in St. Louis would be sold at auction the
following day at 1:00 p.m. -- in just 20 hours. MacElvain and his
partner were able to raise $134,000 in the time alloted, but it wasn't
enough.

The representative of a Pakistani national showed up with $135,000.
Feb. 19, the day his company was sold, was Robert MacElvain's 64th
birthday.

Normally and legally, a seizure and sale like that requires a minimum
of 10 days. In response to questions raised by MacElvain's attorney, the
IRS claimed its authority for selling on short notice was 26 USC Sec.
6336: Sale of Perishable Goods. But stock and a company are hardly
perishable goods. Agent Fran Keith explained in a letter that they had
information that the interest was of "considerable value," but might be
rapidly
decreasing.

"Keith had information from someone, somehow relating to the value of
the stock," said Osborn, "and that information has never been provided
to Mr. MacElvain. Whoever provided the information to the service has
not come forward, but there is no way that any human being can justify
appropriate notice and due process for the sale of corporate stock
within a 24-hour period."

His next action was, MacElvain admitted, "a mistake." Distraught at
what had been done to him, in September he filed commercial liens
against those who had seized his property, including Fran Keith who led
the action and four local contract vendors who helped: the locksmith,
the mover, the appraiser and the towing company.

The IRS was brutal in its response, apparently worried that leniency
might encourage what it perceived as a "trend."

"This kind of activity is consistent with advice that is passed along
by tax protester groups," said the IRS in a press release.

MacElvain denies being part of any such organization and eschews the
"tax protester" label the revenue service has hung on him.

"I'm completely non-political," he said.

He was indicted on six counts of "corruptly endeavoring to obstruct
and impede the due administration of the Internal Revenue laws." In
February, 1994, a jury convicted him on the charges relating to the
contractors, but cleared him of criminal wrongdoing for filing a lien
against Keith. He was sentenced to three years in federal prison, which
he served.

The IRS wouldn't let go. A judgment was entered in a court action in
early 1998, for $2 million, plus interest and penalties amounting to
several more million -- a ploy to extend the 10-year statute of
limitations on collections that was about to expire. At age 71,
MacElvain foresees years of indebtedness to the IRS.

"They're taking what amounts to a non-judicial proceeding -- their
claim of millions of dollars against me -- and having it confirmed by
the court in a civil action so that instead of having only six or 10
years to come after me they can come after me for 20 or 30 years 'til
the day I die," he said. "That's going on right now. They've taken
everything I have, put me into debt to people who helped me, and then
they've put millions of dollars on top of that. That's a pretty deep
hole to work out of, especially at my age."

Hoping to have the civil action nullified, MacElvain has appealed the
judgment, but Judge Ira DeMent refused to set it aside.

"I guess I'd have to say if they were keeping score it would be IRS,
99 -- Bob MacElvain, 0," he quipped.

Darkness to light

A year ago he heard about Vicki Osborn
and contacted her for help. Today, he credits Osborn with whatever
progress has been made in his case, saying otherwise he'd be "very much
in the dark."

Osborn holds degrees in accounting and finance and is expert in the
use of computers. She has, in her words, "years of working with
businesses, helping them find out where they're failing on their
financial end."

It's only recently that she has become involved with IRS cases, which
she views as a natural extension of her 25-year career in computer
systems and financial management.

Originally from Alabama and with relatives still there, about two
years ago Osborn's brother, an architect, heard that a friend and fellow
architect, Jack Mizell, was struggling in an IRS quagmire. Knowing his
sister's work, he suggested to Mizell that he contact her -- which
Mizell did. It was her first case, and opened the way for introductions
to three other IRS victims who wanted help -- one of them was Robert
MacElvain.

She works closely with her husband, Richard, on the cases --
crediting him with being the "computer genius" of the team and the main
researcher -- the one able to locate obscure documents. Her forte is an
ability to assemble all the tiny pieces of the puzzle. As a forensic
accountant she must be able to look not only at numbers, but
behind them.

"In all four cases, I found overwhelming evidence of fraud," she
reports. After accepting his case, Osborn carefully read "every single
one" of the thousands of documents MacElvain sent her: transcripts of
depositions, trial testimony and hearings; correspondence; memos and
interagency reports; and a printout of his individual master file.

The individual master file is an arcane, computer-generated document
that shows by a system of numerical codes all transactions between the
revenue service and a taxpayer -- audits, investigations, levies, liens,
penalty assessments, tax assessments, and notices of deficiency that
tell how deficient a person is in his tax payments. The date of each
transaction is recorded in two different forms.

According to Osborn, the master file is the only thing that carries
greater weight than an agent's word in administrative and court
proceedings. Yet even in his master file, fraud was apparent as
evidenced by the removal of significant codes and the backdating of
transactions to make them appear to fall within the statute of
limitations, she said.

Here are a few of her findings regarding his case:

The day before the raid on the MacElvain home, agent Fran Keith
gave a sworn affidavit to the court in order to obtain an order of
entry. In her affidavit she asked that Mr. MacElvain not be notified
ahead of time because the IRS knew he was had been concealing his assets
for years and might attempt to hide his possessions if he got wind of
the raid.

"This was a false charge," said Osborn, "made without any supporting
documentation."

In her affidavit, Keith swore that notices and demand were sent
on certain dates -- after assessments had been made.

"But this is what the trick is," said Osborn. "The law requires that
a notice of deficiency must be sent prior to an assessment.
Those were not sent. Instead, they made the assessment, then they
sent the notices and demands. But notices of deficiency were never
sent."

In her sworn testimony at MacElvain's criminal trial, Keith said she
knew nothing about the statutory notices.

"Once I receive a case, an assessment has been made so I cannot
testify to any notices that were sent or in any assessments that were
made prior to my receiving the case," she testified.

Says Osborn: "The trial testimony is the evidence that Keith lied to
the court to get the writ of entry that allowed her to seize Mr.
MacElvain's property. That was done on a fraudulent affidavit. Her
affidavit is proven to be fraudulent by her trial testimony or the other
way around.

"Either way they twist it, it's clear she perjured herself in one or
other of her testimonies: Either the affidavit is false or her trial
testimony is false" Osborn remarked.

In obtaining a grand jury indictment against MacElvain for filing
liens, John Thomas, Jr., was the sole witness for the IRS. He never told
the grand jury that the agents had violated federal bankruptcy laws by
continuing with the seizure after Mrs. MacElvain's attorney had obtained
an automatic stay.

He also described MacElvain as a tax protester and told the grand
jury that he never filed tax returns, that he never paid taxes.

"That was every bit a lie," says Osborn. "The master files clearly
show that Mr. MacElvain paid his legitimate taxes. And there is nothing
to indicate he was a tax protester."

By law, assessments cannot be made unless the taxpayer is
provided with a notice of deficiency. IRS didn't do that, Osborn
discovered, but it did put a hold on his individual master file -- then
began levying his state retirement account and his Social Security.
Actually, MacElvain had two editions of his individual master file: One
he had requested and received in 1994 during the time he was facing an
indictment; the second was obtained by Osborn in April of last year.

On comparing the two, she noticed significant differences. The first
edition showed a series of payments the revenue service had been levying
from his social security and state retirement during a period of
litigation -- which is illegal.

"You can tell they're liens because each one has a two-digit code
called a designated pay code with it -- which in this case is 05,
meaning they were liens," Osborn explained. In the second edition, which
is in the same format, but updated to April 1999, the transaction codes
have been stripped out.

"Someone from the service -- between 1994 and 1999 -- went into Mr.
MacElvain's master file and removed the designated pay codes that
indicated the payments were made by way of levy," said Osborn. "The
money was forcibly taken by levy during litigation, which is unlawful.
The taxpayer did not voluntarily make the payments. These show up as
money that's been paid, but without the code there's no evidence the
money was taken forcibly. There is no code indicating voluntary payment
-- so if there's no code, supposedly the transaction was voluntary."

IRS responds

The charge of removing the pay codes is serious. For comment,
WorldNetDaily contacted the IRS Gulf Coast District office in New
Orleans.

Public Affairs spokesperson David McWhorter said he could not discuss
the case per se, since it was in litigation, "But I can say that when
there is the kind of tampering -- as you call it -- with the master
file, that is something that we take extremely seriously. There are now
because of the Restructuring and Reform Act of 1998, that is one of the
misconducts that are mandated to be punished by removal, meaning
termination of employment."

Osborn is not optimistic that that will happen, even with all the
evidence she has assembled. However, she has been able to get
MacElvain's Social Security payments reinstated, though the IRS is still
taking his state retirement.

"It's big money to get even a few hundred dollars a month," he said,
"And the first positive thing to come up in the case."

As it stands, MacElvain and Osborn hope to have the case reviewed by
another judge. Judge Ira DeMent has been the judge not only on the
various motions and consistently ruled against MacElvain, but he
presided over the MacElvains' trial regarding the commercial liens. It
was DeMent who sentenced him to three years in federal prison.

In August, MacElvain filed a motion for a stay and reconsideration of
the $2 million judgment, and a hearing to review based on new evidence
of fraud. Less than a month later Judge DeMent denied the motion, with
no reason given. Osborn and MacElvain asked him to recuse himself
voluntarily for conflict of interest, but he never responded.

Last week he and Osborn requested Harold Albritton, Chief Judge of
the U.S. District Court for the Middle District of Alabama, Northern
Division to appoint another judge in DeMent's place and grant a hearing
to review the evidence of fraud. Judge Albritton gave the revenue
service until March 24 to respond.

Besides the case of Robert MacElvain, Osborn is handling that of Jack
Mizell -- which also deals with fraud. Both cases are in district court
pending a decision about whether to reopen them now that fraud can be
shown.

"If those cases are reopened because of what we discovered, do you
know what that means?" she asks rhetorically. "That will be a first time
ever. It will be a landmark opportunity for people -- and we would have
done it by ourselves, pro se. Without an attorney. It would be really
incredible."

Popular Right Now

Chauvin judge admits: Maxine Waters' incitement possible ground for appeal!

Gov. Kristi Noem fights back after Biden bans fireworks at Mount Rushmore

Mike Lindell sues election-machine operator Dominion Voting Systems

Reigning Mrs. World arrested after taking tiara from winner in ugly meltdown

Poll: Stunning number say Biden suffers 'cognitive ailment'

Whites aren't hated for slavery but for making America and the West

Why the spike in mass shootings?

Mastercard cuts off payment processing to unethical porn sites to address ongoing abuse of women and minors

Recently Posted