The Janet Malone case: why I despise the IRS

Now my advice for those who die
Declare the pennies on your eyes
Cos I'm the taxman, yeah, I'm the taxman
Taxman-The Beatles
My problem with many federal regulatory agencies in general and the IRS in particular is that they tend to operate under Lavrentiy Beria's proscription of "Show me the man and I'll find you the crime". When both by regulation and by law the list of crimes ever expands then everyone, innocent or not, can be found guilty of something. I have read (and experienced?) that if a police officer really wants to stop you he can find a esoteric traffic violation of some sort before you've driven three blocks. The IRS operates under the same principle. When all you have is a hammer, everything looks like a nail. This society is supposed to endorse the principle of innocent until proven guilty. The IRS doesn't really operate under those rules. For too long Congress has given the IRS a free hand to seize people's assets and property before any sort of proceeding has really established guilt. I believe in paying the taxes that I owe and following the law. But I don't believe that Congress (which is to say we the people) should be giving the IRS and other regulatory or law enforcement agencies wide swaths of poorly defined authority, particularly when it comes to putting people in jail and taking their money. Too often such authority is wielded with a vengeance against relatively powerless individuals who don't have the connections or funds to fight back. It's rare that we hear about a banker or other financial big shot going to prison for money laundering in drug or arms dealing crimes. Such banks and individuals are often thought to be too big to fail. No one has gone to prison for the mortgage meltdown that almost destroyed the US economy.
To combat tax evasion, drug trafficking, money laundering, terrorism, and other crimes, the IRS requires your bank or other financial institution to report to the IRS any deposits you make that are over $10,000. 

Once that rule became public knowledge, anyone with a working brain who was engaged in nefarious activities who still nonetheless needed access to the banking system would make deposits that did not exceed the $10,000 threshold and keep it moving. Maybe Monday they would deposit $2000 at ten different branches. Maybe Tuesday five different newly incorporated Bahamian based companies would make thirty deposits at twenty different banks. And so on. Apparently feeling a bit stupid at being so easily foiled Congress/The IRS also made it a crime to break up transactions below the $10,000 threshold. Theoretically this would allow them to go after those supposed super smart bad guys who had learned to count. The problem is this rule also made technical criminals out of virtually everyone else who used the banking system. So if you deposited $5000 today and $5000 next week because you're a small widget company owner who gets paid irregularly, or deposited $3500 in the morning and $6500 in the afternoon because you're a realtor who attended two closings, or deposited $5800 today and $9000 tomorrow because you're a widow who is closing the estate of your late husband the IRS could take your money and threaten to put you in prison.

IOWA CITY, Iowa (AP) — An Iowa widow is charged with a crime and had nearly $19,000 seized from her bank after depositing her late husband's legally earned money in a way that evaded federal reporting requirements. Janet Malone, 68, of Dubuque, is facing civil and criminal proceedings under a law intended to help investigators track large sums of cash tied to criminal activity such as drug trafficking and terrorism. 

At issue is a law requiring banks to report deposits of more than $10,000 cash to the federal government. Anyone who breaks deposits into increments below that level to avoid the requirement is committing a crime known as "structuring" — whether their money is legal or not. 

Larry Salzman, an attorney with the Institute for Justice, criticized the government's case against Malone given its declared shift in practice. "This is shocking because it demonstrates that prosecutors are not taking seriously the IRS' alleged policy change not to prosecute legal source structuring," he said. After the policy change, federal prosecutors in Iowa agreed to return money the IRS seized from two people accused of structuring, including a restaurant owner who had $33,000 taken and a doctor who fought to get back $344,000 in earnings from his medical practice. But prosecutors declined to drop the civil forfeiture case over $18,775 the IRS seized from Malone.

Instead, they added a misdemeanor criminal charge last week alleging she willfully violated the law, after her husband had been warned about the practice four years ago. Malone is expected to plead guilty next week and let the government keep the money, under a plea agreement filed Monday. The charge carries up to one year in jail and a $250,000 fine.

Shortly before his death in October 2011, Ronald Malone told his wife about a briefcase containing $180,000 cash from his job as a publishing executive, gambling winnings and investment income. She deposited some of it in increments between $5,800 and $9,000. The IRS obtained a warrant to seize it based on suspicion that the transactions were meant to avoid reporting requirements.

LINK

I see this as nothing more than pure bullying. I have more respect for the Mafia thug who forces you to join his local "business association" or the hoodlum who carjacks you. Such criminals are honest at least. Here the government has taken money from an elderly widow and threatened to jail her simply because she deposited her money in her bank. There is no proof of criminal behavior. The same government that can't figure out how to make corporations pay taxes can bring down the hammer on an old woman. Such brave people they are. This kind of Kafkaesque exercise of authority needs to be halted. 

Thoughts?

Obama, Holder, Clinton: Benghazi, and DOJ AP Subpoenas

Well well well, what a difference a day makes. It was seemingly just yesterday when the President was having his inauguration and sneering at people who didn't trust the government, or thought that they were taxed enough already, thank you very much. And it wasn't that long ago that rather than answer direct questions about her role in the Benghazi situation, Secretary Clinton was screeching "What difference does it make" at questioners.

Well Madame Secretary it may make some difference after all. Yes indeed. You know just like it makes a difference that you didn't actually land under sniper fire in Bosnia. With that record of truthfulness you might understand that people don't necessarily want to take your word on something without proof.
( When you have a moment after reading this post please check out this excellent C-SPAN discussion with CBS investigative reporter Sharyl Attkisson. It's very long and not strictly speaking necessary for this post but it does clarify a great many of the issues raised by this scandal)

                          

Or it may not, it could all indeed be much ado about nothing  h/t field negro
We don't know yet. What we do know is that Cheryl Mills, Secretary Clinton's Chief of Staff, called Gregory Hicks, the deputy Chief of Mission in Libya, and expressed her firm displeasure that Hicks had spoken to Representative Jason Chaffetz. She was also peveed that Hicks was raising questions about the initial official explanation on Benghazi. Hicks claims that his job and competence were harshly questioned and that he was demoted. We also know that Hicks stands firm that there was a stand down order that prevented a possible rescue mission from taking place. 

The full truth has yet to reveal itself. This story is changing by the day.  By the time you read this new facts will almost certainly have been revealed. I doubt there was any sort of desire by the Obama Administration to allow attacks on American consulates. But I do think that, rightly or wrongly, whether it's in response to Republican hatred and intransigence or born out of pure technocratic arrogance that there is often an Obama Administration response to a crisis that privileges politics over all else. Maybe this is no different than any other Administration. After all why would you be kind or forthcoming with folks who have made it clear that they would like nothing better than to beat your brains out with a baseball bat?  Nevertheless when the State Department spokeswoman, Victoria Nuland, suggests removing or reworking talking points to be given to the public and media because "the information could be abused by members of Congress to beat up the State Department for not paying attention to warnings" at the very least there is some inter-agency CYA behavior going on here.  At worst, well I don't think we have evidence to suggest the worst just yet. 

But withholding truthful but harmful information because you fear rivals will use it against you is wrong. It doesn't work. Think about your own job. If you or someone in your department have made a serious mistake, sooner or later it's going to come out. It's best to own up to it, put the truth out there, (wo)man up and take what you have coming to you. And this issue also shows the importance of maintaining calm and politesse under great stress. Perhaps if Mills and Jones hadn't felt entitled (for political reasons?) to tear Hicks a new one and demote him, perhaps he wouldn't be the country's newest whistleblower. But who can say. As I mentioned I don't think there's really anything here. The Republican eagerness to find something, anything on the President is too obvious. And Benghazi is just the latest in a long line of attacks on American institutions. 

Government agencies often defend overbroad exercises of power by tacitly assuming that the ends justify the means. So whether it's guns in New York where Mayor Lord Bloomberg sends out his minions to shake down anyone darker than Wentworth Miller, or California cops who enter a home without a warrant and taser a husband and wife on suspicion of domestic violence, people who are legally allowed to use coercion must be strictly watched and limited. Otherwise they have a tendency to get out of hand. I've written here and elsewhere that the Obama Administration has a mild to strong disdain for civil liberties. I think this comes from the top. It's nothing new in Washington. The entire reason that we theoretically want limited government authority is that the power of the government is so extensive. The government can compel you to do a lot of things against your will. But there are supposed to be limits. 

The Department of Justice ignored those limits. In a search for leaks around overseas activities in Yemen, the Department of Justice secretly obtained two months of phone records from AP reporters. It's unclear whether a judge signed off on this or not. 

NEW YORK –- The Associated Press revealed Monday that the Justice Department secretly obtained two months of reporter and editor phone records from the spring of 2012, the latest and most illustrative example of the Obama administration's unprecedented war on leaks.

AP president and chief executive officer Gary Pruitt wrote in a letter to Attorney General Eric Holder on Monday that "there can be no possible justification for such an overbroad collection of the telephone communications of The Associated Press and its reporters." Pruitt demanded the DOJ return the records and destroy any copies.

The AP reported that the DOJ obtained lists of "incoming and outgoing calls, and the duration of each call, for the work and personal phone numbers of individual reporters, general AP office numbers in New York, Washington and Hartford, Conn., and the main number for AP reporters in the House of Representatives press gallery." The Justice Department seized records for more than 20 telephone lines from April and May 2012....

Obama and Holder can't be bothered to prosecute banks for bad behavior. Because that might impact the world economy or something. But evidently Holder, or to be precise, his deputy attorney general, has no issue in taking steps which make a mockery out of the First Amendment.  I think this is a much larger scandal than Benghazi. The press ignored the previous tell signs like FISA or the Patriot Act or several other laws or actions that make Swiss cheese out of constitutional protections. It's only when the press' own prerogatives are seemingly violated that it raises an uproar. Well better late than never I say. Self-interest comes through again.  It's critically important to remember that everyone leaks. People do it because they want to hurt the Administration or because they want to help the Administration or because they want to settle scores with rivals or because they've honestly run across something so bad they think every citizen needs to know about it. 

You can't have a functioning constitutional republic without an informed citizenry and a watchdog press. 

If citizens would rather read about which Hollywood starlet is sleeping with which musician/athlete and the press would rather act as the court stenographer for the King, then you can kiss democracy goodbye. You can't have a watchdog press if the government is obtaining phone records that, by their very nature, show to whom the press is talking, and what they're investigating. You would have to be extra special stupid to tell a news agency about something shady that's going on if you know that the government is getting your phone records (and tapping your phone??) Actions speak louder than words. As has been pointed out much of late, the Obama Administration has prosecuted more whistleblowers than all previous administrations combined. Sometimes this moves into the realm of farce. The President grandly decided not to prosecute any of the CIA agents or others who tortured. How nice of him. I know if I were a torturer I'd be relieved. But a CIA agent who disclosed the torture was gleefully prosecuted and convicted. Actions speak louder than words, my friends.

Now on both the Benghazi and the AP situation there is no doubt that some of the President's critics are acting in bad faith. It was just a few weeks back that some Republicans were claiming that recognizing that the Boston bombing suspect had Miranda rights was somehow being soft on terrorism.  Good luck trying to find many mainstream Republicans or conservatives who enthusiastically support the Fourth Amendment. There are previous Presidents, Democrat or Republican, who have committed what I view as unethical, unconstitutional or outright criminal acts. But as the cop who stopped me for speeding a few years back told me when I angrily pointed out the other people exceeding the posted speed limit, "But I saw you." Obama has to live up his own standards of excellence, not just say he's like all the others. Despite Republican hostility, even a broken clock is right twice a day. The AP story in particular as well as the IRS issue which we wrote about yesterday may last a minute. And just as I am about to publish this I notice that the President is calling for a new federal shield law which would prevent the DOJ from doing what it just did. Right. In other news the New York Mafia's Five Families today urged passage of a law which would prevent extortion and loansharking....

Questions

1) Do you think the Benghazi and AP scandals matter or not?

2) Will Benghazi damage Clinton's future political plans, if any?

3) Do you think the DOJ subpoenas were overbroad?

4) Should Holder resign?