Friday, June 22, 2012


From: Legalbear
Reply-To: ""
Date: Sunday, June 3, 2012 6:19 PM
To: ""
Subject: [tips_and_tricks] Giving the IRS an Attitude Adjustment

After § 7433 Suit Filed, IRS Attitude Changes for the Better:

I’m kind of excited. I just got word of what appeared to be a total change of heart by the IRS after receiving a final notice of intent to sue followed by the actual filing of a suit under 26 U.S.C. § 7433. 

The IRS had made this couple promises and was not keeping them. When the couple started taking the IRS to task for not keeping the promises they gave them still more runaround. This is such a typical story that I hear all the time.

The couple had already sent a notice of intent to sue based on § 7433. But, when the couple sent a final warning that they intended to file suit and then actually did file the suit, the IRS had change of heart and became kinder and more gentle. They began to leave polite messages on the voice mail and seemed to become very sincere about correcting the errors. It appeared that they were concerned that their actions had resulted in the suit being filed and inquired about the status of the suit. 

Beneficial Features of Section 7433:

As you may recall, 26 U.S.C. § 7433(a) provides: 

If, in connection with any collection of Federal tax with respect to a taxpayer, any officer or employee of the Internal Revenue Service recklessly or intentionally, or by reason of negligence, disregards any provision of this title, or any regulation promulgated under this title, such taxpayer[1] may bring a civil action for damages against the United States in a district court of the United States.

But, subsection (d) provides limitations:

(1) A judgment for damages shall not be awarded under subsection (b) unless the court determines that the plaintiff has exhausted the administrative remedies…

As some of you know, I’ve been a proponent of using the exhaustion requirement to our advantage. 26 CFR 301.7433-1(e) provides: 

An administrative claim…shall be sent in writing to the Area Director, Attn: Compliance Technical Support Manager of the area in which the taxpayer currently resides.

Administrative Claim Letter Success:

Letters sent in compliance with this provision have met with some success. 

In all, I am aware of seven instances where levees were released after one of these letters was sent. 

I had always said that there was a possibility that somebody would get a check as a result of these letters. A while back that actually happened. Somebody combined my lien and levy research in their letter and got a check back for over $6000 of wrongfully levied funds from the IRS.

Government Does Not Want More Litigation:

I recently got some additional insight as to the distastefulness of litigation to the government when I read the book The Price of Loyalty by Ron Suskind, Simon & Schuster Paperbacks, 2004. The book is about Paul O’Neill’s 1.5 year stint as Secretary of the Treasury. He was trying to make some changes in the ways that executives of corporations were treated. The results will become self-evident as you read:

On page 225:

Shifting the standard to negligence is a huge problem, the SEC chairman said. We just can’t go there. There’s no doubt that we have to prevent gaming the system. But we need a high standard, otherwise we’ll be overwhelmed with litigation.

On page 230:

Three days later, a story ran in the Wall Street Journal about O’Neill’s position on corporate governance and his desire to lift the standard from recklessness to simple negligence. It mentioned that Pitt and Hubbard were against the new standard, “concerned that no matter how it was crafted it will lead to more lawsuits.”

At page 233:

Many of the CEOs seemed to have consulted already with their chief counsels. The one thing they didn’t want was even the slightest uptick in litigation.

At page 239:

The move from recklessness to negligence was dropped for fear it would invite a wave of lawsuits. O’Neill and Greenspan were discouraged. A single issue for the corporate crowd—fear of lawsuits—carried the day, O’Neill said, his outrage boiling over.

So, big corporations and big government, with all of their attorneys and resources, as I suspected, do not want more litigation. An administrative claim for damages, or notice of intent to sue, gives us an opportunity to take advantage of the government’s distaste for litigation. 

Success after the Suit has been Filed:

There have been reports of no results from administrative claim letters, but, after hearing about the results described in the first paragraph of this e-mail, it got me to thinking about the results I found in the case law after the suit was filed; for example: 

1) Mrs. Shaw received a refund of all the money collected, and the remaining tax liability was abated.  Shaw v. U.S., Fifth Circuit.  

2) After filing one of these suits, the government dismissed the criminal action against the 7433 plaintiff.  Fishburn v. Brown, Sixth Circuit, 1997.  

3) After filing one of these suits, the IRS returned a seized Cadillac.  Washington v. U.S., Ninth Circuit, 1992.  FE

4) After filing one of these suits, the plaintiff's tax liability "was resolved in the plaintiff's favor in tax court.  Templeman v. U.S., First Circuit, 1994.  

5) After filing one of these suits, an injunction restricting state court filings was vacated.  Templeman v. U.S., First Circuit, 1994. 

6) After filing one of these suits, improperly levied funds were returned.  Raymond v. U.S., Sixth Circuit, 1993. 

7) After filing one of these suits, the government conceded that an assessment was erroneous and released its liens.  Miller v. U.S. (N.D. Cal. 1992). 

8) The government provided the forms during the litigation that they had previously refused to. Ball v. U.S., No. 94-2125 (7th Cir. 1995). 

It Is Possible to Win Damages off a Section 7433 Suit:

Let’s not forget the 5th Circuit case Gandy Nursery v. U.S. where $388,500 in damages were awarded and $317,738.50 in costs and attorney's fees; plus, post-judgment interest on the $16,800.   

Some Suggestions for Those Dealing With IRS:

If you already sent your claim letter:

26 CFR 301.7433-1(d) provides that, “…no action under paragraph (a) of this section shall be maintained in any federal district court before the earlier of the following dates: (i) The date the decision is rendered on a claim filed in accordance with paragraph (e) of this section; or (ii) The date six months after the date an administrative claim is filed…”

If you had a decision on your administrative claim letter, you can go ahead and file your suit, or, you can do like the couple in the first paragraph and send them a warning letter.

If you send an administrative claim letter and less than six months has passed you may want to send a warning letter telling them that the six month deadline is approaching; and that they may want to take action.

If you send an administrative claim letter and more than six months has passed you have the option of sending the warning letter or filing suit.

If you have one of my packages, but have not sent a section 7433 letter:

You may want to go into my package and locate the file 26USC7433. If you need to search your hard drive you should quickly find the file if you search for exactly this: 26USC7433. Once you locate it you should review the notes files and the sample letters. You should also review the statute and the regulation which are here:

and here:

I’m sure these have changed since you bought my package. Locate some statutes and regulations that the IRS violated and you will be ready to put together your letter. I am available to review letters; if you would like that please call me: 720 -675 -7230 9:00 AM to 8:30 PM MST. 

If you do not have one of my packages, but think it would benefit you to send an administrative claim letter: 

My research packages amount to what I call a “shortcut to competence”. If you follow the statute and the regulation there is somebody on the other end that is going to be reading your letter. Because of this, you want your letter to display a certain degree of competence. It must appear in your letter that you’ve done your homework. A competent letter is the shortest route to success; and may save you from having to file suit. If you go to my shopping cart here:

You’ll see you will see THE BIGGEST PACKAGE! THE BIGGEST SAVINGS! This package includes Lien & Levy Thumper-IRS Terminator for CDPH-All Angles Offensive MP3’s-Frivolous Return Penalties Research-Bear’s Online Legal Research Video & Golden FOIAs. This package is normally $577. For the next 10 days (June 13) when you enter IRSAttitudeAdjustment during the checkout process you will save $200 and be able to get the package for just $377. That’s a $1213 savings over what you would pay for these packages separately!

I’m convinced that filing one of these letters, sending a warning letter, and filing suit is one of the quickest and most effective ways of getting some respect from the IRS.

Knowing what your rights are is the first step to getting them: 

When the IRS violates our due process rights, most people feel bad. The bad feeling is what tells you that your rights have been violated. However, the bad feeling should only be the trigger that sets in motion a search for the authority, usually from the Supreme Court, establishing the right and explaining it. Understanding this concept is what set me on a search for Supreme Court decisions explaining due process rights. I copied and pasted 34 pages of due process quotes from the Supreme Court with the citations to the cases and quotes and put them here:

If the IRS agent fails to give you all your constitutional rights he could lose his job. I made a video about this and you can view it at the link above. I call this package HOW TO HOLD IRS CONSTITUTIONAL VIOLATIONS over THEIR HEAD. This is a tremendous lever to use against IRS personnel, the threat of the loss of their job. Normally I sell this package for $200. Through June 13th, when you enter DueProcessViolations in the coupon code blank on check out you will save $100 and be able to buy these quotes for $100; a 50% savings!

NOTE: If you would like to get both of these packages you must make separate purchases because the shopping cart will only accept one discount code at a time.

I hope this email has been some help to you and given you some hope. Bear

Call me at: 720-675-7230

On Skype: legalbear

Best times to call: 8:30 am to 9:00 pm MST

Join my Yahoo Group Tips & Tricks for Court by sending an email to:

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Tax sites: 

(formatted like this so this email doesn't end up in your spam folder)

[1] The Supreme Court has held that there are two kinds of taxpayers: 1) the taxpayer from whom the tax is sought to be collected; 2) the taxpayer that is subject to the Internal Revenue Code. The court held that a non-taxpayer could not be deprived of remedies under the Code by virtue of that status.

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