Anti-Irs Road Show Hits Town Chenoweth And Crapo Collect Ammunition To Overhaul Tax Law

FROM FOR THE RECORD (Friday, December 12, 1997): Correction Caption wrong: The wrong caption ran with a photograph that appeared on Page A1 of Thursday’s Spokesman-Review. The photo of the crowd at a Coeur d’Alene hearing on the Internal Revenue Service also ran on Page A8 Thursday with the correct caption information.

Lori Cometto expects her family to lose its Sandpoint home and business in six days, courtesy of the Internal Revenue Service.

This, even though the Comettos voluntarily have paid nearly $20,000 in back taxes. This, after she voluntarily contacted the agency to ask how much they owed after a fire destroyed the family’s home office and business records in 1995.

Cometto’s testimony was one of many tales of IRS terror shared by North Idaho residents who testified here Wednesday before U.S. Reps. Helen Chenoweth and Mike Crapo, both Idaho Republicans. The speakers called the IRS the “American Gestapo” and the “militia of our federal government.”

At first, the IRS agreed to allow Cometto and her husband Tom to pay the outstanding business and personal taxes in installments, Lori Cometto said. Then the agency changed its mind and demanded full payment.

The couple now has until Tuesday to fork over $30,000 in taxes, interest and penalties, Cometto said.

If they fail, the IRS told her husband, “we have a federal lien prepared for your home and your business,” Cometto tearfully said during Wednesday’s congressional field hearing. “They said, ‘You are a young man. What we don’t get from you now, we will get later.”’ “I will not stop until I stop them,” Cometto sobbed.

Coeur d’Alene’s packed City Council chamber was stop three on a five-city tour where Crapo and Chenoweth are attempting to gather consensus for overhauling both the tax code and the IRS. Out in the halls, the National Federation of Independent Businesses was gathering signatures as part of its effort to get one million people to call for elimination of the federal tax code.

Anti-United Nations activists chatted along one wall. A table along another wall advertised a raft of Chenoweth press releases lambasting the IRS, brochures from tax preparation experts, and business cards from a Boise-based IRS employee with the title of “problem-resolution specialist.”

Chenoweth is calling for elimination of the agency, she said before the hearing. “I don’t believe we can just wound the monster,” she said.

A flat tax or national sales tax is the answer, she said.

The First District Congresswoman trotted out a list of statistics that allege half of all the errors on 1040 tax forms are caused by IRS employees inputting incorrect numbers. She complained that the IRS budget has tripled since the Jimmy Carter administration, yet can’t account for millions of dollars it has spent.

The IRS office in Seattle declined to comment on specific cases, but said the agency is working hard to resolve taxpayer complaints.

Inside the hearing, Coeur d’Alene attorney Steve Fender ticked off the reasons the agency should be eliminated. “I commonly think of the IRS as the American Gestapo,” he said. “The only thing worse than having Mike Wallace and the 60 Minutes crew coming to interview you is having the IRS come and audit you,” Fender said.

The agency constantly ignores people’s rights to the presumption of innocence until proven guilty and not be subjected to unreasonable search and seizure, he added.

One result: there is an untaxed underground cash economy run by people who fear this Gestapo. If the enormous effort put into evading the tax code went toward finding a cure for cancer, “cancer wouldn’t have a chance.”

Some people expressed fear that their appearance at the hearings would guarantee an IRS audit. Former IRS agent Robert Schnurr, of Spokane, said he hasn’t been so afraid since he joined the Marines and headed for combat.

Coeur d’Alene accountant Ray Bradley cited a case where it took nearly four years and $11,000 to get the Idaho Tax Commission and the IRS to settle a simple question of what constitutes alimony for one of his clients. Still, Bradley praised local IRS employees, saying they are responsive, prompt and courteous.

Nevertheless, the fear factor commanded the attention of other residents. Vickey Babayco, of Sagle, told Chenoweth and Crapo she went into hiding after the IRS tried to garnish her wages for $150 in taxes she contends she did not owe.

She no longer uses her Social Security number, and has put all of her assets in a trust or in someone else’s name.

Barbara Fix said she is sure that the IRS went after her family after she started shopping a board game that makes fun of the federal government to conservative talk radio shows. Soon the agency was telling her that the $18,000 in startup costs on their Palmer, Alaska, bed and breakfast couldn’t be deducted.

Fix and her husband sold out and moved to Wallace where they purchased another sizeble home. But they are afraid to open another bed and breakfast, she said.

Shawn George of the IRS in Seattle said the agency knows it makes mistakes. But, “one thing we are saying is the hearings have identified some problems and we are listening to what people are saying,” George said.

The IRS is making it tougher for its agents to seize property, and no longer allows its districts to be compared on the basis of how much money they collect, she said. The agency also started a series of problem-solver days around the country and will bring one to Spokane on Feb. 18.

, DataTimes ILLUSTRATION: 3 Photos (2 Color)