A: My book is an expose of the IRS plan to audit every aspect of your financial life. We have uncovered documents that show the IRS is in the midst of launching an audit invasion. It amounts to a spy operation on every American citizen.
They want to track every transaction you engage in. They want to know where and how you are spending your money, and who you are giving your money to. They have put forth a plan that will allow them to track every transaction with the long-term goal of eliminating cash and the paper tax return so they can follow every single move you make.
What is really staggering is they intend literally to reach into the living rooms, bedrooms and closets of every American citizen, and they want to reach into the file cabinets, back offices, and front meeting rooms of every business.
I have gone through about 600 pages of documentation in the manual that shows this. The first critical element is to have a number assigned to every citizen.
I have been talking about Social Security numbers and minors since the first law was passed in 1986. I have always maintained the IRS never had the legal authority to actually get or use that number for minor children.
Now things have changed. In 1996 Congress [gave] the authority to force every citizen to take a number. The IRS is trying to set up an economic system to allow the government to know everything you buy, how you buy it, where you buy it from, and what you are going to do with it once you get it.
The whole premise of this audit invasion is the notion that every citizen is cheating on his tax return. This is the one thing driving the IRS nuts about any cash in circulation at all. This is why the agency is working so hard to eliminate cash.
They believe people are cheating across the board - not from the standpoint of overstating deductions, but from the standpoint of under- reporting income. The IRS knows as long as there is cash in circulation, there is at least the possibility that somebody might earn a dollar and not report it on their tax return, and they can't possibly tolerate that.
Q: Is the issue one of money or of control?
A: It is both. Money is part of it: Congress has spent this country hopelessly into debt. The other element is control: they've got to be able to control people -- what they do, how they do it -- more importantly, how they react to the IRS.
The IRS has a plan to gain access to every mortgage application filed in this country; home loans, second mortgages on homes, home equity lines of credit. You tell the mortgage company your story; you give them your financial data. They have been running a test program in the Fresno district in California that is now being rolled out nationwide. The IRS is accessing private files and records almost on a full-time and continuing basis.
There are several things the IRS is trying to exempt itself from in order to expand its information-gathering practices. The IRS has [a plan] to exempt itself from the Privacy Act of 1994 so it does not have to reveal the information it has gathered about an individual -- that you have the right to be notified by the IRS that it is in the process of gathering information about you, or the sources of information that it is gathering about you.
Second, the IRS has a plan called the Automated Information Integrated On-line Resource Network. They want to gain on-time or immediate time access to every public and private data base in the country for the purpose of spying on people and finding out what is going on.
Third, they have a plan to actively, physically, plant spies in businesses for the purposes of observing their operations. The IRS has included the Small Business Administration, the Better Business Bureau, Dunn & Bradstreet, and trade associations like the Chamber of Commerce as part of this spy network. This means every bit of data you give to these organizations as a business person is going to end up in the hands of the IRS.
Fourth, they are building a dossier on personal finances. They want to do an analysis of every nickel you spend, every check you write, your assets, your personal property including furniture, clothing, jewelry, cars, recreational vehicles, your credit card, borrowing and spending habits.
They even want to go through personal files such as divorce records and talk to your friends and neighbors. This should be - to me it is - a very disturbing proposition.
Fifth is a lifestyle interrogation where they sit down with you to fill out what they call their Personal Living Expense analysis -- a PLE. It is a detailed analysis of how you are spending money.
They want you to list how much money you spend on groceries and outside meals, clothing, laundry and dry cleaning, barber, beauty shop and cosmetic supplies, educational supplies, recreation, entertainment, vacations, club dues, lodge expenses, gifts and allowances.
The IRS's tentacles are reaching out in every direction. Every time you spend money, you are potentially creating income for the person you give it to, and the IRS is certainly concerned about those people as well, particularly the small businesses, the self-employed operations, the men and women who are the backbone of this country that provide jobs for 80 percent of the people.
Q: You say there is "phantom income" they are looking for. What does that refer to?
A: "Phantom income" is the name I have given the income the IRS is going to assign to people who don't know how to defend themselves in the audit environment. They think everybody is hiding income. These new audit techniques are designed to uncover this alleged income and to assess people with the income.
The problem with this is that the vast majority of Americans are honest when it comes to reporting their income. That means people are going to be victimized by phantom income -- income that doesn't exist except in the minds of the IRS tax auditor.
The vast majority of what the IRS is going to try to do it does not have the legal authority to do.
It is going to rely on bluff, intimidation, misinformation, misinformation - in many cases it is going to lie to people concerning what your rights are and what their limitations are. It is vital that people understand they have the right to say "no" to this tax audit invasion, and they can make it stick when they do.
The American people are doing their level best with what everybody knows is a very complicated tax code. The motto of the IRS, as I see it in my coming-up on 21 years of experience in dealing with the IRS is: They don't care if you owe it or not, they just want to get the money.
Q: there any way the states and the people can devise a public disclosure commission to oversee the IRS as to what it is doing to the freedom of citizens?
A: That is a question more people need to be asking: why doesn't somebody oversee the IRS more carefully? I have testified and provided documentation before the House Ways and Means Committee on a number of occasions About a year ago the IRS had its Taxpayer Compliance Measurement Program Audit - the so-called TCMP audit - shut down. The reason is because of the testimony I provided to the oversight subcommittee on how outrageous those IRS audits were, considering that they are wrong more than half the time.
Q: What happened to the law they were going to put into effect that the IRS must prove we need an audit?
A: Rep. Jim Traficant had offered a proposal that would effectively shift the burden of proof to the IRS.
What the law says has changed ever so slightly. Under the new Taxpayers Bill of Rights, no longer can the IRS blindly rely on a W-2 or 1099 (they have tremendous error rates), "The secretary shall have the burden of producing reasonable and probative information concerning such deficiency in tax in addition to the information return."
That means the IRS has to come up with something more than just the information return as evidence of the fact that you had the income when you the citizen claim that information is wrong.
What it does not say is that the burden to prove the case is on the IRS and that is what the bill's original authors intended. We are talking about the claim that the IRS knocks on your door and says, "We think you earned $20,000 and you didn't report it on your tax return." If you do it right you can force the burden of proof on the IRS now, legally and properly, and if they can't come in with some evidence, they are dead in the water.
Q: It's the federal government -- not the citizens -- who drove this country toward bankruptcy. Now the feds want to tax us to pay their bills.
A: You are exactly right. Congress spent the money and has put the average family in the U.S. in the position where they have to spend 45 cents of every dollar they earn on taxes at the federal, state and local level. People wonder why their standards of living have gone backwards.
The reason is taxation. For Congress to continue to look to the American people to fund this insatiable appetite for spending is insane - when is it going to end?
In 1791, Philadelphia's city leaders met to decide how to deal with bands of delinquent youth. And gangs were well known in 19th century New York City. Decades later, the 1961 movie classic West Side Story, showed the teenage "Sharks" and "Jets" protecting their urban turf.
It seems that groups of trouble-making adolescents, particularly boys, are nothing new. And until recently, these kids were not considered a threat to society as a whole -- even if they were neighborhood nuisances.
THAT WAS THEN. Time was, juvenile offenses consisted of truancy, shoplifting, drag racing, petty vandalism, or underaged drinking and smoking. Occasionally, a fist-fighting rumble made the news if one gang member pulled a switchblade knife on another. But killings were rare, and drugs were virtually unknown. Jump ahead to today's generation of adolescents, whom Princeton scholar John J. Diluho, Jr. characterizes as "fatherless, godless and jobless."
As a result, says criminologist James Alan Fox, we are seeing a veritable "epidemic" of criminal violence by juveniles, especially the "superpredators" -- who "kill and maim on impulse, without any intelligible motive." They are kids whose faces are empty and hard, their eyes reflecting anger and hurt. "Bonded to no one, with no hope for the future, no fear of justice and absolutely no respect for human life," writes Manna Huffington, chairman of the Center for Effective Compassion. They are teens like the gang who, in 1989 savagely beat, then repeatedly stabbed and raped a jogger in New York's Central Park - leaving her for dead. Later one of the attackers told prosecutors, "It was fun." In 1994 alone, the FBI says, more than 114,000 persons under 18 were charged with rape, robbery, and aggravated assault. What has happened to America's kids?
ARMED AND DANGEROUS. Twelve percent of teens in a 1996 Harris poll reported carrying a weapon - and as many as three out of four had seen or been fights involving weapons. Even colleges - traditionally havens of quiet congeniality - are battling sharp increases in student crimes such as murder, rape, and illegal drug trafficking. One university official blamed the rise on drug use and violent behavior by middle and high school students who bring their bad habits onto campus.
According to a recent Justice Department study, children under the age of 15 accounted for one third of all juvenile crime arrests in 1995. Not only are the perpetrators getting younger and younger, so are their targets: Last year, one in four victims of violent crime was between the ages of 12 and 17.
A WAVE OF TERROR. Between 1983 and 1993, murders committed by 14-to 17-year-olds rose a whopping 165 percent. During that same time period, juvenile arrests doubled, with an estimated 2.7 million teenagers arrested in 1995. Today, youths under the age of 25 commit nearly half of all violent crime, reported David O. Walchak, president of the International Association of Chiefs of Police. Moreover, close to one quarter of U.S. students surveyed by the Justice Department say they knew someone who died violently.
GANG VIOLENCE. Not surprisingly, many of these deaths are gang- related. Describing "a violent and insidious new form of organized crime," California authorities characterize today's youth gangs as "heavily armed... involved in drug trafficking, witness intimidation, extortion, and bloody territorial wars." When Metropolitan Life surveyed police, students, and teachers, 93 percent attributed violence in schools to gang membership. And, according to Chief Walchak, street gangs have been a significant factor in the increase in homicides by juveniles.
THE SPREAD OF GANGS. How extensive is gang activity? The Justice Department claims there are over 120,000 gang members in 1,436 gangs nationwide. But in 1995, The Washington Times reported more than 350,000 gang members on the west coast. And the National School Safety Center estimated 125,000 gang members just in Los Angeles. Some "supergangs" - or "nations" - include thousands of members.
No longer exclusively an inner-city phenomenon, gang networks have infiltrated even small towns and the nations most comfortable, secure suburbs. For instance, the latest federal crime statistics identified more than 20 gangs in Montgomery County, Maryland, one of the most affluent areas in the U.S. And two of the largest, most notorious gangs, the rival "Crips" and "Bloods," now terrorize 58 cities in 35 states across the country -- with an estimated 70,000 members in Los Angeles alone. "Often," writes researcher Robert Maginnis, "gangs are formed in prison and then emigrate to the streets."
WHAT ARE THEY LIKE? Nihilistic thinking pervades the gang mentality. Social scholar Comel West comments: "The frightening result is a numbing detachment from others and a self-destructive disposition toward the world. Life without meaning, hope, and love breeds a cold-hearted, mean-spirited outlook that destroys both the individual and others."
According to Newsweek, almost all crime is now committed by males between the ages of 15 and 35. However, the most recent Justice Department figures indicate rapidly rising crime rates for teenaged girls as well. In 1995, females accounted for one fourth of all juvenile crime.
Jack Levin, a criminologist at Northeastern University, found that girl gangs are now imitating boys' physical violence: "For the slightest reasons, a dispute over a boyfriend, a challenging glance, girls will get into violent confrontations where they used to have [only] verbal [disputes]."
Gang members, girls or boys, "will kill over trivial matters - a jacket, some sneakers, a dirty look," says James Fox. "For them, murder is just not the taboo it once was." Yancey Griggs, director of Juvenile Hall in Detroit, laments: "Twenty years ago a youngster would shy away from a killer... Today kids flock around [him]. He's a big shot, a hero, and he shows no remorse, no sense of wrong." Twenty-five percent of seventh through tenth graders polled in 1996 agreed: "Most young kids admire gang members."
HOME AWAY FROM HOME. Many see gang membership as a way of acquiring power and protection from the crime 2nd violence they fear in their communities. But the primary draw of gangster "families" is their offer of the identity, acceptance, security, and attention so many kids are not getting at home. And gang members' loyalty to one another, even unto death, presents a strong appeal to abused or neglected children.
"Gangs provide a sense of belonging and fraternity," says John King, a Maryland police captain. The paradox, he added, "is that the gang's approach for achieving these things is illegal and destructive to the gang member, the family unit and the community."
A TICKING TIME BOMB. Demographers forecast the number of prime-crime young males (aged 14-24) will increase by about 2 million in the next three years. Thus, FBI director Louis J. Freeh predicted that an "ominous increase in juvenile crime coupled with [these] population trends portend future crime and violence at nearly unprecedented levels."
The fuse has been lit. And unless we as a nation -- parents, teachers, pastors, business and political leaders -- address youth crime and violence with real, workable solutions, our very society will explode.