The Hoyt Fiasco: How Kevin "Laws Do Not Matter" Brown Tried to Destroy 4300 Victims of Crime

We are not much different from you. The difference is that we are victims of a $103 million fraud conducted by IRS employees, followed by even more fraud to silence the victims. The costly and illegal abuses ordered by (now former) IRS executive Kevin Brown were so outrageous and morally offensive that his lead prosecutor quit in disgust.

We can't stress enough the fact this has nothing to do with tax collection or funding the government. It's all about hiding the fraud committed by Kevin Brown and cohorts. In fact, the IRS is sloppy about enforcing the tax code in any way that makes any sense.

Kevin Brown proved, with tragic consequences and wide-spread devastation, that the IRS does not provide adequate oversight of its employees. In fact, Brown epitomizes the culture of crime that pervades the IRS. The GAO reported that IRS employees stole 4300 computers from their own offices in a single year. Small wonder this happens, with psychopaths like Kevin Brown holding very senior positions and doing what he did (human carnage, financial looting, intimidating subordinates to egregiously break the law, etc.).

We had hoped, as we learned the truth of Brown's complicity in this fiasco, that IRS employees would do the right thing and turn Brown in. That never happened. We had also hoped the IRS employees involved in this fiasco would follow the law, rather than follow Brown. In a few rare cases, that did happen. But it did not save the victims from the many illegal and personally devastating acts committed against them by law-scoffing IRS employees.

When we were able to get a response from the (relatively few) law-abiding employees inside the IRS, they were "mysteriously" made unavailable after they began investigating. We were told they were "transferred."

The Hoyt tragedy, which has dragged on illegally for over three decades, is not an anomaly. This kind of misconduct occurs because the IRS has far too much power and almost zero accountability. That needs to change.

Watch this video. Help stop the terrorism; contact your senator and each of your Congressional reps today. Send them this video and ask them why they tolerate this in what is alleged to be a civil society.

There is no recourse for victims. Tax Court is a joke, with, in our case, a judge creating and entering false evidence that even the IRS attorneys objected to though it was favorable to their case (the evidence stood).

Referring to the Tax Code is also pointless. IRS simply disregarded it, making up a special "code" of their own to destroy the Kevin Brown victims with.

It's well documented, BY THE IRS, that the Hoyt Fiasco victims did nothing wrong. Many paid the ultimate price, despite being innocent. Yet, Geithner and Rangel (a tax cheat and a tax cheat who committed criminal offenses respectively) both got a free pass.

• 10PointChecklistForPeopleWithIRS-Problems
• IRS Attorney Statement
• Lobbyist Statement
• Myth vs. Truth
• Outline for Legislators
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• TAO Website
• TMP Factoid
• Writing for help

• Read this and ask, "Why are Hoyt victims saddled with interest and penalties?":
  2009-02TheWeekIRSAbatesInterestAndPenaltiesForTopDogs.pdf
• Here's an example of an agency that is not held accountable for idiotic and wasteful behavior:
  IRS Collections Attack On Zeff TheWeek2010-03-12.
  

The documents below may prove useful in your own situation in talking with the IRS, or when writing to legislators to make them aware of how your particular case yet another example of abuse from the IRS. It's a good idea to read these and make yourself familiar with the principles involved. If you want to explore a referenced court case further, you can find information at your local law library.

Do not ask the PDFT attorneys about these documents or about these cases. If you wish to use them in a legal effort, please refer to your individual attorney.

• WSJ-2003-02-12-CowValuations. This shows the fraud that Jay Hoyt committed against his partners (see the related IRS coverup document, IRS-86-FlowThroughOK).
• 2002-04-08WSJ. Article that show how capricious Congress is about the role of the IRS.
• 2002-01-07WSJ-CourtCases. IRS lost one court battle after another.
• 2002-01-09WSJ. It's very hard to work with the IRS and reach a reasonable settlement.
   
• Application for Reward. Form 211, to report IRS employees who participated in the fraud.
• Biven Brief 2002. The original "big case" in the Hoyt Fiasco.
• Department of Justice Dumb Response. This is the kind of help we get? Isn't the DOJ supposed to enforce the laws, rather than aid in breaking them?
• Expert Advice No Penalties TaxShelter TaxHotline 2008May. Tax Court ruled that penalties do not apply when people act on expert advice before investing in a business that has tax advantages (very similar to Hoyt Fiasco, in which IRS refuses to reduce or eliminate penalties).
   
• Innocent Spouse2002-10-05. The marriages of many Hoyt investors were destroyed by malicious (and often illegal) IRS actions. Those who remarried found their new spouses soon under attack also.
• Innocent Spouse2002-10-05-Direct From Screen. A variation of the above.
   
• IRS-86-FlowThroughOK. IRS assured a taxpayer, in writing, that the Hoyt investment was fine and no personal income tax increase would arise from it. Later, IRS sent that same taxpayer a bill for over a quarter million dollars.
   
• IRS Committed Fraud Appeals Court Ruled. Just one of many examples of fraud conducted by the IRS. Sometimes, they actually don't get away with it.
• IRS Delay Means No Dice. The Hoyt victims are subject to an entirely different "tax code" (one made up just for us), case precedent, laws, and so forth. Where a law or case applies to everyone else, for some reason it doesn't apply to the Hoyt victims. Here's an example.
   
• IRS Pays For Document That Didn't Exist. IRS failure to produce gets taxpayer off hook. It seems that nothing but death gets Hoyt victims off the hook.
• IRS Neglect Not Excusable TaxHotline2008-03. The court declared IRS to be a "sophisticated creditor" and didn't allow IRS to claim its employees' negligence justifies abusing a particular taxpayer. In the Hoyt Fiasco, IRS successfully relied on negligence  to justify overly aggressive actions against the very victims of IRS negligence (IRS also claimed ignorance and incompetence). One set of (harsh) rules for Hoyt victims, another set for everyone else....
   
• Must Assess Individual. The IRS claimed it assessed individuals by assessing the partnerships, but such a claim is without merit.
• Partners Not Liable. The Hoyt investors were a partners, with Jay Hoyt the managing partner who controlled everything. The IRS gave Hoyt a free pass, but then viciously attacked people who were not even liable.
• Partners Not Liable-2. More evidence of the preceding point.
• Person With No Authority Not Liable. Jay Hoyt controlled everything, leaving the Hoyt investors with no authority. That means none of them are liable, yet Kevin Brown, a high-ranking manager at the IRS national office, illegally asserts they are. And what Kevin Brown wants, he apparently gets. Regardless of the law, the facts, or the ethics involved.
   
• Tax Liens Do Not Help. As common sense would predict, and the Taxpayer Advocate Office has finally asserted, Tax Liens provide a negative financial impact to the government. The reason is what the massive, often irreversible, damage they do to the taxpayer. You cannot get eggs from a dead chicken.
• Taxpayer Advocacy Panel, a citizen's suggestions. Use as basis for your own letters.
• TMP Conflict Of Interest. Hoyt was the TMP who sold the Hoyt investors down the river, though he had no authority to sign anything. The IRS managed to get around this problem, just as they've managed to ignore other laws and regulations.
   

Here are some philosophically-related documents. If the government is so desperate for money, why not cut back on regulations instead of focus on wiping out innocent victims of a scam abetted by federal employees?

• CostOfRegulationsTheWeek2008-01.pdf. Want to save a billion dollars, which can then be taxed at 30%? No problem. Just reduce the thousands of pointless regulations that afflict businesses. By eliminating regulations, Congress could have the benefits of a tax increase without the pain of one.
   
• Cost of federal income tax system. This doesn't include actual taxes--just the cost of the system. If sending to a legislator, you may want to point out the tremendous waste of resources being used to crush the victims of the Hoyt Fiasco. Note: the federal income tax is just one of many federal taxes and not nearly the largest one that the typical citizen pays. Of course, for Hoyt victims, it's not 15% or 25% of income--it's a theft tax (not passed by Congress) that amounts to 20 thousand percent or more of the victim's wages.

Kevin Brown so aggressively drove the IRS machinery against the Hoyt victims that his lead attorney quit in disgust. This had absolutely nothing to do with "collecting taxes" or "funding the government," because Brown's storm troopers spent far more government money attacking the Hoyt victims than could ever be collected from them. In some cases, individual victims were singled out for abuse and the IRS spent more on each person than that person could earn in a lifetime.

Once the victims were devastated and thus no longer a potential threat, Brown left the IRS (which, incidentally, never recovered the missing $103 million). First Brown followed his former boss to the scandal-plagued Red Cross and then left there as well....

Covering up a robbery. The Hoyt victims were robbed by IRS employees colluding with Jay Hoyt over many years. Is this why Kevin Brown took it upon himself to come up with a special tax on theft--even though nowhere in the income tax code does any such thing exist even in theory--and stick that to the Hoyt victims?

Brown's special illegal tax law works similar to: someone robs your house and you have to pay taxes on what they took. That's the essence of Brown's creative and illegal legislating.

Brown's misconduct ensured that due process was eliminated and the all timelines expired before victims could do anything other than be on the hook. Brown and his minions not only failed to notify potential victims but lied to them in writing when they inquired. Writing that "You will have no personal tax liability" isnot, contrary to Brown's later assertions in the Kangaroo Tax Court, the same as notifying someone they owe a tax.

Thanks to Brown's lies, deceptions, and abuse of power, the IRS is still aggressively attacking people whose only "crime" was to believe what the IRS told them--in writing. But they let the tax cheats below get away with obvious tax cheating. Why the double standard?

The IRS has done nothing about these actual tax cheats:

• Timothy Geithner blatantly cheated on his taxes for several years, but after getting caught he claimed he made an honest mistake. The IRS let him off with no penalties or interest. Meanwhile, the IRS behavior toward the Hoyt victims has been downright brutal and well outside what any sane person would consider "civilized." The Hoyt victims didn't cheat on their taxes; but they did follow written instructions from, and believe written assurances from, the IRS. Watch this video: Geithner Song

• Bill Clinton deducted $4 a pair for used underpants he "donated" to charity (as if anybody would want to wear them). The IRS turned a blind eye to this obvious tax cheating--and to a long list of other obviously inflated "donations" of trash the Clintons made to charity. Try deducting $80 for a worn-out pair of shoes on your tax return.

• Congressman Chuck Rangel is Chair of the House Ways and Means Committee, which essentially writes the tax code. He cheated on his taxes, then claimed he "didn't know" it was illegal to hide income from the IRS via offshore accounts. The IRS lets him off with no penalties or interest. And Rangel, who should be serving 30 years in prison for tax evasion, is still Chair of the House Ways and Means Committee.

• Ted Kennedy hid millions of dollars offshore for decades. The IRS never investigated this. The Kennedy clan, in fact, ran many tax scams that the IRS knew about and still does. Apparently, tax cheating is fine with the IRS. It's when you do nothing wrong that they try to bury you.

Can we count on help from the DOJ? Hardly. O.J. Simpson committed a brutal double homicide, yet the government let him walk away. Meanwhile, people whose only "crime" was to trust IRS employees' written assurances are being systematically destroyed. Why the double standard? After you read this dumb response from the DOJ, you'll wonder if aliens could ever find any sign of intelligent life there.

Well, maybe our Defense Department will defend thousands of innocent Americans against brutal attacks? Wrong again. The number of victims of the Hoyt Fiasco exceeds the number of victims of all three attacks on the World Trade Center combined (1992 and 2001). In both cases, the attacks caused innocent people to die. Congress has done nothing for the 4300 Hoyt victims across America, but for an attack on fewer Americans in just one city--the entire nation went to war.

The IRS is using tactics one of their own attorneys publicly stated were unethical and morally indefensible (as reported in the Augusta Chronicle). That statement came out before the trial in which IRS people suppressed material evidence and repeatedly claimed "I can't remember" instead of answering questions on the witness stand.

Devastation

How can anyone justify devastating thousands of innocent people who relied on the written promises of government officials? The costs to the remaining victims continue to mount, as government employees continue to misappropriate IRS resources and violate Congressional mandates in their zeal to destroy the victims.

Consider these victim statements:

"Jay Hoyt defrauded me of $50,000 over 11 years (roughly twice my average annual wages during that time), until 1995. IRS calls this 'tax sheltering' and now wants all of my assets and nearly all my income for the next 10 years. Figure that one out."

"I ran the numbers. If I can somehow charm someone into loaning me the money to pay what I allegedly owe, it will take me 233 years to pay back the loan--and doing that means living below the poverty line the whole time."

Imagine being bilked of your retirement savings, with the help of people working for a federal agency. Imagine that those people provided you written assurances that your suspicions of wrong-doing were incorrect--that they had examined things and you had nothing to worry about.

Now imagine--after you discover that, yes, you had been defrauded after all, these same people create a "theft tax" and hit you with tax bills that would stagger someone earning ten times what you make.

Denying you due process, they threaten you with prison if you don't fork over absurdly large amounts of money--more than you could earn in a lifetime. And they do this even though nowhere in the Tax Code is there any such thing as a "theft tax" (tip: it's called an "income tax").

If you think that can't happen to innocent American citizens, think again.

Welcome to the Hoyt Fiasco.

Why?

• Why are these people going to such extremes to silence the victims?

• What are they trying to hide?

• Why is over $103 million "missing?"

• How do IRS employees justify spending far more on devastating the victims than they can possibly ever collect from them? This isn't helping the government--so why are they doing it?

• Contact federal law enforcement officials, your senators, your Congressman, members of the Senate Finance Committee, the Treasury Inspector, and others who should object to this inexcusable misconduct and ask them why Brown and his cohorts got away with it.
   
• Report any abuse to as many people as possible.
   
• Contribute to stopping future abuses by reminding legislators the whole 1040 tax system brings in less than it costs the economy (due to economic drag, compliance costs, and abuses like this). Simply abolishing the IRS outright is easy; let the 50 states use existing state tax collection methods to pay a tax by apportion and submit to a small office overseeing that. Existing IRS employees could be retasked to some function that's actually useful, with no more Kevin Browns being inflicted on law-abiding citizens.

We are trying to remain unbiased. Despite the situation inflicted on us, we have tried to cooperate with the IRS. While they have made statements we have proven wrong, we have made every effort to present the facts as we know them and not to distort things just to further our agenda. In fact, we have asked IRS officials to let us know if any information on this site is inaccurate.

We are not anti-IRS. We aren't on some mission to make the IRS look bad (we can't possibly do that as well as they do already). We are thankful for good people in the IRS who oppose the inexcusable way other folks in the IRS are handling this fiasco and mistreating the Hoyt victims. Unfortunately, the good people do not seem to be the ones in charge. And why hasn't Congress put a stop to this blatant abuse? Have members of Congress forgotten that "representative" means something?

Why the unethical treatment of the Hoyt Victims? And where's the "missing" $103 million?

We are not tax protestors. We are not trying to protest taxes or shirk our duties as citizens. We are not part of any tax protest group, nor are we one ourselves. We seek to thwart specific abuse, conducted by people in the IRS. This outrageous violation of the public trust has already cost the taxpayers far too much. Worse, it has taken the lives of several victims and ruined the lives of hundreds more. How many more innocent American citizens will be unlawfully stripped of their property or even their very lives, before we can resolve this in an intelligent, lawful, and equitable manner?

Some links you may find interesting:

• 7 Questions
• 10PointChecklistForPeopleWithIRS-Problems
• 23 Facts
• Abatement Proposal
• Abusive Tax Shelter--No
• Amicus Brief
• Biven Suit Update
• CA passes law for relief of Hoyt victims
• Document requests
• Evidence
• Letters
• More than allegation
• Number partners by state
• Page View Stats
• Phantom Cow: last issue
• Senate Finance Committee
• Settlement Information
• Site Support and Funding
• Sordid Saga
• Synopsis
• Timeline
• Traffic stats
• Transpac