toobfreak
Tungsten/Glass Member
This has to be one of the greatest abuses of power I think I've ever heard. Hard to believe that such a thing can happen in this country. I URGE YOU TO READ THE FULL STORY.
IN SHORT: An elderly foreign immigrant couple owning a designer gown shop in Texas was raided by 20 armed IRS agents who seized their entire inventory of designer gowns worth $600,000 and took them at gunpoint.
Supposedly, they owed the IRS $30,000 in back taxes which both the couple and their attorney deny even owing. Normally in such a case, you have 10 days to appeal, that is, unless the property is perishable---- plants, foodstuff, etc. The designer gowns were deemed "perishable" by the IRS in stark contrast to IRS's own guidelines and seized immediately on those grounds.
The IRS took the $600,000 worth of gowns representing the couple's life savings and sold them off in four hours for $17,000. Many of the gowns were bought by IRS employees themselves for $4 apiece. The full story is below with even more horrifying, unbelievable details.
You can try this link for the web version, and then click on the first story at top:
IRS Seizes designer gowns - Bing
If the above link does not gain your full access, here is most of the story, I urge you to read it all:
A defunct Texas bridal shop hit the Internal Revenue Service with a $1 million lawsuit Wednesday accusing the agency of improperly seizing its entire inventory, which amounted to the owners' life savings, based on a tax bill that wasn't even owed.
Tony and Mii’s Inc. alleged in Texas federal court that the IRS marked its more than 1,600 designer gowns and related items as “perishable goods” in order to turn around and auction the dresses the same day based on a total inventory valuation of $6,000 instead of the more than $615,000 initially assessed, all to “shut down” a venture believed to owe $31,422.
“Armed agents then seized the inventory from Mii’s owners, an elderly and feeble immigrant couple from Thailand, and sold and liquidated the entire stock within four hours. The lead agent brought four children to join the armed agents and tag along during the entire process. Remarkably, seizing agents bid on and purchased property during the sale,” the bridal shop said.
“Unfortunately, the small tax debt at issue turned out not to even be owed in the first place. And shortly after the traumatic incident, and as a direct result thereof, Tony, Mii’s president, was forced to undergo a quadruple bypass surgery, effectively ending his ability to lead Mii’s into recovery,” the shop continued. “The couple, Tony and Somnuek, were left destitute — everything that they had built since immigrating to the United States and beginning their business in 1983 wiped out before their very eyes.”
Tony and Somnuek Thangsongcharoen allege their inventory was bought and paid for and that it was in effect their life savings.
The IRS is supposed to adhere to a 10-day waiting period from public notice of sale to auction, according to the complaint, unless the goods being seized for a tax bill are considered to be perishable, meaning that the items' value will “greatly diminish” or they can't be held onto absent “great expense.”
Wednesday's complaint relies on purportedly extensive internal IRS documents in asserting that tax agents twisted the rules in a “bad faith” effort to value the dresses as perishable and cheap enough — at $620 below a threshold barring the perishable goods procedure — to move in and make the sale all in one day, on March 4, 2015, when the shop owners were given two hours to furnish a $10,000 check or face seizure.
IRS agents had initially valued the inventory, based on physical inspection, at more than $615,000 and potentially in excess of $1 million, according to the complaint, and they stated the entire inventory needn’t be seized to pay the tax bill, but then the supervisory officer was allegedly pressured to “shut down this failing business venture.”
That allegedly prompted the agent to drastically undervalue the inventory that was ultimately sold at auction for around $17,000. The agent allegedly justified it to the judge who approved the seizure by labelling dresses initially deemed “retail sell condition” as instead “lower quality.”
“As internal documents showed, the agents repeatedly took steps to justify lowering the internally documented 'value' of the inventory,” the bridal shop said, “Progressively and arbitrarily lowering the value from over $615,000 down to $90,000, then to $35,000, then to $21,000, then to $10,000, then ultimately to $6,000 — the 'magic' figure that the agents took the position was a few hundred dollars below the amount necessary to justify invoking the perishable good procedures.”
The IRS' seizure, observed by four children allegedly set on a pallet with boxes of pizza, allegedly also picked up items like a television and video games that weren't even covered under the court order agents were using, according to the complaint, as was a Vietnam veteran's uniform hat on the premises that purportedly didn't even belong to the Thangsongcharoens. One of the 20-plus armed agents taking part in the seizure even allegedly purchased some assets but tried to cover it up by certifying that those items were bought by another bridal shop.
And the entire seizure was allegedly based on a bad tax bill.
“IRS documents demonstrate that the revenue officer in charge of the seizure was well aware that the assessed balance was incorrect and due to a system error, and had been in communication with the taxpayer’s tax representative over the issue,” the bridal shop said. “In fact, the taxpayer’s tax returns on file with the IRS reflect that the tax year at issue generated a net operating loss carryover, not a taxable amount.”
If the Thangsongcharoens owe anything, their attorney Jason B. Freeman said Friday, it's far less than the bill they were hit with, which he said wasn't "anything close." And it certainly wasn't fair for the IRS to seize the entire inventory for the bill, he told Law360.
The Thangsongcharoens say they’re not sure what if any prejudice motivated the IRS’ actions. They allege the entire ordeal cost them an additional $500,000 in damages on top of the seizure, which put them out of business, in addition to $500,000 in reputational damages and another $300,000 in Tony's medical bills. The $1 million lawsuit represents the statutory cap, Freeman noted Friday.
The IRS does not comment on litigation.
IN SHORT: An elderly foreign immigrant couple owning a designer gown shop in Texas was raided by 20 armed IRS agents who seized their entire inventory of designer gowns worth $600,000 and took them at gunpoint.
Supposedly, they owed the IRS $30,000 in back taxes which both the couple and their attorney deny even owing. Normally in such a case, you have 10 days to appeal, that is, unless the property is perishable---- plants, foodstuff, etc. The designer gowns were deemed "perishable" by the IRS in stark contrast to IRS's own guidelines and seized immediately on those grounds.
The IRS took the $600,000 worth of gowns representing the couple's life savings and sold them off in four hours for $17,000. Many of the gowns were bought by IRS employees themselves for $4 apiece. The full story is below with even more horrifying, unbelievable details.
You can try this link for the web version, and then click on the first story at top:
IRS Seizes designer gowns - Bing
If the above link does not gain your full access, here is most of the story, I urge you to read it all:
A defunct Texas bridal shop hit the Internal Revenue Service with a $1 million lawsuit Wednesday accusing the agency of improperly seizing its entire inventory, which amounted to the owners' life savings, based on a tax bill that wasn't even owed.
Tony and Mii’s Inc. alleged in Texas federal court that the IRS marked its more than 1,600 designer gowns and related items as “perishable goods” in order to turn around and auction the dresses the same day based on a total inventory valuation of $6,000 instead of the more than $615,000 initially assessed, all to “shut down” a venture believed to owe $31,422.
“Armed agents then seized the inventory from Mii’s owners, an elderly and feeble immigrant couple from Thailand, and sold and liquidated the entire stock within four hours. The lead agent brought four children to join the armed agents and tag along during the entire process. Remarkably, seizing agents bid on and purchased property during the sale,” the bridal shop said.
“Unfortunately, the small tax debt at issue turned out not to even be owed in the first place. And shortly after the traumatic incident, and as a direct result thereof, Tony, Mii’s president, was forced to undergo a quadruple bypass surgery, effectively ending his ability to lead Mii’s into recovery,” the shop continued. “The couple, Tony and Somnuek, were left destitute — everything that they had built since immigrating to the United States and beginning their business in 1983 wiped out before their very eyes.”
Tony and Somnuek Thangsongcharoen allege their inventory was bought and paid for and that it was in effect their life savings.
The IRS is supposed to adhere to a 10-day waiting period from public notice of sale to auction, according to the complaint, unless the goods being seized for a tax bill are considered to be perishable, meaning that the items' value will “greatly diminish” or they can't be held onto absent “great expense.”
Wednesday's complaint relies on purportedly extensive internal IRS documents in asserting that tax agents twisted the rules in a “bad faith” effort to value the dresses as perishable and cheap enough — at $620 below a threshold barring the perishable goods procedure — to move in and make the sale all in one day, on March 4, 2015, when the shop owners were given two hours to furnish a $10,000 check or face seizure.
IRS agents had initially valued the inventory, based on physical inspection, at more than $615,000 and potentially in excess of $1 million, according to the complaint, and they stated the entire inventory needn’t be seized to pay the tax bill, but then the supervisory officer was allegedly pressured to “shut down this failing business venture.”
That allegedly prompted the agent to drastically undervalue the inventory that was ultimately sold at auction for around $17,000. The agent allegedly justified it to the judge who approved the seizure by labelling dresses initially deemed “retail sell condition” as instead “lower quality.”
“As internal documents showed, the agents repeatedly took steps to justify lowering the internally documented 'value' of the inventory,” the bridal shop said, “Progressively and arbitrarily lowering the value from over $615,000 down to $90,000, then to $35,000, then to $21,000, then to $10,000, then ultimately to $6,000 — the 'magic' figure that the agents took the position was a few hundred dollars below the amount necessary to justify invoking the perishable good procedures.”
The IRS' seizure, observed by four children allegedly set on a pallet with boxes of pizza, allegedly also picked up items like a television and video games that weren't even covered under the court order agents were using, according to the complaint, as was a Vietnam veteran's uniform hat on the premises that purportedly didn't even belong to the Thangsongcharoens. One of the 20-plus armed agents taking part in the seizure even allegedly purchased some assets but tried to cover it up by certifying that those items were bought by another bridal shop.
And the entire seizure was allegedly based on a bad tax bill.
“IRS documents demonstrate that the revenue officer in charge of the seizure was well aware that the assessed balance was incorrect and due to a system error, and had been in communication with the taxpayer’s tax representative over the issue,” the bridal shop said. “In fact, the taxpayer’s tax returns on file with the IRS reflect that the tax year at issue generated a net operating loss carryover, not a taxable amount.”
If the Thangsongcharoens owe anything, their attorney Jason B. Freeman said Friday, it's far less than the bill they were hit with, which he said wasn't "anything close." And it certainly wasn't fair for the IRS to seize the entire inventory for the bill, he told Law360.
The Thangsongcharoens say they’re not sure what if any prejudice motivated the IRS’ actions. They allege the entire ordeal cost them an additional $500,000 in damages on top of the seizure, which put them out of business, in addition to $500,000 in reputational damages and another $300,000 in Tony's medical bills. The $1 million lawsuit represents the statutory cap, Freeman noted Friday.
The IRS does not comment on litigation.
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