I cannot quite say that I view this with bemused detachment because I simply cannot be detached from the US tax system from which I have successfully carved my food chain niche for the past 47 years. Yet it is with an astonishing degree of cynicism that I view, within the Tax Professionals link on Linkedin, the "More Unbelievable FBAR Penalties Cases!" section. The current item of discussion regards the 1,500 percent penalty imposed in a California FBAR case.

Is 1,500 percent constitutionally permissible? If they can collect it, then it is permissible, although not very moral, ethical or generating any degree of patriotism. You have to volunteer to be eligible for a hefty fine like that. Simply join the others who have applied for and been accepted for entry in the US government's VD program. The US wants you to get this form of VD - Voluntary Disclosure. By opting into this program, you waive your rights, you agree to give up some very favorable alternatives by joining the IRS's Criminal Investigations Unit Voluntary Disclosure Initiative. Of course it is now 'constitutional' because by admitting that you are criminally negligent in your tax omissions - and that you are a criminal (this goes, automatically, with your application to the program), the three year statute of limitations no longer applies to you and you now have an eight year reporting obligation.

Yeah, you are probably negligent, but criminal negligence? Are you a criminal? If not, then why would you ever consider joining this group? I've been vocal about this since this all arose. There were a few others who were equally vocal, then. There are more, now.

We started as a rag tag bunch of individuals who saw what the IRS was doing and were not afraid to call them at their bluff. That rag tag bunch is growing in size - in geometric proportions, no less, being critical of FATCA, being outraged about F(u))BAR and now, starting to publicly question the ethics and morality of the way the IRS sends out letters in its attempt to collect revenue.

First, my friends, let's talk about the lies that the IRS issues in its press releases. Example to be utilized: the Washington Post of 29 April 2013 and its article "IRS Has Collected $5.5 Billion From Tax Cheats Overseas".

Here are some quotes from this article: "The Internal Revenue Service has recouped more than $5.5 billion under a series of programs that offered reduced penalties and no jail time to people who voluntarily disclosed assets they were hiding overseas, government investigators said Friday.

In all, more than 39,000 tax cheats have come clean under the programs.

The number of people reporting foreign accounts to the IRS nearly doubled from to 2007 - 2010, to 516,000."

Hiding accounts overseas? Tax cheats coming clean? Bull bleep! This is an out and out lie and I challenge the IRS to prove it otherwise. There have been three programs for voluntary disclosure since 2009. The first program brought in approximately 15,000 applicants who, for the most part, should not have even applied, as they were simply unaware of what their obligations were. I was part of a 'discussion' (with both elbows on the bar at the Foreign Correspondents' Club in Hong Kong),at the conclusion of the first program, OVDI -1, with the journalists from both the Wall Street Journal and the International Herald Tribune and we three reached the same conclusion regarding misguided applicants who simply should not have entered the program.

I know for a fact - and have documented proof how after that first program but prior to the second program, those who only 'partially applied' but did not forfeit/sign away their legal right to the 3 year statute of limitations for non-criminal activities, were simply besieged by the Criminal Investigations Division of the IRS, with letters and telephone calls, intimidating and harassing - basically trying to scare the bleep out of taxpayers.

These people are not criminals. These people are not cheats. Why, IRS, are you so insistent in labeling them as such?

Now I agree that those 4,500 'hidden accounts' at UBS which, in 2010 were guilty of some of the IRS accusations. Same goes for those LGT accounts the IRS went after. I assume that these people not only part of the 39,000 "cheats" that the IRS released to the press but probably paid the majority of the $5.5 billion.

But hey, the TDF form has been around for years. Up until 2009, no monetary amounts were required to be listed - all you had to do was check a box for the range within which your account fell: under $10,000; $10,000 - $100,000; $100,000 - $1 million; over $1 million Until OVDI 1, there was obviously a laxity in filing the form because no one understood it and it was theoretically for information purposes, only. Of course, after all that publicity the filing of this form between 2007 and 2010 doubled. Here it is, 2013 and the 2012 filing season is on for US taxes. And yet how come the IRS is only providing comparison between 2007 and 2010? What about 2011? Let me tell you a bit of an embarrassment for the IRS: It's Detroit, Michigan center where these forms are filed. From what I understand, that Center is so inundated that not only are details of 2011 still unavailable (and it is open to conjecture whether all of the 2011 forms received have been data entered to the system) but the IRS last year had to introduce a new form, Form 8938 that has to be filed with the tax return because Detroit is not capable of sharing its data with the other IRS centers. The IRS computer systems are broke - quite possibly beyond repair, in an era where there are simply no funds available to build it anew.

And that leaves us with the last area of commentary, this go around: communications with the IRS.

In the last few months, I have taken on three new 'communications projects', representing clients overseas, who have received letters from the IRS, billing the clients but not explaining how the IRS arrived at its assessment. In two of those cases, the clients wrote back to the IRS - and have proof of sending - but the IRS wrote second, 'more threatening' letters.

What's that, you say? The IRS 'always' explains its billings? Not so, at least, recently, outside of the US. Does this happen, domestically? I doubt it.

Late yesterday afternoon, I was called regarding the IRS's levying close to $US50,000 from the US accounts of a taxpayer who was never-ever notified by the IRS.

What do you do when something like this happens? How can you call the IRS when you do not now who to call?

Call 911.... go to the IRS website ( www.irs.gov ) and download Form 911, a 1 page form with 3 pages of narrative that you can now understand! Why? Because it is your only means of getting into the system - that's why!  This ombudsman, the Taxpayer Advocate Service, was set up by Congress to try and 'humanize' the abuses of the system. Lo and behold, there's a set of instructions there (three of the four pages - don't let that intimidate you - that actually is an easy, understandable read!

Nina Olson, Chief of the TAS, was blunt in her assessment of the 'system', last year, in her annual report: 'The complexity of international tax law, combined with the administrative burden placed on these taxpayers, creates an environment where taxpayers who are trying their best to comply, simply cannot.'

And if the taxpayers cannot, then why is the IRS categorizing them as cheats?

P.S. Yes, it took a while to get through to the telephone number listed on Form 911 but the client was able to get this situation put on hold until 2 July, to get it straightened out.