Do you FEAR the IRS?

Question

The college student that caught Barry Bonds 756 home run ball can be hit with a tax bill of as much as $260,000, whether he sells the ball or not. The IRS has declined to speak about it, which makes me nervous.

Do you think the US Government, including the IRS has TOO much power?

If he sells the ball he absolutely WILL have to pay 35% in taxes.

If he DOESN'T sell the ball the IRS can (and probably will because he doesn't have the resources to appeal) assess the retail value of the ball and send him a bill. To make matters WORSE, they can do this next year, and on top of the bill make him pay interest, and a penalty because he didn't have 90% of his "potential" taxes paid by the end of the year.

I have a little experience with this. I sold some stock, and had to pay the IRS quarterly and was penalized because one of my payments was, get this, 2 DAYS LATE.

So while this may be based on some theory, the IRS can make up it's mind 2 or 3 years from now, even if this guy hasn't sold it, and MAKE HIM PAY the assessed value, plus penalties, plus interest. If he refuses they can seize his real property and sell it, including his bank accounts. (they can even wait until he graduates and gets a job!!) It's based on "you should have known" rules the IRS uses.

I included my brush with the IRS over the sale of stock as an indication of the "letter of the law" attitude enforced, not how value of a commodity with a price indicated. THEY are in a position to determine the value of the ball at any time. Once they do that he must pay on what THEIR assessed value is which some estimate is as high as one million dollars, then he's stuck. He can WRITE OFF the ensuing decline in value, but he's still stuck doing the math and PAYING instead of waiting until he sells it, if he ever does, and actually KNOWING what it is worth.

As you so keenly noted, the value of the ball may change significantly DOWN if it is determined that he cheated by "juicing". I'm more concerned about the zero tolerance method of operation the IRS uses on many people who can't afford representation, or can't afford the fight, and the number of people of "means" who have not paid their "fare share" of taxes in years, a-la G. Soros (who is a citizen with no American asset)

Bravo Will!!!!!!! I concur.

Compiant?

Did you know that if you call the IRS with a question, and they get the answer wrong, YOU are responsible for the error, the penalty and the interest?

Answer 1

Of course not (For any US Government persons who might be looking at yahoo answers to see if there's anything going on that they can investigate, did I do good with my answer? Am I off the hook?)

Answer 2

It's one thing to assess the value of a stock. There are literally millions of precedents along with lists of the closing price of every stock going back decades. Piece of cake!

This ball is such an unusual occurrence that it's impossible to accurately assess any value until it's sold. It's value may drop with each additional home run and it may become worthless if Mr Bonds is stripped of the title for "juicing." When the ball left the pitcher's hand it was worth about $8.00. Until it's sold at auction it will be impossible to assess its true value and once it is Mr Murphy will have the funds to pay the tax so it's really a non-issue, IMHO.

If the IRS were to attempt to levy any tax on this prior to its sale, the hew and cry from the masses would be heard by Congress who probably cannot afford to not act with an important general election looming in a bit over one year.

Answer 3

I don't and no one else should ever fear the IRS as long as people are compliant, that is the only thing that should manner. It's the cheats that mess up the system. I am compliant and don't like to see others cheating the government because its messing it up on the rest of us honest citizens.

Answer 4

Always remember Al Capone -- for all his illegal activities, the police were not able to capture him.

But he finally landed in jail because of the IRS. Because of failure to pay his taxes, he ended up locked up in jail for a decade and 1 year.

The IRS was able to do to him what law enforcement could not (and would not) do.

Answer 5

We dont need the Irs we need to tell the goverment that they are spending to much money

Answer 6

You said "can be"....how much hypothetical are we dealing with here?