In the post IRS Money Laundering? You Bet! author Kevin E. Lake recounted his personal experience with having his veterans benefits garnished after the funds were deposited into his bank accounts. Just that fact that the IRS can do this is a threat to everyone who disagrees with the government, is enough to enrage any good American. The fact that they do this to veterans is appalling and sets a dangerous precedence. The ability of the government to use the IRS to stifle dissent can only result in the suppression of liberty.
Mr. Lake was kind enough to allow me to post his follow up article, which I present to the Esteemed Readers of Fix America, in its entirety.
How Disabled Veterans Can Prevent The I.R.S. From Garnishing Their VA Disability Payments
Jun 8, 2014
“More than a year ago, I wrote an article about a nightmare I was having with the IRS that was only beginning for me at the time. I’d checked my bank account, to verify my monthly VA disability payment (I’m a 60% disabled veteran of the Iraq War) only to find that my entire payment, and the rest of the money in my account, had been swept out by the bank and sent to the I.R.S.
I contacted the I.R.S. to inquire as to why this happened and I was told something about owing them one hundred thousand gazillion trillion dollars in back taxes. I almost laughed at whatever the real number they told me I owed was, because it was close to one hundred thousand gazillion trillion dollars and then I asked what I needed to do. In essence, I had to redo several years worth of returns, and at the end of the day, I owed them nothing. I found that they actually owed me several thousand dollars from 2008, but since more than two years had passed since then, they did not have to, and as you can imagine, they did not pay it.
This incident happened just before news broke of the I.R.S. targeting Tea Party officials and candidates and others deemed to be “conservative” and though I claim no political affiliation, at the time, I was writing for several key Tea Party and Libertarian media outlets, and I have every reason to believe that I was targeted because of this. However, it turned out to be a blessing in disguise, because through my nightmare, I came across several findings that I can now share with my fellow disabled veterans that will allow each of them to protect themselves from garnishing of any type as far as any current and future VA disability payments go.
Fact number one; according to IRS code USC, Title 38, 5301, VA disability is 100% exempt. This means it cannot be garnished for any reason, to include taxes owed, child support, personal debt or liens of any kind. Most people know this, but what I found out during my nightmare, is how the I.R.S. in particular gets around this, their own law.
The I.R.S. waits until the veteran’s disability payment is made into a bank account, where it is co-mingled with the veteran’s other money and then they take it out by way of lien. The burden of proof that the money that they actually took was from the VA then lies on the veteran. This process, as I found, can take up to three weeks, and most people either don’t want to deal with what’s involved or they become overwhelmed and give up.
Fact number two; there is a way to avoid allowing the I.R.S. to in essence launder your VA disability money through your bank, and it’s quite simple, though it will require a couple of phone calls and a little bit of paperwork. What the veteran can do is simply open up another bank account at a different financial institution into which his or her VA disability money, exclusively, is deposited. Ideally, the veteran should make sure it is a non-interest bearing account so that the institution never sends a 1099 to the I.R.S. The I.R.S. will likely never even know the account exists, and if they do, and should they garnish future disability payments, it is because they apparently sought out the veteran’s VA disability deposit information, and oh what a hay day any attorney or journalist worth their weight in sand could have with that!
One financial institution that is ideal for this situation is a company called U.S. Direct Express. They issue prepaid credit cards, through Master Card, to recipients of VA disability and S.S.I. disability, and the amount of the credit limit is the amount available in your account. Basically, it is like having a debit card at your bank. Once your disability payments are deposited into your account, you can withdraw the amount available in cash at any ATM machine that accepts Master Card, or you can make purchases up to the amount of the available balance anywhere that Master Card is accepted. One major advantage to using U.S. Direct Express is that there is no daily cash withdrawal limits on the card, so you can withdraw your entire disability check the day it is available if you need the money.
This is not tax evasion or even tax aversion, the first of which is illegal and the second of which is perfectly legal, rather, a smart way in which to protect yourself from the long reaching arms of the I.R.S. if you are a disabled veteran. Yes, they already have laws in place, as I’ve stated above, to protect us from them, but as we are finding more and more, the laws put in place by Government seem to apply only to the general population, not those working within Government themselves. Somewhere along the line, those within Government seem to have forgotten that they work for us, not the other way around, and too many people lack the fortitude to stand up for themselves and remind our elected officials of this. This is merely one way in which the men and women, who at one time were sent into hell by their Government to do things most people have not done and could never do, can stand up for and protect themselves once they get home.”
Thank you Mr. Lake, I trust that by posting your experiences on Fix America, others will benefit from them.
I encourage the Esteemed Readers of Fix America to share this article and their own experiences with IRS and the Veterans Administration.