Burton Wolfe's Internet Rag
All the news and other stuff
the New York Times sees unfit to print

September 2007 No. 68




Internal Revenue Service - The Infernal Revenue Service.

- Lucifer's Dictionary of the American Language*






The nationwide taxicab 'lease' racket - part 4

Government agencies in complicity with the taxicab companies' 'lease' racket



It would be easier for me to tell you which city, state, and federal government agencies are not in complicity with the taxicab companies' "lease" racket than to list all of those that are, since those that are run into the thousands and even include the Federal Bureau of Investigation (FBI), which refused to act after I submitted a list of 7,000 working taxicab drivers who had not been filing income tax returns and I asked, under law, for a percentage of the uncollected tax money following the haul. Had the FBI instituted action for tax law violations, starting with my list and then compiling its own nationwide, the cab companies would have been held responsible and the "lease racket" would have been brought to an end.

I had first found out how all-prevailing the complicity in fraud and law violations are when I broke through the racket by obtaining unemployment compensation benefits for drivers declared to be ineligible for them under the "lease agreement" that dominates the taxicab industry. Unlike the lawyers who botched proceedings before the California Unemployment Insurance Appeals Board, I secured a ruling from an administrative law judge that the "lease agreement" is a subterfuge to disguise the true work status of hired cab drivers, and they are eligible for benefits no matter what is stated to the contrary in the "lease agreement."

Once I obtained the kind of decision that should have been rendered from the start, a tax auditor from the Employment Development Department told me the EDD would have to audit all the taxicab companies because the "lease agreement" is standardized, and if one driver is actually an employee and not a "self-employed lessee" of the "leasing company," as the bandits who run the cab companies assert, then all drivers must be treated as employees. It never happened. Kaye Kiddoo, who was the director of the EDD at the time, told the auditor to back off, keep his mouth shut, and let the Appeals Board handle the cases one by one. I tried to overcome that with a class action which would have produced a court ruling that the "lease agreement" is an illegal fraud; but it had to be handled by lawyers since a layman cannot prosecute such an action, and the team of lawyers sold out the lawsuit for a $1.3 million payoff from the taxicab company bandits. (I will have more about that in a subsequent newsletter.)

THE IRS COULD END THE RACKET - WHY IT IS NOT

As I mentioned in the prior parts of this series, more than 90 percent of the cab drivers are out of the tax system. So, I approached the Infernal Revenue Service with a proposal to nail the cab company bandits with nationwide action holding them responsible for the massive amount of income tax evasion - action encompassing an audit of all cab companies and/or a RICO (racketeering) litigation. I got a long-distance phone call from the man in charge of the IRS's Program Analysis division in Washington, D.C. at the time, Theodore (Ted) Strunk. He had called, he explained, to apologize for the non-action and to exchange information with me.

"We know everything you say is true," Strunk said. "Hell, when I was working in the field I found out the extent to which the hanky-panky is going on. I'm sorry we have left everything to you and haven't provided any help."

"Why not?" I asked. "There was an announcement on the front page of the Wall Street Journal that the IRS is going to crack down on all the fake independent contractor schemes, not just the one in the taxicab industry, because they're costing the government around fifteen billion dollars a year in lost taxes."

"I know," Strunk replied. "We're working on it slowly, but our budget has been cut; so, we're shorthanded."

"Well, how can the President and the Congress announce a crackdown on tax evasion schemes when the budget is cut so that the personnel are not available to do the job?" I wanted to know. "The cuts certainly cannot be to save money, since you and I know that every IRS agent of the most minimal competency brings in a hundred times his or her salary in recovery of evaded taxes and penalties. So, from what you say, I can only conclude that the President and the Congress are shucking the public."

"Draw your own conclusion," Strunk said. "I can't talk about that."

He then went on to exchange information with me as to the number of cab drivers not filing income tax reports, and after I estimated 75 percent he said that my figure was too low. "We know the figure for being off the tax rolls completely is closer to ninety percent."

Once I published that statement in a newsletter of the Homosapiens Educational and Legal Project that I was running, and the head muckamucks of the IRS saw it, Strunk was ordered not to talk to me any more. His telephone number was changed, and he and the entire staff were ordered to make it unavailable. The mail room employees were ordered to reject any mail from me to Strunk and to send me a notice stating "no person of that name employed here." As a checkup, I wrote to the IRS personnel director, Tom Nelson, asking him to find out if anyone by the name of Theodore or Ted Strunk was employed at IRS headquarters. Evidently the personnel director was one IRS employee who had not received the order for non-communication with Burton Wolfe. He returned my letter to me with a notation at the bottom of it: "Theodore Strunk, Program Analyst."

If all of this sounds like something out of some totalitarian state, then be advised that it is merely one aspect of how Sinclair Lewis's famous line "it can't happen here" is being reversed throughout what is advertised to the world as "American democracy."



[Next: How to restructure the destabilized, deprofessionalized taxicab industry.]