There are better ways to start the week than to walk down to the mailbox on a Monday morning and find a letter bearing the return address “Internal Revenue Service—Criminal Investigation Division.”

The whole ghastly business had its origins in a desire to do the right thing by Uncle Sam.  One day in August 2009, my wife noticed a small news item in the Seattle Times which announced that the IRS had settled its civil suit with UBS, the Swiss global financial-services company.  At issue was the identity of some 52,000 American customers of UBS, who were said to have hidden $21 billion in what the U.S. government termed “otherwise problematic” assets, making an average of around $400,000 per customer.  I wish I had such problems.  According to the newspaper, the IRS was now to offer a 30-day “Voluntary Disclosure Program” or “Full Amnesty” for U.S. taxpayers to come clean about any overseas holdings or accounts they might somehow have previously failed to mention.  (Readers may note that the government offers a variety of definitions of the word amnesty as it applies in different circumstances, and that the Treasury Department might not understand the term in the same sense as, for instance, the Immigration and Customs Enforcement agency.)

“Could that mean you?” my wife asked.

I confess I wasn’t immediately aware of a sense of impending disaster.  No alarm bells rang.  After all, I was not exactly one of those “super-wealthy US taxpayers” who had “individually or collectively conspired to defraud the United States” by engaging in “sustained cross-border business,” as the Seattle Times put it (making clear the paper’s own stance on the matter).  Having been born and reared in England, I was later lucky enough to qualify for dual American citizenship.  Since coming under the aegis of the U.S. government, I had meticulously detailed my total annual salary to the authorities in the normal way.  Perhaps not unreasonably, I had also accumulated a small number of bank accounts and other holdings during my 40 years’ residency in the United Kingdom, and where these generated interest or a dividend of any kind, with one inadvertent exception, I included the full amount as part of my gross annual income.  (It would be fair to say that, on the whole, this was not a sum likely to impress the average UBS customer, as characterized in the newspaper.)  It seemed clear enough to me.  But as subsequent inquiries proved, I should also have filed a completely separate declaration—Form TD F 90-22.1, to be exact—listing my U.K. accounts in each and every year from the moment I opened them to the present.  The argument could possibly be made that this hardly contributes to the “sustained and determined reduction in paperwork” the IRS lists among its accomplishments, but I immediately accepted my error.  Still thinking I had committed no more than a technical offense, I wrote to my local tax office on September 17, 2009, to acknowledge my oversight and ask how I could make this right.

It’s easy to dislike the federal government, and it may be just as easy to grow attached to it, with a childlike embrace of its apparent munificence.  But over the next two years, I came to wonder whether the appropriate reaction to it might not be one of combined pity and awe, much as one might view a hopelessly confused but still impressive charging ungulate, such as a rhinoceros.  It was the power we seem to have ceded to the government, and the completely feckless manner in which the government uses it, that got me thinking this way.

The first hint of trouble came in Christmas Week 2009, three-and-a-half months after I first volunteered my information.  It wasn’t that I was expecting a friendly note of thanks from the IRS, but I admit I was slightly thrown by the ferocity of their response.  “Dear Mr Sanford” (sic), the anonymous correspondent wrote.  “We have received your application to be included in the Voluntary Disclosure Program, and no determination has yet been made on this matter.”  The letter went on to say that a revenue agent would be in touch, and to warn me in dire terms of the “severe criminal penalties provided by law,” should I in any way fail to cooperate with this individual.  Two subsequent form letters, from different regional offices, further emphasized this latter point.

In January 2010, I opened an envelope bearing the now familiar IRS logo and extracted a document roughly the size of the Greater Seattle telephone directory.  The attached letter was not, perhaps, distinguished by its clarity of phrase, and my surname again proved an insurmountable barrier, but it did bring the welcome news that I was no longer under criminal investigation.  Instead, the IRS enclosed six separate bills relating to the years 2002-07 inclusive, which apparently reflected my “negligence” and “shortcomings” in failing to “timely itemize” my British assets during that period.  I was to pay each of these bills immediately, with six separate checks, or face the threat of “renewed investigation.”  The aggregate sum was a significant one, but, rashly thinking that this concluded the matter, I settled up.

In April 2010, two more bills, each marked “FOR IMMEDIATE PAYMENT,” arrived from the IRS.  Among the many pages of accompanying material, minutely typed and fussily annotated, there was no immediately obvious explanation of what these new charges referred to.  However, I again paid up.

In June 2010, more correspondence: I was to furnish the IRS with “all bank statements, certificates of deposit, and all other documentary material whatsoever” pertaining to “each and every offshore transaction” conducted from 2001 to the present.  If I had walked down my local high street during my summer holiday in London and cashed a check with my newsagent, or bought a pair of socks at Marks & Spencer with a credit card, the U.S. Treasury Department wanted to know about it.  Among the numerous challenges of the request was the fact that the IRS required these documents “within 14 days of the date of our demand,” failing which I would face yet more “investigation and/or criminal penalties.”  Since the IRS letter took six days to travel between their regional office in Nevada and my home in Seattle, I was left with slightly over a week to collect a decade’s financial paperwork, copy and collate this in an orderly fashion, and supply it to an address in, somehow appropriately, downtown Las Vegas.  Four days later, I arrived at my local post office hauling a burden roughly the size of an old-fashioned steamer trunk, and eventually persuaded the clerk on duty there to accept my money and overnight this to Sin City.

Four months later, the IRS responded.  They wanted me to sign a “voluntary extension of time permitted for Agency to assess possible reporting discrepancies of taxpayer Christopher Sanford” (sic), since they were facing “extreme challenges in meeting current workload commitments in a timely fashion.”  It was now just over a year since I had first written to tell the IRS of my original filing error.  I signed their waiver.

It would be fair to say that, by this stage, even I had no illusions about the magnitude of the problem facing me.  When words like “federal agency” or “United States enforcement authority” are mentioned, one perhaps thinks of an organization, offices, a reporting structure, and the like—particularly when the agency in question enjoys a publicly funded budget of $12.63 billion per year, which is more than twice the current estimated GNP of Somalia.  Dealing with a monolithic state entity is one thing.  But clearly I was facing a chameleonic opponent of real cunning, which consistently kept me off balance by conducting itself as a relentless and finely calibrated machine at one moment, and a barely coherent rabble at the next.  Nor is it a comfortable feeling to be at the economic mercy of a body unable to spell correctly one’s two-syllable surname.

The next blow fell one Saturday afternoon in March 2011, when another ominously fat package from Las Vegas thudded onto my doormat.  Among numerous other items, it contained an 84-page “Closing Agreement and Final Determination” of apparent “taxpayer negligence,” which the IRS desired me to sign in order to achieve “resolution” of my affairs.  This document required me to “waive all defenses against restrictions on the assessment and collection of taxes,” including any defense based on the statute of limitations, but did not prohibit the IRS from “proposing further adjustments related to [the] taxpayer’s offshore financial arrangements” at any time in the future suitable to themselves.  My name was again misspelt in the “closing and binding contract” between the U.S. government and myself, which included my pledge to have been “accurate in all details” disclosed therein.  The sum of money demanded in the accompanying worksheet was some five times the worst-case scenario I had been prepared for in August 2009, and roughly equivalent to three full years’ pre-tax income—or, put another way, my son’s entire private middle-school education.  On balance, this seemed a steep penalty for my failure not so much to report interest from my childhood bank accounts, but to report it on the correct IRS forms.

Once I had started breathing again, I began counting.  Within a very few minutes, it became clear that both my “contact” at the IRS and that individual’s supervisor had made a basic error in adding up a row of figures, and that as a result I was being billed some $10,000 more than was correct.  The following week, my CPA raised the point in a phone conversation with the IRS.  On the spot, the IRS agent agreed that “a glitch” had occurred, and that a new statement would be prepared accordingly.  This amended bill came with a cover note that did not include the word “apology,” but did contain the words “immediate” and “payment.”  The revised demand reached me on a Tuesday afternoon; first thing on Wednesday morning, an IRS officer contacted me to request my “prompt co-operation” in the matter, as the agency was now keen to “show the file as closed.”  I cooperated.  My accountant subsequently sent me a bill for $385 for the phone call to correct the IRS’s error, which I also paid.

The whole ordeal, however, wasn’t quite over yet.  Five weeks later, another impressively bulky delivery arrived from Las Vegas.  It contained page upon page of densely packed figures, many of them crossed out and reentered by hand, some of which seemed dimly familiar from the previous month’s bill, and others that were of more cryptic origin.  Since there was no cover letter attached, nor correspondence of any sort, it was hard to say precisely how to proceed.  Several days of anxiety ensued.  The IRS was ultimately to explain that this document represented a “convenient worksheet” by which to fathom their original assessment.  “Convenient” was not my own immediate description of it.  Although this was again portrayed as the “full and final resolution” of the matter, no fewer than ten separate tax demands followed over the next month, apparently referring to “adjustments” made to my previously filed annual 1040 returns, as opposed to the one-off penalty incurred as a result of my misfiling of my British bank-account interest.  Each of these bills, too, was marked “Due immediately.”  Some time later, I heard from the Social Security Administration that my expected retirement benefits, already modest enough in conscience, had been “adjusted in light of information provided to us by the Internal Revenue Service.”  By “adjusted,” they meant reduced.

As of today, my original letter to the IRS has brought a total of 46 separate responses from two federal agencies, making the U.S. government by some distance my most prolific correspondent over the past two years.

In late August 2011, after a brief summer lull, the bombardment resumed.  A letter from yet another IRS office, this one in Holtsville, New York, informed me that I had been charged a penalty “for failure to timely [sic] notify our Service of one or more of various activities related to foreign bank entities as required by the United States Code,” and that I had ten days to pay said penalty or face “further charges and/or criminal procedures.”  Curiously, the sum of money stated was exactly the same as the one I had paid five months earlier to my “IRS contact” in Las Vegas.  For the next several weeks, I found myself in the role of a middleman between two outposts of the same government agency, as I attempted to explain to the IRS (Holtsville) that their Nevada branch had already received and banked my money, and to the IRS (Las Vegas) that I was still being diligently pursued for this by their eastern colleagues.  “Kafkaesque” might be going too far, but not, perhaps, heading entirely in the wrong direction, to describe the ensuing three-way discussions.  Unlike most civilian organizations, in the looking-glass world of the IRS the burden of proof lies on the customer.  As a result, many irrecoverable hours have been spent writing to the Technical Services Assistant Group Manager (Revenue) to update that individual on the latest thinking of his counterpart, the Regional Assessments and Collections Controller, a dialogue the parties involved appear unable or reluctant to conduct unassisted.  In this jungle of a governmental system, as incalculable as any Oriental sultanate, the taxpayer is always, and in every sense, the loser.

Perhaps it’s extrapolating too much from my experience of my primary IRS contact in Las Vegas to think of that individual savoring the city’s racy promise and vibrant nightlife while, back in Seattle, the Sandford family crouches amid the encircling gloom of financial ruin.  The mind is apt to play curious tricks under the stress of dealing with a simultaneously incompetent and psychotically aggressive opponent.  In this nauseatingly helpless and vaguely terrifying environment, I found myself grappling with issues that transcended mere accountancy and touched on the matter of the citizen’s proper relationship to the state.  Having lived in the United Kingdom and indeed in the old-time Soviet Union, I like to think of myself as inured to a certain amount of sclerotic administrative bureaucracy.  I can accept the notion that government ineptitude and occasional harassment of its subjects did not begin on January 20, 2009.  Defenders of President Obama would no doubt (and do) point to the vast expansion of the IRS that has taken place under his watch as part of a proud record of fiscal probity, a small but valiant attempt to staunch the hemorrhage of national revenues by securing every penny due the federal exchequer.  The point is debatable.  What is beyond doubt, however, is that our relentlessly progressive and humanly empathetic leader has done precious little for the rights of those of us who find ourselves caught in the spokes of his infernal government machinery.  Indeed, to the contrary, both he and his economic myrmidons have frequently spoken of their intention to pursue the allegedly noncompliant taxpayer to the very brink of that unhappy individual’s endurance and sanity.  That, most certainly, is a part of Obama’s record.  And it does not seem very liberal to me.