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VOL 19, NO 37, MARCH 27, 2007

IN THIS ISSUE:
Friday Program: The Price of Not Paying Your Taxes!
 | Prelims | BBRC Annual Retreat | Cares and Concerns | A Thought For Freedom | Scholarship Recipients Return  | Black is Now Blue | Web Fun

Click here for photos from the meeting.

Friday Program:
The Price of Not Paying Your Taxes!

[Steve Goldfarb announced that the Program Committee was a little unhappy about all of the scooters lately, so they decided to help. "Today's speaker," he said, "is from the IRS, and agents will be parked at the top of the stairs to collect documentation from anyone who leaves early." A few people took their chances and left, although post-meeting, your editor can say they missed a great program.]

Reveille ImageFriday's speaker was Paul Comacho, Assistant Special Agent in Charge of the Criminal Investigation Division of the IRS for the Seattle Field office. (That is quite a title!) Here is what he had to say:

The topic today is how to avoid a criminal investigation. Basically, the IRS is in the business of scaring people. We want people to know that if you cheat, you might go to jail. You will be proud to know that the US has the highest rate of tax compliance of any nation. People come from all over to learn how we do it. I have a badge and a gun, we are like the FBI and DEA but with a focus on tax. If there is a little blip on your taxes, it’s not going to get to CID (Criminal Investigation Division), it’s the question of 9 million dollars that will bring in the Criminal Investigation Division. There are some high end taxpayers that get involved in some wacky schemes, “abusive tax schemes.” We go after the promoters of these schemes. We also go after the knuckleheads, someone who probably didn’t go to college or maybe even graduate high school, but considers themselves a research expert that knows the Constitution does not require them to pay taxes. They go out and promote this idea with crazy reasons like, “the federal judge is not legitimate because the flag in his court has tassels.”

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Prelims

Reveille ImageDavid Bolson read a poem written by his 15-year-old son (see in sidebar).

Tim Johnstone had no visiting Rotarians to introduce. We did have a few guests, though, including Steve Szirmai’s guest from London, recently moved to the area.

Our own Brother’s Three, with only two brothers present, sang a little song. It was written by a guy on a walk who was reportedly wearing thongs, or a thong — the details are a little unknown — " Take a Walk on the Eastside."

Reveille ImageJenny showed us the beautiful brochure for Rotary Walks! We are only five weeks away, so spread the word and get the brochures out. Online registration is available at the Rotary Walks! website.

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BBRC Annual Retreat

Reveille ImageThe BBRC held its annual retreat at the Inn at Port Hadlock near Port Townsend Friday evening and Saturday morning, March 23 and 24. The Inn is housed in an old alcohol distilling plant building, a relic of the once-thriving lumber business. Each guest room is different and the staff was quite pleasant and accommodating. The Inn was so nice that a few of the couples decided to say an extra night.

About 35 Rotarians and several spouses attended. There was golf on Friday and dinner at the end of the day, with a shopping excursion to Port Townsend on Friday afternoon. Melody Carney, wife of Jim Carney won the coveted "Eddy." Sandy Zidar, winner of the 2006 Eddy Award, praised Melody for her "mission-drive" approach to retail therapy. She went on to say that Melody personified Sharon Edberg's drive to "see it all and buy most of it." We salute Melody and look forward to watching her defend her title at the next
BBRC retreat on April 4, 2008, in Gig Harbor.

Reveille ImageCyril Faulkner was the first place winner twice in golf: once for having the Individual low score and again for having the lowest team score. Second place went to Norm Johnson for the Team prize and Bob Bowen for the Individual prize. President Jim Zidar received recognition for the "Shortest Drive" and Kim Shrader took an honors win in the "Lowest Cost per Stroke" competition. Jim Carney played well enough to finish in the middle of the pack and, alas, went home without a trophy. Ron Black just went home. This year's weather was overcast with strong wind and no rain. We are saving Dick Brown's weather prowess for "Rotary Walks."

Reveille ImageThe business of the Retreat took place Saturday morning. Incoming President Phil Salvatori had enlisted three helpers to facilitate three breakout sessions. Fred Barkman led the session on the BBRC Foundation; Paul Chapman chaired the session on youth oriented programs and attracting those involved in Rotary programs to become future Rotarians; and John Martinka led the discussion of public relations.

The sessions were lively. Many good ideas were developed. Stay tuned for a summary from the three groups.

CLICK HERE TO SEE THE
2007 RETREAT PHOTO ALBUM.

Thank you to Jim Kindsvater, Ernie Hayden, Norm Johnson & Bob McKorkle for these great photos.

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Scholarship Recipients Return

Reveille ImageTom Smith welcomed back Marta Campo and Sergio Santiago. They are the first scholarship students that we have developed a multi-year relationship with.

Marta is in her third year at the UW. She is applying for a degree in medical technology. She is very thankful for the scholarship that has allowed her to continue in school and not have to take any quarters off.

Sergio is attending Central and is going to graduate in June 2008 with a teaching certificate. He wants to focus on elementary education and hopefully help students reach their goals.

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Black is Now Blue

Reveille ImageIt’s about time Ron Black gave up his red badge; the only thing left to do was give his classification talk ... so he did.

Ron was born and raised in Ballard, attended the UW, graduated in 1970 in accounting and finance. Went into public accounting for four years then moved to Seafirst. After listening to people doing bond trading on the phone and having more fun than he was in auditing, he decided to make a change. Eventually Ron moved into mortgage banking.

Ron is married to Stella; their only child at home is a 100 lb. yellow lab. Their first grandchild was born 8 months ago. Last August their team joined Chase, an advantage over being self-employed. Being National allows Ron to close homes in Hawaii, Arizona and lots of other sunny locations. His favorite hobby is golf; he joined Sahalee many years ago when it was only $1800 to join. His handicap is 22 at Sahalee.

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Friday Program:
The Price of Not Paying Your Taxes!

Reveille ImageFriday's speaker was Paul Comacho, Assistant Special Agent in Charge of the Criminal Investigation Division of the IRS for the Seattle Field office. (That is quite a title!) Here is what he had to say:

The topic today is how to avoid a criminal investigation. Basically, the IRS is in the business of scaring people. We want people to know that if you cheat, you might go to jail. You will be proud to know that the US has the highest rate of tax compliance of any nation. People come from all over to learn how we do it. I have a badge and a gun, we are like the FBI and DEA but with a focus on tax. If there is a little blip on your taxes, it’s not going to get to CID (Criminal Investigation Division), it’s the question of 9 million dollars that will bring in the Criminal Investigation Division. There are some high end taxpayers that get involved in some wacky schemes, “abusive tax schemes.” We go after the promoters of these schemes. We also go after the knuckleheads, someone who probably didn’t go to college or maybe even graduate high school, but considers themselves a research expert that knows the Constitution does not require them to pay taxes. They go out and promote this idea with crazy reasons like, “the federal judge is not legitimate because the flag in his court has tassels.”

Think of it this way, if you can cut your taxes by a million dollars, you can really get a leg up on your competition. You can see why people get the crazy ideas in their heads.

CID not only handles tax evasion, but also money laundering. If someone is involved in any number of crimes, and then uses that money to invest in the activity more or tries to conceal it by using their grandma’s name, that is money laundering. Once they follow the money, CID tries to seize the property. This is very important because the property is often the element that allows the crooks to keep going. Some guys will even offer to sit in jail longer provided they don’t have their car, house, boat … taken.

Reveille ImageAnother area, especially in the NW, is investment schemes. Basic good rule: If it is too good to be true, it’s not true. If you look at all the cases for the past 3-5 years a large portion are investment schemes costing people millions. Watch out for your friends and neighbors; you wouldn’t believe the devastation these crooks create. There are great web pages that tell about schemes: www.quatloos.com

What are the challenges? 10-15 years ago money didn’t flow around the world as easily. Globalization has caused challenges. Money launderers have gotten very creative. It used to be simple, but the bank secrecy law says deposits over $10,000 have to be reported to the IRS. This has made it more challenging for launderers and required them to be more creative. Technology has also made laundering easier.

Sayoko asked for immunity for any Club business that may be questioned. CI does not do any audits, they make recommendations for prosecution. We get tips from the general public including ex-wives, ex-business partners. Be nice, don’t offend your book keepers, keep them happy. Local law enforcement often call in an report and we generate our own cases. We do projects to “test the waters.”

Are your agents paid on commission?
Ha, ha. We cannot evaluate them by the number of dollars they collect.

In Rotary, we have something called Rat on a Rotarian. Do we get a cut if we turn someone in to the IRS?
There is a form 211 that will allow you to turn in information and if it truly helps the investigation, you can get a percentage of money that comes in. Approximately 10% of my staff is involved in terrorist investigations. We are limited to the financial end though.

With the Wade Cook guy, what was his penalty?
You go to trial, get convicted, and get sentenced. That is the criminal end and they send you to jail and may also have a financial penalty. Then, while you are in jail, someone visits you to talk about civil offenses. Whatever you owe in taxes, you have to pay 100% plus interest.

Do states have investigative units too?
Yes, Washington does have a force that goes after folks that do not pay state sales tax.

How much cooperation does the US get from foreign nations?
There are about 20-30 places the US has designated as tax havens. In those countries the cooperation is not great. It is better after 9-11. There is an interesting thing about world commerce, even though it looks like it is going over seas, it really doesn’t, because everyone wants US funds.

Do you have an amnesty program for people who have never filed a return?
No, not really. If you come to us, before we come to you, there is no case to take to court. Most likely you avoid a criminal investigation.

Can you negotiate with the IRS? What about the “we get you pennies on the dollar” ads? I don’t understand these ads.
Compliance is approaching 85% based on 1992 audits.

How often do you try cases and what is your success rate?
We win approximately 90% of the trials.

What costs more, operations or the money you don’t collect?
IRS budget is $10 billion, the outstanding dollars are $350 billion. We are the most profitable company in the world!

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Web Fun

In honor of the Retreat Golf:

TOP TEN CADDIE COMMENTS

Golfer: "Think I'm going to drown myself in the lake."
Caddy: "Think you can keep your head down that long?"

Golfer: "I'd move heaven and earth to break 100 on this course."
Caddy: "Try heaven, you've already moved most of the earth."

Golfer: "Do you think my game is improving?"
Caddy: "Yes sir, you miss the ball much closer now."

Golfer: "Do you think I can get there with a 5 iron?"
Caddy: "Eventually."

Golfer: "You've got to be the worst caddy in the world."
Caddy: "I don't think so sir. That would be too much of a
coincidence."

Golfer: "Please stop checking your watch all the time. It's too much of a distraction."
Caddy: "It's not a watch — it's a compass."

Golfer: "How do you like my game?"
Caddy: "Very good sir, but personally, I prefer golf."

Golfer: "Do you think it's a sin to play on Sunday?"
Caddy: "The way you play, sir, it's a sin on any day."

Golfer: "This is the worst course I've ever played on."
Caddy: "This isn't the golf course. We left that an hour ago."

Golfer: "That can't be my ball, it's too old."
Caddy: "It's been a long time since we teed off, sir."

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THIS FRIDAY

"Cancer & Trauma Research, the Promise of Metabolic Hibernation," Dr. Mark Roth, Fred Hutchinson Cancer Research Center’s Basic Science Division. Dr. Roth is a cell biologist who has recently discovered a way to induce mice into reversible metabolic hibernation. If this discovery can be replicated in humans, it has promising and significant implications for treating critically ill trauma and cancer patients. A new biotech company, Ikaria, has been formed to help develop this discovery into clinical application. (Goldfarb)

THOUGHT FOR THE WEEK

Arthur Godfrey said, “I am proud to pay taxes in the United States, the only thing is, I would be just as proud to pay half the money.”


Click on the names below to wish your fellow members a happy birthday or congratulate them on their BBRC anniversaries.

BIRTHDAYS

03/05
03/06
03/07
03/08
03/09
03/12
03/15
03/16
03/23
03/27
03/30

ANNIVERSARIES

20 yrs
18 yrs
17 yrs
14 yrs
12 yrs
10 yrs
10 yrs
10 yrs
5 yrs
2 yrs
1 yr
1 yr
1 yr

 

Cares and Concerns
Dick Brown notified us that Carol Hoft is still dealing with her ovarian cancer and needs to resign from the club. If you know Carol, please send her a card with your thoughts.

A Thought For Freedom
By Harry Bolson
I see the bars
I yell so loud
Yet no one will listen
This is my punishment
But I know no crime
Discrimination is the lock
One revolutionary man is the key
There is no escape
So I just have to wait
This is the consequence for being me.
One day the sun shined
Blinded me in my cell
And after so long in despair
The answer to my prayer has come
I hear the key turn
Yet I am still blinded
The way out is shown
I am guided.
For this time I didn’t have to search
Because I was found.
I am free
This is my freedom.

 

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