Bankrupt tax protester gets own bailout
Filed under: Tax
Corporate bailouts. Troubled assets. Bank rescues. Federal stimulus. While the Bush and Obama administrations were scrambling to put spins on what they labeled "economic recovery" programs, angry taxpayers had a more simple description: increased government spending.
Increasingly frustrated that their voices were not being heard, they banded together to form organized groups that they called "Tea Parties," a reference to the infamous 1773 Boston Tea Party which sparked the American Revolution.
Beginning on Tax Day, April 15, 2009, Tea Party activists organized a number of protests across the country, speaking out against what they view as wasteful government spending at taxpayers' expense. Many have called for a tax revolution, evoking imagery from the American Revolution and taking as their slogan "Taxed Enough Already."
In the midst of it all is Jenny Beth Martin. Martin is credited with co-founding the national organization, Tea Party Patriots, which has, as a main priority of the organization, to bring attention to and oppose massive government spending. Speaking just before a Sept. 12 protest in Washington, D.C., Martin explained that she, like many Americans "don't want to bailout things and organizations and individuals who haven't been fiscally responsible."
Martin may know a little bit about not being fiscally responsible. She filed bankruptcy along with her husband in August 2008, having racked up debt including more than $71,000 to Ford Motor Co. Martin also lost her home.
Martin and her husband have made no secret of their financial woes, even talking about it on appearances on Fox News' Fox & Friends. She told Fox: "We've been hit by the financial crisis and the recession, and we are like everyday Americans."
Fair enough. Only there was one aspect of her financial situation that she failed to disclose during her Fox appearance: Martin owed the IRS $510,000 in unpaid taxes just to prior to her bankruptcy. In other words, she got her own bailout.
Martin claims that the recession -- and problems with a business partner -- led to the failure of her husband's business. That failure, she claims, led to her bankruptcy and her tax situation. She says those woes make her an "everyday American." But here's the thing: "everyday Americans" don't rack up $510,000 federal tax bills.
As a tax attorney, I work with a number of people who find themselves in tax trouble. Bankruptcy and tax delinquencies happen. I understand that. Bad things happen to good people.
But half million dollar federal tax bills don't just happen. They take some time to amass. And you know they're coming.
While Martin tries to paint what she did as noble, noting that her husband chose to pay his employees instead of the IRS, it's anything but noble. That $510,000 in lost revenue to the IRS could have been used to pay for equipment in a VA hospital, provide funds for homeland security or maybe even buy a Kevlar vest or two for our military personnel.
I'm all about protesting wasteful spending. I don't understand why we need to spend millions of dollars on the "search for extraterrestrial intelligence" or why it's necessary to fund commissions to study whether we need a committee to study an issue (does that even make sense?). And as Americans, we're fortunate that we're allowed to stand up and say what we believe in. But let's call things what they are.
Martin and her husband didn't pay their taxes. A LOT of taxes. That doesn't make them noble. It doesn't make them martyrs. And it doesn't make them "everyday Americans." It makes them hypocrites.
Increasingly frustrated that their voices were not being heard, they banded together to form organized groups that they called "Tea Parties," a reference to the infamous 1773 Boston Tea Party which sparked the American Revolution.
Beginning on Tax Day, April 15, 2009, Tea Party activists organized a number of protests across the country, speaking out against what they view as wasteful government spending at taxpayers' expense. Many have called for a tax revolution, evoking imagery from the American Revolution and taking as their slogan "Taxed Enough Already."
In the midst of it all is Jenny Beth Martin. Martin is credited with co-founding the national organization, Tea Party Patriots, which has, as a main priority of the organization, to bring attention to and oppose massive government spending. Speaking just before a Sept. 12 protest in Washington, D.C., Martin explained that she, like many Americans "don't want to bailout things and organizations and individuals who haven't been fiscally responsible."
Martin may know a little bit about not being fiscally responsible. She filed bankruptcy along with her husband in August 2008, having racked up debt including more than $71,000 to Ford Motor Co. Martin also lost her home.
Martin and her husband have made no secret of their financial woes, even talking about it on appearances on Fox News' Fox & Friends. She told Fox: "We've been hit by the financial crisis and the recession, and we are like everyday Americans."
Fair enough. Only there was one aspect of her financial situation that she failed to disclose during her Fox appearance: Martin owed the IRS $510,000 in unpaid taxes just to prior to her bankruptcy. In other words, she got her own bailout.
Martin claims that the recession -- and problems with a business partner -- led to the failure of her husband's business. That failure, she claims, led to her bankruptcy and her tax situation. She says those woes make her an "everyday American." But here's the thing: "everyday Americans" don't rack up $510,000 federal tax bills.
As a tax attorney, I work with a number of people who find themselves in tax trouble. Bankruptcy and tax delinquencies happen. I understand that. Bad things happen to good people.
But half million dollar federal tax bills don't just happen. They take some time to amass. And you know they're coming.
While Martin tries to paint what she did as noble, noting that her husband chose to pay his employees instead of the IRS, it's anything but noble. That $510,000 in lost revenue to the IRS could have been used to pay for equipment in a VA hospital, provide funds for homeland security or maybe even buy a Kevlar vest or two for our military personnel.
I'm all about protesting wasteful spending. I don't understand why we need to spend millions of dollars on the "search for extraterrestrial intelligence" or why it's necessary to fund commissions to study whether we need a committee to study an issue (does that even make sense?). And as Americans, we're fortunate that we're allowed to stand up and say what we believe in. But let's call things what they are.
Martin and her husband didn't pay their taxes. A LOT of taxes. That doesn't make them noble. It doesn't make them martyrs. And it doesn't make them "everyday Americans." It makes them hypocrites.



Reader Comments (Page 1 of 1)
10-09-2009 @ 6:40PM
Marisa said...
I thought federal taxes weren't "wiped out" by bankruptcy. If that's true, are they still on the hook for the bill or did the bankruptcy somehow let them off?
Reply
10-09-2009 @ 7:02PM
Kelly said...
Marisa, that's a great question. Actually, it's very facts and circumstances specific. It depends on the kind of taxes, the age of the taxes and the relief sought (which chapter of bankruptcy, for example).
Generally, unsecured income taxes that were due more than three years before the bankruptcy is filed, assuming no fraud, can be discharged. Priority taxes, like payroll taxes or taxes which are recently due, are much more difficult to discharge.
Reply
10-09-2009 @ 8:09PM
Noadi said...
Search for Extraterrestrial Intelligence gets zero tax funding. It is entirely privately funded and has been since 1994 (even when it was part of NASA it was a tiny fraction of their funding). There's plenty of wasteful government spending out there but SETI isn't on the list.
Reply
10-09-2009 @ 9:54PM
Kelly said...
Noadi, Thanks for the clarification. I should've made it clear that SETI doesn't receive funds anymore. It's a popular target since prior to funds being cut, it had reportedly received about $60 million. Not so much today when we don't even blink at billions - but in the 80s and 90s was thought to be quite a lot.
Reply
10-10-2009 @ 12:28PM
Parklyn said...
Jeff Day's "comment" was a third longer than Kelly's interesting article. Kelly's article made no mention of political views, it simply pointed out that racking up a half-million dollar tax liability doesn't just "happen".
Jeff should get his own blog. If he wants to publish on Wallet Pop, he should submit his own article for publication. I prefer to read the comments and questions of readers of Kelly's article that seek clarification or add interesting content.
Reply
10-10-2009 @ 4:44PM
Jenne said...
One sided. Your article failed to mention all those people in Washington who failed to claim income to the IRS, how about Geithner who is if people have forgotten in Treasury, and oops didn't know he had to claim his money.... and Charlie Rangle who failed to report $75000 of his income. Way to go! No one is above the law whoever you are an whatever party you belong to. I think the average "working class" american pays to much damn money to the government anyway.
Its everyones right as americans to voice there concerns, tea parties got people together, doing the right thing, getting the message out there, enough is enough Washington!
Reply
10-11-2009 @ 11:03PM
DER said...
Jeff Day,
Your right on about Kelly. She has a history of trying to hide her liberal bias by not disclosing all the facts.
DER
Reply