TIGTA: Tax Liens Up 200%, With 26% IRS Error Rate

The Treasury Inspector General for Tax Administration today released Actions Are Needed to Protect Taxpayers’ Rights During the Lien Due Process (2010-30-072):

The IRS is not always following statutory requirements regarding the timely notification of taxpayers when liens are filed and does not always follow its own regulations for notifying taxpayers’ representatives of the filing of lien notices. ...

A Federal tax lien is created on balance-due cases in which the taxpayer has received a notice demanding payment and has neglected or refused to pay. The IRS files a Notice of Federal Tax Lien (lien notice) to protect its claims against taxpayers who owe delinquent taxes. These lien notices establish the IRS’s priority among secured creditors for the taxpayers’ property. The IRS must notify the affected taxpayers in writing, at their last known address, within five business days of the lien filings. However, as noted in previous TIGTA audits, the IRS has not always complied with this statutory requirement and it does not always follow its own internal guidelines for timely notifying taxpayer representatives of the filing of lien notices.

“This is a serious matter,” said J. Russell George, Treasury Inspector General for Tax Administration. “Because of this problem, some taxpayers’ rights to appeal the lien filings may have been jeopardized, and others may have had their rights violated when the IRS did not notify their representatives of the lien filings,” he added.

Al Qaeda No. 2 Threatens More U.S. Attacks

Ayman Al-Zawahiri Also Mentions Times Square Attack in Audio Message

Al Qaeda's second in command Ayman Al-Zawahiri has surfaced again, this time threatening more attacks against the U.S. and the West.

Al Qaeda's second in command, Ayman Al-Zawahiri, top left, is heard in a new audio message posted...

Al Qaeda's second in command, Ayman Al-Zawahiri, top left, is heard in a new audio message posted online today, in which he threatens more attacks against the U.S. and the West in a eulogy for former al Qaeda official Mustafa Abu Al-Yazid, bottom right.

(ABC News)
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"Oh American people…We offered you a peace plan, and mutual benefit; but your governments were proud and haughty, and so the attacks against you followed one after another, everywhere – from Indonesia to Times Square, by way of Madrid and London. And the attacks are ongoing, and more will come one after another," said Zawahiri, according to a transcript provided by the Middle East Media Research Institute, based in Washington, DC.

Zawahiri also continued his promise of near victory in Iraq and Afghanistan, among other issues.

Former White House national security official Richard Clarke, now an ABC News consultant, said that up until this point, there haven't been any correlations between Zawahiri's past threats and any attacks actually occurring.

"U.S. government and counterterrorism officials are not going to increase their alert based on Zawahiri's statement, because of his previous track record," Clarke said. "But they're on relatively high alert already because of the increase in homegrown terrorist threats related to al Qaeda."

The 47-minute audio message, a eulogy for Mustafa Abu Al-Yazid, was posted on jihadist websites July 27 by al Qaeda's media arm Al-Sahab.

Yazid, who was referred to by American officials as al Qaeda's No. 3 leader behind Osama bin Laden and Zawahiri, is believed to have been killed in the last half of May by an American missile strike in Pakistan's tribal areas. He was of Egyptian descent and was considered a top financial officer and al Qaeda's leader in Afghanistan.

Zawahiri was last heard from July 19, when an audio recording produced by Al-Sahab and posted on jihadist websites promised imminent victory in Afghanistan. He has released only a handful of videos this year, and terrorism experts believe the two messages released this month were likely transported out at the same time.

Also on July 19, an audio message from radical Muslim cleric Anwar Al-Awlaki was posted online, taunting President Obama and the U.S. military.

"Imperial hubris is leading America to its fate: a war of attrition, a continuous hemorrhage that would end with the fall and splintering of the United States of America," Awlaki said in the message, which featured a picture of him juxtaposed with those of Fort Hood massacre suspect Major Nidal Hasan and suspected Christmas Day bomber Omar Farouq Abdulmutallab.

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Consumers, Wall Street disagree on economy

WASHINGTON — The disconnect between Wall Street and Main Street is growing.

Americans' confidence in the economy faded further in July, according to a monthly survey released Tuesday, amid job worries and skimpy wage growth. That's at odds with Wall Street's recent rally fueled by upbeat earnings reports from big businesses such as chemical maker DuPont Co. and equipment maker Caterpillar Inc. That's because the pumped-up profits are being fueled by cost cuts like layoffs and overseas sales. In fact, big companies have shown few signs they're ready to hire.

The Consumer Confidence Index came in at 50.4 in July, a steeper-than-expected decline from the revised 54.3 in June, according to a survey the Conference Board. The decline follows last month's decline of nearly 10 points, from 62.7 in May, and is the lowest point since February. It takes a reading of 90 to indicate a healthy economy — a level not seen since the recession began in December 2007.

"Consumers have a much different view of the economy than the stock market does, and their views matter more to the economy," said Mark Vitner, an economist at Wells Fargo. The index "tells me the economy is heading for slower growth in the second half. We have low expectations for back-to-school."

Joel Naroff, president of Naroff Economic Advisors, agreed, noting that the fatter profits have shown that companies have been able to squeeze out higher productivity from workers, but that also means that "households are not benefiting."

The profit picture is "good news for Wall Street, but not good for workers," he added.

The survey was taken July 1-21, beginning just before the Standard & Poor's 500 index hit a nine-month low of 1,022.58 on July 2. It had risen 4.5 percent by July 21 and has since climbed an additional 4 percent as upbeat earnings reports from key manufacturers have made investors more convinced that the economic recovery isn't stalling as much as they had originally thought.

Audit: US cannot account for $8.7B in Iraqi funds

BAGHDAD – A U.S. audit has found that the Pentagon cannot account for over 95 percent of $9.1 billion in Iraq reconstruction money, spotlighting Iraqi complaints that there is little to show for the massive funds pumped into their cash-strapped, war-ravaged nation.

The $8.7 billion in question was Iraqi money managed by the Pentagon, not part of the $53 billion that Congress has allocated for rebuilding. It's cash that Iraq, which relies on volatile oil revenues to fuel its spending, can ill afford to lose.

"Iraq should take legal action to get back this huge amount of money," said Sabah al-Saedi, chairman of the Parliamentary Integrity Committee. The money "should be spent for rebuilding the country and providing services for this poor nation."

The report by the Special Inspector General for Iraq Reconstruction accused the Defense Department of lax oversight and weak controls, though not fraud.

"The breakdown in controls left the funds vulnerable to inappropriate uses and undetected loss," the audit said.

The Pentagon has repeatedly come under fire for apparent mismanagement of the reconstruction effort — as have Iraqi officials themselves.

Seven years after the U.S.-led invasion, electricity service is spotty, with generation capacity falling far short of demand. Fuel shortages are common and unemployment remains high, a testament to the country's inability to create new jobs or attract foreign investors.

Complaints surfaced from the start of the war in 2003, when soldiers failed to secure banks, armories and other facilities against looters. Since then the allegations have only multiplied, including investigations of fraud, awarding of contracts without the required government bidding process and allowing contractors to charge exorbitant fees with little oversight, or oversight that came too late.

But the latest report comes at a particularly critical time for Iraq. Four months after inconclusive elections, a new government has yet to be formed, raising fears that insurgents will tap into the political vacuum to stir sectarian unrest.

In a sign that insurgents are still intent on igniting sectarian violence, at least six people were killed and dozens more wounded when a female suicide bomber blew herself up near a checkpoint in the holy city of Karbala, local police said. They spoke on condition of anonymity because they were not authorized to speak to the media.

Thousands of Shiite pilgrims are converging on the city, 50 miles (80 kilometers) south of Baghdad, for an important religious holiday marking the birth of a Shiite saint known as the "Hidden Imam" who disappeared in the ninth century. Such mass displays of devotion by Shiites have often been targeted by Sunni extremists.

Iraqi lawmakers met Tuesday, but for the second time this month failed to convene a parliament session, leaving wide open the question of when the new government will take shape.

Underscoring its financial challenges, the International Monetary Fund in March approved a $3.6 billion loan to help Iraq meet its obligations. Iraq is projected to run a deficit through 2011, according to analysts, with a possibility of a surplus following that hinging on oil prices.

Iraq took a financial hit in 2008 as oil prices plummeted on the back of the global financial meltdown. While those prices have since rebounded, Iraq remains at the mercy of international oil markets, with revenues from petroleum sales accounting for over 90 percent of its government budget.

The $9.1 billion in question came from the Development Fund for Iraq, which was set up by the U.N. Security Council in 2003. The DFI includes revenues from Iraq's oil and gas exports, as well as frozen Iraqi assets and surplus funds from the defunct, Saddam Hussein-era U.N. oil-for-food program.

Iraq had given the U.S. authorization to tap into the fund, which is held in New York, for humanitarian and reconstruction efforts, withdrawing that approval in December 2007.

With the establishment of the Coalition Provisional Authority, which ran Iraq shortly after the start of the U.S. invasion in 2003 until mid-2004, about $20 billion was placed into the account. The $9.1 billion audited by the Iraq reconstruction inspector general were funds withdrawn from that account between 2004 and 2007.

The report found that the Defense Department could not "readily account for its obligations, expenditures and remaining balances associated" with the DFI. At issue was $8.7 billion, or 95 percent of the withdrawn funds.

Of this amount, the Pentagon could not account at all for $2.6 billion, according to the audit.

Tracing the rest of the money is difficult because of a combination of lax financial controls and management, the failure to designate an organization to oversee the spending and the failure to set up and deposit the funds in special accounts, as required by the Treasury Department.

The Defense Department, in responses attached to the audit, said it agreed with the report's recommendations to establish better guidelines for monitoring such funds, including appointing an oversight organization mostly likely by November.

The failure to properly manage billions in reconstruction funds has also hobbled the troubled U.S.-led effort to rebuild Afghanistan. About $60 billion have poured into Afghanistan since 2001 in hopes of bringing electricity, clean water, jobs, roads and education to the crippled country.

The U.S. alone has committed $51 billion to the project since 2001, and plans to raise the stakes to $71 billion over the next year — more than it has spent on reconstruction in Iraq since 2003.

An Associated Press investigation showed that the results so far — or lack of them — threaten to do more harm than good. The number of Afghans with access to electricity has increased from 6 percent in 2001 to only about 10 percent now, far short of the goal of providing power to 65 percent of urban and 25 percent of rural households by the end of this year.

As an example of the problems, a $100 million diesel-fueled power plant was built with the goal of delivering electricity to more than 500,000 residents of the capital, Kabul. The plant's costs tripled to $305 million as construction lagged a year behind schedule. The plant now often sits idle because the Afghans were able to import cheaper power from neighboring Uzbekistan before the plant came online.

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Associated Press writers Mazin Yahya in Baghdad and Robert H. Reid in Kabul contributed to this report.

Down To The Last Trillion in Red Ink

US Treasury Running on Fumes

July 27, 2010 "Information Clearing House" --The White House is screaming like a stuck pig. WikiLeaks’ release of the Afghan War Documents “puts the lives of our soldiers and our coalition partners at risk.”

What nonsense. Obama’s war puts the lives of American soldiers at risk, and the craven puppet state behavior of “our partners” in serving as US mercenaries is what puts their troops at risk.

Keep in mind that it was someone in the US military that leaked the documents to WikiLeaks. This means that there is a spark of rebellion within the Empire itself.

And rightly so. The leaked documents show that the US has committed numerous war crimes and that the US government and military have lied through their teeth in order to cover up the failure of their policies. These are the revelations that Washington wants to keep secret.

If Obama cared about the lives of our soldiers, he would not have sent them to a war, the purpose of which he cannot identify. Earlier in his regime, Obama admitted that he did not know what the mission was in Afghanistan. He vowed to find out what the mission was and to tell us, but he never did. After being read the riot act by the military/security complex, which recycles war profits into political campaign contributions, Obama simply declared the war to be “necessary.” No one has ever explained why the war is necessary.

The government cannot explain why the war is necessary, because it is not necessary to the American people. Any necessary reason for the war has to do with the enrichment of narrow private interests and with undeclared agendas. If the agendas were declared and the private interests being served identified, even the American sheeple might revolt.

The Obama regime has made war the business of America. Escalation in Afghanistan has gone hand in hand with drone attacks on Pakistan and the use of proxy forces to conduct wars in Pakistan and North Africa. Currently, the US is conducting provocative naval exercises off the coasts of China and North Korea and instigating war between Columbia and Venezuela in South America. Former CIA director Michael Hayden declared on July 25 that an attack on Iran seems unavoidable.

With the print and TV media captive, why doesn’t Washington simply tell us that the country is at war without going to the trouble of war? That way the munitions industry can lay off its workers and put the military appropriations directly into profits. We could avoid the war crimes and wasted lives of our soldiers.

The US economy and the well-being of Americans are being sacrificed to the regime’s wars. The states are broke and laying off teachers. Even “rich” California, formerly touted as “the seventh largest economy in the world,” is reduced to issuing script and cutting its state workers’ pay to the minimum wage.

Supplemental war appropriations have become routine affairs, but the budget deficit is invoked to block any aid to Americans--but not to Israel. On July 25 the Israeli newspaper, Haaretz, reported that the US and Israel had signed a multi-billion dollar deal for Boeing to provide Israel with a missile system.

Americans can get no help out of Washington, but the US ambassador to the UN, Susan Rice, declared that Washington’s commitment to Israel’s security is “not negotiable.” Washington’s commitment to California and to the security of the rest of us is negotiable. War spending has run up the budget deficit, and the deficit precludes any help for Americans.

With the US bankrupting itself in wars, America’s largest creditor, China, has taken issue with America’s credit rating. The head of China’s largest credit rating agency declared: “The US is insolvent and faces bankruptcy as a pure debtor nation.”

On July 12, Niall Ferguson, an historian of empire, warned that the American empire could collapse suddenly from weakness brought on by its massive debts and that such a collapse could be closer than we think.


Deaf, dumb, and blind, Washington policymakers prattle on about “thirty more years of war.”

Dr. Roberts was Assistant Secretary U.S. Treasury, Associate Editor Wall Street Journal, Columnist for Business Week, Senior Research Fellow Hoover Institution Stanford University, and William E. Simon Chair of Political Economy in the Center for Strategic and International Studies, Washington, D.C

LPS Data Shows GSE Foreclosure Starts Are Accelerating

Fannie Mae and Freddie Mac are beginning to initiate foreclosures at a faster pace.

According to a new study from Lender Processing Services (LPS), GSE foreclosure starts have been accelerating and are currently at all-time highs. From May to June, foreclosures initiated by Fannie and Freddie jumped 21 percent.

The GSEs’ prime borrowers are performing the worst. Foreclosure rates among the agencies’ prime loans have soared nearly 400 percent since January 2008, with a notable hastening tracked over the last two months, LPS reports. That increase is second only to the swell seen in non-agency “jumbo” mortgages, for more than $729,750.

LPS says the recent momentum in GSE foreclosure starts coincides with Home Affordable Modification Program (HAMP) cancellations, with most of the volume concentrated in the very late stages of delinquency (six-plus months).

The latest HAMP statistics from the Treasury showed an extremely elevated number of cancellations from trial plans, as many borrowers who received temporary modifications have not been able to verify their income or have missed trial payments.

As of the end of June, 520,814 HAMP trials had been cancelled – more than have been converted to permanent status. In addition, 8,823 permanent modifications have been cancelled under the federal program.

In contrast, LPS says foreclosure starts have remained relatively stable over the last several months for the rest of the industry. The company puts the overall foreclosure rate as of the end of June at 3.65 percent, but notes that foreclosure inventories are still elevated.

According to LPS’ market data, total foreclosure starts for 2010 are at 1,456,000. That stat is lower than 1,682,000 for the same period in 2009, but up from 1,245,000 in the first half of 2008.

It’s Now Legal to Catch a Raindrop in Colorado

Rick Scibelli Jr. for The New York Times

Todd S. Anderson used to keep his rain harvesting a secret.

DURANGO, Colo. — For the first time since territorial days, rain will be free for the catching here, as more and more thirsty states part ways with one of the most entrenched codes of the West.

Precipitation, every last drop or flake, was assigned ownership from the moment it fell in many Western states, making scofflaws of people who scooped rainfall from their own gutters. In some instances, the rights to that water were assigned a century or more ago.

Now two new laws in Colorado will allow many people to collect rainwater legally. The laws are the latest crack in the rainwater edifice, as other states, driven by population growth, drought, or declining groundwater in their aquifers, have already opened the skies or begun actively encouraging people to collect.

“I was so willing to go to jail for catching water on my roof and watering my garden,” said Tom Bartels, a video producer here in southwestern Colorado, who has been illegally watering his vegetables and fruit trees from tanks attached to his gutters. “But now I’m not a criminal.”

Who owns the sky, anyway? In most of the country, that is a question for philosophy class or bad poetry. In the West, lawyers parse it with straight faces and serious intent. The result, especially stark here in the Four Corners area of Arizona, Colorado, New Mexico and Utah, is a crazy quilt of rules and regulations — and an entire subculture of people like Mr. Bartels who have been using the rain nature provided but laws forbade.

The two Colorado laws allow perhaps a quarter-million residents with private wells to begin rainwater harvesting, as well as the setting up of a pilot program for larger scale rain-catching.

Just 75 miles west of here, in Utah, collecting rainwater from the roof is still illegal unless the roof owner also owns water rights on the ground; the same rigid rules, with a few local exceptions, also apply in Washington State. Meanwhile, 20 miles south of here, in New Mexico, rainwater catchment, as the collecting is called, is mandatory for new dwellings in some places like Santa Fe.

And in Arizona, cities like Tucson are pioneering the practices of big-city rain capture. “All you need for a water harvesting system is rain, and a place to put it,” Tucson Water says on its Web site.

Here in Colorado, the old law created a kind of wink-and-nod shadow economy. Rain equipment could be legally sold, but retailers said they knew better than to ask what the buyer intended to do with the product.

“It’s like being able to sell things like smoking paraphernalia even though smoking pot is illegal,” said Laurie E. Dickson, who for years sold barrel-and-hose systems from a shop in downtown Durango.

State water officials acknowledged that they rarely enforced the old law. With the new laws, the state created a system of fines for rain catchers without a permit; previously the only option was to shut a collector down.

But Kevin Rein, Colorado’s assistant state engineer, said enforcement would focus on people who violated water rules on a large scale.

“It’s not going to be a situation where we’re sending out people to look in backyards,” Mr. Rein said.

Science has also stepped forward to underline how incorrect the old sweeping legal generalizations were.

A study in 2007 proved crucial to convincing Colorado lawmakers that rain catching would not rob water owners of their rights. It found that in an average year, 97 percent of the precipitation that fell in Douglas County, near Denver, never got anywhere near a stream. The water evaporated or was used by plants.

But the deeper questions about rain are what really gnawed at rain harvesters like Todd S. Anderson, a small-scale farmer just east of Durango. Mr. Anderson said catching rain was not just thrifty — he is so water conscious that he has not washed his truck in five years — but also morally correct because it used water that would otherwise be pumped from the ground.

Mr. Anderson, a former national park ranger who worked for years enforcing rules and laws, said: “I’m conflicted between what’s right and what’s legal. And I hate that.”

For the last year, Mr. Anderson has been catching rainwater that runs off his greenhouse but keeping the barrel hidden from view. When the new law passed, he put the barrel in plain sight, and he plans to set up a system for his house.

Dig a little deeper into the rain-catching world, and there are remnants of the 1970s back-to-land hippie culture, which went off the grid into aquatic self-sufficiency long ago.

“Our whole perspective on life is to try to use what is available, and to not be dependent on big systems,” said Janine Fitzgerald, whose parents bought land in southwest Colorado in 1970, miles from where the pavement ends.

Ms. Fitzgerald, an associate professor of sociology at Fort Lewis College in Durango, still lives the unwired life with her own family now, growing most of her own food and drinking and bathing in filtered rainwater.

Rain dependency has its ups and downs, Ms. Fitzgerald said. Her home is also completely solar-powered, which means that the pumps to push water from the rain tanks are solar-powered, too. A cloudy, rainy spring this year was good for tanks, bad for pumps.

The economy has turned on some early rainwater believers, too. Ms. Dickson’s company in Durango went out of business last December as the construction market faltered. The rain barrels she once sold will soon be perfectly legal, but the shop is shuttered.

“We were ahead of our time,” she said.