Mr. Chairman:
My name is Thomas L. Treadway and I'm from Pipersville, Pennsylvania. Mr. Chairman, you are looking at a man the IRS has destroyed. For five years I have been totally consumed by a nightmare, a nightmare that began with a seemingly routine IRS audit that turned into a jeopardy and termination assessment and a seizure of my companion and friend's bank accounts. The IRS seized over $27,800 out of Shirley Lojeski's bank account for my alleged tax deficiencies, using my social security number.

In December 1979 Revenue Agent Richard Boandl began an audit of my 1977 tax returns. During 1981, he began auditing the ones for '78, '79, and '80. In February 1982, Mr. Boandl proposed an assessment of $247,000 including penalties and interest. I refused to accept his findings and the next thing I knew they had already assessed the tax and started seizure actions.

Agent Boandl subsequently testified in court that because I was involved in the sale of some real estate holdings, he believed that I was liquidating my assets to the detriment of the government and disbursing the proceeds to my friend Shirley Lojeski. On this speculation Agent Boandl received permission from his supervisor to do a jeopardy assessment and a termination assessment against me.

Subsequently Revenue Officer George Jessup began jeopardy seizure actions. On August 3, 1982 I was presented with assessment notices for $247,000. Officer Jessup stated that he was doing this because of the "apparent dissipation" of my assets while I was being audited. On the same day he filed a tax lien against me and another one against Shirley. Revenue Officer Jessup's history sheets - which we obtained under the Freedom of Information Act - stated that he was proceeding without the approval of IRS legal counsel because he feared the government would lose revenues.

Officer Jessup's history sheets showed that he merely assumed that money had been transferred from me to Shirley because a cursory review of her tax returns had shown operating losses. He wondered how she could be making mortgage payments without my help. His notes state that that fact is "probably what made this case so far."

Officer Jessup even lied to Shirley's banks that IRS had "evidence" that I was concealing funds in Shirley's name. He had all her funds seized even though she did not owe any taxes, and there was no "evidence" that I was concealing funds in her name. Even though he filed a tax lien against all her property and seized her life savings he never even gave her notice or an opportunity to challenge the levy or the lien on her property.

It's clear that even though she was an innocent party, she had no rights in this matter at all. At least I had a 30 day appeal right.

Revenue Officer Jessup took all these actions on his own, without any approval from the IRS legal counsel as required by the Internal Revenue Manual. In court Jessup repeatedly testified that he "didn't need authority from any superior to do what he did, and that he alone could make the determination." The U.S. District Court for the Eastern District of Pennsylvania ruled that Agent Boandl and Officer Jessup "failed to show that they had a reasonable ground for belief and a good faith belief that their actions were fully in accordance with the law and regulations."

As a result of the seizure of Shirley's life savings:

• She lost her health and life insurance policies because she did not have the money to pay the premiums.

• She was threatened with foreclosure of her real estate because she couldn't make her mortgage payments.

• She couldn't run her horse business because she couldn't afford to buy feed and other items.

• She was sued by a supplier because she couldn't pay the bills.

• She had to borrow money to buy her groceries and to make her mortgage payments.

• She felt humiliated and degraded and became withdrawn.

• She wouldn't leave the farm because she was ashamed to meet people, and for fear that Officer Jessup would come back to the farm and seize all her personal property.

I filed an appeal of this assessment right away, and while the appeals conference was pending, Revenue Officer Jessup told my attorneys that he would not back away from further seizure actions.

On September 23, 1983 IRS Appeals Officer John Percaccio, after reviewing the case, ruled that, the entire $247,000 jeopardy assessment against me was " unreasonable", and abated the entire deficiency back to zero. It was later at a subsequent audit, that we agreed I owed $11,000 for the minimum tax, which wasn't even part of the original $247,000 jeopardy assessment.

Not only was the entire jeopardy assessment unreasonable, the IRS never proved in court that there were any facts substantiating the jeopardy and termination actions. Agent Boandl testified that he never checked the real estate records, nor did he know of any funds that I may have received from the sale of properties in March and June of 1982. In fact, I had received no funds. It all went to the bank to pay off the mortgage.

The outrageous and arbitrary actions of Agent Boandl and Officer Jessup have ruined our lives. August 3, 1982 is a day which will go to my grave with me. Even when the abatement was directed by the Appeals Officer, Agent Boandl and Officer Jessup refused to back down. They kept threatening to do the whole thing all over again. The IRS took 4 months to get Shirley's money to her and when her attorney called to complain of the delay, Officer Jessup told him that he "resented the pressure ... to release the lien and refund the money." Even when the IRS continued stalling in refunding Shirley's money, Officer Jessup wrote in his history sheets that he was "not overly concerned."

Officer Jessup was so obsessed with harassing me that he tried to contrive an excuse to start seizure actions all over again. While I was out of town for a family funeral where 4 of my family members had died in a fire, he wrote that I had "apparently skipped the area" and could not be located. To this day I have to contend with more audits, harassment, and surveillance from Agent Boandl.

What I have learned since this has happened to me is that taxpayers have no rights in dealing with the IRS. We are totally at their mercy. You can murder 10 people and you are innocent until the state spends the taxpayers' money and proves you guilty. In this case we were guilty without any hearing or any due process. The IRS did what they did without any internal management protections or any protection from the court. Even common criminals have more rights. At least the police need a search warrant first before seizing a taxpayer's property. The IRS is allowed to seize anything they want anytime they want without so much as a court order, even when you don't even owe the tax.

I am now broke, I have no job, no insurance policies, and no car. At one time I had a very successful business in trash management, but the government has stripped me of everything, and everything they did was based on naive assumptions. Nothing they did had any basis in fact whatsoever. Since August 3, 1982 we have never felt so humiliated and so totally stripped of all the faith we've always had in our system of government. But we have done nothing wrong and nothing illegal. We are victims of an IRS mentality that believes that all taxpayers are criminals and should be punished.

After years into this nightmare we have lost many of our acquaintances, family and friends. Everyone assumes that the IRS must have had some basis for what they did. They refuse to believe that our great country with its constitutional protections of the Bill of Rights could have allowed some government agents to go berserk. After all, they say, those kinds of things only happen in communist countries.

But I have also learned that not only can the IRS make you a victim, but lawyers can also. Shirley and I have incurred over $75,000 in legal and accounting fees fighting the IRS. Shirley, a totally innocent bystander in this mess, had to pay out over $30,000 in legal fees to redress her wrong!

As a taxpayer the system is stacked against us. We have to contend with overzealous IRS agents who try to make us pay more than we should, and lawyers and accountants, who play along with the game to try to get higher fees.

I come before you today to ask for your help, not only for me but for all other Americans. I used to pray at night that this would happen to every American, because only then would the system change. We in this country are getting away from our great documents, the Constitution and the Bill of Rights. We need protection from government agents like Boandl and Jessup who think they have the power to destroy people's lives without cause or justification.

We also need your help to protect our constitutional rights. The courts are not sympathetic to taxpayers. Shirley sued Agent Boandl and Officer Jessup for violating her constitutional rights. In the U.S. District Court she won because the court ruled the IRS had violated the 4th and 5th amendments to the Constitution. The court granted her compensatory damages but no punitive damages.

In the 3rd Circuit Court of Appeals Shirley lost through some strange and twisted reasoning. The IRS argued that her constitutional rights were not violated just because Agent Boandl and Officer Jessup violated the IRS Manual. The IRS argued "that the IRS Manual establishes an internal operating procedure, not a constitutional due process standard."

The Court agreed with this argument because Shirley had "failed to show any detrimental reliance on the requirement that IRS Regional Counsel approve the filing of notices of lien and levy." I don't know how she was supposed to rely on this requirement when she was an innocent victim in this whole affair. There was nothing she could have done ahead of time to rely on this. She never even knew about IRS' liens and levies until her checks started bouncing. But what is even more bizarre, the court recognized that "jeopardy assessments ... preclude the possibility of reliance." To top it off, the Court ruled that the IRS had not violated her 4th Amendment rights against warrantless seizures for the "simple reason that such actions violated no privacy interest." The court totally ignored the fact that Shirley did not owe any taxes.

I come before you today and ask you why? Why did this happen to me? Why did it happen to Shirley? How could our government have let this happen? Where are the controls on the IRS and its agents? Don't we at least deserve the same rights as common criminals? Aren't we entitled to a due process? Doesn't the Constitution guarantee me protection from unreasonable searches and seizures?

For five years I have been shackled and in an invisible prison. I don't drink, smoke, or take drugs, but for 5 years I have been in a depressive drunkenness. Every moment of my life has been totally consumed with this. Because of this I am left with nothing, but Agent Boandl got a promotion and a raise for what he did to me.

I ask you, is this the way you want our country run? Shouldn't overzealous government agents be held responsible for their actions? Shouldn't there be an easier way to stop these people than having to bankrupt yourself through legal fees? Shouldn't the government be requested to repair the damage and make me and Shirley whole again?

Mr. Chairman, thank you for giving me this opportunity to tell you how the IRS can destroy a taxpayer's life. I sincerely hope that you are successful in creating a Taxpayer's Bill of Rights to protect other taxpayers from experiencing a similar nightmare.