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Comment by andrewfelix | Hacker News Reader

Jeez I thought our tax system was broken. This must happen all the time.

Thankfully Australia's taxation is handled federally.

We have federal income taxes too. The US IRS will play the same sort of tricks for delinquent taxes (imagined and real).

I've found the IRS to be incredibly reasonable. I had a high tax bill due to non-realized gains (sigh...), but was able to get them to do a payment plan at low interest for a couple years. They were nothing but polite and accommodating.

I also spoke with IRS CID on another matter (someone was making death threats to IRS agents, and they had mail through my anon remailer). Way saner than FBI or even USSS. (I had no information, by design, but being able to tell someone that and explain how remailers worked without them threatening to seize servers was refreshing.)

I had a high tax bill due to non-realized gains...

Do you mind elaborating? I was under the impression that capital gains aren't taxed until they're realized, would love to hear when that's not the case.

AMT

It probably has to do with Alternative Minimum Tax (AMT), which is calculated under different rules. It hit some of the Silicon Valley millionaires hard when they exercised their options before the dot-com bust, then held onto the shares for a year to get the lower capital-gains rate, and then the bottom dropped out of the market. Under AMT, those stocks represent millions in income even if they're now worthless.

Well, a member of my own family has not had such a wonderful experience with them. Nor have I found my own interactions with them ideal. I expect they are like anything else, some good and some bad. It's a fact though, that IRS agents have a tremendous amount of power to wield over a person's life. Taxes being such a contentious issue, it's not surprising that people are sensitive about having their assets seized.

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