What the Hell is a PUBLIC ADJUSTER?

A Public Adjuster is a professional claims handler claims adjuster who advocates for the policyholder in appraising and negotiating a claimant's insurance claim.  Aside from attorneys and the broker of record, public adjusters licensed by state departments of insurance are the only type of claims adjuster that can legally represent the rights of an insured during an insurance claim process. A public adjuster will be most beneficial when it is clear that the insurer will pay the claim and the only issue is the proper identification and valuation of the loss. Most public adjusters charge a percentage of the settlement. Primarily they appraise the damage, prepare an estimate and other claim documentation, read the policy of insurance to determine coverages, and negotiate with the insurance company's claims handler.

A public adjuster is a representative of the policyholder who advises, manages, and submits a claim to the policyholders insurance company.

There are three classes of insurance claims adjusters: staff adjusters (employed by an insurance company or self-insured entity), independent adjusters (independent contractors hired by the insurance company) and public adjusters (employed by the policyholder). "Company" or "independent" adjusters can only legally represent the rights of an insurance company.

Outside the United States adjusters are commonly called (or translated into English as) "insurance loss assessors" (or simply "loss assessors") and staff adjusters or independent adjusters are called or translated as "insurance loss adjusters" (or simply "loss adjusters"). However, there is a clear distinction between a loss adjuster, who works on behalf of an insurance company, and a loss assessor who works on behalf of a policyholder.

Successfully Negotiate Property Damage Claims We can evaluate your existing insurance policies to determine what coverage may be applicable to your claim. We then research, detail, and substantiate damage to buildings and contents and evaluate any additional covered expenses, including business interruption losses and extra expense claims for businesses. In addition to recommending a good Public Adjuster it’s good to have an experienced Accountant and Attorney on your side.  

  

Licensing and regulation

Currently, 44 states (and the District of Columbia) have in place some form of statutory and/or regulatory scheme which licenses public adjusters. The states that do not are: Alaska, South Dakota, and Wisconsin.^[5] In addition, it is important to note that on October 14, 2005, the National Association of Insurance Commissioners (NAIC) adopted the Public Adjuster Licensing Model Act (MDL-228), which governs the qualifications and procedures for the licensing of public adjusters. It defines a public adjuster as "any person who, for compensation or any other thing of value, acts on behalf of an insured", specifies the duties of and restrictions on public adjusters, including regulations for the following: examination, bond or letter of credit, continuing education, public adjuster fees, contracts, record retention, and standards of conduct. In addition, the model act states that public adjusters may only act or aid on the benefit of the insured in first-party claims.

Holding a license in one state only permits the licensed to practice in that state. Although the regulations vary from state to state, the model act states that a non-resident can obtain a license in another state if their home state allows non-residents to apply for a license on the same basis. This reciprocity agreement means that in many cases one can apply for a license in another state without having to pass that state's examination or pre-licensing education requirements. Generally, public adjusters only work with insurance claims related to property damages and the business losses that they trigger such as business income, builders' risk, mechanical and electrical breakdown, extra expense and expediting expense, and leasehold interest. Although it is uncommon for public adjusters to handle health insurance claims, in some states such as Florida they are legally authorized to handle claims in all lines of insurance except life and annuities.

Duties

The public adjuster's main responsibilities are to:

·       Evaluate existing insurance policies in order to determine what coverage may be applicable to a claim

·       Research, detail, and substantiate damage to buildings and contents and any additional expenses

·       Evaluate business interruption losses and extra expense claims for businesses

·       Determine values for settling covered damages

·       Prepare, document and support the claim on behalf of the insured

·       Negotiate a settlement with the insurance company on behalf of an insured

·       Re-open a claim and negotiate for more money if a discrepancy is found after the claim has been settled

Typically a policyholder hires a public adjuster to document and expedite their claims, obtain a more satisfactory claim recovery, more quickly, and completely restore their residence or business operations, and insulate themselves from the stress of engaging in an adversarial role with a large corporation. However, the cost of hiring outside experts, no matter how well-earned, can be an added burden when they are borne entirely by the policyholder. The added burden can be alleviated by the work of a public adjuster. However, policy holders who are not properly indemnified by their insurance carriers may be left with little choice but to hire professional assistance to recover the claim payment to which they are entitled.

Public adjusters must be able to recognize claims that may be insubstantial and disputable and explain such problems to the client. The everyday meanings of terms like "collapse", "partial collapse" and "extent of physical damage" might be entirely different from their legal interpretations, requiring the adjuster to clarify such terms for the client.^[ Regulations regarding the uses of these terms are constantly in a state of flux so it is important for public adjusters to have a firm grasp of the law including the division of legal responsibilities between insurance companies and policyholders.

Successfully Negotiate Property Damage Claims We can evaluate your existing insurance policies to determine what coverage may be applicable to your claim. We then research, detail, and substantiate damage to buildings and contents and evaluate any additional covered expenses, including business interruption losses and extra expense claims for businesses. In addition to recommending a good Public Adjuster it’s good to have an experienced Accountant and Attorney on your side.  

Fees

Most public adjusters are paid based on a percentage of the total settlement. For example, one Georgia company states their fee is between 5% and 10% based on the type and amount of the insurance claim. However, lower percentages are used for larger losses being claimed under a policy of insurance. Higher percentages are needed for smaller claimed losses. Smaller insurance claims can have similar costs as larger claims, but because the recovery is less on smaller claims the fee range must be adjusted to compensate for the operating costs. All public adjusters are not equal in their abilities to secure policy benefits. Skills of performance can vary significantly between public adjusters ranging from basic to elite expert. Fees of 10% to 12% are ordinary and typical for claimed losses of $100,000 or greater when handled by standard-rated public adjusters. Expert-rated public adjusters get a higher fee than standard-rated adjusters. For example, an expert public adjuster can charge 12% to 15% on a loss that exceeds $100,000. However, superior experts possess capabilities to obtain the most effective results. Therefore, highly qualified adjusters can be expected to be better skilled at achieving a greater increased benefits settlement amount than an adjuster who is not an actual expert. Adjusters who are experts must be classified and registered as an expert by the judicial system. Public adjusters declaring themselves to be experts should be verified, because such notice is not always factual. For those public adjusters who proclaim to be actual experts, it's highly recommended that their credentials be validated to prove such qualifications. Most public adjusters are not court-registered experts, but instead just have claims experience. Experience is often not expertise. Some public adjusters charge a flat percentage or a flat fee set price, while others use a regressive scale. It depends, in part, on the State Law where the loss occurred. For example, a regressive scale can be 25% of the first $100,000, 15% between $100,001 and $200,000, and 10% of any amount beyond that. Claims that are less than $50,000 are considered small claim losses. There are Public Adjusters who will not service smaller claims at all, while other public adjusters charge a normal range of a 30% to 35% fee rate for insurance claims with a settlement value that is less than $50,000. Public adjusters can charge a lower fee on the total settlement value of the claim, or they can charge a higher fee on an improved settlement amount that is beyond the initial settlement originally offered by the insuring organization. For example, for a $100,000 loss, a fee can be 12% on the whole claim value, where the cost risk can be a shared expense with the client, but for a lower fee which is a benefit for the client; or alternatively, if the initial settlement was $50,000, then a public adjuster might accept a 25% fee —not on the initial $50,000― but on any additional recovery settlement referred to as "new money", being a partial claim value of an amount which exceeds the initial $50,000 settlement, where fees apply exclusively to only the additional amount recovered. However, this additional recovery method of "new money only" means that the public adjuster assumes all of the cost risk and expense, with no cost risk shared by the client, hence the higher fee. (For a claim not covered by the Policy, the public adjuster could experience a business loss from operating expenses spent on "new money only" claims that are limited to only improved settlement recovery services). There are public adjusters who contract for "new money only" services but charge fees of 40% and 50% to accept that high risk, where any improved settlement benefit, or the new money recovered, is essentially split about evenly between the public adjuster and the client. It's important to note that some states cap public adjuster fees at levels such as 10% or 20%, and some consumers opine that normal public adjuster fees are standardized, citing 10% on any claim regardless of its value. This is not accurate and cannot work. Such limitations can cause public adjusters to avoid helping consumers with smaller claims altogether when the services' costs can actually become a financial loss if not providing a fair, reasonable and necessary business earnings' margin needed by public adjuster firms in order to operate, just as with any business. Most states do not cap fees for this reason, while nearly all states welcome public adjuster services for their insuring public. Professional fees must be adequate for public adjusters to cover operating and business costs while still providing sufficient business income returns on those costs. Higher fees on smaller claims having low recovery values are necessary to provide the adequate compensation that a public adjuster needs to accept the costs of providing full services. Regardless of the fee structure, the public adjuster professional fee may, and will likely, be offset by an increase in the settlement amount on a covered claim. In many jurisdictions, the fee structure must be disclosed up front. It is important to note that a public adjuster cannot obtain more than the policyholder is legitimately entitled to, but public adjusters ―especially experts― generally recover a better financial settlement benefit than the fees charged to their clients, thereby leaving their clients with a net financial improvement of benefits recovery after fees are paid. The indemnity promised and provided for by an insurance policy, or the full potential financial recovery value of an insurance claim, is often not obtainable without professional assistance like that which comes from a very capable public adjuster.

Successfully Negotiate Property Damage Claims We can evaluate your existing insurance policies to determine what coverage may be applicable to your claim. We then research, detail, and substantiate damage to buildings and contents and evaluate any additional covered expenses, including business interruption losses and extra expense claims for businesses. In addition to recommending a good Public Adjuster it’s good to have an experienced Accountant and Attorney on your side.  

Loss recovery insurance

Loss Recovery Insurance is an insurance policy devised by Lorega Ltd - which covers the cost of an independent Chartered Loss Adjuster, who acts solely on behalf of the behalf of the policyholder, in preparing, negotiating and settling an insurance claim. Insurers always have the benefit of staff or independent adjusters to act on their behalf, reducing the claim wherever possible. Loss recovery insurance helps level the playing field by providing the policyholder with independent expert advice. Lorega Limited is a Lloyd's Managing General Agent, based in London, and distributes a number of assistance insurance products which provide expert help, when it is needed, to policyholders in the UK.

When to contact

While it is not always clear when a policyholder may benefit from hiring a public adjuster, the most benefit is likely to be realized if they are engaged immediately in case of a loss. Shortly after the insurance company receives notice of a loss, an adjuster representing the insurance company will visit the policyholder to gather facts about how the loss occurred, the magnitude of the loss, and the possibility of subrogation. Incorrect, incomplete or inadequately expressed answers to the adjuster's questions may reduce the amount that can be claimed. A public adjuster engaged early in the process, before the fact-finding stage, will have more opportunity to help the policyholder receive a fair settlement for all losses legitimately covered under the insurance policy. However, any time during negotiations with the insurance company and even after a settlement has been received by an insured, a public adjuster may be able to negotiate for a higher amount.

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TAX PROTESTOR ARGUMENTS

Tax protesters refuse to pay Taxes on constitutional and/or legal grounds. They claim that our tax laws are unconstitutional or otherwise invalid. Tax protesters claim that compliance with the Internal Revenue laws are "voluntary" or "optional" and  assert the following arguments:

(a) Filing a Federal tax or information return or paying tax is purely voluntary under the law, or similar arguments described as frivolous in Rev. Rul. 2007-20, 2007-1 C.B. 863.

(b) Nothing in the Internal Revenue Code imposes a requirement to file a return or pay tax, or that a person is not required to file a tax return or pay a tax unless the Internal Revenue Service responds to the person’s questions, correspondence, or a request to identify a provision in the Code requiring the filing of a return or the payment of tax.

(c) There is no legal requirement to file a Federal income tax return because the instructions to Forms 1040, 1040A, or 1040EZ or the Treasury regulations associated with the filing of the forms do not display an OMB control number as required by the Paperwork Reduction Act of 1980, 44 U.S.C. § 3501 et seq., or similar arguments described as frivolous in Rev. Rul. 2006-21, 2006-1 C.B. 745.

(d) Because filing a tax return is not required by law, the Service must prepare a return for a taxpayer who does not file one in order to assess and collect tax.

(e) A taxpayer has an option under the law to file a document or set of documents in lieu of a return or elect to file a tax return reporting zero taxable income and zero tax liability even if the taxpayer received taxable income during the taxable period for which the return is filed, or similar arguments described as frivolous in Rev. Rul. 2004-34, 2004-1 C.B. 619.

(f) An employer is not legally obligated to withhold income or employment taxes on employees’ wages.

(g) Only persons who have contracted with the government by applying for a governmental privilege or benefit, such as holding a Social Security number, are subject to tax, and those who have contracted with the government may choose to revoke the contract at will.

(h) A taxpayer may lawfully decline to pay taxes if the taxpayer disagrees with the government’s use of tax revenues, or similar arguments described as frivolous in Rev. Rul. 2005-20, 2005-1 C.B. 821.

(i) An administrative summons issued by the Service is per se invalid and compliance with a summons is not legally required.

(2) The Internal Revenue Code is not law (or “positive law”) or its provisions are ineffective or inoperative, including the sections imposing an income tax or requiring the filing of tax returns, because the provisions have not been implemented by regulations even though the provisions in question either (a) do not expressly require the Secretary to issue implementing regulations to become effective or (b) expressly require implementing regulations which have been issued.

(3) A taxpayer’s income is excluded from taxation when the taxpayer rejects or renounces United States citizenship because the taxpayer is a citizen exclusively of a State (sometimes characterized as a “natural-born citizen” of a “sovereign state”), that is claimed to be a separate country or otherwise not subject to the laws of the United States. This position includes the argument that the United States does not include all or a part of the physical territory of the 50 States and instead consists of only places such as the District of Columbia, Commonwealths and Territories (e.g., Puerto Rico), and Federal enclaves (e.g., Native American reservations and military installations), or similar arguments described as frivolous in Rev. Rul. 2004-28, 2004-1 C.B. 624, or Rev. Rul. 2007-22, 2007-1 C.B. 866.

(4) Wages, tips, and other compensation received for the performance of personal services are not taxable income or are offset by an equivalent deduction for the personal services rendered, including an argument that a taxpayer has a “claim of right” to exclude the cost or value of the taxpayer’s labor from income or that taxpayers have a basis in their labor equal to the fair market value of the wages they receive, or similar arguments described as frivolous in Rev. Rul. 2004-29, 2004-1 C.B. 627, or Rev. Rul. 2007-19, 2007-1 C.B. 843.

(5) United States citizens and residents are not subject to tax on their wages or other income derived from sources within the United States, as only foreign-based income or income received by nonresident aliens and foreign corporations from sources within the United States is taxable, and similar arguments described as frivolous in Rev. Rul. 2004-30, 2004-1 C.B. 622.

(6) A taxpayer has been untaxed, detaxed, or removed or redeemed from the Federal tax system though the taxpayer remains a United States citizen or resident, or similar arguments described as frivolous in Rev. Rul. 2004-31, 2004-1 C.B. 617.

(7) Only certain types of taxpayers are subject to income and employment taxes, such as employees of the Federal government, corporations, nonresident aliens, or residents of the District of Columbia or the Federal territories, or similar arguments described as frivolous in Rev. Rul. 2006-18, 2006-1 C.B. 743.

(8) Only certain types of income are taxable, for example, income that results from the sale of alcohol, tobacco, or firearms or from transactions or activities that take place in interstate commerce.

(9) Federal income taxes are unconstitutional or a taxpayer has a constitutional right not to comply with the Federal tax laws for one of the following reasons:

(a) The First Amendment permits a taxpayer to refuse to pay taxes based on religious or moral beliefs.

(b) A taxpayer may withhold payment of taxes or the filing of a tax return until the Service or other government entity responds to a First Amendment petition for redress of grievances.

(c) Mandatory compliance with, or enforcement of, the tax laws invades a taxpayer’s right to privacy under the Fourth Amendment.

(d) The requirement to file a tax return is an unreasonable search and seizure contrary to the Fourth Amendment.

(e) Income taxation, tax withholding, or the assessment or collection of tax is a “taking” of property without due process of law or just compensation in violation of the Fifth Amendment.

(f) The Fifth Amendment privilege against self-incrimination grants taxpayers the right not to file returns or the right to withhold all financial information from the Service.

(g) The Ninth Amendment exempts those with religious or other objections to military spending from paying taxes to the extent the taxes will be used for military spending.

(h) Mandatory or compelled compliance with the internal revenue laws is a form of involuntary servitude prohibited by the Thirteenth Amendment.

(i) Individuals may not be taxed unless they are “citizens” within the meaning of the Fourteenth Amendment.

(j) The Sixteenth Amendment was not ratified, has no effect, contradicts the Constitution as originally ratified, lacks an enabling clause, or does not authorize a non-apportioned, direct income tax.

(k) Taxation of income attributed to a trust, which is a form of contract, violates the constitutional prohibition against impairment of contracts.

(l) Similar constitutional arguments described as frivolous in Rev. Rul. 2005-19, 2005-1 C.B. 819.

(10) A taxpayer is not a “person” within the meaning of section 7701(a)(14) or other provisions of the Internal Revenue Code, or similar arguments described as frivolous in Rev. Rul. 2007-22, 2007-1 C.B. 866.

(11) Only fiduciaries are taxpayers, or only persons with a fiduciary relationship to the United States are obligated to pay taxes, and the United States or the Service must prove the fiduciary status or relationship.

(12) Federal Reserve Notes are not taxable income when paid to a taxpayer because they are not gold or silver and may not be redeemed for gold or silver.

(13) In a transaction using gold and silver coins, the value of the coins is excluded from income or the amount realized in the transaction is the face value of the coins and not their fair market value for purposes of determining taxable income.

(14) A taxpayer who is employed on board a ship that provides meals at no cost to the taxpayer as part of the employment may claim a so-called “Mariner’s Tax Deduction” (or the like) allowing the taxpayer to deduct from gross income the cost of the meals as an employee business expense.

(15) A taxpayer may purport to operate a home-based business as a basis to deduct as business expenses the taxpayer’s personal expenses or the costs of maintaining the taxpayer’s household when the maintenance items or amounts as reported do not correspond to a bona fide home business, such as when they are grossly excessive in relation to the conceivable costs for some portion of the home being used exclusively and regularly as a business, or similar arguments described as frivolous by Rev. Rul. 2004-32, 2004-1 C.B. 621.

(16) A “reparations” tax credit exists, including arguments that African-American taxpayers may claim a tax credit on their Federal income tax returns as reparations for slavery or other historical mistreatment, that Native Americans are entitled to an analogous credit (or are exempt from Federal income tax on the basis of a treaty), or similar arguments described as frivolous in Rev. Rul. 2004-33, 2004-1 C.B. 628, or Rev. Rul. 2006-20, 2006-1 C.B. 746.

(17) A Native American or other taxpayer who is not an employer engaged in a trade or business may nevertheless claim (for example, in an amount exceeding all reported income) the Indian Employment Credit under section 45A, which explicitly requires, among other criteria, that the taxpayer be an employer engaged in a trade or business to claim the credit.

(18) A taxpayer’s wages are excluded from Social Security taxes if the taxpayer waives the right to receive Social Security benefits, or a taxpayer is entitled to a refund of, or may claim a charitable-contribution deduction for, the Social Security taxes that the taxpayer has paid, or similar arguments described as frivolous in Rev. Rul. 2005-17, 2005-1 C.B. 823.

(19) Taxpayers may reduce or eliminate their Federal tax liability by altering a tax return, including striking out the penalty-of-perjury declaration, or attaching documents to the return, such as a disclaimer of liability, or similar arguments described as frivolous in Rev. Rul. 2005-18, 2005-1 C.B. 817.

(20) A taxpayer is not obligated to pay income tax because the government has created an entity separate and distinct from the taxpayer—a “straw man”—that is distinguishable from the taxpayer by some variation of the taxpayer’s name, and any tax obligations are exclusively those of the “straw man,” or similar arguments described as frivolous in Rev. Rul. 2005-21, 2005-1 C.B. 822.

(21) A taxpayer may use a Form 1099-OID, Original Issue Discount, (or another Form 1099 Series information return) as a financial or other instrument to obtain or redeem (under a theory of “redemption” or “commercial redemption”) a monetary payment out of the United States Treasury or for a refund of tax, such as by drawing on a “straw man” or similar financial account maintained by the government in the taxpayer’s name (see paragraph (20), above); a taxpayer may file a Form 56, Notice Concerning Fiduciary Relationship, that names the Secretary of the Treasury or some other government employee as a fiduciary of the taxpayer and requires the Treasury Department to honor a Form 1099-OID as a financial or redemption instrument; or similar arguments described as frivolous in Rev. Rul. 2005-21, 2005-1 C.B. 822, and Rev. Rul. 2004-31, 2004-1 C.B. 617.

(22) A taxpayer may claim on an income tax return or purported return an amount of withheld income tax or other tax that is obviously false because it exceeds the taxpayer’s income as reported on the return or is disproportionately high in comparison with the income reported on the return or information on supporting documents filed with the return (such as Form 1099 Series, Form W-2, or Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains).

(23) Inserting the phrase “nunc pro tunc” on a return or other document filed with or submitted to the Service has a legal effect, such as reducing a taxpayer’s tax liability, or similar arguments described as frivolous in Rev. Rul. 2006-17, 2006-1 C.B. 748.

(24) A taxpayer may avoid tax on income by attributing the income to a trust, including the argument that a taxpayer can put all of the taxpayer’s assets into a trust to avoid income tax while still retaining substantial powers of ownership and control over those assets or that a taxpayer may claim an expense deduction for the income attributed to a trust, or similar arguments described as frivolous in Rev. Rul. 2006-19, 2006-1 C.B. 749.

(25) A taxpayer may lawfully avoid income tax by sending income offshore, including depositing income into a foreign bank account.

(26) A taxpayer can claim the section 44 Disabled Access Credit to reduce tax or generate a refund, for example, by purportedly having purchased equipment or services for an inflated price (which may or may not have been actually paid), even though it is apparent that the taxpayer did not operate a small business that purchased the equipment or services to comply with the requirements of the Americans with Disabilities Act.

(27) A taxpayer may claim a refund of tax based on purported advance payments to employees of the Earned Income Tax Credit as reported by the taxpayer on a filed Form 941, Employer’s Quarterly Federal Tax Return, or other employment tax return that reports an amount of purported wages, tips, or other compensation but leaves other line items on the return blank (or with a zero as the amount)..

(28) A taxpayer may claim the section 6421 fuels tax credit (such as on Form 4136, Credit for Federal Tax Paid on Fuels; Form 8849, Claim for Refund of Excise Taxes; or Form 1040) even though the taxpayer did not buy the gasoline or the gasoline was not used for an off-highway business use during the period for which the credit is claimed. Also, if the taxpayer claims an amount of credit that is so disproportionately excessive to any (including zero) business income reported on the taxpayer’s income tax return as to be patently unallowable (  e.g. , a credit that is 150 percent of business income reported on Form 1040) or facially reflects an impossible quantity of gasoline given the business use, if any, as reported by the taxpayer.

(29) A taxpayer is allowed to buy or sell the right to claim a child as a qualifying child for purposes of the Earned Income Tax Credit.

(30) An IRS Form 23C, Assessment Certificate — Summary Record of Assessments, is an invalid record of assessment for purposes of section 6203 and Treas. Reg. § 301.6203-1, the Form 23C must be personally signed by the Secretary of the Treasury for an assessment to be valid, the Service must provide a copy of the Form 23C to a taxpayer if requested before taking collection action, or similar arguments described as frivolous in Rev. Rul. 2007-21, 2007-1 C.B. 865.

(31) A tax assessment is invalid because the assessment was made from a section 6020(b) substitute for return, which is not a valid return.

(32) A statutory notice of deficiency is invalid because the taxpayer to whom the notice was sent did not file an income tax return reporting the deficiency or because the statutory notice of deficiency was unsigned or not signed by the Secretary of the Treasury or by someone with delegated authority.

(33) A Notice of Federal Tax Lien is invalid because it is not signed by a particular official (such as by the Secretary of the Treasury), or because it was filed by someone without delegated authority.

(34) The form or content of a Notice of Federal Tax Lien is controlled by or subject to a state or local law, and a Notice of Federal Tax Lien that does not comply in form or content with a state or local law is invalid.

(35) A collection due process notice under section 6320 or 6330 is invalid if it is not signed by the Secretary of the Treasury or other particular official, or if no certificate of assessment is attached.

(36) Verification under section 6330 that the requirements of any applicable law or administrative procedure have been met may only be based on one or more particular forms or documents (which must be in a certain format), such as a summary record of assessment, or that the particular forms or documents or the ones on which verification was actually determined must be provided to a taxpayer at a collection due process hearing.

(37) A Notice and Demand is invalid because it was not signed, was not on the correct form (e.g., a Form 17), or was not accompanied by a certificate of assessment when mailed.

(38) The United States Tax Court is an illegitimate court or does not, for any purported constitutional or other reason, have the authority to hear and decide matters within its jurisdiction.

(39) Federal courts may not enforce the internal revenue laws because their jurisdiction is limited to admiralty or maritime cases or issues.

(40) Revenue Officers are not authorized to issue levies or Notices of Federal Tax Lien or to seize property in satisfaction of unpaid taxes.

(41) A Service employee lacks the authority to carry out the employee’s duties because the employee does not possess a certain type of identification or credential, for example, a pocket commission or a badge, or it is not in the correct form or on the right medium.

(42) A person may represent a taxpayer before the Service or in court proceedings even if the person does not have a power of attorney from the taxpayer, has not been enrolled to practice before the Service, or has not been admitted to practice before the court.

(43) A civil action to collect unpaid taxes or penalties must be personally authorized by the Secretary of the Treasury and the Attorney General.

(44) A taxpayer’s income is not taxable if the taxpayer assigns or attributes the income to a religious organization (a “corporation sole” or ministerial trust) claimed to be tax-exempt under section 501(c)(3), or similar arguments described as frivolous in Rev. Rul. 2004-27, 2004-1 C.B. 625.

(45) The Service is not an agency of the United States government but rather a private-sector corporation or an agency of a State or Territory without authority to administer the internal revenue laws.

(46) Any position described as frivolous in any revenue ruling or other published guidance in existence when the return adopting the position is filed with or the specified submission adopting the position is submitted to the Service.

Returns or submissions that contain positions not listed above, which on their face have no basis for validity in existing law, or which have been deemed frivolous in a published opinion of the United States Tax Court or other court of competent jurisdiction, may be determined to reflect a desire to delay or impede the administration of Federal tax laws and thereby subject to the $5,000 penalty.

Selig & Associates represents Contractors, Subcontractors and Minority and Women Owned Businesses before the Internal Revenue Service, the New York State Department of Taxation and Finance, the New Jersey Division of Taxation, the Department of Justice Tax Division and the Defense Office of Hearings and Appeals (DOHA).