Exploiting a Flaw in the System
First, you have to appreciate the kind of guy Nathan is. Brilliant engineer/crazy person. Because Nathan likes rules and Nathan doesn’t give up when he knows how things should work.
I like to get him to tell the story whenever we’re together because he doesn’t even see why it’s funny—it’s just how he deals with all problems. Nathan was like if you saw Sisyphus and you thought, maybe I should try to stop him.
But then one day, the boulder was on top of the hill. And you go and ask Sisyphus how he did it and he replies, “It was simple…I just kept pushing it forever and ever, and eventually…the mountain gave up.” A real Grade 19 Bureaucrat.
He just works systems through problems no matter how daunting they should seem. Until one day, when he came up against something that really infuriated him. I came into work and saw checks and envelopes spread all over his desk.
And Nathan filling them out with the kind of grin Steve Buscemi might have crossing names off a list with a tube of lipstick. I ask him about it and he calmly starts explaining that he’s “having trouble with the IRS.”
I probe a little deeper since that in no way explains more than one check or envelope, and he starts telling me about how last year during tax season he was about to be in China for work so he started filling his taxes out early while at his parents’ house.
He owed a little but left before he could mail it in. But he remembered while in China and (after breaking through the firewall) paid it online. But then his parents, thinking he forgot, also wrote a check for him and mailed his taxes in too. So now his taxes would be paid twice.
So they said don’t worry about it, we’ll cancel the check. Well, it turns out that IRS has a cancelled check fee of something like $40. And they sent Nathan a bill and penalty for the $40…That was it. That was the whole story. A $40 fee. Nathan, why do you have 20 checks on your desk?
“Oh, well after I explained to them what was wrong with the fee, they didn’t get it.” So Nathan spent the next four weeks escalating the issue to the point that he got a case officer—a real, live human agent on the phone with a case number.
Nathan started by asking for the agent to spell his name and politely to demonstrate that he was where he said he was by asking how the weather was and how the “drive in” had been that day. He then asked for his agent’s manager. He got their name and exchanged some pleasantries.
He explained that his parents wrote the check but that he was the one being charged the fee. The agent explained that this was the policy of the IRS: “All cancelled checks will result in a $40 fee.” The agent and Nathan went in rigorously compliant circles for hours exploring the rules.
Nathan then calmly confirmed that: It is the policy of the IRS to allow just anyone to write a check on behalf of anyone else: “Yes sir, that is fine. You just need to indicate the name and zip code of the account.”
Second: It is the policy of the IRS to charge a $40 cancellation fee to the person whose account is indicated on the check: “Yes sir, that is the policy.” This means that—and I swear to God he actually asked the agent this hypothetical on the phone—
”I (Nathan) could write a $10 check and indicate it’s for you (Mr. “Agent” at 1234567 Schenectady, NY) and cancel it, resulting in a $40 fee for you with absolutely no penalty or recourse to me?” The equally compliant and rule-minded agent replied, “Yes sir, I guess you could.” So, that’s what Nathan did.
And that’s what he was doing with 20 checks on his desk and what he meant by “IRS trouble.”
He was following through… sending checks to the IRS addressed to pay the taxes of the agent and the agent’s manager, all so Nathan could cancel them, causing the agent and his manager to owe the IRS a fee for each cancelled check.
He was exploiting the same flaw in the system in which he was caught to essentially take advantage of the IRS agents. I laughed about this for weeks after. But then came the best part.
Three or so weeks later, I’ll be darned if he didn’t receive a letter from the IRS: “Sir, we understand the point you’ve made. Please consider your fee waived and I hope we can put this behind us.”