Different Circles

“That wouldn’t matter even if it were true,” Pauline told him. “At least not on the federal level. You might be able to get away with that for California, but in order to pull that off with the IRS you would have to renounce your American citizenship and prove to them that you actually do live in Mexico the majority of the time.”

“Hmmm,” Matt grunted. “Are you sure about that shit?”

“Absolutely sure,” she assured him. “And I find it really hard to believe your accountant doesn’t know that.”

“You’re saying that he’s running some kind of scam?” he asked.

“I don’t know where he’s coming from with this,” she said. “Is he doing something malicious or is he just an idiot? I don’t know. You know him, I don’t.”

“It could be either one,” Matt said, sighing again. “Maybe a little of both.”

“I think you are definitely going to need a good tax attorney, Matt,” she said. “At least he was right about that. I see big trouble coming your way. Expensive trouble.”

“But the feds aren’t auditing me,” he said. “Just California. Didn’t you just say I could get away with the whole Mexico thing in California?”

“I said it was possible,” she corrected. “You at least have an argument to make. In order for them to buy it, however, you’re going to have to prove to them that you live the majority of the time outside of California. Do you have the ability to do that?”

“I don’t know,” he said. “I guess that’s something to talk to the tax lawyer about, right?”

“Yes, most definitely,” she said. “Even so, I would be prepared to pay all of your back taxes for the past four years to the franchise tax board. That will be a significant amount of money.”

“Well, at least it’s only California,” he said with a sigh.

“It is not just California,” Pauline warned. “The feds are going to come after you too. Don’t think for a moment they won’t.”

“What do you mean?” he asked carefully.

“State tax boards are required by federal law to report income discrepancies to the IRS if they uncover them. As soon as they finish your audit, as soon as they have documentation of four years of unreported income, they are going to forward it to the IRS. And, since you have not renounced your American citizenship, you have no argument to make that you don’t owe taxes on that income. They are going to hit you with all the back taxes and then charge you an assload of penalties on top of it. If you’re pulling in what I suspect you’re pulling in, we’re talking tens of millions of dollars here, Matt. Literally tens of millions. And they will do anything to make sure they get that money. They’ll seize your disposable assets and sell them. They’ll put liens on your property. They’ll garnish your royalty checks. You are in a whole lot of trouble here.”

There was silence on the phone for a few moments and then Matt summed up the situation in three words. “What a rip.”

Pauline hooked Matt up with Wesley Brimm of Brackford, Redman, and Jackson, the same firm that Celia used for her divorce lawyer and the same attorney that Pauline used for KVA taxation issues. He was a stuffed suit if ever there was one, an obnoxious, condescending, cocky piece of shit that Pauline sometimes suspected just might have a few severed heads in his freezer, but a top-notch expert on California and federal tax laws and tax procedures. He accepted Matt’s notarized contract and immediately went to work trying to gather information. He, like Pauline, was absolutely astounded that a licensed CPA would actually promote the idea that someone could claim that owning a house in Mexico relieved that person of the burden of paying federal and state income taxes.

Brimm ran into problems immediately in his quest for documentation. He could not get hold of Hopple in order to interview him and look over the files. He called six times a day, both at the office and on Hopple’s cell phone (the number for which he had obtained by nefarious means he elected not to discuss). At the former, he only got the receptionist who repeatedly claimed that Mr. Hopple was not in and that she did not know how to reach him. At the latter, he got nothing but a recorded voice telling him the cellular customer he was trying to reach was not available.