Letters to the IRS, State Franchise Tax Board, and others. Solving the problem Craig caused.
Exhibit 1 - January 29, 1997, Letter to Shanie at West Coast Escrow
Melinda Franklin
2028 Anacapa Street
Santa Barbara, California 93105
(805) 569-0421
January 29, 1999
To: Shanie
West Coast Escrow
16501 Ventura blvd. Suite 102
Encino, CA 91436
(818) 382-7474
Regarding: Escrow No. 1-40514-M, Closing date 2/10/97
Property Address: 9547 Burnet Avenue, Sepulveda, CA 91343
Dear Shanie,
You will receive this with a check for $25.00 to cover the costs of obtaining the closing statments for the above escrow. The fax number of my accountant, Doug Thorburn, is: (818) 363-3111.
Thank you for all of your help in expediting this matter.
Sincerely,
Melinda Pillsbury-Foster
Enclosed find check for $25.00
Exhibit 2 - Februry 3, 1997, Letter to Hilda
Melinda Pillsbury-Foster
2028 Anacapa Street
Santa Barbara, CA 93105
February 3, 1997
Dear Hilda,
Here is the counter-offer on the house. I also need three title searches and would appreciate your running them for me. The properties are:
1. 9547 Burnet Ave.
North Hills, CA 93105
Last documents in file as well
2. 2028 Anacapa St.
Santa Barbara, CA 93105
Last documents in file as well
3. Lot 82 of Tract 119, County of Tulare, CA recorded in Book 19, Page 146 of Maps.
Last documents in file as well
Thanks in advance for your kind attention in this matter.
Sincerely,
Melinda
Melinda Pillsbury-Foster
2028 Anacapa Street
Santa Barbara, CA 93105
Tel: (805) 569-0421
February 3. 1997
Ron Taylor
Servicing Center
UC Lending
RE: Loan # 038808828016
Dear Mr. Taylor,
Thank you for your expression of
concern. In fact, my husband, Craig Franklin, came down with adult
on-set diabetes in mid January and this, coupled with a sequence of
other family health problems, has caused us some short term problems
with keeping our commitments. Craig was in denial for several weeks
after being informed by our physician and has only in this last week
been able to deal with both the diabetes, medication, and other
necessary changes.
We both deeply regret this and are anxious to come to a keep our obligations - which it appears will be possible in just a few weeks due to assistance from family, friends and the liquidation of some assets, stock and bonds. I will be able to commit to a schedule of payments to bring us up to date by March 15th. I am the second owner on the two mortgages you hold and will now be handling this matter.
The locations of the two properties in question are:
2028 Anacapa St.
Santa Barbara, CA 93105
9547 Burnet Ave.
North Hills, CA 91343
Thank you again for you very kind inquiry. I am sorry that I have been unable to respond earlier but your letter did not reach my hands until last Saturday.
Sincerely,
Exhibit 4 - February 4, 1997, To: Franchise Tax Board
Melinda Pillsbury-Foster
2028 Anacapa St.
Santa Barbara, California 93105
Tel: (805) 569-0421
February 4, 1997
Franchise
Tax Board
Regarding taxpayer ID No. 554-68-5888
I am writing for my husband, Craig Franklin, who has been a non-filer for many years. Although we have been married for ten years I was not aware that Craig was not filing. In fact, I believed that he was and has initiated the preparation of tax returns for 83 - 87. These were mailed off yesterday and should have arrived (I hope) before this letter.
Although we many not be able to file all past returns before February 20th the necessary documents are now in the hands of an accountant and all returns will be filed as soon as possible. I have now taken over this responsibility and future retirns will be filed promptly. Would it be possible you to to give me some more time to get in years 1988 - 1995? Craig has badly mangled our personal finances as well, and I can’t afford any help.
Craig is now under the care of a psychologist who is helping him sort out the source of this deep-seated phobia regarding all paper work. I have personally sorted through 12 cartons of papers dating from the late 60’s. I have been working day and night on this for over a week. It was in the course of this excavation that I discovered the never-mailed tax returns at the bottom of carton 9 (Saturday night around 11:00 p.m.) In the cartons were unopened letters from family members, traffic tickets, some over 20 years old, and an astonishing array of stuff that I will not bore you with. I have no idea how it was possible for him to deceive me, his birth family, and others. The boxes were in his office at work. I believed they contained books and old business correspondence he was reluctant to part with. Craig is a terrible pack-rat, but the boxes at home were very different. They contained advertising, offers from book clubs, clippings for magazines (some now out of business) and other papers. I did find some things relevant to our personal finances that I needed, so those boxes must be finished, too. This isn’tany fun, believe me. They filled half the garage. (Now a quarter!)
Craig has just been diagnosed with adult on-set diabetes as well and this has necessitated many changes for him - including my going into the office to organize his work.
I am simply appalled to discover what has been going on behind my back. Please except my apologies and assurances that things will be different in the future.
The accountant we are using has been in business for along time and I know from friends he is very competent. I am taking him information as fast as I can assemble it.
If
you can, in any way, help me please let me know. Thank you in
advance for your kind attention in this matter.
Sincerely,
Exhibit 5 - February 4, 1997 – Cover to Fax to Doug Thorburn
FAX Transmission
From: Melinda Pillsbury-Foster
2028 Anacapa Street
Santa Barbara, California 93105
Tel: (805) 569-0421
Fax: (805) 682-4444
To: Doug Thorburn
Tel: (818) 360-0985
Fax: (818)363-3111
Contents:
Tax material for Craig Franklin
Exhibit 6 - February 6, 1997 – Request to World Savings for 1098s from 1988
Melinda Pillsbury-Foster
2028 Anacapa Street
Santa Barbara, California 93105
February 6, 1997
World Savings
Customer Service Research
PO Box 659558
San Antonio, Texas 78265-9558
Loan No.: 4909453
RE: Copies of form 1098 for years 1988 - end of loan.
Dear Customer Research,
I am unable to find the 1098 forms on our now repaid loan from World Savings. I understand that you will provide copies of these forms for $5.00 a year. Since I need years 1988 - the end of the loan please send them all. I enclose a check for $45.00 to cover the cost of nine years worth of forms.
The location of the property is: 9547 Burnet Street
North Hills, CA 91343
The two names listed as Payers/Borrowers are myself, Melinda Pillsbury-Foster and my husband, Craig Franklin. If there are any questions I may be reached at our new home in Santa Barbara, 2028 Anacapa St. CA 93105. My phone number is (805) 569-0421.
Thank you in advance for your attention in this matter.
Sincerely,
Melinda Pillsbury-Foster
Exhibit 7 - March 6, 1997 “Letter to Leticia Fernandez, FTB Lien
Exhibit 8 - March 10, 1997 – Letter to Leticia - State Franchise Tax Board, explaining difficulties and expenses
To: Leticia Fernandez
From: Melinda Franklin
I also must pay my daughter, Dawn’s tuition for the coming quarter. She pays this directly from a check I send her so I don’t have a bill. but I send her $2,500.
My daughter Ayn is a senior at Hillsdale in Michigan and needs $800.00 to pay for expenses I have deferred paying since before Christmas
Our Daughter, Scott, is a junior at Sacramento State and we owe him $2,000 for his tuition and board.
Exhibit 9 - March 10, 1997 – Second Letter to Leticia - State Franchise Tax Board, more difficulties and expenses
From: Melinda Franklin
To Leticia Fernandez
I will fax documents next, some of them may not want to go through.
House in S.B.
Here is the payment coupon for January. It has not been paid since then.
3 X 4,080.21
Here Is the coupon for the Cabin. It has not been paid since November.
4 x $450.00
Property Taxes S.B.
Anacapa
Due: Nov. 1, 1996 Delinquent - $2,501.01. Pay $2,761.11
Due Dec.. 10, 1997 Delinquent - $2,501.01. Pay $2,761.11
Supplemental Taxes (on School Bonds)
Due: Jan 23, 1997 Delinquent Feb. 28, 1997 - $528.13
$590.96 if delinquent
Due: Jan 23, 1997 Delinquent June 30, 1997 - $528.13
$590.96 if delinquent
Other Loans:
Household Finance
Account No. 219202-25-861958-3 Bal. $11,957.79 Due Feb. 19 - (Four months overdue)
Min. $982.00
Cabin
Due: Nov 1, 1996 Delinquent Dec. 10, 1996 - $461.45
Penalty: $507.59 if delinquent
Due: Feb 1, 1997 Delinquent April 10, 1997 - $461.45
Penalty: $507.59 if delinquent
Tax Attornies and Accountants
Brown & Associates - $7,500.00
Thorburn
Accountant - $1,000
I looked at my credit card bills and to make minimums will be $5,000. (this includes business expenses for the business I am starting)
Exhibit 10 - Letter to Dr. Franklin, Craig's Father
`
March 12, 1997
To: Dr. Franklin
From: Melinda Pillsbury-Foster
Dear Dr. Franklin,
I really did hope it would be unnecessary to contact you about this, but since I find it is unavoidable it is also best that I tell you as much of the story as is relevant.
Craig has not filed taxes, either state or federal for 25 years. I found this just about six weeks ago. This was a considerable shock to me since, as part of our marriage agreement he promised to file and I had taken him to the accountant I used and had paid for six years of his past returns. I found the returns at the bottom of box nine while cleaning out his office. You may or may not be aware that Craig simple throws every thing in boxes. 15 boxes burned in the barn fire in 1990 but those had come from North Carolina without being opened.
It took me four weeks working 18 hours a day to organize the stuff. I found jury summons, traffic tickets and everything imaginable - all unopened or opened and unanswered. It explained many things that I had been worried about for a long time.
Evidently, Craig’s pay has been garnished since 1987. He simply lied to me about the extreme variation in his pay. But, of course, he lied about lots of other things, too.
I spent the small inheritance from my parents, and Morgan’s, too paying debts that had piled up. I sold family heirlooms. I thought for a while Craig had a drinking problem or was gambling, but no, there was no evidence of that.
Then, last summer Craig told me that he was having an audit problem and they were levying his pay check. This caused a lot more problems. I was anxious and bewildered. Craig told me he hired a law and accounting firm, but of course, he could never give them information because he wouldn’t go through the boxes.
After he came down with diabetes I insisted on cleaning it up. I might have done so earlier but when I did he battered me.
Craig is now seeing a therapist, I hope he keeps at it but am not hopeful. The reason I am telling you this is that I need information of the bonds you gave Craig so I can get this to the tax accountant. I knew if I asked you would eventually find out the story and so am sparing both of us that agony. You would have asked Craig, and he would have lied, evaded and blamed me. I blacked out Monday and when I regained consciousness my left arm was numb. Our physician wants me to go to the hospital but I won’t until I know that there is money to pay the bills, most especially the kids college, this mortgage, the property taxes and other bills. All very overdue.
I am a believer in honesty. It is my experience that the lack of candor between individuals causes more problems than anything else. I have never approved of the way Craig and his siblings deal with each other or you. You may prefer to believe that I am lying. Therefore, I am giving you the name and number of our tax accountant, our physician and therapist. If you want to call them, feel free. I will ask them to answer your questions. This is not because I think you have a right to know, you don’t. Craig and especially I have a right to privacy and we are not asking you for a loan. It is simply to ensure that if Craig attempts to lie to you there will be an objective means for checking. I have nothing to hide.
I blacked out after talking to the Franchise Tax Board. I thought we would be able to pay these expenses by selling the house on Burnet - but of course, they had several liens on it, which Craig had neglected to tell me. He was in Japan last week; this week he is in Boston.
I convinced the IRS to drop their lien; I convinced the Franchise Tax Board to drop one more lien, but I need the 1994 tax return to get them to release the money, hence, this letter. Now that I have told you, not everything, but enough I hope to convince you of the need to expedite the flow of information I will close.
I am truly sorry if this upset you. I know it will upset Craig, but somehow am less concerned than I once was about his feelings.
Doug Thorburn, Acountant - (818) 350-0985
Dr. Michael Marquart - (805) 966-2294
Dr. Danson - (805) 682-1934
Exhibit 11 - March 27, 1997 - Memo to Doug Thorburn
Updates on necessary tax information.
March 27, 1997
Dear Doug,
On the IMS stock cost, I have been looking over all of the files that I have been able to assemble and my check register. But I am missing two registers from late 1993, the two that I told you were destroyed in the 1994 earthquake. They were most recent then and were to go up to Santa Barbara with the photographs from the Foundation as soon as we got those back from the lab.
Craig’s boxes had lots of material about IMS, but nothing about the stock except some letters. I called the company and the number is not private and they are not in the area. I assume that they have folded. That looked like a distinct possibility when we were last in touch with them. My best guess is that we paid $1.00 a share. I hope that this will be good enough. I will keep looking as best I can.
Thanks for keeping on top of this,
Exhibit 12 - April 10, 1997 Letter Lassiter, remove Tax Levy
Fax Transmission
To the Attention of Mr. Marshall Lassiter
April 10, 1997
To: Mr. Marshall Lassiter
California State Franchise Tax Board
(818) 556-2905
(818) 556-2971
Subj.: Tax Levy, Craig Franklin, SS Number XXXXXXXXXXX
Dear Mr. Lassiter,
It is extremely important that the tax levy now on my husband’s pay check be removed since our financial situation is still very unstable. Last Friday we walked in the tax returns for the years you requested, 1988 - 1995, the 1994 return already being in your possession. We have filed an extension for 1996 and that will be filed well within that deadline. Please send a copy of the release form to my husband’s immediately as the lady who computes the checks will do that today.
That fax number is: (805) 965-6343 Please send it to the attention of Cecelia.
Thank you for your patience and concern.
Sincerely,
Melinda Franklin
Exhibit 13 - April 23, 1997 – Letter to S. Larson, regarding non-renewal of credit card due to credit
M.P. Foster
2028 Anacapa Street
Santa Barbara, California 93105
April 23, 1997
S. Larson
Customer Service
Regarding: Citibank card
Account
No. XXXXXXXXXXXXXXXXXX
Dear Mr./Ms. Larson,
Today I received your communication regarding your decision not to issue new a new card for my Ford Citibank account, number cited above.
I am not writing to ask you to reconsider issuing the card. I am perfectly satisfied to pay off the balance as soon as possible. But I would like you to know why it has been impossible for me to keep up the payments - and why I continued to use the card when I was unable to make payments, as I very much wanted to do.
Last June my husband called me from work and told me that, “he was having a little trouble with the IRS and would need to find an accountant.” I was naturally very concerned and immediately found him three referrals - and several attorneys. When we married he had promised me to clean up his own accounting and he had continued to assure me that this had been done, although we filed separately. He had, as I found out last February, lied to me, continuously and quite successfully. The truth was that he had not filed for 25 years - even though, and this is where I could not believe the outrageous stupidity of his act, he was employed and his employer was taking enough withholding so that he should have been getting a refund every year.
Nothing I said or did had any effect. he paid $6,000 to attorneys; went out for meetings with them, and complained endlessly about taxes, the stupidity of his attorney and everyone he knew or had known - but his pay check continued to dwindle. I was forced to sell many cherished family heirlooms; spend the small inheritance from my father; my children were forced to take full time jobs while they attended college.
Last February he came down with adult-onset diabetes. He was hospitalized and during that time I went into his work and went through his office.
His filing system was remarkable. Twenty-five years worth of unpaid traffic tickets, jury summons, tax liens, and unopened bills filled 29 boxes (we are talking moving boxes here, not those little filing boxes) that lined two walls from ceiling to floor. I had been told these were company records. In box nine I found the tax returns my accountant fad filled out for him ten years ago. He had signed, but never mailed them.
It took me six weeks working 18 hours a day to sort the trash. This included dumping his dirty underwear, quite a collection. I found more boxes secreted in the garage. he continued to maintain that ,”it was not his fault. I spent too much.” Last year his W-2 read, $650,000.00. He also has around $100,000 a year in tax free annuities He could always find money for what he wanted - but not a dime to pay the bills, including the mortgage and loans he had taken out.
The last tax lien should be off this week. He no longer touches money. This will remain the case until our divorce is final. Then I will hand it back with a sign of relief and wish his accountant luck.
If we got back everything taken by the IRS and State Franchise Tax Board in just the last 10 years I could retire. We won’t, but the amount was around half a million.
Now, having explained what happened to me I have a question for you. The Ford card which you issued has listed 508 rebate points available. I would like to redeem these now. What is the procedure?
Thank you for prompt attention.
Sincerely,
M.P. Foster
Exhibit 14 - April 24, 1997 - Letter to Brown & Associates
-
Melinda Franklin
2028 Anacapa Street
Santa Barbara, California 93105
To: Brown & Associates
9920 S. La Cienega Blvd. #501
Inglewood. CA 90301
From: Melinda Franklin
Regarding:
Craig Franklin
April
24, 1997
Dear
Mr. Brown,
I am contacting you regarding your representation of my husband, Craig Franklin, in the matter of bringing up to date his non-filing of taxes for the years 1974 - 1995. I became aware of the situation in January of this year when Craig’s continuing deterioration resulted in adult-onset diabetes. At that time I went into his office and went through the twenty-nine boxes (large moving cartons) of papers and other sundry items including trash and never-answered traffic tickets that had accumulated during his life time. This was not a complete collection; two fires have trimmed the supply, one in 1981 and another in 1990.
I had always believed that these boxes contained material related to his interest in various hobbies. They held those too, but most of the space was taken up by a mish-mash of papers in no order and with no chronological layering. At the bottom of box nine I found the tax returns my accountant had made out for Craig, at my behest, in 1988. They were signed and never sent.
To make a long story short Craig has a disabling emotional handicap that makes him incapable of dealing with authority figures. His therapist, who we consulted in February, believes this condition has been in place his entire adult life. He suggested a conservatorship. This disability is the reason Craig had never filed. The disability also explains why Craig has left company after company never benefiting from the work he performed while employed there.
You could not have known this when you signed a representation agreement with Craig in July of 1996, but these are the facts.
I discussed the matter with my father-in-law, Dr. Carl Franklin of USC. Dr. Franklin thought I would apprise you of the facts.
You have never been able to proceed with your representation because of Craig’s disability. This must have been frustrating for you. But you also never inquired into why this was. Franklin thought it would be best for all concerned to simple cancel the agreement and for you to return the fees already paid.
I am sure that, given the circumstances, you will want to help. Craig’s returns have all been filed as of April 1st. We filed for an extension on his 1996 returns so that those would not further complicate the present situation.
Thank you in advance for your prompt attention in this matter.
Sincerely,
Melinda
Franklin
Exhibit 15 - April 30, 1997 - Faxed Letter to Lassiter
Fax Transmission
To the Attention of Mr. Marshall Lassiter
April 30, 1997
To: Mr. Marshall Lassiter
California State Franchise Tax Board
(818) 556-2905
(818) 556-2971
Subj.: Tax Levy, Craig Franklin, SS Number 554-68-5888
Demand for payment dated April 23, 1997 and due May 3, 1997
Dear Mr. Lassiter,
I am shocked. Let me take a moment to review the facts relating to my husband’s situation.
I informed you more than two months ago that Craig has been unable to file returns because of an emotional handicap that has existed his entire life. This handicap has resulted in his paying not less taxes than he lawfully owes but far more. The disability not only effects his ability to pay taxes but to accomplish many other seemingly ordinary, everyday, actions including the complete inability to deal with any and all authority figures. He does not become defiant; he is simply unable to respond. This has caused him to leave jobs that would have made him wealthy not once, but many times in the course of his career. He has been unable to do such routine things as open letters from his father. (There were 20 unopened letters in the boxes.)
Furthermore, you know from your own long term experience with this situation that Craig’s offense has been to not file. He has never avoided paying.
You promised me more than a month ago that as soon as the returns for all years owing were filed you would remove the lien on his pay. Instead, I received an additional demand for payment last Friday for $5,060.50 for the year 1994, which is one of the years cited in the lien. You further demand that this amount be paid by May 3rd, threatening further penalties, although you must know that it is impossible for us to pay this since you have been draining us with the lien that is still in place. That lien, citing non-payment of an amount of $21,612.07 on 3/15/97 takes 25% of Craigs earnings leaving us unable to even pay our mortgage.
I have told you that the stress of his inability to deal with this situation has had an extreme impact on Craig’s health, being a factor in his adult-onset diabetes. I further told you that both myself and his therapist believe that Craig, unable to cope with the continuing need to pretend that this was not happening, had given up on living because he was unable to otherwise resolve that unbearable conflicts his disability has fostered.
I have sent you evidence in the form of bills which we are unable to pay.
I have shown every evidence of good faith. I have done everything in my power to bring Craig into compliance, which is what the State of California states that it wants. I have told you that the therapist sugests that a conservatorship be set up for Craig since he has no confidence that Craig will ever be able to file himself. But, in less than three months all returns outstanding have been filed. This was a tremendous feat because Craig has never kept records, another aspect of his disability.
I cannot understand why the State of California did not arrest Craig for not filing years ago. If this had happened the situation would have become evident to those of us near Craig long since. Craig would have received the theraputic treatment he still so desperately needs long before now if that had happened. It seems that as long as the Franchise Tax Board was able to extract more money this way it was content to allow the situation to continue.
I am forced to wonder how many other individuals may be in similar situations, unable to file and bled monthly for their earnings in callous disregard for what emotional disabilities may be preventing them from filing.
It seems to me that good faith is necessary on both sides. We have demonstrated good faith. All returns cited in the original lien have been filed, hand carried into the office more than three weeks ago. Instead of dunning us for more money - that we don’t have and can’t get - you should stop the levy. Immediately. Craig has never shown any intention of evading his lawful obligation to pay taxes; he has been unable to pay because of an emotional disability that has existed since he was three years old. It is only because of his extreme intelligence that he has been able to function at all. I have offered to document Craig’s disability; I have filed all of the returns you asked for. Instead of keeping your promise to me you have made further demands for payments without even removing the past demands for the same year - or of informing me of what you were about to do. How can this be? Would the money you are taking from his paycheck apply to this new demand? Or is there no end to it until we are absolutely bankrupt - or dead? Last month I was forced to go to the hospital for an EKG because of blackouts and symptoms of a heart attack.
I have unpaid medical and dental bills for all of the family, therapy bills, overdue mortgage payments, unpaid property taxes, tuition payments, utility payments; And now you want more money - and will fine us if the demand is not paid by May 3rd (with penalties, let’s not forget the additional penalties.) And, you haven’t called me as agreed on last week - although you knew then that you were issuing a demand for even more money that we do not have.
I want the name of your supervisor in Sacramento and the name of the attorney you were going to consult.
Sincerely,
Melinda Franklin
Exhibit 16
What we owe -
as of May 1, 1997
Mortgages:
Anacapa House
UC Lending
Paid for April & May - Check No. 5836 - $6,383.13
Bank of America, Oregon
2 payments @ $900.00 - Overdue
Other Loans:
Household Finance:
Account No. XXXXXXXXXXXXXXXXX Bal. $11,957.79 Due Feb.
Owe around $11,000.00 Will pay $300.00 with second check.
Property Taxes
Anacapa
Due Dec.. 10, 1997 Delinquent - $2,501.01. Pay $2,761.11
Supplemental Taxes (on School Bonds)
Due: Jan 23, 1997 Delinquent Feb. 28, 1997 - $528.13
$590.96 if delinquent
Due: Jan 23, 1997 Delinquent June 30, 1997 - $528.13
$590.96 if delinquent
2nd Supplemental Taxes
Due: Jan 23, 1997 Delinquent Feb. 28, 1997 - $138.24
$162.06 if delinquent
Due: Jan 23, 1997 Delinquent June 30, 1997 - $139.24
$162.06 if delinquent
Cabin
Paid
Utilities
Phones
A T & T Long Distance......Due - $400.00, paid $650 which was most of two months before.
AT&T long Distance WINR - $18.10 (0ne month over due - this is two months charges)
GTE - Overdue (805) 569-0421 - Due Feb 4 - $289.62
Air Touch Cellular - Morgan (Has been turned off for non-payment) $233.92 (three months)
Ait Touch Cellular _ Melinda - (Has not come in yet.)
PacBell - Cabin - Due Feb. 2 - $71.78 (ocerdue three months)
Burnet
TCI of East San Fernando Valley - (overdue) - $40.89
LA Water - (Turn-off notice) - 2/28 - $254.26
Gas Co. - (Overdue) $121.87
Southern CA Edison - Due Jan.27 - $25.02
Anacapa
Southern Calif. Edison - (overdue three months) $633.61
City of S.B. Water - (Due Feb.24 - $105.88
Cox Cable - Due Feb. 17 - $53.57
Gas Co. - Due Feb. 5 - $44.08
Insurance
Norgan’s Medical Insurance - (unpaid for a month, maybe cancelled - $154.00
Prudential XXXXXXXXXXXXXX Full payment $1,091.00, eight installments $274,00 (includes a 25% down payment) Due March 8.
Credit Cards
Melinda’s AmEx - paid $970.00
Melinda’s Corporate Card AC Pillsbury Foundation
CompuServe Gold Visa XXXXXXXXXXXXXXXX Was - Bal. $5,553.18
Due May 9 - 134.00 - Paid $200.00 - Bal. $5.229.
Citibank - XXXXXXXXXXXXXXXX - Feb. 1 - Bal. $3,481.15 - Min. - $141.00 May 2 - $3,304.48 Pay $100.00
LST
Master & Visa XXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXX Feb. 2 - Bal.$5,059.01 - 01
May 5 Bal.$4,826.12 Paid $100.00
Chase - XXXXXXXXXXXXXXXXXX - Feb. 27 - Bal.$2,061.67 - Min. $42.00
Citibank (Craig) - XXXXXXXXXXXXXXXXX- Feb. 21 - Bal.$4,096.89
- Min. $248.00
Wells
Fargo XXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXX (Three months overdue) Bal.$2,241.81
- Min. $91.00
First USA XXXXXXXXXXXXXXXXXVISA - Feb. 7 - Bal.$4,519.47 - Min. $90.00
May 5 4,546.17 90 pd 100
First USA XXXXXXXXXXXXXXXXX MCard - Feb. 10 - Bal. $3,188.76 - Min $63.00
5/10 3,152.82 63.00 pd 100
Citibank XXXXXXXXXXXXXXXXXX - Feb. 8 - Bal.$3,305.57 - Min. $128.00
May 9 - Bal. $3,245.69 - Min $67.00 - Pd $100.00
Ayn’s Cards
First USA XXXXXXXXXXXXXXXXX - Jan. 18 - Bal. $149.91 Min. $10.00
Citibank XXXXXXXXXXXXXXXXX - Feb. 5 - Bal. $1,348.52 - Min $28.00
Gas & Store Cards
RadioShack 7738 1654 97684 - Feb. 18 - Bal.1,405.34 - Min. None
Mobil - Jan. 18 - Bal. $80.18 - To be paid in full
Penneys -Feb. 12 - Bal. $374.66 - Min. $50.00
Robinson’s May - Feb. 3 - Bal. $718.71 - Min. $90.00
Lane Bryant - Feb. 17 - Bal. $233.97 - Min. $20.00
Macy’s - Feb. 18 - Bal. $612.64 - Min - $31.00
Medical Bills and Insurance
Richard Danson - $619.24
(Insurance has been billed, has not paid)
Morgan’s Blue Cross - (2 months) - $154.00
(Overdue by one month)
Bromberg - $2,070.00
Physicians Clinical Lab. - (Craig, ordered by Danson) - $112.00
Household Upkeep
Anacapa
RMS - Gardener - $115.00 (due now)
Burnet
Omar Chi - Gardener - $75.00 (Due now)
Exhibit 17 - May 8, 1997 - Partial letter to the IRS. Melinda gets steamed and calls instead.
May 8, 1997
Dear Sir or Madame,
Today we received a demand for payment in the amount of $25,361.15 for taxes owning for the year 1985. I was shocked and disgusted. Two months ago I submitted tax returns for the years 1984 - 1987 on behalf of my husband, Craig Franklin. The amount that he earned that year, reflected on – Melinda gets on the phone and calls them and takes the IRS on Mano e Mano. It was a moment to remember.
Exhibit 18 - Letter to the IRS on why I did not know what Craig was doing
Melinda Pillsbury Franklin
2028 Anacapa Street
Santa Barbara, California 93105
Tel: (805) 569-0421
May 14, 1997
Chief of Collections
Internal Revenue Service
Fresno, California 93888
Regarding: Craig Franklin, SS. XXXXXXXXXXXXXX
Dear Sir,
I was directed to contact you regarding my husband, Craig Franklin, and his non-filing. Craig has never filed a tax return. He is unable to do so even though, with levies and penalties, he pays much more than he owes, because of an emotional disability. I enclose a copy of a letter I wrote a few weeks ago that gives a run-down of the situation as I understood it then.
Since that time I have learned that the phobia is actually specific to authority figures. Craig cannot deal with authority figures. Finding this out explained much of his employment history. He left company after company because of conflicts with his employers. This has also cost him because he was never able to cash out when the company went public - and yet was so valuable an employee that he often received large shares of stock options. Craig has made many people wealthy.
I enclose a letter from Craig’s therapist. Craig will never be able to file taxes or do many other things that are normal and expected. But because of his enormous intelligence he has been able to conceal his problem.
I have worried from time to time that he was an alcoholic or on drugs - but I had never heard of anything like this and neither had his therapist. We are considering a conservatorship for him. But I now handle all matters relating to his taxes. It is the only way we can function.
You might well ask why I didn’t notice what was happening to our finances. Craig has proven to be a skilled liar and manipulator willing to do and say anything to conceal his problem. Also, we together have six children and I have always had my hands full with the them and with a series of disasters. These included the death of my mother to cancer in 1987, my own near death in 1989 and the death of our last child., Abigail. In 1992 my father died, in 1993 Craig’s mother died, in 1994 we suffered severe losses on our home in North Hills. The estimate for repairs was $250,000. It took two years to have it repaired during which time we were paying the costs of both houses. Then just months after the earthquake my older sister had a heart-attack in Japan. I flew over to find that she was brain dead. And that was only the beginning of that story.
I tell you this not to elicit sympathy but to explain how I could have overlooked what was going on.
We have four children in college and another in junior high school. We are still supporting our oldest daughter, Morgan, who has never entirely recovered from an automobile accident in 1991 and who was unable to work at all for four years. She was rear-ended by a school bus at a school crossing. Craig’s brother handled her claim and consequently she received nothing. (He filed too late.) She is now somewhat better and trying to find employment. My middle son also had a drug problem in 1993 - that took an enormous amount of my time for I don’t know how long.
So, this is what was happening while Craig’s weight swelled and his health plummeted. Since he couldn’t deal with the problems his disability raised he escaped into work and eating. When he was diagnosed he looked terrible. We re really fortunate that he did not die of the stress.
Since I have taken over he had improved enormously. But this has not been good for me. Both of my sisters died of heart attacks, Anne, as I mentioned in 1994 and Carol in 1974. Their ages were 59 and 36. Two years ago my younger brother had open heart surgery. I am now under a doctor’s care for my heart.
What I want is to resolve this so that we can have a normal life, or as normal as possible given Craig’s conditionI really wish that the IRS or the Franchsie had charged Craig with non-filing. I thought that was what happened eventually. If the IRS had charged him he would have received the care he needed years ago - and spared all of us incredible suffering.
Craig’s non-filing arose not from any unwillingness to file but from an inability to file. If you read Dr. Marquart’s letter this is clear. Since that is the case we should not have to pay any penalties - or interest. Most especially since we never owed anything.
This is what I want. I want out from under the mountain of debts that Craig’s condition has caused. A refund of the excess payments would help.
People like Craig who are disabled from childhood are unable to do certain things. Some people have no legs and therefore cannot dance. Craig cannot deal with authority in any form and so cannot file his taxes.
This had been a very difficult letter to write. Thank you for your prompt attention in this matter.
Sincerely,
Exhibit 19 - May, Letter to the IRS to the next level
Dear Sir or Madame,
In
February I wrote a letter to you regarding my husband, Craig
Franklin, who had not filed a tax return in 25 years. I was not
aware that Craig was not filing. In fact, I believed that I had
succeeded in bringing him up to date, and had initiated the
preparation of tax returns for 83 - 87 and paid the bill to the
accountant.
I wrote asking for help with a very painful situation that has almost ruined us financially and come near to killing my husband. All I received from you were demands for more money - that we don’t have and never owed.
Craig is now under the care of a psychologist who is helping him sort out the source of this deep-seated phobia regarding all paper work. - and all authority figures. I have personally sorted through 29 cartons of papers dating from the late 60’s. It was in the course of this excavation that I discovered the never-mailed tax returns at the bottom of carton 9 (Saturday night around 11:00 p.m.) In the cartons were unopened letters from family members, traffic tickets, some over 20 years old, and an astonishing array of stuff that I will not bore you with. I have no idea how it was possible for him to deceive me, his birth family, and others. But he is extremely intelligent, his IQ is high enough to qualify him for Sigma, and so his therapist was not actually surprised at his ability to avoid confessing to his problem for so many years.
As I said in my earlier letter, Craig was diagnosed with adult on-set diabetes as well and this has necessitated many changes for him - including my going into the office to organize his work. Otherwise I still might not know.
But now I do know and I understand the emotional burden that Craig has carried all of these years. He could not file. He could not admit to his inability because of a condition that has existed since he was a young child. But the most shocking thing that I saw was that although he, because of his disability broke the law, he was not charged with non-filing. Even though it must have been obvious to you, or someone in the IRS that not filing was costing him much, much more than simply hiring an accountant.
If you had charged him this condition would have been revealed years ago and he could have not been subjected to the stress and grinding fear that brought on him diabetes and almost forced him to suicide.
I was appalled. I want several things.
First, I want to know what you are going to do to repair the damage you have done to this man, and second, I want to know what you are going to do to prevent this from happening to others in similar situations.
it goes without saying that we would pay no fines, penalties or interest. I have been unable to find out exactly how much money has been levied over and above that which was lawfully owed, but every penny should be returned immediately.
I have no objection to paying what is rightfully due, but the shocking way in which this matter has been handled alarms me both for us and for others caught in similar situations.
The Americans with Disabilities Act guarantees that individuals such as my husband will not be treated like this. He was incapable of filing paperwork - not or not paying what he owed.
I have been under treatment for a heart condition. (Both of my sisters died of heart attacks in early middle age, one at 36 the other at 59.) My younger brother just had open heart surgery. I want to know what you are going to do to stop this abuse of those who are emotionally disabled.
I hope to hear from you as soon as possible.
Sincerely,
Exhibit 20 - June 23, 1997 To: G. L. Joly, regarding Craig's emotional disability. January 29, 1997
Melinda Pillsbury-Foster
2028 Anacapa Street
Santa Barbara, California 93105
(805) 569-0421
June 23, 1997
Dear G. L. Joly,
I apologize for the delay in your receiving this letter, but although it is dated May 2 it arrived after I left to attend my daughter’s graduation and attend to business in the mid-west. I am sending my phone number and copies of those letters relevant to the filing of the 1992 return in hopes that you can help me.
You will see in the letters that my husband, Craig Franklin, did not file his tax returns. You will also see that he has an emotional disability that makes doing so impossible. He concealed this from myself and his entire family for over 25 years.
All due returns have now been filed and I have sent an appeal to the Chief of Collections in Fresno. (I don’t know his or her name.)
I am sending a copy of your letter on to the accountant I hired in early February. He actually did the returns. Please call me as soon as possible.
Thanks for your attention in this matter,
Sincerely,
Exhibit 21 - July 16, 1997 To: Fred Arras, Chief Joint Compliance Branch, Internal Revenue Service, more on Craig's emotional disabilities
Fred Arras
Chief Joint Compliance Branch
Internal Revenue Service
July
16, 1997
Dear
Mr. Arras,
I
am contacting you regarding the letter you sent to my husband, Craig
Franklin dated June 20, 1997. The required tax return for 1995 has
been filed for Mr. Franklin. Addressing mail to Mr. Franklin is
pointless and may result in delays in response. I enclose a copy of
a letter written regarding Mr. Franklin’s taxes explaining the
present situation. We are presently waiting for a response from the
IRS, as you can see.
I am sending a copy of your letter to our tax accountant. When you read the enclosures you will understand why the 1995 return was late. Please call me if the return has not found its way through the mail to you; it was posted more than three months ago now.
Thanks,
Melinda Pillsbury-Franklin
This is notes for years 1988 through 1997. I grubbed through those 29 boxes with documents and records freely mixed with old food and dirty underwear. I made frantic calls to get the information Craig had lost. I should have filed Innocent Spouse and let them foreclose of Craig. Then he could have moved in with Dan and Amy.
Exhibit 23
Answers to Questions Raised by Doug
Regarding Tax-relevant materials
Tax-Free Bonds:
These were given to Craig and his three siblings, $20,000 each from Craig’s parents, Dr. Carl and Mrs. Carolyn Franklin, $10,000 from each thus at the legal limit for gifts, three years running. These years were 1987, 1988, and 1989. Of course, the Franklins paid $20,000 for the bonds Craig received each year.
City of Burbank
Bought for: $20,000.00
Sold for: $28,250.00
County of Riverside
Bought for: $20,000.00
Craig’s Business Expenses - MIT in 1988 - 1989
Craig did consulting work for MIT, creating a video data-base for the Agah Khan. This work was done in these two years. The first trip was in 1988 and the second in early 1989. These were his expenses:
1988
Airline Tickets: $750.00
Hotel and meals - $500.00
Surface Transport: $45.00
Telephone: $150.00
1989
Airline Tickets: $750.00
Hotel and meals - $550.00
Surface Transport: $55.00
Telephone: $130.00
International Meta Systems - Consulting compensation and compensation for serving on Board of Directors. - Paid in stock - Never knew what it was worth until we sold it.
1990
Phone costs: $300.00
Milage for consulting: 7 trips - $210.00
Meals - $120.00
Attending Board Meetings - $120.00
1991
Phone costs: $350.00
Milage for consulting: 4 trips - $120.00
Meals - $70.00
Attending Board Meetings - $60.00
Cost of IMS Stock:
Option price was $.10 a share
Paid: $550.00
Charles Schwab Activity:
Tax-Free Bonds:
These were given to Craig and his three siblings, $20,000 each from Craig’s parents, Dr. Carl and Mrs. Carolyn Franklin, $10,000 from each thus at the legal limit for gifts, three years running. These years were 1988, 1989, and 1990. Of course, the Franklins paid $20,000 for the bonds Craig received each year.
December 93
City of Burbank
Bought for: $20,000.00
Sold for: $28,250.00
County of Riverside
Bought for: $20,000.00
Sold for: $35,788.00
April 1994
- Bought 1000 shares Wind River - $6,000
Sold for $6,004.02
Profit of $4.02 minus commission
Options: M Long LSYXH 50 PUT SPX Leaps .4375 - $2,187.50
$40 Expires 12/17/94
M Long OBXX 50 PUT OEX 100 Leap Index .3750 - $1,875.00
$35 Expires 12/17/94
M Long XLTXE 150 PUT AMEX LT-20 INDEX .0625 $937.50
$25 Expires 12/17/94
Loses: $4,998.00
California State Bonds
Bought for $20,000.00 - Tax free gift to Craig from parents
Sold for: $25,063.00
1995
- Bought Options:
8/01 - Bought 7/31 9 PUT SPX LEAPS .3750 $373.70
$50 Expires 12/16/95
M Long SPXXT 100 PUT S & P 500 Index .4375 $4,375.00
$500 Expires 12/16/95
M Long LSXXJ 9 PUT SPX Leaps .o625 $56.25
$50 Expires 12/16/95
M Long LSZXJ 50 PUT SPX LEAPS .8125 $4,062.50
$50 Expires 12/21/96
Loses: $4,804.95
1996
Loses from Options: $4,062.50
1992
Repair of ruptured water line: $230.00
1993
Getting House ready to sell before Earthquake -
Painting - $3,450.00
Wallpaper - $450.00
Papering - $1,150.00
Cleaning up Garden and planting - $750.00
Repairs of screens - $340.00
Curtain material - $285.00
Sewing curtains & drapes- $890.00
1994
Clean-up after Earthquake - $2,850.00
This was just hauling, cleaning and patching so Morgan could live there until we found a contractor)
Replacement of lost dishes, furniture,
and sundries - $4,600.00
1995
Finally found a contractor
Diversified Construction - GrandTotal - $105,653.00
Painting (interior) - $1,900.00
Painting - (exterior) - $2,300.00
Wall paper - $650.00
Papering - $1,400.00
Garden Clean-up - $970.00
Hauling - $1,500.00
Material for curtains - $540.00
Sewing of Curtains and drapes - $1,120.00
Lost part of the house - a bathroom and one bedroom had to be eliminated in rebuilding. This should be a reduction in the worth of the house. Is it deductible?
Promotion of Album: The Sounds of Freedom
Craig wanted to sell tapes of his songs to pay for the production of a professionally produced tape he could sell commercially through regular outlets.
First, we produced a video with a professional singer and back-up musicians. We staged this at a home for the elderly so there would be an audience.
Costs: Film: $23.00
Dresses for singer and back-ups: $345.00
Singers fee: $100
Programs for audience: $45.00
Total: $513.00
After producing the tape, Craig managed to get a contract to perform at a mike that would give him national coverage on CNN at the Libertarian National Convention.
Costs:
Singers fee: $200
3 round trip plane fares to Chicago - $1,300.00
Hotel - $870.00
Meals - $430.00
Promotional Materials:
Production and graphics: $130.00
Printing: $45.00
Total: $2,975.00
