Ask Lee Now: Answering Readers’ Questions

We love to hear from readers! Please email your question or comment to Independent Living editor Lee Bellinger ([email protected]). Please include your name and home state. You may also reach us via postal mail (P.O. Box 1240; Clover, SC 29710-4240).

About Uncle Sam’s Frantic EMP Preparations

Alex P. writes: They are buying electric cars to use after the grid has been taken out and there is no power to recharge them. This does not make sense to me. Old diesel cars would run without electricity, after they got started. That would make more sense. The diesel fuel required to charge the cars would run diesel cars further.

Lee responds: This comment is in response to a news alert that went up recently on the Independent Living News web site ( “Uncle Sam is suddenly taking the EMP threat very seriously,” we posted. In the post, we specifically cited a “microgrid” being built by U.S. Northern Command in Fort Carson, Colorado:

“They have a backup solar array. Plus, a bunch of diesel generators. All are meant to provide ongoing power to the military base. Even if there’s a total grid failure, the lights and computers will stay on. They have a fleet of electric vehicles. This guarantees them transportation even if gasoline distribution shuts down.”

A fleet of emergency electric vehicles can be shielded from an electro-magnetic pulse if stored in a suitable facility. And the military will have no problem charging their batteries with its backup power generating sources. The downside to electric vehicles is that they have limited range. But it’s possible to conceive of an emergency scenario in which sources of electricity were more accessible than diesel fuel or gasoline.

Outsmarting “Smart” Credit Cards

Scott W. writes: Thanks for all you do to keep us safe in today’s increasingly politically and technologically hostile environment. Regarding RFID chips in cards, I simply took an awl, dug my chips out, smashed them, and disposed of them. The card still works fine (they certainly don’t use the chip when ordering by phone or on the internet!).

End of problem. Sometimes a simple, direct approach works well. I still use a sleeve with my passport. I am a little hesitant to try disabling the chip by hitting it with a hammer. I am not certain it wouldn’t raise questions at the border. Have you heard anything about this?

Lee responds: Physically removing and destroying the RFID chip is the surest way to prevent it from transmitting your data! The downside to that approach is that you will limit the usability of your credit cards. You can still make phone or Internet purchases, of course. And provided you don’t damage the magnetic strip, you may still be able to make purchases at some retailers by swiping the old fashioned way. But increasingly, you’ll need to use a chip reader in order to make purchases.

As for your Passport, it may not be a good idea to try to perform chip-removal surgery on it. Doing so risks inviting additional scrutiny and slowing your processing through Customs. You could even be required to obtain a new replacement Passport.

According to the State Department, “If your passport has been significantly damaged, especially the book cover or the page displaying your personal data and photo, you will need to apply for a new passport. Conditions that may constitute damage requiring you to replace your passport include water damage, a significant tear, unofficial markings on the data page, missing visa pages (torn out), a hole punch, or other injuries.”

As long as you carry your Passport within a protective sleeve that blocks radio frequencies, you shouldn’t have to worry much about unauthorized privacy breaches. When you present your Passport to Customs officials, you will be tracked on the basis of your Passport photo and number, anyway. You’ll also be required to submit information about your itinerary and purpose of travel.

So trying to deny governments the ability to do an RFID Passport scan won’t keep you off their databases and could make getting through Customs more difficult.

This Will Save You Money

Nita J. writes: My husband and I had a house built 6 years ago. It is two stories and totally electric. My question is about how to save on our electric heating bill. Our bill has been as high as $700 a month in the winter. In the summer it averages about $150. We use fans in the summer and only use the air conditioner when absolutely necessary. How can we save in the winter?

Lee responds: You can make some minor adjustments in your lifestyle and usage to enjoy some savings. Things like turning the thermostat way down while you’re sleeping, closing off vents in unused rooms, and reducing heat loss through doors and windows can help. But in order to reap big savings, you may have to invest in some major upgrades.

Inadequate insulation can be a significant source of energy loss. Even though your house is relatively new, that doesn’t necessarily mean it’s well insulated. Builders will sometimes cut corners when it comes to insulation, because most buyers aren’t particular about it and probably won’t bother to inspect it or inquire about its R-value. The R-value is a measure of insulation’s ability to contain heat. The higher the R-value, the more effective it is. Adding insulation to your attic may be a cheap and easy way to boost R-value and reduce your home’s heat loss.

You might also consider upgrading your furnace to a more efficient one. This would be a huge up-front cost, but it could buy you substantially lower heating bills going forward. Low propane prices mean that it’s now much cheaper to heat a typical home with gas than with electricity.

The IRS vs. America

Anonymous writes: The IRS is currently calling people in for any type of minor issue they can find, such as a small 1099 that was forgotten by the accountant. If you are audited for this and go in, they will open up all of your prior tax returns for many preceding years. Then, you are essentially forced to legitimize every single item on your return, whereas if you did not attend, I think you could only be liable for the small item in question, plus the penalties and interest on that item.

You may, however, lose your appeal rights in that case, but if the item is small, this would be a much better strategy than attending the audit.

…Please consider telling your readers NOT to go in if the audit is over a small item, or to seek legal advice about possibly not going in. I think they have to subpoena you if you just don’t show. They then assess you on the questionable item, and you would have no appeal in that case on the assessme nt. But this might be a much better strategy, considering that otherwise you will be in a furious race against time to legitimize every item on your return, and will in that case be assessed on anything you can’t provide by the ultra-short deadline.

If you use this information, please do not use my name.

Lee responds: Thank you for sharing your perspective on IRS audits. The IRS is feverishly trying to process as many audits as possible within its limited enforcement budget. The agency is increasingly relying on “correspondence audits” from computer-generated letters. It is also pressuring taxpayers to waive their rights (to the extent that they are even aware of t hem) in the name of streamlining the process.

One of the rights taxpayers have is the right to refuse or term inate an audit. The IRS doesn’t actually have the legal authority to force you to cough up de tailed financial records in an audit. IRS agents may engage in bluf f and intimidation to try to coerce taxpayers into complying with an audit, but these tactics have no legal backing. The IRS Handbook for Special Agents states, “An individual taxpayer may refuse to exhibit his/her books and records for examination…under the Fifth Amendment.”

But there are potential downsides to asserting your Fifth Amendment rights. If you refuse an audit, you risk having legitimate deductions denied ( because the IRS puts the burden of proof on you) and being assessed for additional t axes, interest, and penalties. The best advice I can give is to seek expert guidance from a ta x attorney or enrolled agent who is authorized to represent taxpayers befo re the IRS.

Note from Lee:

Seth Van Brocklin’s article about energy is must-read this month. It’s on page 3. He made important points about my prediction that cheap energy is here to stay.

The world energy reserve is now much, much larger than it was 10 years ago. This is based on major extraction technology advances. I see gas prices for the long term in the $2.50 at the pump area. That’s very, very cheap when you take into account decades of inflation.

As my article and Seth’s point out, the Saudis are flooding the world with new supply in an effort to crash the U.S energy production sector, so the current prices won’t hold indefinitely.

“Ask Lee Now” is presented for general educational purposes only. Because we don’t know enough about readers’ personal situations, the opinions expressed here should not be construed as a recommendation to buy or sell any financial instrument at any time. We will not be responsible for financial decisions that readers make, and they should be made in consultation with their own advisers.