Introductory audio: Liens, levies, wage garnishments, back tax debts of all kinds. If you’re facing any of these tax debt problems, stay tuned for the next 30 minutes. This is the Levy Tax Help Show presented by Levy and Associated of Delray Beach, tax resolution specialists. Call Levy and Associated 24-hours a day, seven days a week with all of your civil tax questions, 1-800-TAX-LEVY, that’s 1-800-829-5389. Now, the Levy Tax Help Show.
Lawrence: Good morning, South Florida, and welcome once again to the Levy Tax Help Show. We hope that everyone is enjoying, what we hope to be some fall weather. There is a lot of rain this week in Florida, but we are not here to talk about the weather. Thank God, we are not having any of those issues anymore.
We are here to talk about what you do if you have IRS tax problems and on the phone, we have a very famous gentleman, who used to work at the IRS for over thirty years as a revenue officer. He was the guy that would literally knock on your door. He was the guy that would use my last name a lot because that was his job. Although, he was aggressive, he was professional. He was fair, but he was also very strict with what he demanded as an IRS revenue officer. Now, he is on the other side. He is on the Levy team. So, he has been on the show a lot. Great guy who works his tail-end off. He is a really nice guy and a nice family man. Everyone, let me say, “Good morning”, to the famous, former IRS revenue officer of over thirty years, Greg Mahaffey.
Greg: Good morning, how are you doing this morning?
Lawrence: Greg, it is always great, and this week I was going to talk about something else, but instead we are going to talk about a few things. I wanted to have everyone hear your success stories. In particular, I want to actually read an email that we received from a client, but before we do that, Greg, you used to work at the IRS.
I just got a kick under the table from the engineer. Let’s give out the phone number, because we don’t give it out nearly enough.
Locally 561 865 7800, and the toll-free number is 800 taxlevy.
Yes, Levy really is my last name. Greg, isn’t it weird that if you were to look back, if that is the right word, but that is how I use it, it is a little bizarre that twenty years ago who would have thought that you are going to have the last name ‘Levy’ signing your paycheck? It is crazy!
Greg: Oh yes, who would have thought it, at the time?
Lawrence: Right now, for everyone listening in South Florida, there is what they call an O-freeze. That is basically a disaster code because of the hurricane. So, in this listening area, I believe everyone is in what they call an ‘O-freeze’. Since Greg used to work there, not that you had that where you were working because there wasn’t a tropical situation, and there wasn’t an earthquakes and other catastrophic mother nature events, but can you explain to the listeners in layman’s terms, what an ‘O-freeze’ means? Then, I want to talk about how we need to use this time that we have been given through the tragedy due to mother nature, to our benefit, and to the tax-payers benefit as they are our clients. Tell them what ‘O-freeze’ means.
Greg: It basically means that there has been a natural disaster. Life has been disrupted in a given area, and everyone needs a break. It basically freezes all accounts right there, so that no further collection actions can be taken unless it is a very extreme circumstance or dire emergency where the fate of the world hangs in the balance if something that is not done immediately.
So, in other words, we are not going to do anything. There are no enforcement actions which will give us time to basically regroup our clients and work out a better plan of action for them. Especially, if they suffered any damages, or any residual effects from the disasters. They may have damages that are not covered by insurances and we know how much insurance companies love to weasel out of paying their bills, and, again, it gives everyone a chance to pause and regroup, and try to reorganize, and given all of the facts and circumstances of what is happening.
Lawrence: With the O-freeze, we have talked to a couple of different collection group managers. On in Plantation and one actually in the Miami office who, for anyone listening, there is an IRS collections local office in West Palm as well and we haven’t spoken to anyone directly there, but just out of coincidence we did in Plantation and in Miami. Yes, it is correct that all collection action is basically going to be shelved until the beginning of next year.
What we should do, if anyone is listening, is use this time. If you have an IRS problem that you have been dealing with, now is the time, as Greg said, to regroup and strategize to ensure that when the freeze is lifted, and it is unfrozen, that everyone is not caught off-guard, and my last name is going to be flying around again.
The IRS uses a levy, my last name, as a tool to collect when there is money that is owed. A bank levy, a wage levy, and if you are a business owner it could be on receivables if you have payroll tax problems, but right now, in the next few months we have a little bit of a breather. While we have that breathing room, please, this is a great time to focus on fixing the problem while you have that breathing room. It doesn’t happen very often because this is due to a natural disaster. This is very uncommon for this to happen, but there is also a similar O-freeze for parts of Texas that were affected. We hope that, that tropical storm forming in the Gulf is not going to have any negative impact. It is called, Nate. That is the name of that named storm, but let’s focus on what we do in the Levy Office.
The phone number is, 561 865 7800.
Greg, you had quite an interesting experience this week. I am going to set it up and then you can give a little bit more of the details, but there is a business that had a penalty for allegedly not filing their W2 and W3 forms. You were able to negotiate an abatement of that penalty. I think the penalty was large at about $120,000, is that correct?
Greg: Yes, it was well over $100,000 in penalty.
Lawrence: So, what happens is, if you don’t file your W2 or W3 forms as a business owner, the IRS can come after you and they basically charge you a penalty because you didn’t file it. Whether you mailed it off and it got sent to the wrong address, or you didn’t put postage on it, or who knows what happened, but the penalty in this particular case, for this particular client who is in the heating and cooling business was $119,000, I think. Greg, you were able to get that completely wiped off, or something?
Greg: I got the whole thing removed.
Lawrence: That was incredible. So, simultaneously, while Greg was working on that element of it, the penalty side which he literally wiped out $120,000 or close enough, the revenue office said, ‘Hey, by the way, there are a couple of delinquent corporate tax returns’. It is rather uncommon, but the revenue officer requested the returns. It had been a couple of years that needed to get filed and the tax-payer, our client (IRS refers to it as tax-payer, and we refer to it as our client) didn’t give us all of the data and it was just long and dragged out. The revenue officer took, what I would call a pretty aggressive move, in requesting what is called summons enforcement. So, literally the US Marshal’s office will deliver a court order, or a notice to you and you have to go before a federal judge and say, “Here’s what is going on” and then, why you didn’t file this case of corporate tax return. So, Greg called the revenue officer. The revenue officer says, “It is not up to me anymore, it is up to the US attorney”. So, Greg ended up having to call the US attorney on Thursday who turned out to be extremely nice. Right Greg?
Greg: Yes, very professional.
Lawrence: Very professional and very nice, and he said, “No problem, I will give you a few weeks to get the tax returns done”.
I want to explain that story for one reason in particular. This all happened in a last-minute scramble and oftentimes, in the nature of our business, it is such that the clients are the quintessential procrastinators. It is just the nature of our client-base. It does not mean you are a bad person, it doesn’t mean anything like that. It just means that they procrastinate. Sometimes, it is that, coupled with life. They are trying to run a business. They have medical issues going on. This guy in particular, had some minor medical issues going on. It may be the kids and the family, and you have to do all of these things in life, and they have the IRS hovering over them. This, by the way, was not a Florida case, because Florida should be in the O-freeze, but it is an interesting one to explain because in all of the years that you worked in the IRS, Greg, how many times do you think you ever pursued for summons enforcement, just pick a number?
Greg: Twice, and both of them the tax-payer eventually complied so we didn’t have to go before the federal judge.
Lawrence: Right. So, in thirty-years, you did it twice. Considering that there is very little tax due, and if there is, it is going to be a nominal amount that this revenue officer was literally pushing the envelope, and it just made no sense. The amount of aggravation and the amount of stress that it caused, and what you had to do to scramble to talk to the revenue officer, to then have the revenue officer say, “You have got to talk the US attorney”. It was great work on your part and the client was literally saying in an email that I was copied into, “Thank you so much, Greg. You gave me such peace of mind”.
So, you did it twice in thirty-years, that is how uncommon it is. Since we have known you for a long time, even when you worked for the IRS, it is just really frustrating that most time you would try to take a pragmatic, practical approach as a revenue officer. That is a good way to put it, but it is just so strange to me why some people, no matter if it is a state collections revenue officer, or the IRS, why they don’t just take a logical case approach, and why they just try and make life miserable and difficult. It just doesn’t make any sense.
Now you have been out of the IRS for how long, Greg?
Greg: Two and a half years.
Lawrence: So, now you see, and again, you see it a lot. As a former IRS revenue officer in collections for your entire career, you have got to admit that you find it pretty odd that some of these revenue officers do this. It just doesn’t make any sense. I think that it is just life. You can go out with your loved one, and I can go with my wife to a restaurant and have great food but horrible service, and I come back the next time and the food may be still great, and I get a great waiter or waitress. It is just personality, but it is very frustrating because we see that more than we would like to, where to just have some reasonable dialogue doesn’t seem to happen. Great work on that one, Greg.
Also, Greg is in the middle of doing a non-attachment lean discharger.
Greg: It is a lean discharge on a piece of property up here in Michigan, in which the property was actually quite confusing. He had a first mortgage, a second mortgage and federal tax leans and state tax leans.
Lawrence: The first mortgage had actually foreclosed upon the tax-payer, the client. Actually, the client was in a redemption period, so it required a huge sum of money that had to be gathered to get the house back out of foreclosure. Then, that person had to cut a deal after he got out of foreclosure with the second mortgage holder, then the IRS, then the state of Michigan.
The question comes into play, with a complicated title such as that, who gets what out of the proceeds? The tax-payer, the client managed to find a buyer for the home. It wasn’t a cheap home, it was a $490,000 home and that was all of the proceeds that were going to have to be available. So, what I had to do was to get the property pay off figure to redeem the property from the first mortgage. The next person in line was the second mortgage. There wasn’t going to be any proceeds left after the closing costs, real estate commissions and redeeming the house towards the second mortgage, much less the IRS or the state of Michigan. So, what is needed to clear the titles for this deal to actually go through was the tax-payer, the client, cutting a deal with the second mortgage company that they would release their interest in exchange for a promissory note from him.
Then, I had to get a note of consideration discharge from both the state of Michigan and the IRS. The IRS processes usually include a bit of legal work. We have to get the title company, we have to get the (? 00:13:13), we have to show the (? 00:13:15) statement of who is going to get what out of all of this, just to see if there is actually going to be any proceed and what, and if each taxing authority is willing to accept whatever to discharge that piece of property.
Greg, let me just interrupt because a lot of that is pretty technical for some of our listeners. The bottom line is that our client, who is a lawyer, a criminal defense attorney. He is a nice guy who went through a bit of a rough divorce. He has a couple of kids. Twins, if I am not mistaken, and the ex-wife is a nice lady too, for that matter. It is just that there is a lot of twists and turns to these discharge requests. So, if anyone is listening who has a tax lean and is trying to liquidate a piece of property, there are specific ways that you have to go about doing it, if there is another mortgage and there are other creditors. In Florida, it would not be the state because there is no state income tax, but there is the IRS lean and it has to be done the right way.
I want to read a portion of an email that literally came in at about 09.30 on Thursday morning. It starts off by saying, “Greg, I get the fact that there is a lean on the property, I don’t want to operate in this cloud of titles. By the way, you are a machine. Lawrence is lucky to have you. I have received so much communication from you in the past week. Over the time that my matter has been open, other than Lawrence who I find extremely responses and client-focused in communication”. He goes on to say, “My practice takes up a lot of my mental energy and I often need some refocusing, to put it mildly, to make sure that I am working on getting what you need”, meaning the Levy Office. “It is a constant struggle to make sure that I don’t let things slide on my personal matters because I am so focused on my clients. You are clear, direct and have a very timely response which is exactly what I need, and it is extremely useful. I have confidence that now we will be able to get where we need to go with this piece of the puzzle, and in my matter at home whatever form the resolution ultimately shapes up to be. For the first time I feel this will be far from open-ended and there is a direct route to getting there. The bottom line is that I just wanted you to know that I very much appreciate what you are doing, and the way in which you are doing it. I am copying Lawrence into this as I want him to know how I feel about his as well, thanks again, regards”, from the client.
Now, how great did that make you feel? On Thursday morning, that just had to perk up your day and I called you about it. I said, “Way to go, great job”. You really go above and beyond, and your passion is incredible. You are tenacious which we love, and you know your stuff. You know because you used to work there for thirty-two and a half years. For thirty-two years you worked there, and lately, we have just been, as I am sure you will know, incredibly busy. It is just crazy, busy, which is great because ultimately, we help people.
The local phone number is, 560 865 7800, or, toll free 800 taxlevy.
Whether it is you saving penalties for the case we talked about earlier on in the show, you have got over $100,000 of penalties wiped out. It is just incredible that you are able to do these things, but that is what we do in the Levy Office.
We have a very deep bench. We have two former IRS employees actually. Greg, being one of them, and also Claire being another one. Claire worked as a revenue officer for twenty years and then she worked in the ‘offer and compromise’ unit for over eleven-years before she retired and came on board with the Levy Office. Then, of course, we have the CPA(s). We actually have three CPA(s) on staff. W2 employees, we don’t subcontract any of that out. We have the enrolled agents, and we have a great admin staff. We have an incredible team. Great POA(s), great staff, great secretaries, great admins, great case managers and it really is just a great bench that we have.
I was having breakfast with a buddy of mine a few weeks ago, he wasn’t having breakfast, but he insisted on some meeting and he is sort of a friend of mine. He said, “You know, you like to help people. If someone is broken down on the side of the road, you are the guy who is going to stop and help them”. I always tell this story, it was years ago, but I was driving with my family at the time and we saw a car about fifty yards in front of us and it flipped over the guard rail. It rolled down an embankment and literally landed upside down on the roof, so the tyre’s were in the air. I pulled over, my wife called 911 and may have just hit the on-start button, if I am not mistaken, and I literally jumped the fence like little barricade and ran down this hill and ended up pulling some of the family members out from the car. They weren’t unconscious, but they were dazed and confused to say the least. There was some shattered glass. My buddy always reminds me of that story because I always like to help people.
In fact, in the winter months, sometimes when I am in Michigan, my younger son who is now eleven, when there is a snowstorm (? 00:18:20) Michigan, we will literally go out in my SUV. My eleven-year-old said, “Dad, let’s go buy post wraps”, and literally we go out almost like we are on patrol as a good Samaritan, and we help people who are stuck, or who can’t get up the hill because of the ice. We have done this every year now for the past couple of years. Literally, my son looks so much forward to it and it makes you feel good to help people. In the Levy Office, we do the same thing on a different level.
How good, Greg, did it make you feel to get that email from Larry?
Greg: It was definitely enlightening to get that. I also got his discharge from the state of Michigan in less than a week. It is not usual.
Lawrence: Also, from the other client that you took care of, the summons enforcement with the US attorney.
Greg: Within four hours they were possibly facing being held before a federal judge and thrown into jail under contempt for not complying with the summons.
Lawrence: Just to be clear, that is extreme, and I have never seen that, but you don’t want it to get to that. So, why not, right now on Saturday, pick up the phone and call us as we approach the top of the hour. It doesn’t cost you anything to call us. Call the toll-free number and it is really free.
Toll free number, 800 taxlevy
Greg, I want to talk about another one of your success stories. The gentleman, who I think you were able to get additional penalties for as he had cancer, if I am not mistaken?
Greg: Yes. He as a doctor. His wife had gone through expensive chemotherapy and cancer treatment. She should not even be alive today, but by some miracle she was. This is a client that followed me over here from another place (my previous employer), and when I came over here, he followed me. I didn’t ask him to come over. He actually looked me up to find me. So, he was really impressed. Before that, I had managed to get him into an installment agreement. He owed about $175,000 to the IRS because he was given a 1099, as a doctor, in past years as his wife was going through all of this. I worked with him. We got him into an installment plan to begin with. We got the IRS off his back.
Then, we took it one step further and I got all of the medical documentation needed and put it together in the correct format, and with him sitting across from us on a conference call, I called the IRS practitioner hotline. I explained the situation and everything else. We faxed over the documents right then and there, and while the client was sitting there listening to this, they approved his request for penalty abatement. That was for over $26,000 right off the bat.
Then, eventually, there were some additional returns to get filed and assessed after all of this was done, and when he got the first notice of the first bill they were threatening to default his existing instalment plan. So, I jumped into the fray immediately and within 48-hours I had contacted the IRS again about this new period and got an additional $6,000 worth of penalties waived and we included that with the existing agreement, and everything was hunky-dory.
He is now down to where he only owes the IRS about $11,000 and that is all that is left here. He is ready to pay them off and he is doing handstands and jumping jacks now. He has a new career. He moved out to California. He is now working for a large medical practice where he is a W2 employee for his current taxes. Altogether, I saved him about $35,000 and got the IRS off his back, all with a few phone calls and with the people I know.
That is great. You know, it has been such a tough week, this week. Tough for the country, and I was hesitant to talk about it, but I think it is the right thing to do with what took place earlier this week out in Las Vegas. It is a sickening, disgusting situation that occurred and that someone would do this to these innocent people, but unfortunately, we have deranged people that exist with us out there. With what happened, I wanted to actually bring all of these positive things up today with my thought process for sort of an uplifting theme.
I did a radio interview earlier this week in Metro, Detroit. It was on Tuesday and right after this all occurred. It is just a tragic situation when your lives are shattered and changed forever. It makes you feel good to hear good stories like we have talked about today.
So, for anyone listening, if you have connections and if you have loved ones, and have some connections to anyone in Las Vegas, and even if you don’t know anyone, I think it is the right thing to do, to take a quick minute to say a quick prayer and send some well-wishes to everyone out in Nevada.
For those that were the first responders, I saw what everyone else saw on TV with regards to people that were trying to help running into the area where the shooter started shooting, and just for the lives that were lost. I had people that I knew that were actually in Vegas at the time, not at the concert, but at the time, they were there. It is horrible.
So, from the Levy Office and the Levy team, we want to wish everyone well and send our well-wishes to everyone who has had an impact out there. I really just want to say, again, that it is nice to have good things in life happen, especially if we can help and that is what we do in the Levy Office. For everyone listening, we want to wish you all, all the best for everything that took place out in Las Vegas earlier this week, it was just terrible.
For that matter, what have we faced recently on a different level? We were facing IRMA and the hurricane devastation of that and so forth. We have just been having to endure a lot of things. Harvey, in Texas as well, and if we can do something right in our office to try and help someone who is going through some struggles, it makes you feel good.
It makes you feel good, Greg, that you were able to save someone $30,000, like this doctor who had kids and medical issues going on. It makes you feel good that you were able to save the other client over $100,000 in penalties. It makes you feel good that they can, at least, get on with their lives. It is really an incredible feeling that you have, at least it makes me feel great, I have got to tell you, and having you on the team is great, so again, I want to publicly say, “Thank you”, but hopefully, Greg, this weekend you will sleep better knowing that you made an impact on these peoples’ lives.
I tell you, and I have known these clients for a while. Not the doctor that you talked about, but the other two I know. They are just nice people who have been through some rough times in their life, and you were able to help get then past at least the rough times financially with the IRS. So, you should feel good about yourself, Greg, “Thank you”, publicly.
Greg: It is another day at the office.
Lawrence: Do you know what? Greg is a mister calm and cool guy who doesn’t really get too heated, although I have heard you get pretty agitated sometimes at some of the taxing authorities. Now, with the latest thing that we are dealing with, the IRS has outsourced two of its collections to a debt collection agency. Can you imagine that one?
Greg: That is an utter disaster. The genius’ and politicians that force the IRS to do this ought to go up on criminal charges. These debt collection agencies are disasters, out there. They have no sense of tax-payer rights, they don’t care about tax-payer rights, they make a commission off of it through everyone that they can con into an agreement that they can’t afford.
Lawrence: You know, we have been dealing with that, particularly with Michigan for a long time. They subcontract out a lot of their debt collection to a third-party debt collection agency which is, you are right, an absolute nightmare. It has been in place for a while. You know, IRS tried it a few years back and it went to the wayside, and apparently it is back now because we have been getting word of it. It is a disaster and just adds another layer of complexity and another wrinkle. You are right, they are a collection agency and they don’t know what a final notice is, they don’t know what (? 00:25:53) is, and they probably don’t even know what a levy is, for crying out loud. That is frustrating, but if you are frustrated with any IRS problems, no matter what it is, please pick up the phone today.
We are in an O-freeze, which is a disaster freeze so no collection action is being taken in South Florida, and I think all of Florida until the turn of next year. Use that time wisely. Use that time to get your financial house in order.
The local phone number is, 561 865 7800, or call free on 800 taxlevy.
And, yes, Levy really is my last name and like we always like to say, “You want a Levy on your side, not one against you, don’t fear a levy, you hire a Lev”’.
Greg, thanks again. Here is a big shout out to you, you had a huge week and you made a big impact on a lot of clients, and saved literally over $100,000 in penalties. In fact, closer to $200,00 when all is said and done, which is probably a more accurate number. Great job, incredible work.
Again, give us a call if you have tax problems.
Don’t fear a levy, you hire a levy.
Signing-off for now, Lawrence Levy and Greg Mahaffey, former IRS revenue officer for over thirty-years, and now on the Levy team. Give us a call if you have any tax problems.
And, remember, have a nice weekend. Be safe out there, Florida. We will talk to you next time.