Catch Levy & Associates on the radio Saturdays on Big Talk 850 AM WFTL Southeast Florida hosted by Levy Tax Help’s Lawrence Levy.
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 I call beautiful, classic fall weather with sunny skies and very little rain, after we had quite a bit of mother nature action with the hurricanes. We are all past that, thank God, and we are coming into the holiday season now. In fact, to talk about the holiday season, the Levy office just put up our holiday lights. On today’s show, we have another great show lined up. We have a couple of the Levy team members that are on with us. So, let’s start off by ladies first, we have the talented, the beautiful, the phenomenal voice, and a nice young lady who started with the Levy office rather recently and she was almost hired before she walked in the door, and when she says ‘hello’, I will tell you why. So, Eileen, good morning.
Eileen: Good morning, everyone.
Lawrence: Why don’t you start-off by saying our taglines?
Eileen: Don’t fear a levy, hire a levy. You want a levy on your side, not against you.
Lawrence: That is so great because you have that beautiful accent that my father had. He was originally from England and he started the company many moons ago. You are from where? Is it the north side?
Eileen: North of England, Yorkshire.
Lawrence: So that we know our British geography, how far is that from London?
Eileen: It is about three-hours north.
Lawrence: So, it is like going from Boca, Raton to Orlando?
Lawrence: Alright. We have got it. So, that is from the north. On the show with us this week, as well, and we talked about this a little bit on last week’s show, another guy. This guy worked at the IRS for over thirty-years. How long, Greg?
Greg: Thirty-two and a half years.
Lawrence: Thirty-two and a half years, a veteran revenue officer. He was the guy that, if you didn’t meet the deadlines, would use my last name. He pressed a button, and boom – there you go, you have a bank levy, you would have a wage levy, you would have a receivable levy, but now Greg is on the other side and he is one of the Levy team members. I always say, “Can you imagine, who would have thought, ten to fifteen years ago that your paycheck was going to be signed with the name ‘Levy’ on it? How ironic is that one, Greg? It is pretty crazy, isn’t it?
Greg: Oh yes, definitely.
Lawrence: Well, I want to tell you that on last week’s show, we had a nice guy that was listening to the show and called right after it. It was just after nine o’clock and he ended up coming into the office and I met with him. He was a really nice guy and he was very impressed with the content of the show, that we are content-driven and talked about case studies and current success stories of getting penalties waived. He was also really pleased to have a firm that has the experience, the deep bench of what we have. He hired us, by the way. In the Levy office, we have the former IRS revenue officers, like you used to be for thirty-years, Greg. We have another lady, named Clair Coffee, like the coffee and the tea that you drink. Do you drink tea or coffee, or both, Eileen?
Eileen: Both. Tea with milk.
Lawrence: Alright, there you go. We have Claire Coffee, and that is her last name. Both Claire and Greg worked in the IRS for over thirty-years. Then, of course, we have the other power of attorney, the CPAs, the enrolled agents, the attorneys, all of which function as power of attorneys.
So, this guy liked the show and he came on in. It was literally one week ago, at five o’clock in the afternoon. I said that I was around, and it was no problem. He came in and it was great. We followed-up with a meeting on Monday morning of this week?
Lawrence: Right. Eileen was in the meeting too. I try and bring her in to everything as we are trying to cross-train, like the cross-fit gyms. We are cross-training you in the Levy office. You know, it is great to have the deep bench and it is nice because when we have a client that comes in that needs some catch-up on their tax returns, that meeting we had to bring in one of the CPAs, one of the book-keepers and we laid out all of the issues that had to be caught up. The client spoke with the CPA, Joseph. He spoke with one of our book-keepers, Lisa. We all had a meeting, and everyone was on the same page, and now, Greg, you are in the middle of dealing with this gentleman’s tax resolution matters.
This week, I just want to say a big shout out to the radio and all of the listeners out there because we are content-driven, and we try and give real life experiences as to what goes on. Before I jump into Greg, I am going to jump to myself for one second.
Earlier this week, it was mid-week on Thursday morning, a client came into the office, right here from south-east Florida. In fact, I will be specific and say that he was from Palm Beach County. They were a nice husband and wife couple and they didn’t have an IRS issue, but they did have a Florida Department of Revenue issue. Eileen, you sat in on that meeting because, again, we are trying to cross-train you. Whether you are going to lift-weights, or run, we are doing a little cross-fit with the Levy cross-training. You sat in on that meeting, right?
Eileen: Yes, I did.
Lawrence: We called the Florida Department of Revenue and they could not have been any nicer. We happened to get two very nice folks up in the Tallahassee office. They were literally bending over backwards to try and help, and it took a little bit of navigating, but they were very helpful in trying to get through some bureaucratic red-tape that was more technical that it was substantive, in my opinion. At the end of the call, which was a good half of an hour call, I think you stepped out, but do you know what they said to me? They said, and I am quoting the wife, “You are awesome”. It was a really nice compliment to hear because a lot of people don’t know how to navigate through. In the recent weeks that you have been here, you probably hear some feedback from people and they just don’t know. When the gentleman left, it was Thursday morning, if you recall, he said, “Thank you”. I said, “You are welcome”.
Eileen: They were very happy.
Lawrence: Yes, they were very happy and even let the gentleman who came in before them who had an IRS issue and some questions on the shared economic responsibility, which is the fancy term for Obama Care, if you recall. The IRS sent a letter saying that they needed proof of the premiums, and this and that. There was quite a bit going on, but ultimately these clients just want the help. They just want to be clear on things.
Greg, when you used to work at the IRS, oftentimes you got a lot of tax-payers that were in your inventory (as the terminology is) that you basically had to try and straighten-out and clear the air. Now, as a power of attorney, explain what your case approach is so that the public and the listeners can hear how you, as a former IRS revenue officer, approaches these cases.
Greg: Well, the first thing that I do is, I listen to them. I listen very carefully. I review all of the documents they have. I listen to their perspective and the first things that comes into my mind are, do we need returns filed, are they dealing with balances due, and how did these taxes accrue? What is the underlying problem? What caused this whole mess to blow up in their faces? What exactly is going on? Are they a wage earner? Are the not having enough taxes withheld? Are they self-employed? What do they need to do to start making estimated tax payments? Is it a business account, payroll taxes and how did they get to fall behind on these payroll taxes? How many employees do they have? Are they behind on the filings?
I have to analyze and determine whether it is an individual case for 1040s or whether it is a business case and then go further on the business case to determine what kind of entity this is. Is it a simple DBA? Is it LLC disregarded? Is it an LLC tax-partnership, or a limited partnership? Is it a corporation? Is it a ‘sub-s corp’ or is it a ‘C-corp’. Are there other underlying issues regarding such things as 401Ks and so forth? Is there an employee plan? Is it a non-profit business? There is quite a bit that I have to go through in my own mind to figure out what is going on, what the problem is, what caused the problem, and how do we start to fix the problem?
I attack the source of the problem, and I make sure that the tax-payer goes forward and does not owe any further taxes. It is no good to try to give then an instalment agreement or an offer, or any of the other resolutions if the problem is not fixed. We have got to fix the problem first. We have got to find the source of the problem and make sure it never happens again. It is like the TV show on HJTV, homes does it right, or homes on homes. We do it right the first time.
Lawrence: Absolutely, back to me. I feel like we are on the TV. We are going to toss it back to the studios if we were on the field. Let me talk about getting it done the right way, the first time, and getting it fixed. I think it is pretty critical too. We have a client that I am looking at here. It is a letter. They didn’t file a tax return for 2014. I am actually going to show it to Eileen as it is right here on my computer. So, this client received a letter out of what is called a ‘service centre’. So, it is not from a local IRS revenue officer. It is called a statutory notice of deficiency. We referred to it also as the 90-stat notice. It is pretty technical, but basically it means – dear Mr. tax-payer, you didn’t file a tax return, so we filed one for you.
Can you read how much that says, right there?
Lawrence: That is right. $139,000.00 that the IRS says that this guy owes because he has not filed. This letter is about one month old. It is dated 23rd October. He probably got it right before the old trick or treat night, when it came in the mail. So, this gentleman has got multiple years of unfilled returns. The IRS computes an assessment when you don’t file. It is called an SFR. Greg, do you want to just explain in layman’s terms what an SFR means and how that could impact on you if you do not respond back to it?
Greg: An SFR is what the IRS generates for a tax return when you fail to file for your 1040 tax returns. They estimate how much tax you are going to owe if you are married, filing separate, or singe, with absolutely no deductions, no business expenses, no nothing else. The IRS then take that information which is supplied by all of the sources out there. When you get a W2, when you get the 1099, you get a K1, all of that stuff that is sent to the IRS and the IRS has records of this stuff. The computers at the IRS add up all of these totals and then they look and compare that to any tax returns that should have been filed. If you never bothered to file your tax returns and the IRS has to follow all of these numbers and make a determination that you are going to end up owing some money, they will computer-generate one of these letters, or ‘nastygrams’ as I refer to them.
Basically, what it comes down to is, if you don’t file the return and the IRS gives you several chances to file the returns, but if you don’t they will issue a statutory notice on this period which is what you guys looked at down there in Florida. So, in this case, if this tax payer fails to respond, they are going to be facing over $100,000 worth of tax penalties and interest. When the tax is that high they have special penalties, not just negligence penalties – willful failure to file penalties and all types of other penalties. Possibly, even fraud penalties. So, whatever you do out there, if you get one of those notices, do not ignore it as it will not go away. Come to us to fix it because there is a certain time-frame in which you must file a corrected return.
Lawrence: Right. Back to me in the studio. I love that. Greg, that is your new thing. Not in all of these years, back to me. I am going to throw it back to Eileen. Should I throw it? Anyhow, when we do our Fox interview, sometimes on TV, back the studio and we go live on it, but you are right. You want to be able to fix these things the first time, the right way around. Let’s also talk a little bit about what is going on here in south Florida because of the hurricane. Eileen, you have heard me refer to what is called an O-freeze quite a bit?
Lawrence: It is like a disaster freeze. Basically, because of hurricane Irma, most, if not all of Florida, and certainly in this listening audience is in a collection freeze. This means that while we have the opportunity to capitalize on no collection action being taken by any local IRS revenue officers, or for that matter through the automated system, we really should capitalize on that in between now, and I will be conservative and say, “mid-January”. So, we have got a couple of months left. For anyone listening, who has got an IRS problem, now, today, before ‘Thanksgiving’, let’s make this your call to action so that you can get your problems fixed. Right this second, you are in the driving seat. The local revenue officers, and if you are listening in south-east Florida, whether it is Miami, Plantation, or West Palm Beach, there is absolutely nothing cooking with any of these local revenue officers. There is a collection action freeze because of hurricane Irma. Did you lose power when Irma came?
Eileen: Yes, for five days.
Lawrence: You did! Did you burn candles, and did you have flash-lights?
Eileen: Yes, all of the above?
Lawrence: Did you have food? Are you okay now?
Eileen: Yes, we lost everything food-wise.
Lawrence: You are okay and that is all that counts, and you are a very nice and very pretty lady. For right now, I will tell you something. Didn’t I tell you yesterday or the day before, or earlier in the week that you are one of the best hires that I have ever had. I think you are just awesome. You bring such a sense of serenity in your voice and the way in which you conduct yourself. I mean, the accent is a huge attribute.
Eileen: Thank you so much.
Lawrence: You do great. Whether it is ordering lunch for the staff, which happened to be a nice thing that I did on Thursday, or whether it is just helping out with the office. I just really want to publicly say how great you are.
Eileen: Thank you, I appreciate it. I am enjoying being here as well.
Lawrence: You like the staff?
Lawrence: Do you have a nice boss?
Eileen: Yes, I do. He is awesome.
Lawrence: He is. We are talking about him in the third person, right? He is not a bad buy. I got a haircut.
Eileen: Yes, you did.
Lawrence: Not just a haircut, but I got them all cut. That is an American joke, right? So, back to taxes and not to our little bit of ‘Levity’ on a Saturday morning. Let’s talk about a couple of discharges. I know, Greg, that you had some big miracles, as you call them. Can you explain how a discharge works and what you need to do? So, if there is someone here in Florida that has got a tax lien and they need to sell their property, you can still sell it, but you have to go through what is called a discharge process. It is pretty involved. Can you do it yourself? Yes, sure you can do it yourself. Would you know how to do it? Absolutely, not. Let Greg give you the one-minute version as the clock is ticking. Greg, back to you.
Greg: Okay. When there is going to be insufficient proceeds from selling your piece of property to satisfy all of the liens, the IRS will discharge, or agree to discharge its lien from property and not stand in the way of the property. The basic legal requirement is that the property must be sold to a bone-fide third party at an arms-length transaction. So, you can’t just sell the house to your wife and call it a day, and see if the IRS will release its liens. It doesn’t work that way. If the house has to be sold, you are selling your house, and you have a mortgage on it, you will have expenses of sale, real estate commissions, pro-rated expenses, property taxes, closing costs, and maybe an old water bill, and maybe a second mortgage. Then, you throw an IRS federal tax lien into the mix and possibly a State tax lien as well. Everyone has to figure out whose apples and oranges are ahead of who’s at the time of closing, and who is entitled to what from the proceeds. Many times, the reality is that there are not enough funds left-over to pay-off everyone that has a lien on the property. So, they either go through the short-sale process, or they see what exactly is available to give to senior lienors on a property. For IRS purposes, if you have a federal tax lien on your property and you have any equity, that lien only attaches to your actual equity in the property. It can get more complicated if you only have lien on one of two spouses and depending on which county or State that you live in, whether it is an entire liens property, and so forth. This sounds confusing, but that is why you guys need to hire us out there. The common lay person and a lot of regular attorneys don’t know how to get this kind of stuff done.
Lawrence: It is not for the famous Greg Mahaffey. You know, that was pretty complicated even for a guy like me. So, I didn’t mean to cut you off there, Greg, but if there is a lien against your property, and let’s say that Eileen and I are married. From your previous husband there was a lien on a house and I was living in the house that you owned, it get’s very confusing. A lot of the time, a lot of clients and tax-payers don’t know how to navigate through that. So, it is a lot easier if they hire a professional that can help them to navigate through that, and that is what we do. What we did not give out yet was the local phone number:
1-800-Tax-Levy, and the local phone number is 561 865 7800
We are right here, on Federal Highway, about a half of a mile south of Linton on the east side of the street. We are right next to Enterprise, Rent-a-car. We are across the street from the Toyota Headquarters. Come on in and check us out. Right next to us there is a barber shop. I love that guy. I went in and got my haircut earlier this week from this guy. Give a shout out to the local business owners too on the Levy tax help show, but if you have an IRS issue, you need to give the appropriate parties at the IRS the documentation that they need in order to get your case resolved. Often, people don’t know what to do and that is why you hire someone.
I want to give another example. Right here, locally from Florida too, and not in Palm Beach County, but in Florida we had a client. This was a rather large debt that was owed to the IRS. I will let Eileen tell you how much these folks owed, again, since it sounds a lot better with that British accent than mine, they are a husband and wife couple. It is right there.
Lawrence: Right, it is almost a half of a million dollars. Then, read the next sentence.
Eileen: This amount does not include all accrued penalties and interest.
Lawrence: Right. So, when people think they owe this $492,000.00, but when you read the next sentence it says that this amount does not include the accrued penalty and interest. So, it is $492,000.00 plus penalty and plus interest. So, that real number is probably, at least, $550,000. Half of a million dollars. It is crazy. That arrangement that we were able to negotiate for this particular client was what they call a PPIA. There are a lot of acronyms in the IRS. PPIA – partial pay instalment agreement. Their deal was that they were paying $850 on the 15th of each month. Let’s just do some quick math. Let’s say they were paying $1,000 per month. That is $12,000 per year. In a matter of ten-years, if they had that much time left on what is called the life of the statute. This is for taxes 2010-15. They would be in a situation whereby they would never fully pay the debt. Potentially, they could go into an offer and compromise scenario, but this was literally wrapped-up a couple of months ago. The letter date was early August 2017. So, here is a client that had literally over half of a million dollars that ranged back from 2010 onwards, and we were able to get them into a payment plan that they could live with at $850 per month. That is a mighty good resolution. Their clients are thrilled, their book-keeping was a bit of a mess. They were really nice people and we were able to get them into a situation where it is called a partial pay instalment agreement.
Greg, when you were around the IRS, PPIAs were not that common. It is a rather recent thing, in the past four or five years. A part pay installment agreement was not that easy to get through management, is that correct?
Greg: Correct, and then, finally someone looked at the reality of the situation. Especially, in the light of coming out of the recession, depression or whatever you wish to call it, and the IRS finally decided that they ought to get something against these taxes. Even if we can never fully pay this account, something is better than nothing. That gave rise to the partial pay installment agreement. Another condition of partial pay installment agreements is that they get reviewed every two-years to see if your situation has changed, and whether you need to revise your agreement and maybe start paying more than that dollar amount, or perhaps you can pay less because your situation has gone for the worst. That’s it, in a nutshell, for partial pay installment agreements. They agree to take payments even though it will never satisfy the tax debt.
Lawrence: Yes, absolutely. Now, oftentimes, if you are in a PPIA, or you can qualify for one, that sometimes means that you can try and look to an offer and compromise. There is another, more finalized way of resolving your tax problem. It is by getting into an offer and compromise so that you can finally have it done once and for all, as opposed to having to go through this every couple of years.
In the Levy office, that is what we do. We will fix the tax problem, whatever that may be. A lot of these cases are a lot more complicated than they would appear because someone has disposable income, or someone has equity and assets. As we have about five-minutes left on the show, I am going to give you this. It is actually a case that Greg is working on.
There is a nice young lady. She is a single mum. She made just under $30,000 in 2016, if I am not mistaken. She has got a house that is free and clear. So, the issue is that she is between a rock and a hard place. If she qualifies for uncollectable status, she is going to have a lien on her house and a lien on her which is going to damage her credit. If she goes into a payment plan, she may be able to do a direct debit and not have a lien. Although, in this case, actually I think it is already there, so you can go into a direct debit IA if we are get a down order of $25,000, but she doesn’t really have the ability to afford it. Even though she has got a house that is free and clear, a lot of mortgage companies aren’t going to want to give her a loan because: –
- She doesn’t have the best credit
- There is a tax lien
- She doesn’t have sufficient funds, technically, to be able to afford an instalment agreement or (? 00:21:58)
So, it really puts you in a precarious situation. In this case, this nice young lady actually has a revenue officer. So, it is pretty involved, which oftentimes trying to explain these things to the clients suggests they don’t see it like that. You just need to be able to really understand what goes into these files. We try to explain what is going on to the client and why it is going on.
The gentleman who heard us on the radio last week, and that came in on Saturday, was explaining his scenario. He had an EA, and enrolled agent who didn’t really have much experience in tax resolution trying to help him out. That EA also happened to be the (00:22:37). Were you in the meeting when he was explaining that on Monday?
Eileen: No, I think I came in after that.
Lawrence: Okay. He was explaining that this EA basically dropped the bomb and became non-responsive. Now, Greg actually has inherited this file. The guy thought it was great that he heard us on the radio and that is where we are going to take the file back over from, and it works out great. It was a nice compliment. He was very complimentary of you, Greg. It has been a really nice week for these compliments to actually come down the pipe. It really makes your day when you hear from people that are so appreciative and so happy. It is stressful when someone has an IRS problem. It is inherently stressful. You hear about those dreaded letters. IRS. It makes your heart skip a beat sometimes, but when you have a team of people helping you who are on your side, it makes it a lot better. Here’s the phone numbers:
Eileen: 1-800 Tax-Levy
Lawrence: Yes, Levy really is my last name. We always tell you, “Don’t fear a levy, you hire a Levy”.
Check us out on the website: Levytaxhelp.com
We have updated the website a little, Levytaxhelp.com
Locally, we want you to come on in here. I was actually telling the couple who came in this week, I said, “Look, I like if you come in. We want to look you in the eye. We want you to see the office. We want you to be actively engaged. We like that”.
If you can’t, and let’s say, you are listening here in the Keys or in Miami and you don’t want to take that drive up from Miami, or you are listening wherever this booms out to, which is other States, sometimes, just give us a call. A phone call is all it is.
561 865 7800, 1-800 Tax-Levy
Greg, why don’t we wind-up the show here, taking about how people qualify for penalty abatement. I know you have had a couple of recent success stories. One was a gentleman who unfortunately had cancer, but you got literally about thirty-seconds to do it. Just explain how penalty abatement works and what you have to do to qualify.
Greg: Basically, you have to take what the IRS considers to be prudent measures to ensure that your tax obligation is paid. As long as you took prudent business measures and you followed the law as best you were able to, but yet things still got out of hand due to circumstances beyond your control. Usually, that involves things such as natural disasters like the hurricane we recently had, or fires and flooding, or in this case it was a personal disaster on the health-wise. The person was suffering from cancer and going through constant chemo treatments. He was unable to watch his business, so his business fell apart because he wasn’t able to do anything. There were overwhelming medical bills etc., One thing that reasonable cause does not contain is economic reasons, for example if you lose your job because of recession or a company goes out of business and you fall behind on your taxes because you were forced to take a job on a the 1099 and you didn’t meet your payroll tax obligation – your regular estimated tax estimations, you cannot fight on economic reasons.
Lawrence: I am just going to jump in here, Greg, or for a business that didn’t pay or file payroll taxes because they had receivables go bad. This is part of doing business. IRS doesn’t look at that as reasonable cause, but there are situations where the IRS will abate the penalty, but you have to meet what is called ‘reasonable cause’ criteria.
The Florida Department of Revenue, and certain States also have the penalty abatement criteria and that is what we do in the Levy office. The local phone number is: –
561 865 7800, or call free on 1-800-Tax-Levy
And, yes, Levy really is my last name. Let’s close out the show by saying in the great taglines that I came up with after all of the years of advertising agencies that we have hired.
Eileen: Don’t fear a levy, hire a Levy. You want a Levy on your side, not one against you.
Lawrence: Right, exactly. Well, Greg, thanks again for all of your efforts. You are just really a tremendous asset to the Levy team. Greg is in every weekend, believe it or not, and on Saturdays, religiously. You can always find him sitting at his desk. I pop into the office and he is there calling. Eileen, you have been just a tremendous asset as well. You have come on board, and we welcome you, and I want to say now that I am just a big Christmas season type of a guy and we want to wish everyone a safe and happy holiday season. We can talk about that for the next six weeks or so. The lights are up, it is the festive time of year and you want to spend time with your family and your loved ones. You don’t want to have to worry about my last name. You don’t want to have to worry about your bank accounts being levied. You don’t want to have to worry about all of those things. If you have an IRS issue, please call us.
And remember, you want a Levy on your side, not one against you. Signing-off for now, Laurence Levy, you got the famous and unbelievable talented Eileen and also Greg Mahaffey former IRS revenue officer of over thirty-years in the house. Enjoy the rest of the weekend, south Florida. You take care.