Levy Tax Help Show - Transcript - 11/23/2017

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Catch Levy & Associates on the radio Saturdays on Big Talk 850 AM WFTL Southeast Florida hosted by Levy Tax Help’s Lawrence Levy.

 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 had a great ‘Thanksgiving’.  This is the post-Thanksgiving show and on the show today, besides having a great line-up for some really great case success stories that we have had, we have a guy that used to work for the IRS for over thirty-years.  He is a veteran, and not only do I mean veteran, but a veteran of the military.  Greg, thank you for the service because it was Veteran’s Day, he was in the navy, but a veteran revenue officer that was at the IRS for over thirty-years, Greg Mahaffey, how was the Thanksgiving?

Greg: It was pretty good.  The cats are happy, the dog is happy, the family is happy, everyone is happy and well-fed, and I am back to work here on Friday and Saturday, post-thanksgiving again. 

Lawrence: There you go, in the Levy house we don’t have cats and dogs, but we do have a goldfish.  If it’s raining cats and dogs, and the IRS is raining down on you, we are here to be your tent, your umbrella.  We talk about rain and there has been a little bit in South Florida.  It has not been too bad lately, we are past the hurricane and the rainy season, thank God, but if the IRS is giving you a hard time, lately because of the hurricane, the IRS is actually in what is called an O-Freeze.  This is the fancy term for a disaster freeze they are in.  Greg, can you explain what an O-Freeze means so that everyone can understand that?

Greg: It basically freezes all IRS active collection actions.  They cannot levy, they cannot lien, they cannot do anything unless it is very extreme circumstances that dictate that assets are being dissipated. 

Lawrence: In other words, for 99.999% of the population out there that have tax issues this means their accounts are hereby frozen until the end of January, I believe.  So, anyone that is affected in the radio area which is the entire State of Florida, you guys have got a break as the accounts are frozen.  This is time for you to come to us to get the help needed, so that when the O-Freeze is lifted, and the IRS starts going berserk and sending out mass levies and taking enforcement actions, we are there for you.  We are there to protect you.

The local phone number is – 561 865 7800, or call free on 800 tax-levy  

We are here in Delray Beach where we want you to come in and see the office on Federal Highway.  We are about half of a mile south of Linton on the east-side of the street, what I always call car dealership row, in Delray Beach.  We are right across from the Toyota dealership, we are right next to Enterprise Rent a Car.

As Greg was saying, when this O-Freeze, which is their disaster code and no collection action is being taken, none of my last names are being used, no levies, bank levies, wage levies, receivable levies, liens are not getting filed.  So, the lien and levy, my last name, the verb, none of that is happening at least until the beginning of February or the end of January.  We still have a couple of months left to be proactive.  However, while that O-Freeze is in effect, appeals is still actual working cases, on a case by case basis.

We had a client right here in south Florida.  Greg was not involved in this file, but I did want to give this example and ask Greg to shed some light on it and give us his two-cents, because he used to work at the IRS for over thirty-years.  This was a gentleman who owed north of $200,000.  I don’t know the exact amount.  I am not going to try and find it.  We filed an offer and compromise for this gentleman and as it turns out the IRS is going to accept, as best as we know, an offer and compromise for $17,000 against his $200,000 debt.  When the client came to us there was quite a bit of unknown in the equation and it went back and forth with the offer specialist, at level one we will call it or the first go-around, and then after that it went to appeals and a lot of back and forth with appeals again.  Unfortunately, it literally took from August 2014.  The gentleman owed $267,000.

Now, I am going to fast forward to November 20th.  One of the POAs in my office who has taken over the file, who used to work at the IRS like Greg, her name is Clair Coffee – like the coffee you drink.  She received a call on Monday the 20th saying that the amended offer and compromise, which is going to be for $17,000 has been approved by managerial and also district council, and we should be getting an acceptance letter.  Now, right this second, we don’t know exactly when we are going to get the official approval, but this was so much back and forth, and back and forth, I can’t begin to tell you.

Greg, one of the things we have talked about this week, and before I ask you my official question, we have another client that used to work at a police department but is now retired, her husband was diagnosed with cancer in 2012 and in 2008 they filed bankruptcy and in 2009 they adopted three of their grandchildren – a three-year-old, a five-year-old, and a six-year-old back at the time, the husband was diagnosed with cancer in 2012 and eventually passed away, and now this widow owes the IRS just over $30,000.  The case has been assigned to an appeals officer.  This lady is in Florida.  A lot of these appeals hearings are phone calls.  There is nothing, generally speaking, in todays IRS world, most of it is done over the phone.

When we had this call with one of the POAs, actually Claire Coffee who I just mentioned who handled the other file, we said that there is some discretion that is involved in this file.  Will this appeals officer accept the penalty abatement request?  The kids that were adopted had medical issues, psychological issues, there is documentation.  The husband passed away.  He had been diagnosed with cancer.  How do you tie or connect all of those facts to why this lady owes for 2008 – 2012, how does the cancer of her now deceased husband tie in, how does the bankruptcy tie in, how does the fact that she adopted her grandkids because the parents were not fit?  How does all of that tie in?  On the phone, Claire, who used to work at the IRS for over thirty-years, like Greg and in the same capacity as a revenue officer, how does the discretion tie in?  Where you may get someone at the IRS who is going to literally do everything they can and try and do backflips and bend over backwards to try and help, you may get that, but you also may get someone who is pretty hard-nosed and doesn’t really care about these facts and circumstances that lead to, what we believe is a reality-base.

It is rather frustrating because, how do you explain that to the public, Greg?  We have talked about it on the show for years as, you go into a restaurant and you can get a waiter or a waitress who just has a chip on their shoulder, the food may be good, but the service may not be great, or you go in and someone is just taking along time and it is just part of being a human being, that you don’t get everyone who is always rosy and friendly all of the time, but when you worked at the IRS you were pretty consistent in that you were tough but fair, and you sat by, and even now in your post-IRS career as an advocate for tax payers, as a power of attorney you see it.  I hear it, you sometimes can be elevated in your voice, your volume is turned up a little bit, but how is it that there are things in the IRS that are just so discretionary like that, it seems so unfair that the rulebook has a lot of discretion.   I will explain a little bit about how it works with the State collection side of it in a minute, but how is that, or is there just no answer and that is just human nature, Greg?

Greg: That is basically human nature.  Just like you said.  You can get a cop that pulls you over for going two miles per hour over and you get another cop who pulls you over for doing fifteen over, and then he determines why you did this.  Maybe you are rushing your kid to the hospital or maybe some other emergency, and they may let you slide.  That is human nature.  You get some people who have a chip on their shoulder and they feel as though they have to save the country by nailing everyone possible and you get other people, like me, who take reality into consideration and try to reach out to help people.  Again, it is human nature.  You get good people, you get bad people, and it is just the nature of the beast, I’m afraid because in that line of work it is all about the discretion and the authority and limitations, and someone’s personal preferences even.  Their own personal likes, dislikes, prejudices or whatever.

Lawrence: I want to add to that.  I will never forget this.  It was a few years ago.  We had a case where an offer and compromise specialist admitted that they didn’t necessary believe in the fundamental concept of an offer and compromise, but yet in a Hitchcock twist they are working in the IRS in the offer and compromise unit.  It baffles and blows my mind.  We had similar situations with State collections as well, but unfortunately, like Greg mentioned and we have talked about, the subjectivity, the discretion that the tax authorities have is, in my opinion, mind boggling.  I don’t say that a lot, but it just blows me away.  How many times you have to push back, you have to keep on being tenacious, and you have to keep on your persistence, you have to just keep on and on and in that first case that I talked about where the gentleman owed $267,000, there was plenty of time, many times, which is a very unusual comment for me to make, where most other firms, most other tax-payers (if they are trying to do this themselves, which, by the way you shouldn’t) would have been either given up, not known where to push back or how to push back and that you can come back with some kind of response, and that case would have just fizzled.  This one, in my opinion, is such a good success story for the public to recognise that you need to be able to know how to navigate through the IRS collections world.

By the way, in the Levy Office, we only deal with civil tax controversy, we don’t deal with any of the criminal side of it, but you really need to know how and which way to navigate through the system because there are a lot of twists and turns that can take a case down this road, or that road and you really need to know what to do.  That is why you want the most experienced team that you can possible get.

In the Levy Office, located right here in Delray Beach, come on in and meet our staff.  We have a very deep bench on the Levy team.  We have the former IRS revenue officers, Greg, who is doing the show with us, and Clair, who has been on the show with us, we have the attorneys, the CPAs, the former IRS revenue officers, all of which work collectively.  We also have enrolled agents.  Of course, we have account case managers and we have a tremendous staff, so after Thanksgiving, I want to say ‘thanks’ to all of my staff because it is the staff that really makes it great.  This isn’t about me.  This really is about how great my staff is and how great my staff is to get you from start to finish and to clean up your problem, and you have a guy like Greg, who in the years that you have worked for the Levy Office, I don’t think that you have missed all but one weekend of work and it is really incredible, your work ethics.  So, again, it is the time of year to say ‘Thanks’.  The holiday season of ‘Thanksgiving’, Greg, I thank you for everything, for your tenacity, for your case approach, for just the fact of knowing that you care, and you will actually advocate for these clients to make sure that they get the best and most equitable and fair resolution possible, and not every file is always going to end up like that, but I wanted to say, ‘Thank you’.

Let me shift gears for one minute.  This is another example of discretion that was involved.  This is a client that Greg worked the IRS side of the case for.  He didn’t work the State side of the case, but this particular client of ours, both are elderly, both have medical issues, and we requested a penalty of abatement from the particular State that we were dealing with.   We sent in the medical letters, the letters from the hospice and we had a whole set of documentation.  In the first round, the State said no and denied the relief which was unbelievable, but then the Levy Office pushed back, and we went to another division of the State and literally within three-weeks a different department within the State came back and granted some penalty relief.  Now, you ask yourself why?  How is that possible?  One side of the State or the IRS is going to say no, but the other side is going to say yes, but that is why you have multiple levels of appeals.  Greg, you just dealt with what is called a civil penalty for a business that had a penalty of about $120,000 – $130,000, do you know which case I am talking about?

Greg: Yes, there were about three of them that I did like that.  Each one was over $50,000 – $100,000.

Lawrence: This last one, and again, I would like to talk about this one.  It was a business that had what is called a civil penalty for not filing W2s and W3s.  We will call it $120.000 that was up there.  The revenue officer refused to abate that penalty.  So, what did you do?  You appealed, and the appeals officer did what?  I want that to come from your mouth, a former IRS revenue officer and a revenue officer who you actually knew for years, she refused to abate the penalty at all, but then in appeals you got 100% of it wiped out.  Now, how is that possible?  Why?

Greg: Appeals has a greater discretion than State revenue officers do.  Appeals can take in to account the handlers of the litigation.  In other words, what would happen with this case if we really pissed off the customer and took this thing to tax courts.  So, appeals have that possibility which they have to keep in mind when using their own personal discretion.  In this case, the appeals officer knew me very well.  I have actually known him for over twenty-five years.  I have worked with him.  He was in the same office as I was, but he was an appeals officer there.  So, he knows how I work in effect.  I make sure that my tax-payers, my clients out there stay in constant, good compliance going forward.  He knew that I had dotted my I’s and crossed my T’s and we lined up everything perfectly.  We got all of the other loose ends cleaned up, we got missing returns filed and everything was good to go, and at that point he was convinced that it was in everyone’s best interests to allow that penalty to be abated under reasonable cause guidelines.  So, again, it requires professionals who know their stuff, who can help guide a client through getting everything cleaned up and staying cleaned up going forward.

Lawrence: Again, just for us, it is a great victory.  The client is thrilled.  You are correct that we want to make sure that there is ongoing current compliance.  It is the critical component of any case resolution.  So, without being able to demonstrate that the client is current, you can keep the current, a lot of times the IRS is going to say, ‘Why should we do this for you, you are just going to fall off the wagon in a month, or two, or a year’, so part of our case approach is to make sure to the extent that is humanly possible that the client will forever remain current – file on time, pay on time, and not further bleed, we want you to stay current.  That is really one of the case approaches that the Levy Office takes and I will tell you that, as a revenue officer, when Greg worked at the IRS for over thirty-years, that was his philosophy, how can we stop the bleeding, how can we keep you current?  That is one of the things we really hit home on, but getting back to the discretion.  All be it, frustrating and all be it to shock it up to human nature, that is just part of life.

When you go into court and you get a bad judge, or a judge that is going to be a stickler, or a judge that is going to favour one or the other, whether that is right or wrong, it is just part of it.  Like Greg said, you get a police officer that will pull you over for doing two miles per hour over and give you a ticket, or you get the guy who pulls you over at fifteen miles per hour and says, ‘Merry Christmas and happy Hanukkah and please slow down next time’.  Again, that is just discretion and I will guarantee you that when that police officer pulls you over they are going to check if you have had a speeding ticket in the past few years.  If so, have you had ten, one, because if you show a pattern, in my opinion which I think is only fair, logical and human nature, it is going to say that they have already given you a break, you had a ticket, you probably had more than that.  So, your history goes into a little bit of the thought process.  It is the same thing, to some extent, with the IRS.

Let’s give out the phone number one more time.

Locally 561 865 7800 or call free 800 tax-levy. 

I want to also talk about what Greg mentioned about the specialty that we provide.  A lot of CPAs don’t know what to do and how to do it.  Greg, when you were working there, did you come across the practitioner, whether it be a CPA or a lawyer that really didn’t even know what the terms were, and you are thinking to yourself, ‘Oh, my God, I cannot believe this person is trying to represent this tax-payer’.  Did you see this a lot over your career?

Greg:  All the time.  Just because the person may be an attorney, or a CPA, it doesn’t mean that they know what they are doing when it comes to collection issues with the IRS.  Especially, when you start talking about brand new attorneys who are fresh out of law school.  They think it is the easiest part of law that they can actually practice, let’s go for it. 

I ended up having to babysit a lot of these people back when I was a revenue officer, unless they were really arrogant or a jerk, I would help them along with the processes and procedures and what needs to be done, and what the proper method of getting the accounts fixed was.  You might not get a revenue officer like what I was, you might get a total and complete jerk who would take advantage of that person.  Again, the trick is nowadays, make sure you have your ducks in a row and you get someone who know what they are doing.  Just because it says ‘attorney’ on it, does not mean that they know what they are doing.  Many attorneys cannot do divorces, or medical malpractice, the law field is very specialized nowadays.  Some attorneys only do tax court issues, which is mainly exam or criminal investigation, but they don’t know squat about collections.  You need an expert that is a collection expert. 

Lawrence: I want to also bring up something that is very sad along those lines.  It is sad in just the way it is horrible.  We had an attorney who wanted to take over a file and it was for a gentleman that hadn’t filed taxes in many years.  The attorney had his paralegal prepare returns for ten-years of what was a schedule C.  Apparently, the returns were sent in and when we were trying to discuss the file with this gentleman’s attorney, we said, ‘Have you seen a 1058?’.  He asked what a 1058 was.  Then we asked if he knew any of these prior year assessments are SFRs and he asked us to please stop talking ‘Greek’ and speak in regular English.  Now, a 1058 is a final notice.  It is a very common IRS form letter that is sent out when you are in collections.  The acronym SFR is again a very common term which stands for ‘substitute for return’.  In my opinion, that is like going to your dentist and saying to the hygienist, can you please give me some dental floss, and they ask what dental floss is.  It is that common a term, the 1958 and SFR, and it is like asking the dentist of hygienist for some dental floss.  Can you imagine that this guy, who doesn’t know the basic collection terminology lingo, is going to navigate through all of this?  It is really shocking and amazing to me that you are going to get someone like that and that is why you really want the professionals on your team and on your side, that know what to do.

I am going to give you another case here that was right here in South Florida.  The gentleman owed the IRS, as far as IRS says, over $100,000 and because he owed over $100,000 we went back to them.  He said he didn’t owe it.  He was a cheque signer on a corporation that he had no control over.  He said he was just an innocent book-keeper.  Well, this IRS revenue officer, locally here in South Florida, asserted what is called ‘trust fund’ against him.  It was a few years ago.  Unfortunately, at the time, he thought his boss was handling it, don’t worry, and low and behold a couple of years later he is at a point where he is assessed at $100,000 for payroll taxes.  Why the revenue officer didn’t do their due diligence, why they though this guy should be held liable, unfortunately is water under the bridge.

The good news is, we went back and filed a (? 00:23:13) liability and offer and compromise and just recently, Claire was again able to get the IRS to agree that he shouldn’t be liable, and he is going to get an accepted offer and compromise, as of the end of the show we don’t have the official acceptance letter yet, so it is not official.  We hope it goes through, but it goes to show you again that, here is a guy that comes and says, ‘You owe $100,000’ and he advises that he was just the innocent book-keeper.  So, why would the IRS, and I am asking Greg, why would they not do their homework back then?  We see this all of too often where, despite what appears to be very clear and clean, and non-foggy distinctions between who should be liable or not, IRS just seems to sometimes want to throw whatever they can at the wall and see if it sticks, and then say to the client or the tax-payer, ‘You want to fight it, fight it, appeal it’.  It just doesn’t make sense to me why it could be an hour or ten minutes of time to hear and listen.

Again, it is just mind boggling to me why that happens.  Greg, do you have any insight on that, or is that just personality?

Greg: It is partially personality, but the main reason why some of these ridiculous assessments get made is usually from lack of communication.  Maybe at the time there was no-one left in the business, and the business was long gone.  The revenue officer only has basic records to go from and revenue officers would have to summon for bank records.  If someone had a company that fell out of business is nowhere to be found, the people are nowhere to be found, but when they start summonsing and getting copies of records to reconstruct what happened, maybe that owner of the business only put the book-keeper on the signature cards, even though the owner of the business was telling the book-keeper what to sign and how to sign it.  Individual book-keepers have not rights or ability to direct payment.  The revenue officer doesn’t know this information.  Maybe the revenue officer took a shortcut and just assessed everyone like that to sort it out.  Ideally, before those assessments are made, a manager has to review and approve what is called a form that is needed to assess these people.  Then, they send out the letter advising that they intend to assess you and you have to wait for sixty-days. 

Lawrence: Then, you are supposed to respond.  This guy owed from 2011-2013, over $100,000 allegedly.  I just want to tell you that as of November 15th, Wednesday at 02.36 PM, the offer and compromise appeals officer said, ‘Manager and council have approved this, and it has been sent for acceptance of the offer’.  The client is very happy.  It is just a really nice way to end it, as we wrap up this.  I want to read you one more email that actually came in recently.  It is really a nice email that came in on Wednesday 22nd at 09.09 AM.  This is from a client that owed about $80,000 to the IRS and it was sent to Clair and myself, and one of the other case managers, Lance.  It is a very simple, short and sweet mail.

“I just wanted to say, thank you for your services.  It has been a pleasure working with you all.  Wishing you all a safe and happy holiday.”

Quite frankly, the little touch, that two sentence emails really make our day.  It really brightened up my Wednesday morning and it really made my day.  So, I have got to tell you, all of the hard work that we do and everything we do to make sure our clients are okay, is great.  What a great show again, Greg.  Wrapping up for a Thanksgiving way to go on everything.  Clients are saying, ‘Thank you’ and it is just a great way to end it.  Thankyou emails, Thank you, Greg, happy holidays.  This is the time to make sure your IRS problems are all fixed locally.

800 tax-levy   Local phone number – 561 865 7800

Signing off for now, Greg Mahaffey and Lawrence Levy at the Levy tax help show.  Enjoy the rest of the weekend, South Florida – you take care!

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