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. Guess what? We are now officially in the last month of the year. The home stretch of the year. The holiday season. So, happy and healthy holiday season to everyone out there listening. We want only the best of health. We want everything to be good for you and in order to make it good, if you have tax problems listen up because that is what we do, and that is what we fix. That is going to make you sleep better and enjoy the holiday season a lot better, knowing that you are in good shape or better shape than you were.
Again, welcome back to the show, the famous, the long-time now retired, but former veteran revenue officer. He worked at the IRS for over thirty years, Greg Mahaffey, welcome back again to the Levy Tax Help Show. Good morning.
Greg: Good morning, happy working on Saturday again, but that is what we do to help people.
Lawrence: Let’s talk about that because this week we have had a couple of good examples. Let’s rewind a little bit to last Saturday, one week ago. In the afternoon, I ended up getting a text message from an existing client which said that there was a referral for me. I ended up talking to the lady on Saturday and on Sunday morning at 08.30 AM she came into the office and said that she has a non-profit business and that her non-profit business owes over $1,000,000. The non-profit entity has a local revenue officer, and that officer was dealing with the her happened to be not really qualified in my humble opinion, representing this business that owes over $1.000.000. I want to explain that and talk about it a little bit.
The non-profit business owes over one million dollars and we are going to get through that and fix that. It is too early to figure out how, but Greg, you worked at the IRS for how long?
Greg: Thirty-two and a half years.
Lawrence: Over the years that you worked there, did you see a lot of unqualified people, meaning not knowledgeable people, trying to dabble and represent people in the tax resolution industry? Did you see that quite a bit?
Greg: I saw it all of the time. I would literally cringe and have to guide these people on because I tried to help them and teach them what to do, but other revenue officers would have taken a different approach and just taken them to the cleaners, and right them over the coals so to speak. Yes, there are a lot of people. Just because they may be a tax preparer, doesn’t mean they know how to do anything with the collection division of the IRS. They don’t know the processes and procedures. Even CPAs struggle when it comes to collection matters. Many CPAs refused to do anything as far as dealing with the collection aspects of a case. They are great when it comes to preparing complex tax returns, and complex deductions and horrendous depreciation schedules, but when it comes to the collections aspect they are in the dark. They are out of their league and that is why people need to hire us, or hire someone like us, but basically we would prefer you to hire the best in the industry when it comes to resolving your IRS problems.
Lawrence: Keep in mind, and the reason I bring this up is that this nice lady who was very mild-mannered and comes in on a Sunday, and we love Sundays. I really enjoy the Sundays. The weekend meeting focus for us is fantastic to be honest, we encourage it. She comes in and is very soft-spoken and she was just explaining that the revenue officer seemed to not believe her story. Seemed to not believe that she was telling the truth. There was a little bit of an underlying current, or a little bit of rubbing the wrong way that went on there, and our job is to come in there and just speak the facts. Just speak factually about the case. Look the non-profit entity owes over $1,000,000 which is a lot of money, no matter which way you look at it, but if you don’t know what you are doing, like Greg mentioned, and he worked at the IRS for over thirty years. If you don’t know what you are doing, you are just out of your league. You don’t know how to navigate this. As Greg said, we get a lot of referrals from CPA firms across the country actually, bankruptcy lawyers send us business, CPAs who are intelligent and not because they are a great CPA but because they know their limitation or area of expertise and they send us referrals. In fact, just this week, it was on Wednesday afternoon, we had a phone call with a client of ours that owes currently about $250,000 and unfortunately they are going to owe again this year. They are a new client and they are going to owe it all again. It is somewhere between $200,000 and $400.000 and their CPA, who is out of State, said that these are the numbers they think they will owe from a projected net profit. When all is said and done, it is going to be mighty close to another half of a million dollars. On the phone, this CPA said, “I am not anywhere remotely specialized in tax resolution” and that is why you need a company like ours that deals with these things. Greg, when you would run into that, were the folks that you dealt with as power of attorney, they could be lawyers or CPAs, or enrolled agents, but just not trained in tax resolution. Sometimes, I would presume that they took a really aggressive posture because they were compensating for their lack of knowledge by being aggressive, or they ended up just simply not knowing and because you are a good guy when you were at the IRS and did the right thing, and you are good guy now, you tried to help them through that, correct?
Greg: Correct. In fact, I had to train many an attorney or a CPA in exactly what is expected and what is needed to fix a situation. Again, I tried to help people but other revenue officers would take advantage of it. In fact, they would have taken advantage of the situation and started levying the jeepers out of them instead of addressing the problem at hand. Usually that involves current compliance so we have to go down to the basics. We have to fix the source of the problem after we identify the problem. Once we fix the source of the problem, then we can start looking at how to get the back taxes resolved.
Lawrence: Fixing the problem and stopping the bleeding, and the non-compliance was a really critical component of any case resolution. Greg, when you jumped on this case that we literally talked about on Sunday, which is great and I thank you for always being available, and this week alone you have talked to that revenue officer multiple times. Actually, I am going to read a letter that came in the mail yesterday, Friday. It read, “Dear Mr Mahaffey, As you requested on the phone, please find enclosed a copy of the 433B for ‘X’. I have discussed the case with my manager and they have agreed to allow additional time until ‘Y’ to file the offer and compromise and/or request or other options”.
They gave you what you wanted. They gave you almost six-weeks of additional time to get our feet wet with the file and figure out a game plan, albeit we have the holidays in there with Christmas and Hanukkah and New Year, but ultimately that is what happens. You have to have a reasonable time to get yourself activated with a file. I think that revenue officer even mentioned to you that the person she was dealing with didn’t appear to have the necessary skills set to handle a tax resolution case. Did she say that?
Greg: More or less in those words, of course.
Lawrence: Again, IRS get it and they don’t get offended when you hire a professional. Oftentimes, you always take the approach, Greg, that you are here to fix the problem. Let’s work out a solution, and that is how you worked when you used to work at the IRS. So, your case approach is welcomed and well received by the IRS oftentimes. Is that right?
Greg: Most of the time. Occasionally, you do get someone that is very hard core at the IRS who thinks that they are God and that is when you can run into problems. That is why you need a professional who will stand up for your rights and not be afraid to go down to the trenches, to make the complaints and to go to appeals. It is standing up for clients’ rights and that is why you need us.
Lawrence: Right, and unfortunately, sometimes you do. It is awkward. We don’t like to, as a matter of practice, go and verbalize a concern. I won’t go so far as to say make a complaint, but there has been plenty of occasions where we know the proper channels, the protocol, the hierarchy, and who you have to call in order to basically achieve what you want to achieve, and it does take a little bit of persistence. It does take some tenacity, it does take doing these things to sometimes get the end result that is, quite frankly, justified. It is only fair and oftentimes, Greg, before you started in the private sector, you probably didn’t realize how frustrating it is, and you have gotten frustrated with revenue officers, with reps on the phone on ACS, and you happen to get frustrated probably more than you would have thought. Maybe not, because you worked there, and each person is individual. You mentioned, you could get a hard-core very determined and aggressive pastured revenue officer on the other side. Unfortunately, when you get scenarios like that it becomes a problem and it becomes frustrating, but over your years, you have been able to work around that with your approach. Why don’t you explain to everyone about the approach? Before you do, let’s give out the phone number as we are almost half-way through the show and we haven’t given it out.
Local 561 865 7800 Call free 800 tax-levy
Yes, Levy really is my last name. Greg, how do you approach a file?
Greg: I approach a file by firstly having a long discussion with the client. I have to see where the case is at with the IRS. Is it sitting in the queue, is it in a holding tank waiting to be assigned, is it in ACS? Then, how did the client get into this problem and what is causing them to continue to have a problem if they are still having a problem. Maybe the didn’t have enough taxes withheld if they are a wage earner or self-employed and they don’t know how to make a tax payment. They simply need to be sat down with to go through everything and educate them on their responsibilities and the easiest way of developing a solution. Once I have a solution worked out and once I have the source of the problem worked out, I will call the IRS and let them know about the problem and what we have done to fix it. How we have effectively stopped the bleeding as we call it, staying current, and never going to have tax problems again. Now, how do we fix the back taxes? The client cannot full pay his account or can’t get a loan. The client may not be able to make payments. The client may be having medical issues. I have to take into account all of the different factors and that is what makes everyone’s case individual and unique. After I have taken that, we make a proposal on how we are going to get this client out of this mess. The client may qualify for an offer and compromise, or an installment agreement, maybe the client is in a hardship situation. Maybe they have a child who is battling cancer and all of their time is being taken caring for their sick child.
Lawrence: God forbid, that is horrible.
Yes, but we have seen it all here in this office. Maybe the client, way back when, was called up on reserve duty and was shipped overseas. When you are on active duty you usually end up taking a pay cut. I know I took a pay cut back in 1991 when that happened to me.
Thank you for your service, you were in the Gulf War and we appreciate your service to our country, Greg.
So, anyway, that is what we have to do. We have to approach it and hope that we get someone at the IRS who is willing to listen and to work with us. That is the approach that I take. Maybe you do get someone who doesn’t want to work with you and it is their way or the highway, we stand up for our clients’ rights and we make sure that the best deal possible gets done.
Greg, we were talking earlier this week. There was a file and the client owed about $800,000 and was able to file an offer and compromise and they were able to get it to about $55,000. I will try to look this up as we are talking. Again, the revenue officer who had that file didn’t think in a million years that they were going to get an offer and compromise through. It is very refreshing that there is a reasonable solution that is going to work itself out here and I think you came in when I was explaining to the client, and congratulations on how it is going to occur. It really is a very nice way to try and resolve something. It was actually on the 28th. The offer and compromise was for years 2005-16. So, for literally a decade, this gentleman unfortunately owed but we have now corrected the problem and the offer and compromise on what I think is about a $700,000 debt is just under $59,000. Again, they paid 20% down and they have five months to pay the balance, but this is one of those pay on the dollar files where the revenue officer didn’t think in a million years and wanted to continuously use my last name, levy. Greg, you actually had some involvement on this file if you recall, and again, this guy could not be any happier. Everyone should be happy. The client should certainly be happy because he is able to start with a clean slate. The IRS should be happy because they are finally getting a tax-payer that has had literally ten years of non-compliance finally now for 2017 being in compliance.
Greg, as a revenue officer, you didn’t have anything to do with the offer and compromise process, even though you did work in that group for a time, but what is a revenue officer’s job? What should it be as far as processing the offer and compromise? Are they supposed to be the gatekeepers of the offer? I know it has turned into that, but I don’t think it is what the intention is for. The offer and compromise is worked through a different unit and not through a revenue office, but what, in your opinion, is a revenue officer’s job when it comes to a client wanting to file an offer and compromise?
Greg: The revenue officer is not supposed to be scrutinizing the offer. The revenue officer’s job is limited to completing a form that has to filled out with their own input into the offer process. The revenue officer is not supposed to give any kind of opinions per-se. In fact, the revenue officer’s recommendations and so forth are noted and have to be approved by the revenue officer’s manager and reported to the offer group with the offer itself.
Lawrence: Unfortunately, you have lots of revenue officers who have a very negative attitude which is reflected in their revenue officer reports.
It is the 657 to be specific.
Greg: Yes, that is the form that they are required to use, and I have run into it on one other case that we had.
Lawrence: Recently, a couple of months ago, if you remember, right?
Greg: Yes, and I had to go through three levels of management before I finally got the revenue officer to give a straightforward approach and a report, because before that the offer group was taking the revenue officer’s report and rubber stamping it, and refusing to process the offer and compromise. At the time, we gave a legitimate offer. We gave an offer of $100,000 more.
It was $130,000 and the guy owed about $600,000. This was not even 90 days ago, by the way.
Greg: They thought that was a frivolous offer.
Lawrence: Which was a joke, which was horrible.
Greg: Again, I had to go through three different levels of management and finally they agreed that I was right, and the revenue officer was wrong, he was injecting his own opinion and not being straightforward and objective like he is supposed to be. So, we got that offer process in and it is currently being worked right now by an offer specialist, regardless of what that revenue officer tried to do to us.
Lawrence: I will tell you, the amount of time that was spent over the course of two or three weeks was absolutely astronomical. What it taught us, which has unfortunately happened for years and years, was that sometimes the IRS revenue officers become the gatekeepers of offer and compromises which is, quite frankly, wrong. It is just not right. Greg had to spend so much time, the power of attorney that was actually handling the file was impacted by hurricane Irma while this was going on and it was just really an unbelievable chain of events. Greg, again, it goes to your persistence, your tenacity, your knowledge of the IRS system in going through multiple layers from the RO to the GM, and in this case, you even had to get what is called a TM, territory manager involved, and they agreed with you. The territory manager agreed with you and had to redirect their staff to go back and adjust it and the file had to be saved which is just an administrative and logistical nightmare, all of which was caused by a revenue officer who just wanted to e unreasonable on a valid offer. Greg, when you were a revenue officer and you saw someone submitting an offer for $130,000 and they had to pay a non-refundable deposit of 20%, why would someone waste $26.000 just because, it makes no sense. Just on that questions argument alone, you would think there is some legitimacy to it. Isn’t that crazy, Greg.
Greg: Oh, yes. It is definitely insane, but again, some people have their own prejudices in their positions and we had to overcome that, and luckily logic over-ruled the day and our client got his offer considered and we are working on it right now with an objective offer specialist.
Lawrence: It is one of these things that makes you frustrated. You were dealing with a gentleman probably six months ago, before the hurricane. Do you remember, he had cancer and there were some circumstances? I think, he owed about $250,000 and at the offer level they didn’t want to see your position. They didn’t want to listen, and you went to appeals and were able to get that approved for just under $50,000?
Lawrence: I know you saved the client almost $200,000. Again, I want to be very clear that this doesn’t always happen like this. An offer and compromise are a program set by the IRS and certain States have it. Michigan has it and other States do have it, but in order to qualify you have to basically have no disposable income, and you basically have to have no equity and assets, or very little. Not everyone is going to qualify for something like that, but if you do it is a phenomenal tool to use so that you are in good shape with the future of your life, and you just have to keep current. Technically, you have to keep current for five years. We tell the clients that they have got to keep current for the rest of your natural tax paying life, but for the purposes of what we do, it is just one of these things that you just have to keep current with forever. We tell clients, current compliance is doing your book-keeping, paying your payroll taxes on time, filing and paying on time and these are things that are all needed. It is a very critical part and it is absolutely important. It is very critical and that is what we do here in the Levy Office. Believe it or not, we do some things that other firms do not do. When we work our cases, we want to fix their situation permanently. We don’t want the client to have to come back to us to have a case reworked again. We want to make sure our client never has to come to us again. We fix it right the first time. It doesn’t always happen, but that is our goal. If you get some other resolution service, they will beg you to come back. They won’t necessarily address current compliance because when you come back you have to pay them all over again. We work differently than other places. We want to fix it right the first time.
I also want to bring up that tax resolution, but we had a client that was from Florida and happened to be in Michigan this past week and came into the office. They ended up showing us a tax return for 2016. The person who signed it made typographical errors on the tax return, there was improper grammar that was used, there were line items that weren’t perfected the right way and things that were just done fundamentally and cosmetically on the tax return that were just wrong. Unfortunately, we asked if this person was a CPA, or a DA, we didn’t see a comma next to their name, but we still asked. The client said, “No”. One of the things that we like to make sure that everyone knows is, when you are preparing tax returns you want to have someone qualified. You want to have someone who knows what in the heck they are doing. You want to have someone who knows what you can take and what you can’t take as deductions and what is kosha and what is not. You want to make sure that you have the tax return presented in the right way. What should be capitalized in the right spot, there should be a business tax I.D. as opposed to a social security number and you want to make sure that it is done right. That things look right and are in the right spot, and on the right line. Look, mistakes happen, everyone is human. My wife tells me all the time. I bring home the wrong grocery order from the grocery store. She tells me to get paper towels and I come home and bring toilet paper because I didn’t read the text right. Mistakes happen. Greg, not with you though. What your wife says, you do, right?
Greg: I try to. We are all good husbands, of course.
Lawrence: We are all good husbands and we all have good wives. I love my wife. I love my kids. We all make mistakes, but on the tax, return it was very obvious that there were errors and mistakes and things that we would have done differently, and when we brought it to the attention of the client he said, “Wow, you are right, I didn’t look”. So, look at your tax return. Look at the tax return and see what it says. Look and see if it is spelt right. Look and see if you name is right. Take a minute and look at your tax return and proof your own tax return. Don’t just arbitrarily sign it without looking, that is crazy. So, as we come into the end of the year, this is the time. If you listen to the show and people say they have tax problems and listen to the show, but if you listen to it just because you want to hear it, this is a time when you should tax plan. Take some time out of your day and plan your taxes, and plan for what you could do in order to try and save money. Sometimes you can do some things, but sometimes there is nothing you can do, but at least take the time to evaluate and do a little bit of tax planning. It can’t hurt.
Let’s wind up the show today. I want to bring one last thing up. Greg, you recently had a case where there was a business that owed about $120,000 worth of civil penalties. You were able to get that 100% wiped out. So, you saved $120,000 or $130,000 and the client actually came into the office in Delray this week and that was one of the book-keepers and one of the accountants. She happened to be in the Florida neck of the woods and it was great, but Greg, why would that revenue officer not just abate that penalty? Why did it have to get through to appeal? You don’t have to answer the question, but my point of bringing that up is, as a revenue officer they didn’t abate that penalty. The appeals division did and again it was a lot of money. It was $130,000 that was owed actually, quite a bit, and it was just a big scenario that you were able to get through. So, I want to give you a shout out and I really want to go ahead, and I want to go ahead and bring that out, what great work the Levy Office does. It is a team effort. Greg, we have administrative assistants, secretaries that we like to call admins. They really help out. The Levy team has such a huge deep bench.
The phone number, as we round out here at the top of the hour is: –
561 865 7800 or 800 tax-levy
Yes, Levy really is my last name. Look what we have talked about today. Clients that owed over $600,000 and we had an offer and compromise for $59,000. Another client that owes over one million dollars and we still don’t know the outcome yet, but we are dealing with it. Another client who owed $240,000 and settled for just under $50,000. Penalties of $130,000, all of these things can get fixed. You just have to be able to navigate and you have to be able to qualify. It doesn’t always work like that, but they use disclaimers, let’s be real about it. If you have tax problems, there is a solution. It is just a matter of what you are going to qualify for. Call us.
Yes, Levy really is my last name and always remember, you want a Levy on your side, not one against you, don’t fear a levy, you hire a levy.
Greg, thanks very much. Give me a call and I will speak to you soon if you have tax problems.
Greg, thanks again. Call us if you have questions, we are around. Greg, is in the house on the weekend. We will talk to you soon. Bye bye. See you soon.