Rich: So, before the break, we were talking about the government shut-down. I should put it this way, part of our debate is over spending and yet the government shut-down is costing billions. The thing that I don’t understand, and I put this on Face Book and if you are friends forgive me for repeating myself, but a lot of people reacted to this, who cares if the federal government is shut-down on the weekend? They were making such a big deal in the main stream media on Saturday and Sunday. ‘The government has shut-down, shut-down, shut-down’. The only thing that they manned over the weekend were these federal parks like the memorials that you had to get a ticket to go inside. One of the other things that was shut-down was the phone. The switchboard at the White House. If you call the White House, “We apologize, but due to the lapse in federal funding we are unable to take your call”. Now, the last time they had to shut-down, I don’t think the White House switchboard shut-down, but what that means is the switchboard operators were furloughed and sent home.
Here is the thing. The people that have been furloughed today, that are not working, or the military. A lot of the democrats are trying to scare the hell out of us by saying, “Oh, the military is not going to get paid, so they are not going to fight…. blah, blah, blah!” That is not true, and while the military is not getting paid, all their pay goes retro-active. So, they don’t miss a dime. The difference is that they are not getting it right away to pay their bills. That is a big problem. The fact that congress voted for themselves to get paid during this kind of situation, that also bothers me.
One of the questions that a lot of people have is, what happens to organizations like the IRS? Is the IRS in business? Now, there has been two different stories that have been told and I want to get to the bottom of it. So, I asked an expert, my friend Lawrence Levy from Levy and Associates to join me today, to kind of break it down and find out what is real and what is not. Lawrence, how are you?
Lawrence: Hey, good morning. How are you?
Rich: I am doing good. I am just a little confused.
Lawrence: At least you and I are working today, right. We are not shut-down, are we?
Rich: We are not. That is true. You know, I was thinking last night that, technically, I work for Alpha Media, but Alpha Media is regulated by the FCC which is shut-down. So, did I have to come in today?
Lawrence: You know, unfortunately, I don’t have those luxuries, although we are regulated by the IRS to some extent, but I am here, and you are here. So, that is all that counts, Rich, but to answer your question, there are a lot of things going on on-line. From what we can gather and, believe it or not, we may not know a heck of a lot more than you know, but, if the government remains in a shut-down period, or if there is a temporary band-aid that kicks the can down the road until the 8th February, generally speaking, here is what the partial list is going to be that will impact everyone in refunds.
Lawrence: For example, no tax refunds will be issued. It is coming right off of a website. Whether that is true or not, we still don’t know, but when E-filing, the electronic filing deadline starts to kick-in to do a refund, and if you have done it, it would usually come pretty quick. So, your refunds are going to be impacted.
Rich: Any amended tax returns are going to be put on ‘hold’. You won’t have anything going on with the automated system. So, calling the IRS to try and get help or answers questions, that is going to be put on ‘hold’. Now, the E-filing, the electronic filing of tax returns should still go on, but many people file to get their refund. So, you can file, but your refund may be on ‘hold’. So, let’s hope that things change a little bit, but for right now, as of today, a lot of the IRS is actually in a ‘holding’ pattern, and from what numbers are telling us there is about 35,000 employees who would be retained during the shut-down. Well, that is about 43.5% of the total employee populations. There is supposedly going to be some people manning the phones and staffing the phones so that people can get answers, but like you mentioned earlier, just before we came on the air, with the Whitehouse being shut-down a lot of it is still in flux. So, refunds are going to be a problem, but for those of you listening in this audience in South Florida, the collections division of the IRS has been on ‘hold’ due to hurricane ‘Irma’. That is supposed to end as of the end of this month. It is what is called the ‘O-freeze’. It is a collection ‘O-freeze’, a disaster freeze.
So, right now. Even though some revenue officers, locally in the Plantation Office, the West Palm Office, the Miami Office are supposed to be working today, and actually my staff have calls set with them, in fact, one was supposed to be at 10 o’clock this morning, they are not in today. They are off. They are furloughed. So, what is going to happen is unknown, but refunds are going to be impacted and, hopefully, we can still file, and, hopefully, the legislatures out there and the legislators get their act together and keep us back in business.
Rich: Right, we are talking to Lawrence Levy, from Levy and Associates. Here is a good question for you. I owe some money to the IRS, or let’s say I owe, I should say. Can I hold the cheque and not send it in today?
Lawrence: I am not sure we can give you that advice, to hold the cheque and not send it in. You should be sending it in ‘timely’ because the tax-payers are not going to get a break. Really, anything that should have been paid or due, still send it in. If anyone listening has an installment agreement, and if anyone listening is in the middle of an offer and compromise, and if there are still pending actions, we are telling all of our client that they still have to meet those deadlines. So, I would not bank on a shut-down to give you a little bit of extra time.
However, strategically, if you owe the IRS and you have a problem, or you are getting audited and you haven’t filed in a while, now is the time to take advantage. Not only of the ‘O-freeze’, but also while the government is in shut-down, now is the time to strategize with your tax professional, or make sure you hire a reputable firm that is going to help you navigate through an IRS problem. If you have money though, Rich, send it in. Do not play games with it. Let’s play it like they are open and active for business. For all we know, at 1 o’clock, that vote may happen, and they might kick it back and flip the light-switch back on.
Rich: Let’s just say. I mean, let’s speculate for a moment here because if they kicked the bucket down for another couple of weeks and some of this happens again, then we are closer to April 15th. On April 15th, the government shut-down, what happens then to somebody that is supposed to file a tax return? Are you still responsible to file the tax return if the government is going to be shut-down?
Lawrence: Just as we can tell from the website, to answer your hypothetical question, and if this is still on-going come April 15th, yes, you are still going to be subject to file your tax return. Absolute.
It is worth noting that while there are contingency plans in place, things are not set in stone. When this government shut-down happened five years ago in 2013 a lot of changes were made at the last minute, but if this continues, or if it happens again and there is a temporary band-aid that gets ripped off again, come the middle of April you still are going to want to file your tax return on time.
The question is, if you have a refund, how long will it take? Now, if there is any lag, is the processing of refunds going to take a little bit longer than it normally would take. A lot of these are unknown, but keep an eye on it, listen to the Rich Stevens Show, call the Levy Office if you have questions specific to your particular needs, and make sure that you really stay on top of the news and what is going on because, look, we are in tax season. A lot of people want to file their returns. A lot of people bank on their refunds, and for right now, that is on ‘hold’.
Rich: We are talking to Lawrence Levy, from Levy and Associates. I don’t know if you remember, but in 2013 you and I had this same conversation, but it was a lot clearer at that time about refunds because they were being sent out in the beginning and then they stopped. Here is the thing. A lot of people are concerned about their social security checks. Those are being sent out and those are printed at the same exact place where the tax refund checks are being sent out. So, the question is, why aren’t I getting my tax refund if people are getting social security because they have the same employees that are running the press, or whatever you call it, to print out the checks.
Lawrence: I am going to also read you a little excerpt, Rich. The law also allows for “activities necessary to safeguard human life and protect government property”. You might not think of your tax return is a matter of life or death, but the government begs to differ. The IRS may process tax returns to ensure the protection of those returns that contain remittances. In other words, they could make sure that the government gets its money. So, it is interesting how, again, this is right from an article online here, but there is an anti-sufficiency Act that was put into place way back when that talks about what this is and what is authorized underneath it. If the IRS is confronted by a large lapse in appropriations, the IRS will need to continue return processing to the extent necessary to protect government property, which includes tax revenue. So, there is a lot of things that go into play here and, unfortunately, there are some unknowns in the equation, but stay tuned. Listen to the Rich Stevens Show, listen to your local news, and certainly give us a call if you have any specific questions, but, again, for right now, keep everything as you would normally do. Get your tax returns filed, but if you have an IRS problem that has been pre-existing, especially in this listening area act on it now. Forget about this shut-down, you still have this time for the ‘O-freeze’ and there is only about a week and a half left before the collections light-switch gets flipped back on.
Rich: One question before I let you go, and I appreciate you taking the time to be with us today because I know that you are obviously busy. It is your tax season. Does this feel different to you than in 2013, as far as the closure and the IRS?
Lawrence: It may feel a little bit more temporary than permanent and, I think, there are discussions on the news that would actually put us there, and I am not really a political guy, but what put us there was really an unrelated issue to the budget. So, the budget is okay. It is this immigration issue that has sort of put us at a log-jam. So, unfortunately, I think, it is something unrelated that got us here and I also think it is going to be a relatively quick fix, if at all possible. I want to try and end on one positive note because a lot of people are concerned about what to do with an IRS problem, Rich. This is just one – because of the government shut-down. I am going to read you a letter that we received not even two weeks ago. It is dated January 11th. This was a client of ours that owes the IRS literally over $800.000. This was out of Oklahoma City. Oklahoma is where this campus was.
We have accepted your offer and compromise signed and dated on November 27th, 2017.”
This gentleman owed a substantial amount of money and the amount of his offer which dated back over literally 11 years of tax problems from 2005 – 16. He ended up owing a total north of £750,000 or thereabouts. The IRS accepted an offer and compromise of just over $59,000. So, the deals are out there if you qualify. So, an offer and compromise are a great tool that someone can use. Tax-payers can use it. There is a business offer and compromise for someone who may owe payroll taxes and there is also the individual offer and compromise, but I want to stress that this isn’t for everyone. You have to qualify. You have to fit certain criteria as far as your income versus your expenses, and if you have any equity and assets, but success stories like this really make peoples’ day to listen. It is just before 11 o’clock on a Monday when we are talking about the government, and Washington DC, and the law exam. It is just nice to let people know that these things are out there, and they do exist.
Rich: Yes. Especially, because there is so much confusion with the media not really knowing what is going on, and there is the other side of the media that is just trying to scare the hell out of people. Lawrence Levy, from Levy and Associates, what is the phone number at the Office there?
Lawrence: The phone number is 1-800-tax-levy, and, yes, Levy really is my last name. You always want to have a Levy on your side, not one against you. The local number for us right here on Delray Beach is 561 865 7800.
Rich, I also want to say, ‘thank you’ to folks like you who take the time to get the word out. Whether it is tax resolution related about trying to fix your problems, or whether it is just talking about something as basic as, ‘Oh my God, what am I going to do if the government is shut-down and I can’t get my refund back?’. So, thank you, to the news folks like you that actually give people the straight news and not a bunch of garbage.
Rich: The same to you as well, I appreciate it very much. It is always good to talk to you, Lawrence, and I hope to talk to you soon. Maybe with better news.
Lawrence: Absolutely. Well, listen. Look, I think, it is better news. The guy who owed the IRS a chunk of money and he settled for almost $59,000. That is a pretty good way to start off your Monday.
Rich: No doubt about it. Thank you so much. Have a great day and we will talk to you soon.
Lawrence: Right on, Rich. Take care. Thanks for having me on.
Rich: Thank you so much. Lawrence Levy from Levy and Associates. A good guy. Obviously, he knows his stuff and there is so much confusion, as I said, because these morons at MSNBC and CNN are just trying to scare the hell out of everybody. I don’t think that is right. Alright, standby. It is a quick time-out and when we get back there will be some more about the government shut-down. We will do the women’s march stuff at 11.05 AM because I still have a lot of questions that are unanswered and maybe you can help me.
Call 877 850 8585 – if you want to grab a line, I would love to talk to you. Just get rolling. Here we go. It is a quick time-out on the Rich Stevens Show.