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 the month of February. We are in the throws of tax season and the IRS now, from the collections perspective, is back in business. The IRS has been in what is called an ‘O-freeze’ that has now lifted as of January 31st. So, IRS collections is back in full force and affect. My last name is going to be used a lot. You want to avoid my last name on your bank account. You don’t want a bank levy. You don’t want a wage levy. You don’t want a levy on your receivables. As we always say,
“Don’t fear a levy, you should hire a Levy”.
Talking about the IRS, we have the privilege and the honor of having a veteran in more ways than one, a revenue officer who works at the Levy Office. In fact, we have two. We have a lady named Claire Coffee who used to work at the IRS for over thirty years as a revenue officer and she rounded out her career as an ‘offer and compromise’ specialist. We also have a gentleman named Greg Mahaffey. Greg, good morning.
Greg: Good morning, Laurence.
Lawrence: You were at the IRS for how long?
Greg: Over thirty-two years.
Lawrence: As a revenue officer your job was to collect tax, work out an arrangement based upon the financial condition of the tax-payer of either a business or individual. When you were there, we interacted with you and you were always tough, but you were always fair. You were always reasonable, but you wanted to do the right thing by the tax-payer. Of course, you had an obligation through your job, to Uncle Sam, but ultimately you were there to do the right thing. Not every IRS or State collections employee, in our opinion, is always there to try and help. In fact, we had a client come into the office this week that said they tried to call right before Christmas and they got on the phone with a lady. The way this client talked about this lady was that he referred to her as ‘Miss Hostile’. She was very mean. She was very unfriendly. She was not polite. There is a way to do your job and you were always polite when you worked at the IRS, and now that you are on the other side and a power of attorney advocating for tax-payers, businesses and individuals, it is probably a pretty good feeling when you have a situation where the IRS is doing something that you wouldn’t have done.
Before we talk about any examples that actually happened this week, and I want you to talk about it a little bit, but there was a client who was making voluntary payments to the IRS and I don’t know whether the revenue officer had issued a levy. Greg ended up speaking to not only the revenue officer, but the revenue officer’s group manager, and the group manager’s territory manager, and it was really an interesting chain of events because it wasn’t tremendously huge dollars, but Greg, you got that levy released, correct?
Greg: Oh yes. It took me some time, but I convinced them and at the end of it the territory manager agreed with my analysis and that this whole thing was blown away out of proportion and never should have got to that level.
Lawrence: Now, you are the former revenue officer. Before I forget, by the way, we talked about veterans and you are a former veteran. You were in the navy in the Gulf War, correct?
Greg: Correct. The first Gulf War, Desert Storm. If anyone still remembers that.
Lawrence: Of course, we remember that. Thank you for your service because it is people like you that make the world a better place to live in. So, thank you to the first-responders. Thank you to those in the military, currently and retired. We appreciate that. We respect that.
Let’s talk a little bit about how you did your job. So, when you were an IRS revenue officer, an employee for over thirty years, and you would get into a situation, you had the discretion and you had the authority which, I think, are two different positions to take and two different words to do something or not do something. As a thirty-year veteran revenue officer, even when you were fifteen or twenty years into it, didn’t you take a practical approach to your case resolution?
Greg: Yes. Well, that was something I developed over many, many decades, so it seems, of interacting with tax-payers and trying to finally figure out what worked and what did not work, what was the end-game and what did we want done. The bottom-line for the IRS is that they want the taxes paid and they want the tax-payer to stay compliant. Now, obviously, a lot of revenue officers take a position that the only way to do that is to basically go in there and kick butts, and to, in effect take enforcement action. I call that punishing the tax-payer, but their job is not to punish people. Their job is to promote voluntary compliance, identify the problem at hand, and solve that problem at hand so that not only do they get the taxes paid but they resolve the situation so that it doesn’t happen again. Unfortunately, after many years and decades, some people get jilted. They get burnt-out. They take the approach that we must go and kick-butt and take names. If it has got to this level, that therefore tax-payers are trying to scam the government at any and all costs. I have relied out of simple necessity and out of practice that very few tax-payers are out there trying to scam the government.
Lawrence: That is right.
Greg: They may have make bad decisions that may have gotten into bills situations that they couldn’t afford. They may have made lots of mistakes, but we all make stupid mistakes out there. The approach I tried to take as a revenue officer was trying to help people because I found out that the most satisfaction I could actually get was turning around and doing something positive for someone. There are few revenue officers who take that approach and try to instill that upon people at the I deal with.
Lawrence: It is nice to actually hear your approach and your case approach, and I wish there were more people out there that would take that would take that case approach. Not only at the IRS but certainly even at State levels whether it is the local for withholding tax, or in Florida Sales tax with the Florida department of revenue, but it doesn’t always happen like that.
This week, I want to talk about a couple of clients that had medical issues. Before we talk about the client that had the medical issues, I just want to share a brief story.
I travel back and forth between the Detroit office and the Florida office. I was on the phone on Sunday. I was going to see my kid in college. I was driving, and I ended up on the phone with the representative from the airline. We just got to talking. My father-in-law had just passed away right after Thanksgiving. So, we were just talking about a flight that had to be cancelled and so forth because of his medical issues and his passing. She said, “Yes”, she had lost her father a few years ago and we got to talking, and it turns out… talk about the military. I want people to listen-up to this story because it is very sad and tragic but emotionally I found it uplifting at the end. Her father was in his early thirties. She was a young girl at the time. They were stationed and living in Hawaii. Her father had a stroke in his early thirties. I think, she said thirty-two or thirty-four. So, I don’t know how old this lady was, but she was super nice on the phone. Her father was a quadriplegic and he couldn’t swallow food. He had a trach and he literally had to have his food crushed. He had a full-blown trach. He lived from his early thirties until he was sixty-five. The family built an annex where he lived, and he had around the clock care. This lady who I was talking to from the airline, her brother literally quite high school. He didn’t go to college, just to care for his Dad. Tragically, there was an electrical fire. The house catches on fire and this gentleman passes away because he can’t speak, and he obviously couldn’t move. So, she was telling how her brother literally devoted his entire life just to the care of his father. When you hear stories like that, a guy at thirty years old who was in the military, had a stroke, had a trach, couldn’t eat solid foods, and passed away in a fire. I tore me up, but the family was so strong. This guy was so strong that he lived for thirty something years like that.
I wanted to share that story with you because it was such an unbelievable story and I really wish that family… I don’t know the name. I will probably never talk to this lady again in my life, but she was so nice and so appreciative that I took the time to hear her story and was asking about it. We really got on the topic because my father-in-law just passed away right after Thanksgiving.
To talk about medical stories and so forth, we had a client that unfortunately owes the IRS probably about $100,000. I talked to him this week right here from South Florida. He couldn’t any nicer, this guy. He was telling me that he has got full blown kidney failure. He has to have dialysis. He came into the office right here on Delray. It was on Wednesday, January 31st. It was a couple of days ago at about 2.30-2.45 in the afternoon. He sat down. I shook his hand. We had to ask questions about his dialysis and he lifts up his arm and rolls up his sleeve and shows me where they have to put a port. It is tremendous pain. Four hours, three days per week, the guy gets up at four in the morning, drives to the dialysis clinic. He has them poke him so hard that he cringes in pain twice to get the port in his arm. He has the dialysis for four hours. He leaves at, let’s say 9 o’clock if he starts at 05.00 AM, and he tries to make a life for himself. The guy is in his late fifties to early sixties, I think. He is just a nice guy. So, here he is trying to live a life. He is a father. He has got three sons. I could have talked to this guy for hours. We got into the discussion because my father-in-law also had kidney failure that contributed to his medical issues and his ultimate death. Hearing what this guy said about how he tries to just live life. He is trying to get on a donor list. His kids are seeing if they are a match and can they have that surgery and give up a kidney.
You hear all of these stories and then you have guys like Greg that have to challenge the IRS. When you were at the IRS, Greg, you had a heart attack while you were working there, right?
Greg: I had a silent heart attack and ended up having angioplasty in 1994, and then back in 2010 I had a full-blown triple bypass. That took me out of work for almost five whole days. It was actually eight days. I was in the hospital for five and I was out of work for eight days from that. That was related to the war and my toxic exposures.
Lawrence: So, eight days after having open heart surgery, and it still sounds like you remember it as if it was yesterday. It was eight years ago in 2010. When you worked at the IRS, did you or maybe some of your colleagues have compassion when you heard about medical issues? Whether it was cancer, kidneys, heart attacks, strokes, is there that discretion to have some compassion?
Greg: Yes. You can’t help it. It is just being human, and it would have to be a heartless person not to take that into account. I have client right now who is trying to recover from having a kidney transplant which is also just like your father-in-law. She was in that position and now she is trying to recover from that, and I am trying to convince the IRS that she is currently not collectible while she is trying to resume her practice as a practicing dentist. It is difficult for her because she can only work part-time a lot of the times.
Lawrence: She was fatigued?
Greg: Sometimes she couldn’t make it. Yes, she is fatigued. She can’t afford to hire people much any more and things are just not good for her, altogether. So, I am trying to work with the revenue officer and explain the situation to her in more detail. That is what we tried to do, find someone who actually cares. There are people out there who do, very rarely they don’t, but when they don’t that is why you hire us, so we are there to protect you when you need help.
Lawrence: Let’s give out the phone number because we are about half-way into the show here and we have failed to give it out as we come up to the half-way point.
Tel: Local 561 865 7800, toll free 800-tax-levy.
Yes, Levy really is my last name. I talked to many people, especially lately, and they say, “Wow, is that really your last name?”, and we say, “Yes, it is”.
This year, as we have done in the past, we have some special discounts for several different folks out there. My son came up with the idea last year during the last tax season to basically say, ‘thank you’, to educators. So, anyone who is a faculty member or an employee, whether it be maintenance, janitor, bus driver, school teacher, administrator, or secretary, we are giving a discount for taxes. So, as opposed to going to national chains and as opposed to going somewhere where you may not be thrilled with your current accountant or CPA. If you are an employee of a school, private or public school, or charter school, it does not make a difference. My son’s idea was to say, ‘thank you‘, to the educators out there and we are going to give you a discount.
In addition to that, we also have our standard of giving the discount to first-responders, police officers, fire fighters, paramedics, members of the military (former and retired), come on in. We would also like to say, ‘thank you’, and that is the Levy way of saying thank you to those that have served. Oftentimes, I think, the educators aren’t appreciated enough and, I think, sometimes first-responders and the military aren’t appreciated enough. So, at least that is the Levy way to say, ‘thank you’.
Let’s move onto another couple of examples that have occurred this week. We had a client who ended up owning the IRS about $90.000. She is recently divorced, and she is a business owner in the contract industry. In fact, Greg, it is one of your files. She was in an installment agreement and owed about $50,000 and she had a decent year, but because of the divorce she became a single mother and she struggled to get through that emotionally and financially, and she owes another chunk of change. So, now, Greg is going to have to revisit her entire file and get her back into a situation where she is going to be able to live and survive, whether that is going to be a ‘revised installment agreement’, which is the fancy term for a payment plan, or whether that is going to be some other collection alternative like an ‘offer and compromise’.
So, in the IRS world, Greg, do you want to summarize what the three basic options are – installment agreement, offer and compromise, uncollectable, and then what is called a PPIA? Do you want to sort of run through those? Why don’t we start with an offer and compromise?
Greg: Yes, an ‘offer and compromise’ is what we call ‘the home run’, but it is difficult to get an offer. You have to lay the groundwork first. The IRS gives’ offers and compromise’ and it is not on a percent basis. What it comes down to is that they analyze the tax-payer’s financial situation and make a business decision. What is the maximum that they are going to collect from this tax-payer over the life-time of the taxes? The IRS generally has ten years to collect taxes when they get assessed. So, the IRS only takes an ‘offer and compromise’ after we have laid the groundwork. The first requirement for that from the IRS is that the tax-payer must be in the position that they will never owe taxes again.
Lawrence: We have to get them current!
Greg: Yes. We have to get them current and develop a system to keep them current. Again, if they owe taxes ever again in the future for the following five years after an offer is accepted it defaults the offer.
Lawrence: Sorry, I am going to put “time-out” in there. We just had a very nice success story. It was not even a month ago. I am looking at a letter from the IRS which is dated January 11th. This was a gentleman who owed over $750,000 to the IRS. We talked about this a couple of times recently, but because we are talking about it again, this gentleman literally owed for over a decade. He was in the real estate industry and he just ended up owing. Finally, we were able to get him current, and on the $750,000 he was able to get an accepted offer for a compromise for just under $60,000. So, in this case, it was the true less than ten cents on the dollar.
Unfortunately, it doesn’t always work out like that with everyone, but sometimes it does. You have to analyze. Is it doable or is it not doable? What are the chances of it? Generally speaking, the ‘offer and compromise’, if you qualify, is a very good tool. Not everyone is going to qualify. Let’s make sure that we are clear about that, but that is why the program is there. It is there to resolve a debt if the tax-payer, the client, meets the qualification. It is basically two components. What do you make and what do you spend? What you spend has certain caps on it which is called IRS allowable expenses. The other component is equity and assets. Do you own anything that has got equity? A house, a boat, a car, a motorcycle? Do you have retirement funds that have liquidity? Those answers will then determine, with some calculations, whether you will qualify for it. If not an ‘offer and compromise’, we go to a plan ‘B’. Plan ‘B’, Greg, is an ‘installment agreement’, correct?
Greg: Correct. There are two different kinds of’ installment agreements’. The first ideal one is an ‘installment agreement’ that will full pay your account in seven years or less. Generally, they call those streamlined if they are under $50,000. The ideal situation is to get below $25,000 so the IRS is not required to file a lien.
You don’t want a lien file. That is why we work to try and avoid liens at any and all cost. Liens tie up your property. Liens try up everything and they will wreck your credit. It is just the nature of the lien bean, but ideally, if you get an ‘installment agreement’ it can full pay everything again within 5 – 7 years. The caveat to that is that you must agree never to owe taxes again. So, like an ‘offer and compromise’, we have to figure out how you got into the problem and we have to develop a system to keep you current before anything else happens. Then, we will see what is left over and that we can apply against a potential ‘installment agreement’.
Then, you have what is called ‘partial payment installments’ in which the IRS will never be paid in full over the life-time of the taxes. In those cases, they will agree to take an amount that is less than the amount that is needed to full pay the account. If they do that, generally they review those accounts every two years. They will send out a request for updated financial information and make a determination about whether they should increase your amount that you are paying or change the payment terms accordingly.
Lawrence: The way that I explain that is, they just want to “look-see”. They want to take another look at what you are financially looking like on paper. Every couple of years, when you are in a PPIA (partial payment installment agreement), they want to take another peek at things. (? 00:19:49).
The third option is what we refer to as CNC, the acronym is ‘currently non-collectable’. Do you want to explain that one, Greg?
Greg: That is basically for those people who are in a hardship situation. They don’t have sufficient equity and assets to use against their taxes, and they are not in the position to make payment. I am in the process right now of getting a lady put into ‘currently non-collectable’ status who has been trying to sell her house for quite some time now. She is still trying to sell the house, but, at least now, she doesn’t have the pressure of the IRS coming down on top of her. The biggest thing that we did was to solve her tax issue going forward so she will never again owe any more taxes. In fact, in 2017 she will have a refund which will be applied against what is owed. With any kind of luck, within another week or two we will be getting the case closing letter from the IRS saying that they have agreed to suspend active collection on this account. Now, if her income rises in the future when she files a future return and it goes up significantly, it could reactivate her account. So, once again, ‘currently non-collectable’ is not an ideal solution, but for many people it is the best solution they can hope for. So, the IRS recognizes when you are in a hardship situation. That is what those phases are for.
Lawrence: Keep in mind though, you always want to try and hire a professional. Going this alone, generally speaking, is not wise. In fact, this week we had a gentleman who thought it was easier for him to try and work out his own arrangement and when we were trying to explain to him a couple of the facts, we said, for example “Do you know what a C-STED is?”. C-STED is the acronym for ‘collection statute expiration date’ which means ‘when’ your tax debt is basically going to drop-off. He was not aware of that. We try to educate our clients on these things. He said, “Wow, I did not know that”. There’s a lot of people out there, and I hope that anyone listening understands a few things.
When you have an IRS problem, you always want to seek professional advice.
Can you do it alone? Sure, you can. Do you know all of the rules? Absolutely not, because that is not what you do for a living. You want to hire a firm that has been around for a long time. The Levy Office has over twenty years. You want to hire a firm that as the support staff. We love our admins. You want to hire a firm that has got the deep bench of the former IRS revenue officers, the attorneys, the CPA’s, and EAs (enrolled agents) that function as power of attorneys. We are here to resolve the problem.
It is not always going to be an ‘offer and compromise’. It is not always going to be an ‘uncollectable’ status. Maybe, sometimes, it is going to be a payment plan. In fact, earlier this week we were talking to one of the POA’s in our Florida Office who was speaking to a husband and wife couple and they are going to owe, when they add in 2017, probably north of $600,000. That is just what they owe. They got themselves into a bad jam. They have a couple of kids. They are a very nice couple. So, as Greg was saying earlier, good people get themselves into jams and that becomes a problem, but there’s options. Let’s give out that phone number again and talk about options.
Tel: Local 561 865 7800, toll free 800-tax-levy.
Yes, Levy really is my last name. I want to say a big ‘thank you’ to my staff. The power of attorneys that work so hard for all of these clients. It really is nice to have such a good staff. Our administrative staff, the support staff that we have, receptionists, the administrative assistant – I am very blessed to have a team that is working in cinque with each other. Greg, you are really a phenomenal guy. I know this week you had a minor fender-bender, correct?
Greg: No, I had a major accident. The T-bone in my car is legally totaled, although I am still driving it right now as we speak. Then, my wife broke her ankle last week, and now the baby that we are raising is sick. So, it is going to be a hectic day tomorrow when I have to take my wife to the doctor and the baby to the doctor, and possibly the wife has to have surgery to repair the ankle. It is one thing after another, but we are always there, and my cell-phone is on, and I am sure that I am going to be working while I am in the waiting room, waiting for people.
Lawrence: You know, it goes to your work ethic and I am sorry that you were in the T-bone, but glad that you are okay. Your work ethic is incredible, and that is how we operate in the Levy Office. I really think that it is something that we pride ourselves on and we care about, and on the radio show we talk about these things all of the time. So, I really wanted to say how much I appreciate all of your hard work and I hope that your wife and the baby, and your car is repairable. Hopefully, your wife’s foot is repairable, and you know what, no question about it, but ultimately you will get through that, and you want to make sure the baby is okay. The flu is going around and that is not a good thing. So, stay healthy.
If you have an IRS problem in Florida, IRS is back in collection mode. A couple of weeks ago they were shut down for a day because of the government, but the IRS is back in action and it is tax-season. So, if you haven’t filed your taxes in a few years, come on in.
The Levy Office is open, literally for 24-hours a day, seven days a week. You will be able to speak with someone and we pride ourselves on that. We also have someone who is in the office on Saturdays and Sundays. Greg typically is in on Saturdays and we have one of the POA’s in on Sundays. So, if there is something that has to happen internally, (? 00:25:28) internal revenue service, but we make it happen. We actually enjoy the weekend meetings. We enjoyed last Saturday. We were all in the office and weekends are great. It is tax season so that is what you do anyway, but we are available to you for seven days of the week.
- ‘Offer and compromises’.
- ‘Installment agreements’.
- ‘Penalty abatements’ (which we didn’t talk about).
- ‘Innocent spouse claims’.
- If you are in the middle of an exam.
- If you are in the middle of an audit.
- If you haven’t filed your taxes.
- If you owe back payroll taxes.
- If you have income tax issues.
You give us a call in the Levy Office. We have a tremendous staff.
Greg, thank you so much for all you are doing and all you have done, and it is a pleasure. I bet you that fifteen years ago you would never have thought you would be having your pay check signed by ‘Levy’ right? Now, would you?
Lawrence: Right, so you used to fire that off and now you love seeing ‘Levy’ because that guy signs your pay check. Thanks again, and on a serious note, I wish everyone well who has got any medical issues that are out there. For clients this week, we have heard some of these stories. Certainly, your grand-daughter, certainly your wide, and I am glad you were not hurt in the accident.
Signing-off for now from the first show in February, the Levy Tax Help Show. We are launching it off now for February. I think, we have been on the air for probably seven years now. Greg Mahaffey, former IRS revenue officer extraordinaire, now retired from the IRS and working as a power of attorney on behalf of tax—payers, and we really appreciate everything that you do. Thank you very much for everything you do, Greg. We will speak to you next time.
If you have an IRS problem, you give us a call.
Tel: Local 561 865 7800, toll free 800-tax-levy.
Remember, you want a Levy on your side, not one against you! Don’t fear a Levy, you hire a Levy!