Introductory audio: Liens, levies, wage garnishments, back tax debts of all kinds. If you’re facing any of these tax debt problems, stay tuned for the next 30 minutes. This is the Levy Tax Help Show presented by Levy and Associated of Delray Beach, tax resolution specialists. Call Levy and Associated 24-hours a day, seven days a week with all of your civil tax questions, 1-800-TAX-LEVY, that’s 1-800-829-5389. Now, the Levy Tax Help Show.
Lawrence: Good morning, South Florida and welcome once again to the Levy Tax Help Show. We hope that everyone is enjoying what I would call spectacular weather in the South East Florida neck of the woods because if you are not here, other parts of the country are getting hammered like one of the guys in my office up in Michigan. He is on with us now. He used to work at the IRS for over thirty years. Good morning and thanks again, Greg, for coming on to the Levy Tax Help Show. Greg Mahaffey, welcome again.
Greg: Thanks Laurence. We are shoveling snow right now. I am glad to be here today.
Lawrence: I couldn’t believe it. In Florida, we have got sunny skies and no rain. What do you do if you have got an IRS problem? You pick up the phone right away. If you are listening right now, jot this number down.
Locally – 561-865-7800 Toll free – 1-800-Tax-Levy
Yes, Levy really is my last name. We have people in our office, like on the phone today, that used to work at the IRS. We have Greg on with us and he will explain in a minute about how long he worked there and what he did, and then we also have Claire Coffee that worked in the offer and compromise group along with the other power of attorney’s that are out there. You want to hire a firm if you have an IRS problem, that specializes in tax resolutions, civil tax controversy.
Greg, give us a little background on you. How long did you work at the IRS?
Greg: It was over thirty-two years and I held several different roles while I was at the IRS. My main job was as a revenue officer, but I also worked for three years as an offer and compromise specialist. I was trained and worked for three years as an employment tax specialist, known as a revenue officer examiner. That is the differences between the independent contractors and employees. So, if anyone is listening out there, you are getting a 1099 and you feel like you are getting screwed over, and you should have taxes with-held, come to us. We can help you. We can make a determination on whether you are properly classified or not, and we can do something about it if you are classified.
I also worked for a while as an innocent spouse specialist. So, I made a six-month detail doing that. I also worked for six months dealing with congressional enquiries and having to respond to congressmen. There are such fun loving, political types out there. Also, I wrapped-up my career doing a three years stint as a specialty RO working what is called ‘ATAK’ cases. That is for people with multiple entities and it could be involving 50 or 60 corporations, possible money-laundering, receipts transactions, bogus trusts and so forth. So, I have pretty well been around the block quite a few times, and between that I even went off to war for three months back in 1991 as part of being in the reserves at the time.
Lawrence: Well, that is quite a lot, and number one, thank you for your service in the navy. We always like to give a shout out in that regard. You also had quite a career at the IRS and we knew you because you were a regular there and I always thought that you were very fair to our staff. You were tough, but you were fair. You were tough, but you were reasonable, and you always took that type of a case approach. Now, as a power of attorney advocating for clients, for tax payers, you get to see now what unfortunately is out there.
I just want to share a little bit of a story for this week. We can talk about it, Greg. You had a client that you were dealing with. It is not in the South East Florida neck of the woods, but they were giving you a very difficult time. They were giving you a difficult time in terms of procedural issues. They were just wrong. They were trying to demand things that they didn’t have the authority for or shouldn’t be demanding. You were able to give professional, polite push-back to their requests and demands because you know what is right and what is wrong, because you know what is reasonable and what is not reasonable.
I want to have a little time on the show talking about why it is critical to hire a firm that knows what they are doing and that has experience. When you were working at the IRS for thirty years, how many times did you hear of power of attorneys that were out there that didn’t know what in the heck they were doing, or tax payers that were coming in there because either they didn’t know the concept of tax resolution existed and that there was help out there, or that they couldn’t afford it, or both?
Didn’t you see that quite a bit, where people were just out there not knowing what the hell to do and there were so many messes? We see it a lot, but did you see it a lot?
Greg: I saw it all of the time. People that would hire (? 00:05:24) attorneys in the middle of nowhere who had no idea what they were doing about tax resolution, or IRS. They can look up the internal revenue code, they can look-up the manual, but they had no idea of the processes and procedures. In fact, I used to run circles around those people, but I also politely helped them. I would educate people. I would educate what the IRS priorities are and what we have to do to fix the situation right the first time. Starting with returned taxes. That is the most important thing in life. When we go to fix your tax problems, we never want to see you again. In other words, we want to do it right the first time. We set you up on estimated tax schedules. If you are a business we make sure that you make the current deposits timely, and then we do what is necessary to resolve the back-tax situation. Whether it is through hardship determination, instalment plan, or partial pay instalment plan, or whether it is an offer and compromise, the options are pretty numerous, and you need a professional to help get you through the system. Someone that knows what they are doing. Someone that usually knows more than what some of these revenue officers know. Not to say that I do, but a lot of times I do, and I try to help them out as well.
Lawrence: It is interesting because a lot of people come to us and say, “I didn’t know that you could do this”. “Oh my God, no-one told me that, I just can’t believe it”. It is one of those, ‘Oh my God, moments’.
Greg: We also have people coming to us that have had other companies really screw-up their stuff beyond recognition.
Lawrence: Well, let’s talk about that. We have had a couple of examples this week. We had a gentleman right here, in our Delray Beach Office.
Locally – 561-865-7800 Toll free – 1-800-Tax-Levy
We had a gentleman who came in a few months ago and we are the third power of attorney firm that this gentleman has hired. It is always interesting to hear what other folks might have done, or not done, but we try and make sure that we give you the honest, transparent, realistic expectations. A lot of time, people get a false sense of what reality is going to be and if you make too much, spend too much, or have too much, unfortunately your options are limited with the IRS. It is basically that simple.
The gentleman owed quite a bit of money. It was close to about $800,000. Unfortunately for him, he has quite a bit of equity and he makes a decent amount, and he spends a decent amount on certain things that IRS doesn’t allow. As a father, I always tell the client that I have two boys. As a father, I would probably do the same thing. I would want to make sure that my kids were in private school and stayed in private school if that is what they wanted to do. I probably wouldn’t move because you don’t want to uproot the family, but IRS has certain guidelines that they must keep to, and you have to fit in. If you don’t fit in the case can become very problematic and trying to explain these to our client sometimes is not easy. It is awkward and it is tough, it is a big pill to swallow, but you have to try and be able to get through these things because, unfortunately, the IRS is not going to be very flexible oftentimes when you are wanting to donate to the church, or when you are wanting to pay your credit card bills, or you are wanting to pay back friends and family that have loaned you money and they are unsecured creditors. When you want to keep your kids in private school, when you are paying mortgage or rent payments that are higher than what IRS allows, they have rules. IRS calls it ‘national standards’, and those national standards, generally speaking, are actually pretty low, to be honest with you, but they are generally derived from national census bureau statistics as to what someone in a particular county should be paying for rent or mortgage, and that is based upon how many people are in the house and what county that you live in.
Some of the other standards like, what do you spend on food and clothing and getting your hair cut and buying a birthday gift once in a while are called a national standard for food, clothing and miscellaneous and it is the same no matter where you live. It makes absolutely no sense to me as you could live right here in Delray Beach, or you could live in Manhattan, or Texas, or you could live in Los Angeles, or in Metro Detroit where the cost of living is more, the cost of buying a hamburger is more, the cost of gas is more (although gas is a separate line item), it just makes no sense how that number is the same no matter where you live.
So, IRS has these rules that you have to live within. Are there deviations? Of course, there are. Are there other options or tiered agreements? There are various options that exist, but a lot of people just don’t know that they exist.
Greg, that is part of your job, to explain the options, correct?
Greg: Yes. I definitely go through all of the options. I explain where the IRS is coming from, at the same time when I am dealing with IRS I explain where the tax payer is coming from. My job is to try to put them in the tax payer’s shoes and that there are certain conditions to the case. It could be medical issues, health issues, (? 00:10:41) children, there are legal issues. I have to get the IRS involved in also crafting a realistic solution that can account for the reality of an individual life. Many times, I am successful, sometimes they argue with me, sometimes it is outright obstinance. That is why you have got us, and that is why we know how to file the deals and do what is necessary to protect our clients’ rights.
Lawrence: I will tell you, also on Friday morning, yesterday morning, right here in the Delray Office. It was early. We are an early start at 07:30 a.m. I had a very nice couple come in. They couldn’t be nicer. These are some of the sad stories. They were so upbeat, so polite, and so nice and so thankful. They were in an audit scenario which ended up that we got to the tune of $36,000 to their favor, or slightly over $36,000. We were able to win that one. Unfortunately, the wife has been battling cancer and they are so positive and upbeat, and trying to keep their lives going, and talking about their kids. One of the kids is married. They mentioned their son-in-law. It is so refreshing to hear how upbeat and resilient someone can be in the face of adversity. Then, you have to try and explain those circumstances to the IRS and sometimes someone is going to be sympathetic and understanding, and that is where it really helps the client because that is where there is discretion involved in some of these files. I think, that is where a lot of the frustrations come out.
I could have a client that could owe $1 million and hasn’t filed in 10 or 12 years and you have a very nice revenue officer who is reasonable and is going to give you all of the time in the world to fix the problem. Then, you could have a revenue officer and a tax payer that owes $17,000 and they are coming out with a very aggressive posture, over a $17,000 debt.
This case is one of your files, Greg. The business is willing to make voluntary payments while delinquent corporate tax returns are getting filed. We have spent more time on this $17,000 corporate debt where the client is willing to make voluntary payments temporarily, and then we have a gentleman who hasn’t filed in over a decade and has $1 million worth of (? 00:12:57).
In your experience at the IRS, why is that? What goes on there, where a $17,000 liability is being worked as if it is the Al Capone case, and a $1 million liability and there is a nice revenue officer saying, “Yes. We will give you plenty of time. File the missing returns and get us the financial statement”, and it is very nice. It is just human nature and personality? I am sure you will know. We talk a lot about this on the show. Maybe there is no answer.
Greg: There are basically a lot of different factors. It depends upon who, in the IRS, is looking the case, whether it is the revenue officers group manager, territory manager, area director, and it depends on how important the case is, and how old the case is. It depends upon what they determine to be the level of cooperation, or non-compliance. If it is really a hardcore case. My case involves multiple entities, but the only entity that is open right now is the one that is underneath their skin. It just depends upon who you get, and their whole attitude. It is like anything else in life. It is whoever the cop is who pulls you over for a small infraction and whether they want to give you a break, or he nails you to the wall. It is human nature.
Lawrence: We talked about that too on the show. That is what is really unfortunate. The police officer story about giving you a break or not, it is really interesting because that is a really good example, actually. If you are speeding and you say, “Look, I am sorry I was speeding. I was in a rush. I have got a clean record. I wasn’t pay attention because I was on the phone.” You would hope someone would be reasonable, but again, that is a discretion that is out there in this industry.
I want to give a couple of other examples because, again, it happened this week. I had a client that we had inherited who owes about $250,000. It is a lady who owns a dance studio. The dance studio has been around for a while, but because of the decline in the population, and the decline in the socio-economic population in that area it has had a decline in revenue. They have struggled. They had a prior representative, which was a CPA who filed this offer and compromise. We picked it up midstream. It came as a referral to us. It was just a mess.
We are trying to deal with it midstream with an offer and compromise specialist who is trying to analyze the files based upon the data that he was given originally with a submission of the offer and compromise. So, it just doesn’t go well when we come in midstream. I don’t think anyone does, for that matter. We are trying to pick up the pieces of someone’s mis-step, I think, is the best way to put it by the way it was presented and packaged. It was not very good from an optic standpoint. Therefore, the offer specialist rejects it and now it is in appeal.
I tell you, this appeals officer who has this file, she is probably one of the nicest, the most reasonable, the most thorough appeals officer that we have run into in a long time. The client calls and says to me, not to the power of attorney in the office, but to me, “I am frustrated”. I said, “With what? What are you frustrated with? Let’s talk about it”. “I am being asked so many questions. I am being asked to give so many documents. I am being asked the same questions I was asked six months ago”.
Part of my job, and part of our job is to explain to the client what the process is. You submit financials a year ago when you started. You submitted them again six months ago. Now, you may have to submit them again. Now, the IRS wants to see your tax return, so you may as well show them that your income is really down. So, let’s get the 17 tax returns filed because it is a really good indicator of your income. After explaining these things, the clients say, “You know, I feel so much better”, but with the process there is so much ‘back and forth’ that goes on. There’s multiple requests, multiple times. Sometimes the questions seem silly. Sometimes they seem insulting, and it is very frustrating. There is no questioning that. Just keep in mind that it isn’t just the IRS that we deal with. We deal with State tax controversy as well. We also deal with audit defense. I am going to tie-in a little bit of an audit story here in a second. It came up this week from a gentleman that is unfortunately battling cancer. He is a real nice guy. This happened late on Thursday when the gentleman actually hired us.
Greg, is it common that revenue officers take a long time to respond? You send them documents and they take forever to respond. You call them, and they are rarely in the office these days. They work what is called ‘flexi-time’. They are working on from their home on their laptop, with almost like a ‘voice over IP’. Do you see that? I know that years ago it wasn’t like that. Now, there is a lot of it. How often do you call a revenue officer and you never get them? They don’t answer the phone. It is so crazy to me.
In fact, I will tell you, the IRS not answering and responding timely is a very, very good advertising tool for us. It is common in the industry. It is not just with our office, but with many. A lot of people will say, “I tried to reach the IRS. I called a revenue officer. I called, and I never got an answer”. You are seeing that a lot, but it wasn’t like that 10 – 15 years ago.
Greg: No. 10 – 15 years ago they were just starting to the flexi-place program in which they allowed people to work out of their homes. Given the way that technology is nowadays, there is really no reason to be in an office. With the IRS budget cuts over the years it has had to shut down some of these smaller offices that are out in the middle of nowhere, just to save money. Congress were basically gutting the one agency that turns a profit, but that is besides the point. Anyway, with all of the everything else that is going on out there, people are being forced especially in the rural areas, in the middle of nowhere – Podunk, Iowa. There really is a place called Podunk, Iowa. I have a client who lives there. Anyway, they have been forced to work out of their homes. They have to get creative, and yes, sometimes they don’t return calls right away.
Lawrence: It is not even right away. It takes days in order to reach them. It is so crazy. I just sent an email, if you saw it this week, when you have an appeals conflict there is a specific time. We have Monday, March 12th (Eastern time), and there is a specific time set for the phone conference. Most of what we do is via phone. Alright, with the revenue officer, let’s say that you called them on Friday morning. You happened to be in the men’s room. You happened to be meeting with a client. You happened to be on the phone with another IRS revenue officer. You happened to be on the phone with what is called ACS, and the revenue officer calls back and you are not available. Well, now you have the phone texting again.
I want to follow basically a mirror image of the protocol and the procedure that appeals has. Setup a phone call. Set a specific time so that the power of attorney is going to be available and the revenue officer is going to be available. For crying out loud. If we have just spent 10 – 15 minutes of productive dialogue, as opposed to messages and a phone call and a 433A, and I have got a review (? 00:20:03). If there was just an easier way, but I am sure we are not going to rewrite how the world handles collections cases. I will tell you, for some States, Michigan is an example, we try and schedule a phone call at a specific time so that there can be specific, productive, professional, fruitful dialogue so that there can be something substantive that is going to come out of that phone call. As opposed to sending a random, “Here is the 433A, call me with questions”, which could go on for months and months. Then, the client is calling us saying, “Hey, what is going on. I haven’t heard. I need a status update”. It is a very frustrating chain.
Greg, now that you are on the other end as a power of attorney, how many times in a week do you call a revenue officer and they don’t pick up their phone? Would you say it is 8 out of 10 calls that they don’t pick up the phone? I don’t know, but it is a high number, right?
Greg: Yes. It is. Most of them are good about calling back right away. Some are lengthy wait times. The biggest majority of the wait times is when you request the automated collection system people for a management callback. We have an issue with what a representative says or wants because we don’t feel as though it is fair, and we are standing up for our clients’ rights. So, that can be a hassle at times also, but that is life and we have to try to figure out a solution. That solution, as you said, is to schedule appointments for discussions so that we can get fruitful work done.
Lawrence: I think, that is the policy that we are at least going to try and implement here. I can’t really see how and why the IRS would push back the net. Staff in the Levy Office are going to say, “Mr. ‘X’ would like to schedule a call”, so that there is no phone tag. It is going to be efficient and productive for everyone. “When is a good time for you?” It will be interesting to see how that pans itself out because it really is literally identical to how appeals do it, and even though revenue officers are in the field, I am sure they could carve out an appointment, and phone calls could be anywhere from 10 – 60 minutes. It is not as if it is going to be an entire 8-hour day that it is going to take up. It doesn’t work like that especially for some of the ‘back and forth’ that we have to go through.
Locally – 561-865-7800 Toll free – 1-800-Tax-Levy
If you are frustrated and you can’t get through. If you are now not able to work out a resolution that you think is fair and equitable, number 1 – you shouldn’t do it alone. It is very simple. If you are sick you go to a doctor. You are not going to try to go to CBS or the pharmacy and get your own vitamin C pills and get better. You go to a doctor. If your toilet is broken you are going to need a plumber, generally speaking. Some people will try to fix it themselves. Me, I call the plumber.
If you have an IRS problem you should try and fix it, but not alone. You should try and fix it proactively and have someone on your side.
Locally – 561-865-7800 Toll free – 1-800-Tax-Levy
In the Levy Office we have the former revenue officer, like Greg Mahaffey, like Claire Coffee who worked in the offer and compromise unit for over thirty years. We have the attorneys and the CPA’s and the EA’s that function as power of attorneys, representing tax payers and civil tax controversy.
Now, I want to talk about something different. We are gong to switch gears from collections which is what Greg focuses on most of the days. We had a client. It was earlier this week and we ended up talking to him late on Thursday. It was a couple of days ago. I mean, late. It was after hours at seven o’clock. We love the after hours calls. We love the weekend calls. We really encourage that because it gives us time to really focus and it doesn’t impact our clients’ workdays. The guy was in the middle of an audit and he was trying to represent himself, and the exam agent came back saying that he owed $210,000, or $201,000. There was just no way. This guy also, unfortunately had cancer and was in the hospital, I want to say from September of last year until January of this year. He is a nice guy. He was so thankful and so appreciative, texting back and forth, it was just an unbelievable experience to be able to help someone like that. So, at least, finally they could sleep at night. That case is going to go on as well.
There has been quite a bit of activity now in South East Florida. The hurricane ‘O-freeze’ is now lifted. So, when hurricane Irma came through the IRS was basically in suspense mode from then until January 31st. Now, the light switch is back on and the IRS collections is back on. They have a job to do.
Greg, when you worked there, you had a job. When Claire worked there, she had a job and over the years we probably had 10 former IRS employees that have worked in my office, and we hire them because they have worked there, and they know the system. They know the process, they know the protocol, they know what is fair and what is not fair, and it is good because when they go to law school, or go to be a CPA, or take your enrolled agent test, you don’t really have this hand-on experience until you have got some years under your belt. That is why it is so critical to find a firm that knows what they are doing and that specializes in tax resolutions work. You see it too often where people are out there, and they really don’t have a darned clue of what is going on.
I will never forget, about a year ago, I was on the phone with a client who said, “Look, my CPA is saying we don’t need you. My CPA can handle it”. I said, “Alright. What is the basis as to where he is at with the file?” We get the guy on the phone. You will laugh at this one, Greg. We get the guy on the phone and the show at the top of the hour here, is coming at 0900 am, if you are hearing this live on Saturday. We got him on the phone and we say, “Hey, did you get the 1058 notice from the RO and are you going to file a CDP on the 1058?” Now, that is pretty basic language, right? Greg?
Lawrence: “Did you get a 1058 notice from the RO and are you going to file a CDP on the 1058?” That is like going to the dentist and talking about dental floss and a filling and a cavity. It is basic tax resolution words, knowledge, and numbers and acronyms. CDP (collection due process). RO (revenue officer). 1058 is a final notice. This guy had no clue what any of that meant. I said, “Look, if you don’t know what an RO is, and if you don’t know what a CDP is, and if you don’t know what a 1058 is, you have no business being in tax resolution”, but the Levy Office does! Needless to say, the client hired us.
If you have an IRS problem and you haven’t filed in a few years, if you have an IRS problem and you owe payroll tax, or you have income tax issues, or you are under exams pick up the phone right now. It is Saturday. It is a nice weekend. There is a little bit of cooler water coming to Florida next week, but we are not here to talk about the weather, we are here to talk about how to cool off if you have an IRS issue. Call us immediately at: –
Locally – 561-865-7800 Toll free – 1-800-Tax-Levy
Signing off for now from the Levy Tax Help Show, you have the former IRS revenue officer of over thirty years, who also was in the military, in the navy, and he got called up from the reserves in the Gulf War, Greg Mahaffey. Thank you for your service. Thank you for your service to the Levy Office and the Levy Team. Laurence Levy and Greg Mahaffey signing off for now from the Levy Tax Help Show, enjoy the rest of the weekend South Florida. You take care.