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Levy Tax Help Show - Transcript - 03/30/2018

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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.  If you are listening to this live, it is March 31st.  We are now in the season of the spring break.  It is also Passover, and it is Easter tomorrow.  It is tax season as well.

Well, you pick up the phone and you should call us immediately.

 Telephone – 1-800-829-5389.  Toll free – 1-800-TAX-LEVY

 Yes, Levy really is my last name.  Locally, check us out.

20881 South Federal Highway, Delray Beach. 

 Local – 561 865 7800

 Let me introduce everyone that is a first-time listener, but if you are a regular, and I want to give a shout out to a regular listener who came into the office yesterday, on Friday.  ‘Hello’, you know who I am talking about, but if you are not a regular listener, let me introduce everyone to Greg Mahaffey on the Levy Team.

Greg, you used to work at the IRS for how long?

Greg: For thirty-two and a half years.

Lawrence: You were also in the navy.  You were in the Gulf war.  So, thank you for your service to our country.  We always like to thank those who keep us safe and sound.  You came back good from the Gulf war, thank God.

So, you were at the IRS.  You were a revenue officer for the majority of your career.  You did a little little bit of work in the offer and compromise unit, and now you are on the other side.  You are now a power of attorney advocating for tax-payers throughout the country.  I want to tell you, Greg, and I haven’t had the chance to mention this, but, this gentleman who came into the office yesterday was a big fan of the show.  He listens to it quite a bit and really was very complimentary.

We try to make it content driven.  We talk about real life examples.  I want to talk a little bit about what I am going to call ‘shocking’.  It is going to be the ‘Levy Shock Show’.  I was pretty shocked.  This happened on Thursday and it takes a lot to get me shocked.

We had a client come in to the office this week.  The client actually hired us on the 27th.  So, literally earlier this week.  The night before, at 11.30 at night, and I kid you not.  It was 11.30 on Monday night.  The client calls and someone in my team takes the call.  The guy comes in and he says that he has currently been working with his attorney.  The business that this gentleman owns owes over a quarter of a million dollars and he just doesn’t feel it.  He just doesn’t have the confidence with this attorney.  To cut a long story short, we happened to be familiar with the revenue officer and on the 27th the gentleman hires us.  We send off the power of attorney forms and the POA in my office, Danielle, has been leaving messages for the revenue officer, and it turns out that the revenue officer is out until this coming Monday, and everything is fine.

In the meantime, we said, “Why don’t we have a smooth transition with your prior attorney?”  We looked him up online and it shows that basically they are a bankruptcy law firm, but the company hasn’t filed bankruptcy yet.  It doesn’t appear that it is going to be going down that road.  Anyway, the client doesn’t want to file bankruptcy.

So, there has been multiple meetings with this revenue officer.  In fact, one of the last meetings was in the attorneys’ office with the tax-payer present.  Well, on Thursday, 29th, we called this gentleman and we said, “Can you give us a little bit of the background as to where you last left off with the RO?”

Greg, I haven’t told you this story yet.

So, there is dead silence on the phone.  There is a pause.  I said, “Hello”.  I thought we had dropped the call.  I said, “Can you give us a little bit of background on where you left off with the RO so that there can be a smooth transition?”  He didn’t know what ‘RO’ was.

Greg, I am sure that in your career you have seen many POAs that don’t know the lingo and don’t know the basics, but that is like asking your dentist, “Hey, can you give me some dental floss please?”, and the dentist says, “I don’t know what dental floss is”, and gives you a blank look, but you have probably come across this in your career, correct?

Greg:  Usually with CPAs, they are out of their league when it comes to collection matters.  CPAs are great when it comes to the time to actually file tax returns and preparing tax returns, but, when it comes the time to resolve any balances due, most CPAs are in over their heads.  Simply because this is not their primary specialty.  Their specialty is to stay on top of all tax flaws and be able to prepare accurate returns and knowing all of the ins and outs as such.  What they don’t know is, what do you do when your client gets into trouble?  Also, what do you do when the client doesn’t have the ability to pay, or can’t pay?  Maybe, they got embezzled.  It could be one of a zillion things.  What do you do?

 A lot of CPAs and a lot of professionals, and even attorneys are simply in over their heads.  Just because you are an attorney, it doesn’t mean that you know everything.  Attorneys are like doctors, they specialize in certain fields.  In this case, this attorney specialized in bankruptcy issues.  So, he is probably one heck of a bankruptcy attorney, but when it came time to doing this he was in over his head.  He was just gasping and choking and not knowing what the heck to do. 

Lawrence: After I said, “Hey, can you fill us in from where you last left off with the RO, so that we can pick it up form there?”

I was trying to get Danielle on the phone with him, but the timing didn’t work out when we called and left a message.  He called back, and it was closer to 4 o’clock when we were speaking to him.

So, we said, “Alright, did you get any 1058 letters?  Did you file a CDP on the 1058?”

Again, for us talking, “Did you file a CDP and a 1058?”  That was literally as basic, again, as the dentist coming in and saying to the hygienist, “Did you floss the patients teeth?”

He said, “I don’t know what these are, what are you talking about?  I don’t know what these terms are.”

I said, “Wait a second, you don’t know what a 1058 is?  You don’t know what a CDP is?  That is just basic tax resolution numbers, forms, and knowledge.  How can you be representing a tax-payer in a collection matter when you don’t know what a CDP is, or what a 1058 is?”

I was nice.

I said, “What about a 433B?  Did you ever submit a 433B?”

He said, “Well, the IRS wanted a payment plan and they were going to let him pay this, and then it was going to go up to this.”

I said, “Well, it sounds like that is a tiered agreement, but have you ever submitted or reviewed a financial to see if the client can afford what IRS is requiring?  It just sounds like it is going to be a full pay within the life of the statute.”

He said, “Yes, that is all they want.  They just wanted a payment plan.”

I said, “So, in order to cover a $5,000 per month payment plan the client has got to show an ability to pay $60,0000 per year.  Have you looked at those financials?  Do you have a 433B in the file?”

He said, “I don’t have the documents labelled by that, but we will send over everything that we have.”

Well, it turns out, I ended up knowing this gentleman’s relatives and family.  So, I tried to be professional and polite on the phone, as I always am, but it was truly embarrassing that this gentleman did not know any of the basic IRS collection lingo.  It was unbelievable.  It was shocking to me.

At the end of the call, he said, “Yes.  If you ever have any clients that have bankruptcy issues, feel free as I am happy to help you out and give you some advice”.  I am thinking to myself, “I can’t believe that you are dabbling in tax resolution with a tax-payer, a client that owes a significant amount of money.  There are some twists and curveballs in this particular file, and you don’t even know the first thing about how to handle this”.

I said, “You received an 1153 letter, right?”

He said, “What is that?”

I said, “Well, you filed an appeal on the 1153 letter.  That is the trust fund recovery penalty proposed assessment.”

He said, “Yes, I think, I filed an appeal.”

It was shocking.  It was sad.  It was shocking.  It was really unfortunate that this gentleman is out there dealing with the IRS and interacting with the IRS.  A very nice revenue officer, by the way, sophisticated.  She has been around for a long time, but, he didn’t know the first thing in tax resolution, whatsoever.

I find that terrible.  I just think that is a terrible way in which people are trying to tell the public that they know what they are doing in tax resolution.  The Levy Office has been around for over twenty-years and we deal with civil tax controversy.  We don’t deal with bankruptcy.  We don’t deal with criminal IRS matters.  We don’t deal with criminal Florida Dept. of Revenue matter.  Typically, we deal in civil tax controversy.  Whether it is collection matter, or an exam issue, that is what we do, and in the Levy Office we are available to you over seven days per week, literally for 24-hours per day.

This particular client, as I mentioned, had called the office at almost midnight.  We took his call and he was in the office and had retained us within about 17-hours.  It was pretty remarkable.

Greg, when you were working at the IRS and you came across a power of attorney that didn’t have the proper skills set, and you were quite frankly out-powering him, not because you are a stronger guy, but because your knowledge-base was far superior, how did you approach that as a revenue officer?

Greg:  Well, people get lucky because I would approach it by trying to help this attorney and education the attorney, at the same time as I was educating the tax-payer.  Not everyone at the IRS is going to be willing to do that.  With most people at the IRS, some will take advantage of this attorney ignorance and just run rough-shot over the tax-payer, the client, and without regard to fairness or anything else.  I took a different approach.  I tried to educate and help people because I know, in the long run, less people are educated, and they want help, and they are willing to listen, but they are never going to change their ways, and these taxes will keep accruing and coming back, time and time again. 

My job, back when I was at the IRS, was ensuring that the tax-payer stayed compliant, and I never have to see them again.  They may be great people.  I may like them personally, but I want them to fix their problems right the first time, which is what we specialize in here at the Levy firm.  We like our clients.  We think they are great people, but ideally, “Hey guys, let us help you to fix this thing and get back on the right road so that you never have to call us, or anyone else again”.  That is the ideal situation and that is what we try to do here.

Lawrence: It really should be something that is straightforward, but I want to tell you about another example.  We had a client that came into the office this week and just went through some additional struggles.  We had secured an installment agreement for him.  He had another issue.  He fell of the wagon a little bit and, unfortunately, his going to owe again, and it is going to trigger a default on the existing agreement that we set him up with.  It happens.  Good people get themselves into a jam.  The gentleman said that he listened to us on the radio.

I said, “Look, is it the adverts throughout the week, or is it the radio show that you enjoy?”

He said, “I love your adverts, but I love the content”.

He loves these real-life examples.

Let me give you another one.  We have a client that makes a very healthy living.  He was in an installment agreement.  Due to financial circumstances he ended up having a problem.  He defaulted on the agreement.  Then, he got it reinstated, and now he has got an issue where he had a modification of a mortgage and the IRS issue called the 1099C.  It is a cancellation of debt.  Ultimately, he was concerned because it was a little bit unique and he is going to owe again for 2017, and he is going to default the existing agreement.  He is a really nice guy.  He is a good family man with kids and a wife at home.  He just wants to fix the problem.

A lot of these clients can get themselves into this IRS pickle, or in this IRS jam.  They just want to be able to survive.  Unfortunately, we have seen quite a bit lately where the IRS is taking, what I am going to call, ‘a little bit more of an aggressive posture’ than we have seen in a while.   Maybe it is because of the economy.  The pendulum has swung back.  Maybe it is because, in Florida, in particular, you had the IRS O-Freeze.  When hurricane IRMA occurred all of IRS collections was put on hold.  It was literally on hold with no action and no activity on it until the end of January.

It has only been about sixty-days since the IRS in this listening area switched back on.  The light switch is turned back on and there is a push, from what we have been told, for revenue officers to actually be in the field.  So, people will be getting field visits.  IRS will be physically knocking on your door.  IRS will be physically coming.  All of these things occur which is going to make a tax-payer have to react.

Now, when the IRS is going to stop at your business, or perhaps come to your house, please make very good note of this, ‘do not speak to them’.  You always want to say, “Thank you, and I will have my power of attorney get back in touch with you”.  You do not want to speak to them yourself.  You do not want to have any direct interaction with them.  You always want to make sure that you have your tax professional respond back.

Let’s talk about that for a second.  Who should you hire?  You should make sure that you hire someone who has a tremendous amount, and a long history of experience interacting with the IRS.  That is a really critical part.  You want to make sure that you have a firm that knows what they are doing.

Greg, you used to work at the IRS for thirty years.  We have another POA, Claire, who used to work at the IRS for about the same time of thirty years.  We have the experienced team here that can help navigate.  Too many times, we see people who hire a firm that doesn’t know what they are doing.  I think you will say, Greg, from working on both sides, now a POA, but, you used to be a RO, ‘how important that is’.  Don’t you agree?

Greg: Definitely.  You have to remember too, I have other experiences besides being an RO.  I was a revenue officer examiner dealing with employment tax audits for three years.  I worked offer and compromises for three years.  I worked innocent spouse cases for a six-month detail, and congressional issues for a six-month detail.  I worked overseas transactions (? 00:15:20) team involving money laundering for three years.  All during my thirty-two-year career. 

 So, I have done it all, and that is what you need.  You need someone who can actually help you.  Not only for collection issues, but what happens when you get a nasty-gram.  You have a business and they are questioning the fact that you call some of your workers independent contractors, and others as employees.  How do you respond to that?  Very few people know.  You need a firm that can actually go in there, know what the laws are, know what the section 530 safe harbors are, and other such things.  You need to know if you might qualify for .  We are the firm that can do that.  You can’t just hire any ‘old joe blow’ attorney out there who does traffic stop cases and occasionally criminal cases and think that they can handle the IRS for you.

 You need a professional who know what they are doing, who knows the ins and outs and can actually help guide you.  If you are doing something wrong, we will tell you and we will help you fix it.  So, you don’t have to go through this again.  We don’t just put out the fire, we make sure that the embers are totally put out for good.  Back to you, Lawrence.

 Lawrence: Actually, thanks.  I love the ‘back to you’.  It is like we are live in the studio.  Talking about ‘live in the studio’, I was actually on WPTV last week and it was great.  It was great that the WPTV had me on in West Palm.  We talked about what you do if you have an IRS problem.  Ultimately, you just want to make sure that you deal with it face on.

You brought up ‘innocent spouse’, by the way, and innocent spouse is a very interesting scenario.

The innocent spouse element is unique.  I am looking at a letter dated at the end of January where we were granted partial relief for some of the years, and full relief for some of the other years for a client right here in South Florida, for 2006, 2007, 2008, 2009, and 2010.  This case ended up going to appeals, but we were successful in appeal.  So, there is so many components that make up how this actually is going to fall into place for a client.

Greg, I think, you can allude to this, but sometimes, quite frankly it is going to be dictated by the personality of the revenue officer, which I don’t agree with.  Some revenue officer’s will literally bend over backwards.  They will try and accommodate.  They will try and help.  They will be professional.  They will be polite.  They will be reasonable.  They take a pragmatic approach to the case resolution.  However, oftentimes, you get revenue officers who are not so friendly and that becomes the problem.

So, Greg, when you end up having to go to appeals, and we like appeals.  As a tax resolution firm, we have always been very happy with how appeals, 98% of the time, resolve things.  They are fair.  They are impartial.  They take a reasonable approach to a case resolution, but, a lot of people don’t know that these tools exist.  So, dealing with appeals is a huge benefit to a lot of tax-payers.  They are, generally speaking, a lot more reasonable, and a lot more practical, and a lot more down to earth.

Ultimately, if you have a tax problem and you want to give us a call…

Locally in Sth Florida– 561-865-7800          Toll free 1-800-TAX-LEVY

 Greg, can you just give a little bit of background to penalties and getting penalties abated because we have had another successful week, this week, in penalty abatement.

 Greg: Basically, the IRS has various means in which they can abate penalties under certain circumstances.  The easiest one of which is, if you just fall off of the wagon for one year only, that is an easy resolution.  The IRS has what they call ‘first time penalty relief rules’.  All you have to do is call them up to say, “We had a problem.  We fell off the wagon.  We owe you some money.  We have fixed the source of the problem and we are on a payment plan.  Can you guys give us a break on the penalties under the ‘first time’ rules, and nine times out of ten you will get it.  Not all penalties are included with that, but the vast majority of them are. 

 Another way is what they call, ‘by reasonable cause guidelines’.  The IRS has strict reasonable cause guidelines.  In fact, they have a manual or handbook.  The Reasonable Cause Handbook.  They have a computer program which, I think, was designed by the VA because it mainly says, ‘No’.  They have a computer program which they can go through.  It is called ‘The Reasonable Cause System’.  If a disaster happens to you, and you have to keep in mind that reasonable cause does not include economic reasons.  So, because the economy went to crap, you lost our job, you didn’t get paid, your client didn’t pay – if you are a professional, or an insurance company screwed you over, that is not reasonable cause guidelines.

 Reasonable cause is where you took all prudent business measures to stay current, and through no fault of your own you couldn’t do so, such as in a natural disaster like what the listeners here have been through with Florida recently.  During that period of time, everyone’s penalties were frozen. 

 Another, such as a personal disaster, such as the death of someone close in your household following prolonged illness.  For example, you had a sick child battling cancer for years and years and you couldn’t keep up with your business, and you didn’t keep up with your estimated tax payments and things got out of hand because you were too worried about the family member who ultimately died.  That is reasonable cause.  You took prudent business measures, but because of factors beyond your control, this happened. 

 Or, you had a business.  You had a book-keeper.  The book-keeper embezzled you and you were basically robbed blind on the taxes.  You thought they were being paid and it ended up in that person’s bank account, and later it transferred overseas, and you are a victim of crime. 

Lawrence: Let’s talk about that for a second because one of the files that came in earlier this week and this attorney didn’t know what in the world he was doing, that was part of the basis.  There was someone, and I am not going to go so far as to say, ‘embezzlement’, but that was part of it, that there was a mix-up, shall we say.  We don’t know the story yet, but this guy, I think, was intentionally not letting the owners know that there was an issue.  It happens, and the IRS has a mechanism to abate penalty.

Just this week alone, on Thursday 29th, before lunch-time, Danielle was able to tall the IRS and get a client’s penalties wiped-out for over $2,000.  That was on Thursday morning.  So, there are ways to do it.  You just have to know what to do, what to say, what not to say, and it is a very unique area of practice dealing with tax resolution.  A lot of people, oftentimes, don’t seek the professional help either because they think they can’t afford it, or they think that their CPA or someone can handle it.  We get a referral from a tremendous amount of CPAs.

Greg, you have worked on a lot of files that come to the Levy Office as referrals from CPAs, and, by the way, before we forget as we come up to the top of the hour…

Locally in Sth Florida – 561-865-7800          Toll free 1–800-TAX- LEVY

 Yes, Levy really is my last name.

Greg, before I forget, in all of the years that you worked at the IRS, would you have ever thought that you would be getting your pay check signed by a Levy?  Imagine that!

Greg: Probably not. 

 Lawrence: I want to give Greg a shout out.  Greg has been at our office for a while now.  Literally, he has been there almost six days per week.  He really cares.  He is a passionate guy.  He really cares about his cases, his files, and his clients.  He is a human being.  Greg is a dad with his kids.  Greg is a grandpa.  Greg is a husband.  He is a normal family man as well, and there are plenty of times where Greg leaves the office at 06.30 p.m., or 07.00 p.m.  I could call him on his cell phone.  He is in the office on Saturdays.  He is very particular with his bagels though.  I bring him a bagel on a Saturday.  You only want a certain bagel, but, if not, you take it home to your wife, right?

Greg: Yes.  Cinnamon and raisin, but if you only have the salt bagels, she likes those.

Lawrence: Yes.  The point is, you are always in the office.  You care.  You are passionate, and you are extremely knowledgeable because you worked there.  So, how many times have you had to say to an IRS employee, whether it is an ACS rep., whether it is appeals, whether it is a revenue officer, “You can’t do that.  I used to work there.  That is not the way to do this.  That is not right.”  How many times?  I mean, it is countless, obviously, but how often does that happen where you actually have to say, “I used to work there.  You can’t do that.  That is not right.  You need to do this.”

Before you came into the private sector, we talked.  You said, “No.  There is no way.  You are exaggerating.  It doesn’t happen like that.  There is no way it can be that bad.  There is no way, no way.”  Now, you see it out there.

Look, there are some revenue officers that are extremely nice, and they really will try and help you, but there are some that are just really horrific to work with, and the amount of time and wasted energy is unbelievable to me.  It really is, and by the way, it is not just the IRS.  Florida Dept. of Revenue.  Other States.  Sometimes, these states are very cumbersome to work with.  A lot of it is that you have to get through to someone that is reasonable.  You have to persevere.  You have to make sure that things are being handled in the right manner, but if you haven’t filed for a few years…

Greg, what is coming up on the 15th?

Greg: The tax filing date, which is actually the 17th this year, due to Monday being the 16th which is some other tax holiday in some States.

Lawrence: Well, let’s talk about that.  It is Emancipation Day.  It is celebrated primarily, I think, in the district of Columbia.  So, since April 15th fall on a Sunday, Monday is the date, but that is a holiday, and so everyone in the United States has until April 17th.  So, you get a couple of extra days.  We are literally two weeks away from that.

So, if you haven’t filed, you are worried, you need to catch-up, give us a call.

Come on in to the office.  We are open for seven days per week.  We are open on Saturdays.  We are open on Sundays.  The Levy Office is much like Vegas, it never sleeps.

We want you to call.  We want you to interact.  We want you to come in, bring us your documents.  We want to make sure that you can sleep at night, and it is not an overnight fix, just so you know.  It is not going to be ‘boom’, you haven’t filed for five or six years and you are going to fix the problem, but, before my last name is going to be use, you want to avoid the levy.  You want to avoid a wage levy. You want to avoid a bank levy.

How do you avoid those major pitfalls?  It is very simple.  Be proactive.

Levies – you want one on your side, you don’t want a levy against you. 

As we always say, “Don’t fear a levy, you hire a LEVY.  You want a Levy on your side, not one against you.”

 By the way, I came up with those.  It wasn’t an advertising agency.  I was one of those days that I was just sitting, thinking about my last name, and I give a big shout out to my father, God rest his soul.

Listen, it is the holiday weekend, but the Levy Office is open.  Whether you are an observant of Passover, or you are celebrating Easter.  Good Friday was yesterday, if you are listening to this live on Saturday, or if it is re-airing on the sister sport station on the hurricane.  We hope you will have a good night, and second night of Passover, but, we want you to come on in and feel at ease.

Next week, we have a full week ahead of us again.  We are rearing up to April 15th.  If you have an IRS problem.  If you have got a knock at the door.  If you have received letters in the mail from the IRS, or the Florida Dept. of Revenue give us a call immediately.  We are here for seven days per week.

Telephone – 561-865-7800

 The Levy Tax Help Show has been around for a long time.  We have a nice listening base.  We want you to be able to sleep at night.  Give us a call.

Greg, thanks again for all that you do.  You are a tremendous asset to the Levy Team.  We have a very deep bench.  The former IRS revenue officers, like Greg Mahaffey.  We have our attorneys, the CPAs, the EAs, all of which function as power of attorneys.

Enjoy the good weather.  Enjoy the holiday weekend, and if you have a tax problem take a minute and give us a call, and we will walk you through what needs to happen to let you sleep better at night.

Signing-off for now from the Levy Tax Help Show, Greg Mahaffey, the former IRS revenue officer in the house, along with Lawrence Levy.  Enjoy the rest of the weekend South Florida, you take care.

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