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 Associates of Delray Beach, tax resolution specialists. Call Levy and Associates 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: Welcome, once again to the Levy Tax Help Show. We hope that everyone is enjoying the month of May and that your post tax season worries are gone, but if they are not gone because you still have an IRS issue we want you to pick up the phone and give us a call.
Local: 561 865 7800 Toll free: 900-TAX-LEVY
Yes. Levy really is my last name. Let’ start of the show by introducing everyone to a gentleman who used to work at the IRS for over thirty years as a revenue officer, and also worked in the offer and compromise group. Greg Mahaffey is joining us once again. Greg, how are you?
Greg: What can I say? Happy Saturday morning to everyone right now. It is good to be at work.
Lawrence: If you listen to the show on Sundays’ on the sports station Hurricane, it re-airs bright and early on Sunday morning.
If you have an IRS problem, what should you do? Well, you should firstly find a company that specializes in tax resolution. Lately, we have seen this a lot, individuals that are either CPAs or lawyers who are playing as tax resolution specialists and really don’t know what they are doing.
Greg, when you worked at the IRS, did you see that quite a bit?
Greg: Yes. Just because you have ‘esquire’ after your name, or CPA, it doesn’t mean that you are an expert when it comes to collection tax matters and IRS rules and regulations, and how they operate. You need someone who is intimately knowledgeable and experienced in dealing with the IRS and knows the rules that they have to play by, and what can be done to fix your situation.
Lawrence: Part of what we also want to talk about, and we have brought this up on a couple of other shows, and maybe last week we talked about it, but there was a client who came in and the business owed quite a bit of money. Before coming to us, the client had used a bankruptcy attorney to deal with some of his issues, I guess is the best way to put it. The bankruptcy attorney didn’t really know what he was doing and said things that he shouldn’t have said.
Greg, when you worked at the IRS, did you see that happen a lot, where sometimes bankruptcy lawyers or other lawyers just didn’t know what they were doing? I want to explain the resolution in this case.
Greg: Yes. I saw that all of the time. Just because you are an attorney, doesn’t mean you know anything about tax resolution or how to deal with the IRS and the collection divisions. Just because you are a CPA doesn’t mean you know it all either. It does mean that it is a CPA that has prepared the returns on complex returns and about the tax laws, however, not what to do when you owe the IRS money. As attorneys, you have to be an expert, so to speak, in all phases of the law. As we know, that is like being an expert in all phases of medicine. That is why doctors specialize. They can’t know everything. It is the same thing with attorneys. They can’t know everything. They might be a great personal injury attorney, but an absolutely crappy attorney when it comes to dealing with the IRS on how to fix your tax problems.
You have got to get someone that is the right fit, who knows what they are doing, and will get it right the first time, and will give you the expert advice to keep you out of trouble going forward. Not just fixing it and putting a band-aid on it, or getting you into an installment agreement, or something else without addressing what caused the issue.
We do everything. We diagnose your issue. We figure out how you got into the mess. We figure out what needs to be done to get you out of the mess, then, further, to keep you out of the mess going forward.
Lawrence: That would explain this client that we are specifically talking about because it is a pretty good example. I am looking at what is called a ‘pay-off calculator’. This company, as of the end of March, owed almost $300,000. It was $298,000 and change. In this particular case, the bankruptcy attorney who was representing this business, we will call it, with a local revenue officer local to where this tax-payer is located, were just tossing out numbers. “Yes. We think we can pay $5,000 per month”, or, “Yes. We think we can pay $1,000 per month”. There was really nothing specific. It was very bizarre the way this all went down. The bottom line is that when we got involved, Danielle, who is the lead power of attorney in our Florida Office, ended up getting hired. It was a couple of days before that and we have now had this file for around 45 days, and, as of earlier this week there was a resolution. The business is going to enter into what is called a part-pay instalment agreement. In this particular case, the client was so tickled-pink that they actually called on Tuesday. We had called the client after Danielle was finished speaking with the IRS to say, “Are you okay with this?” The owner was getting a haircut and he called back after and said that we just made his day. We spoke to his wife who was also helping out in parts of the business to try and get things straightened out. There is so much that was done wrong before we got involved. I bring this up because we hate to see these things. Where things are done wrong and then we have to come in there and fix it. It makes it awkward at both sides because you are sometimes being told one thing by someone, then, something from another person, but Greg brought up a good point.
When you go to the doctor, and God forbid you need to go and see the cardiologist. Your intern is going to send you to the cardiologist, and that cardiologist is the one that is going to address the hard issue. A lot of time, your doctor is going to send you to that sub-specialty, whether it is for the kidney, the heart, or gastral, or whatever it may be, much like the dentist is going to send you to the orthodontist. That is the simplistic way that I always look at these things. A dentist does not put on braces. The orthodontist is going to put on the braces. The orthodontist is probably a dentist too, but it is a specialty area. We see this all of the time, when things get really messed up, which is the best way to put it. So, this file, the gentleman’s company owed $300,000 almost, is literally finalized now. He can sleep at night. He can go on with his life. He can go on with his business. Life can go on for him. We don’t have it officially in writing yet, but, Danielle worked out a phenomenal resolution which ended up requiring to get the manager involved. The manager was extremely nice at the IRS. The group manager was great to work with. Oftentimes, we find that when you are not getting anywhere with the revenue officer for whatever reason. Maybe there is just a law jam, or just a discrepancy that you just can’t get over, I guess is the best way to put it, but you then have to go to the next level and you have to speak to the manager. It is called the GM, the group manager.
Greg, when you were at the IRS there was the same process. You were a revenue officer, then you had your manager, right?
Greg: Yes. There was a definitive chain of command that had to be used and applied. Likewise, we, as necessary, will go to someone’s GM and if we are not getting the right answers and we are still in disagreement, at times, we have even been known to go above him to what is called the territory manager. Above the territory manager there is the area director and after that we are talking about other aspects within upper level national office. There are ways to do this. There is a chain of command just like there is in the military. You have to follow the chain of command and you have to know what that chain is, and you have to follow the rules and procedures. Otherwise, you won’t get your day of getting your point across, so to speak.
Lawrence: You know, it is very rare though, that you have to go to the territory manager. It doesn’t happen very often. It is a very rare occurrence in which something like that goes on, but occasionally you do. Last fall, you had to with a file that required you to get the territory manager involved. It was an offer and compromise file and you ended up tag-teaming on the file with Danielle as the other POA, and we just got the acceptance letter recently on this one. It is just a tremendous feeling that you are successful in that.
Let me shift gears a little to another file from this week. A gentleman, right here and locally from Florida, apparently hadn’t filed taxes back to 2005, 2006, and, I think, 2008. On paper, and because of him not filing, the IRS shows that he owes almost $600.000. It was literally $590,000 and change. That is going to be in the works, but a lot of client procrastinate, and bury their heads in the sand, and they get worried and just think that there is no light at the end of the tunnel. They don’t know what to do or where to go and it turns into an extreme pickle because the client just sits back and thinks that it is going to go away. IRS doesn’t go away. So, this gentleman now has a local revenue officer from right here in South East Florida, and on paper the IRS says to our client that he owes $590,000. That is a huge number that they are staring down, but, ultimately, there may be a way to address that. That is what we do.
We are here to fix the problem and to resolve it. We do not have a magic wand and every file is not going to qualify for an offer and compromise. Every file is not going to qualify for penalty abatement. You have to have a reason as to why penalties should be abated. It is not just because you are nice, and not just because you have on a pair of jeans today, or you wear glasses. There has to be what is called ‘reasonable cause’. So, every client that walks through our doors, and every client that calls, of course, want an offer and compromise, and they want to get rid of the penalties.
In fact, the gentleman that we were just speaking of, whose company owed almost $300,000 said that he had talked to his former CPA and the CPA said that he was batting 3/3 and getting penalties wiped out. Well, that is great, and maybe he has got three files that penalties were abated on, but it doesn’t always work like that. We want to be clear that each file is unique. Each file is going to be based upon the merits of the file, the tax-payers financial condition: –
- What do you make?
- What do you spend?
- What do you have?
So, it is about the income versus the expense, and then there is the equity component.
Greg, when you were a revenue officer, did you ever suggest to clients that you may be able to have penalties abated because of a medical issue? Did you bring that up? You were, generally speaking, a very reasonable and helpful revenue officer. You worked a case resolution-oriented approach, I guess is the best way to put it. So, you were actually trying to help people when you worked at the IRS. We knew you when you were a revenue officer. You were on the other side of the table, but you were always tough, and you were always fair. You were practical, and you were reasonable. It really is something that we wish we saw more often, but you worked a file and you really cared. You were there to help. You were working Saturdays, oftentimes. You would call our office on a Saturday, for crying out loud, and sometimes I would be there and say, “Oh my God, Mr. Mahaffey. What are you doing working on a Saturday?” That was just you, right, Greg?
Greg: Yes. That was me, definitely. My wife said that I didn’t have a real life, but anyway, that is what I tried to do. That is the approach I took back then because I found it was the most successful approach. I got into the shoes of the tax-payers. I tried to figure out how they got into the mess and what is would take to get them out of the mess, then, keep them out of the mess. It is no good to simply slap a band-aid on something and give an instalment agreement that you know they are going to default on within two or three years because they are going to end up owing in a new period. “Yes, we closed the case now”, but it is not the right way of closing a case at the IRS. At least, if should not be. We have seen that all too often on this side of the table.
What we try to do is figure out how the client got into this trouble. What caused this? Well, if you are self-employed you have got to make estimated tax payments. Why didn’t you make estimated tax payments? “Well, I didn’t have the money”, or, “I had to spend it on something else”, or, “I had an emergency”. We have to get into the business and figure out what is going on. What caused this, and what do we have to do to fix it to keep them out of trouble going forward? Again, it does no good to slap a band-aid on it, send them out the door, and give then a resolution; only to find they are knocking at the door the next year, saying, “Why is this thing broken again?” Well, again, we take a different approach.
Ideally, when we have a client here, we like to solve their problem permanently so that they never have to come back again. It doesn’t always work that way, but that is our goal here at Levy & Associates. We want to make sure that we do it right the first time.
There is a TV Show on HGTV called ‘Homes Does It Right’, or ‘Homes on Homes’. It has the same philosophy, which is to ‘do it right the first time’.
Once we figure out what is involved with the fix, we get you going on the fix, then, we will see what is leftover and what can be done about the back-taxes. That is the most pragmatic way of approaching tax resolution cases.
Lawrence: One thing too, Greg, that I want to bring up is that there has been, lately, clients and new clients getting what is called ‘notice of intent to levy’. Levy, like my last name, and, by the way, we haven’t given out the number enough.
Local: 561 865 7800 Toll free: 900-TAX-LEVY
Yes. Levy really is my last name.
We are getting these notices. They are called CP504 Notices. They read, ‘Notice of intent to seize’, then, in print they say my last name, levy, ‘your property, or rights to property’. Ultimately, we are getting those.
This one in particular that I am looking at generated from the Memphis Tennessee Service Centre. Greg, these are spat out of a computer, correct?
Greg: Yes. Almost all IRS notices, unless they are specifically sent by revenue officers, or appeal officers, or settlement officers, or revenue agents, or, God forbid a special agent, those are all computer-generated notices. Generally, if you have a balance due, the IRS will send you four notices. The last one comes by certified mail. After the 504, you get what is called an LT11 Notice. When you get that, that means the IRS is about ready to come and ‘kick your butt’, so to speak, and start taking things from you unless you respond. If you hear from IRS by mail, you call us. Get your butt into us before it is too late. That is the proper way of doing it. Then, we will start on a resolution.
We will send the IRS a power of attorney.
- We will analyze your situation.
- We will try to figure out how you got into the mess.
- We will figure out what the probable suggestions are.
- We will figure out what you need to get you out of the mess.
At the same time, there may be alternative actions that we can take, or, again, we always come up with alternative solutions to your situation because every situation is unique, and every situation is different. There is no such thing as a cookie-cutter solution to all tax issues.
Tax issues are like, if you are sick and the doctor needs to analyze it to see what the specific problem is. It may be multiple problems. It may be something totally strange that he has never seen. It may require multiple specialists on your care. It is the same thing with tax problems. You might need accounting. You might need book-keeping. You might need proper work, someone to come back in and audit your own taxes for you and see if the returns are in order. It could be one of many different things. That is what we try to do here. We tailor every situation to the individual client.
Lawrence: Let’s talk about that for a second. Greg, you are the POA on a file for a doctor, without saying names here, the doctor has a lack of book-keeping and accounting. When we got involved in this we were literally in the middle of doing a few years-worth of book-keeping to get him caught up. That happens.
Right now, we have a file that you are not on, not the doctor’s file, but another file. A lady from Florida has got two different businesses and she hasn’t filed taxes for either one of the companies since 2013. That means, we have to file 2014, 2015, 2016 and 2017. It is not the cleanest of book-keeping. It is messy. We have to go through it line by line and transaction by transaction, trying to figure out the check numbers and what matches up to what, and, if there are any transfers between companies. That is the nature of what we do. It is, sometimes, very pain-staking, but, at least, there is light at the end of the tunnel if you have done it the right way.
As Greg mentioned, you want to keep yourself clean going forward. It is one thing to fix the problem, but it is not different than going to the doctor and the doctor says, “Hey. I need a blood test, Mr. Levy. You are getting on in years and I want to see how your cholesterol is”, and it comes back, and I have high cholesterol. The guy says, “Listen. I would eat foods that are high in cholesterol. I would back-off of the meat. I would start eating some fish. I would start doing things to help”. The next thing you know, I see my doctor out at a restaurant and I am eating a big fat juicy steak and having cheese, and eggs, and things that are high in cholesterol. So, he said, “What are you doing?” It is the same difference with us. It is the same thing. You want to be listening to what you should be doing.
We have a client that hasn’t even taken a pay cheque out of their own company. It happens all of the time. You need to be doing things the right way. You have to file the taxes. Without being in compliance, you are never going to get out of this.
- Current compliance is a critical component of any tax resolution case.
There a lot of C’s in that sentence. Greg, how long did you work at the IRS?
Greg: Over thirty-two years, plus it was in many different roles.
Lawrence: I talked to a gentleman earlier this week from the offer and compromise unit, who happened to answer phone and listen to me. I happen to answer the phones. I am happy to make an appointment. I am happy to do whatever it takes in our office. I am happy to play receptionist. The guy was so nice. He worked at the IRS for over forty-years. IRS has, what they call ‘a flex program’ which allows you to basically work out of your house. Oftentimes, you hear stories about how mean and unfriendly IRS revenue officers can be, but this gentleman was so polite on the phone, I have got to tell you. He worked for the IRS for over forty-something years which is a long time. It is longer than Greg, and long than Claire Coffee, who works for me having worked at the IRS for thirty-years as well. This gentleman was so polite, professional, and down to earth. There are good people out there that work at the IRS and that truly want to help. We find that often enough. We wish we would find it all of the time, but, I think, that is just human nature and you can’t really go by one rule of thumb. “The IRS is just mean and terrible.” It is not like that. They have a job to do. They are there to collect a fair amount of tax, to make sure that you file your taxes, and to work out a solution, and IRS has resolution options. For example: –
- Offer and compromise
- Instalment agreement
- Penalty abatement
You have options that are out there. You just have to know what to do and how to get there. Unfortunately, we see a lot of people who procrastinate. Unfortunately, we see a lot of people who don’t hire someone to help them navigate through these things. You wouldn’t think, ‘in a million years’ that if you were having chest pains you would try to diagnose yourself. You are going to go to the heart doctor. You are going to go to ER. You are going to go to get the help that you need, and it should really be no different in this world.
Think of it like this: –
- How many people listening have gone through a divorce? Did you represent yourself in the divorce, or, did you have a divorce attorney?
- How many people have filed bankruptcy? Did you go to a bankruptcy lawyer, or, did you represent yourself in the bankruptcy proceedings?
- How many people out there have had cavities? You are not going to fill your own cavity, are you? You are not going to clean your own teeth? You are going to go to the hygienist, or the dentist?
It is the same principle. It is the same concept.
Local: 561 865 7800 Toll free: 800-TAX-LEVY
Yes. Levy really is my last name. As we wind down the show for today, and we have about 5 – 6 minutes left, and we are past tax season, but what do you do if you haven’t filed?
We actually had a gentleman that came in this week whose former CPA, unfortunately, passed away. It is not a Florida case. He doesn’t know if he is coming or going, or what is going on. If he is missing returns, what has been filed and what hasn’t? We see that a lot. People that do not know when the last time they filed was. This gentleman is a really nice guy. He went through a divorce and it messed him up in his head a little bit. It is emotional. Certain things go on in your life and it is tragic and it is emotional. Whether it is medical issues, or whether it is a divorce, whatever it may be, you have things that go on in your life that sometimes cause you to lose your focus. Unfortunately, if you don’t focus on the IRS and it snowballs, you end up in this position.
Greg, when you were at the IRS, did you see people that had true problems? People that were truly in a bind, or had medical issues? God forbid, there was a loved one that was sick. You saw that a lot, didn’t you?
Greg: All of the time. It is called life and in life not everything is always fair and equal to everyone. I saw people with broken families. I saw people who suffered tragedies such as death or suicides. You name it, I have seen it. I have seen it on this side of the table as well. You have to be flexible. You have to be sympathetic. You have to try to help people.
Not everyone out there that the IRS deals with the IRS is a crook. Some people get jilted and think everyone out there is a crook, but it is not true. Accidents happen. Tragedies happen. People get sucked into different things. Maybe it could be substance abuse. Maybe it could be a gambling addiction. Things happen in life. As such, you have to be understanding and you have to understand how all of that effects the situation at hand and try to help as best you can while you are resolving the tax situation. That is what I tried to do at the IRS as well, suggesting that they maybe go to a gambling specialist, or the AA, or doing whatever they had to do to help get their mind straight until everything is together. We can help with taxes, but there are other professionals out there as well. That is what we do. We try to help everyone in all aspects we know.
Lawrence: Right, and these things cause a lot of people a lot of stress. You talked about addiction issues. We had a gentleman that had some substance abuse issues and he admitted it, and that is what had caused his downfall. The gentleman that we were talking with earlier this week was from right here in Florida had some gambling issues going on. He was a really nice guy. You have just got to address these things. You have to meet them face-on, and deal with them head-on and, unfortunately, a lot of our clients bury their head in the sand. It is that ostrich-effect. They just bury their head in the sand and don’t get to the right person. They don’t face the music and just keep on kicking the can down the road. Unfortunately, it happens.
Like you said, it is just life, but no-one is going to jail, at least, in our office as we don’t have the criminal side of the IRS that we deal with. We deal with what is called ‘civil tax controversy’.
If you have an IRS problem. If you haven’t filed in a few years. If you are in the middle of an IRS audit. If you have payroll tax issues and you haven’t filed, or you haven’t paid, or you are a business owner, give us a call.
Local: 561 865 7800 Toll free: 800-TAX-LEVY
Let’s summarize what went on in today’s show. We have Greg, who worked in the IRS for thirty-two and a half years?
Greg: Yes. Thirty-two and a half years.
Lawrence: By the way, Greg, you were in the Gulf War. So, we would like to say, “Thank you for your service”. Of course, we always give a shout-out to the first-responders out there, and to the existing folks that serve in the military, and the ones that are retired. So, Greg, “Thank you for your service”. So, you were called up from the reserves for the Gulf War?
Greg: Yes. Back in 1991. I was over there in the northern Gulf area on a ship, off of the coast of Kuwait City. There were two battle ships and two hospital ships. I was on a supply ship. The supply ships supplied for the whole northern fleet. We went down, and we came across many mines while we were there. If we had went down, the whole northern fleet would have been done for. (? 00:25:09).
Lawrence: That is crazy. Thank you for your service. We appreciate everything that you have done and continue to do.
I want to give a big shout-out to my staff. We have a tremendous staff. We have the former IRS revenue officers, like Greg and Claire. We have the CPAs. We have the EAs. We have the attorneys, all of which function as power of attorneys. We have a tremendous staff of accountants and book-keepers, and also the admin. staff, and the case managers, of course, who are great. Everyone functions well together. It is not always easy because of what we do for a living, but we are here to help.
We are here for seven days of the week. We enjoy the weekend calls. We enjoy the weekend client interaction. We are open for seven days a week. Whether it is Saturday or Sunday, we really want you to be able to sleep at night.
Like Greg said, we don’t want you to come back with another problem. We want to keep you current. We don’t want you to fall off of that wagon. It is so important to try and stay current and being current is a really important part of any IRS case resolution.
If you have an IRS issue, pick up the phone right now. It is almost nine o’clock, if you are listening to this on Saturday. Call us: –
Local: 561 865 7800 800-TAX-LEVY
Yes. Levy really is my last name.
If you have an IRS issue and you can’t sleep at night, pick up the phone so that you can sleep better and enjoy the weekend.
Signing-off for now from the Levy Tax Help Show, you have the famous former IRS revenue officer, Greg Mahaffey. Greg now, of course, is functioning as a power of attorney and advocating for tax-payers all over the land. Greg, you are doing a great job and I just want to give you a shout-out too.
Give us a call if you have a tax problem, but, signing-off for now are Greg Mahaffey and Lawrence Levy, in the house from the Levy Tax Help Show.
Enjoy the rest of the weekend, South Florida. You take care. We will talk to you next time.