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: Good morning, South Florida, and welcome once again to the Levy Tax Help Show. We hope that everyone is enjoying the week and the summer, and that you are accustomed to the hot days of summer in Florida.
We are not here to talk about the weather. We are not here to talk about politics, either. We are here to talk about: –
- What you do if you have a tax problem?
- What do you do if you owe the IRS?
- What do you do if you haven’t filed in a few years.
- What do you do if you have had a knock at the door from a local revenue officer?
We have had a really great week. We want to talk about: –
A nice client testimonial that we had for an offer and compromise for a gentleman.
A few levies that we got released within 24 – 48 hours of a client hiring us.
A lady whose is a nurse, that had wages garnished*.
*Garnished is the generic term; ‘levy’, like my last name, is the real term.
“Always remember, you want a Levy on your side and not one against you, and you don’t fear a levy, you hire a Levy.”
Let’s also give a nice warm welcome to a pretty common guest on the show, Greg Mahaffey. Welcome to the show and good morning to you, Sir.
Greg: Good morning, Lawrence. How are you doing this fine rainy day? At least, up here in Michigan it is raining to high heck.
Lawrence: You know, it rains all of the time in Florida in the summer, usually, you get a lot of afternoon tropical rain, but that is okay.
Greg, you used to work at the IRS. For those listeners that are rather new to the show, you worked at the IRS for how long?
Greg: Over thirty-two years.
Lawrence: You were a revenue officer and the guy that would knock on peoples’ doors, whether it was a business, or an individual. You would knock on their door and say, “Hey, you haven’t filed”, or, “Hey, you owe us”.
Greg: Yes. I would show up at businesses unannounced and I would surprise them about back payroll taxes, and for a while I was even doing offer and compromise, employment tax audits, and for a while I was working the specialty ATAC cases with international collections specialty teams. So, I have been around the block quite a few times.
Even, in-between all of that, I worked on innocent spouse issues.
Lawrence: I will tell you something, it is unreal what history you have at the IRS, and, also, we have just recently added on another former IRS employee. She worked at the IRS for over thirty years as well. She rounded out her career as a GM, what is called a Group Manager for seven or eight years, I think it was. We are going to have her on the show as she is now on the Levy team as well.
Let’s start off the show. I want to read something. This is pretty recent. This is a hand-written testimonial from July 14th. It was not even one week ago.
“To Levy & Associates.
Dear Levy & Associates,
I want to take this time to thank you for resolving my issues with the IRS. I couldn’t be happier with the outcome of my case and the professional manner all aspects were addressed.
I want to specifically reach out to Claire Coffee and show my gratitude for all of her efforts, and with making this experience as easy as possible. She always made me feel that she was invested in the quick and favorable outcome of my case. Claire always informed me well in advance of all pertinent dates and monies required to satisfy the IRS.
To all members of the firm who are behind the scene, a heart-felt thank you to everyone. I walked into Levy & Associates in 2016 with five years of unpaid taxes to the IRS, totaling approximately $160,000. I earn approximately $40,000 in income and I knew that I would never be able to repay that debt amount. My expectations were that I would be on the hook for 15% – 20% and years of monthly deductions from my cheque accounts to the IRS.
Levy & Associates blew my expectations out of the water. Within eighteen months my case was resolved with the IRS with all leans reversed, and my $160,000 debt was satisfied for under $2,000. Imagine that!
Thank you, Levy & Associates for your expertise and professionalism.”
That letter was dated, July 14th, hand-written and signed by our client, who is local to here, in South East Florida. I have got to tell you, when we hear things like that it makes us feel so good. It is not overnight. It is not where it is going to be a ‘lickety split’ and you get all of this resolved and everything is great, but, this gentleman’s file started, literally, two years ago in 2016. I don’t remember the exact amount that he owed. He said, “$160,000”, but, ultimately, he was able to get his offer and compromise for under $2,000, assuming his numbers are right.
I have got to tell you; this guy has gone through bankruptcy. This guy has had a lot of issues on his plate over the years and he has just had a tremendous amount of stress that he has gone through. To be able to get this guy a resolution like that through an offer and compromise, it really is just an incredible victory and it really makes you feel good about it.
Greg, now, being a power of attorney, don’t you feel good about truly helping people out?
Greg: Yes. That is partly the reason why I am usually here for about fifty-five to sixty hours per week, even though I don’t have to be here. I am here just to help people, mainly. When I do have success stories, it is very, very gratifying.
Lawrence: It makes you feel good. Each case is going to have its own definition of success. I will give you an example. This happened yesterday, on Friday.
A gentleman down here owes the IRS a lot. It is $300,000 – $400,000. Part of it is payroll taxes. Part of it is income tax. He is going to be offering the IRS a monthly payment plan that he can afford. So, his isn’t going to be like the testimonial that I just read for you. The testimonial that I just read for you settled for pennies on the dollar. That is called an offer and compromise. That does not always occur. Let’s be very clear. That is not for every single file. Every client that walks in the door, mind you, will ask for that. They want an offer and compromise. They want to get rid of penalties. They want to lower the IRS debt, but I can’t stress enough that not every client is going to qualify for an offer and compromise.
- Some people make too much.
- Some people spend too much.
- Some people have too much.
The IRS is going to look at what you make, what you spend, and what you have. If you have liquidity in your assets, whether it is a house, a boat, a motorcycle, a jet ski, a trailer, or, liquidity in your retirement plan, they are going to look at that, and want to see how you are living, and what your expenses are. IRS has, what is called National Standards.
So, this is what you make, but, also, you are going to be ‘capped’ on what you actually are allowed to spend.
Again, it is what you are allowed to spend on certain expenses, such as: –
- Food & clothing.
- Housing – mortgage, or rent, and utilities.
- Car payments – lease or purchase.
Food & Clothing
So that everyone who is listening understands this, the food and clothing is based upon how many people are in the house. Generally speaking, if you claimed them as a dependent, that is national. You could live in Florida, Alaska, California, or New York, that number is not geographically specific. In my opinion, it probably should be I think the cost of living is more expensive in certain parts of the country than it is in others, but I don’t write the rules. We just live by the rules. So, that is food and clothing.
Housing & Utilities
Now, on housing and utilities, that number is going to be based on how many people are in the house, and the County that you live in. So, that is County specific, therefore, geographically specific.
Other standardized numbers they allow for are car payments, lease or purchase. That is a standard across the country, no matter where you live.
There are variations on operating expenses, which is basically gas, maintenance and insurance, but those are geographically-based numbers depending on where you live. Detroit is going to be different than what Florida will be, for example. So, those numbers are different.
However, no matter what you have as an IRS problem, and, by the way, we only deal in civil tax controversy. We don’t deal in the criminal side of IRS which is called the CI investigations, we simply deal in civil tax controversy. There is a solution out there.
- Is it always going to be an offer and compromise? Absolutely, not.
- Is it always going to be that you can get rid of penalties? Absolutely, not.
However, there are options.
- Maybe, it is getting you deemed what is called, ‘uncollectable’.
- Maybe, it is going into a payment arrangement with the IRS, that you can afford.
There are certain types of ‘payment arrangements’.
- A full-pay.
- A partial-pay instalment agreement (PPIA).
There are options out there. You just need to be able to get there.
- What do you do if you have an IRS letter?
You pick up the phone and call us immediately.
Local: 561 864 7800 Toll free: 800-TAX-LEVY
Yes, ‘Levy’ really is my last name.
Now, we will talk a bit about the gentleman who had $160,000 debt and settled for a couple of thousand dollars, or whatever the real number was. It was somewhere in that ball park.
There is the other extreme where the guy owes $300,000 and he is going to go into a payment plan.
I will give you another example. We had a dentist that just this week feel off the wagon and is going to owe again for 2017. He owes for 2016 and we were able to get him, what is called ‘currently non-collectable’. Now, this is the dentist that I am talking about. He is a really nice guy. When someone is deemed, what they call ‘CNC’, in my opinion, the biggest part of that acronym and the most important part is what is called ‘currently’. It doesn’t mean that you are going to get wiped out forever. About a year ago, we were able to get this gentleman deemed ‘currently non-collectable’. It was actually May 2017.
If you get a letter from the IRS, generally speaking, but not always, and this is right in the middle of the page, in bold lettering, but not all in capital letters except for the first letter of each word. This was May 2017.
“Case Closed – – Currently, Non-collectable.”
I will read it.
“We temporarily close your collection case of the tax types and periods listed below. We determined you don’t have the ability to pay the money you owe at this time.
Although we have temporarily closed your case, you still owe them money to the IRS. We may reopen you case in the future, if your financial situation improves. As you still owe the money, we will continue to add (? 00:10:59) interest to the account, subject to other adjustments and offsets.
You don’t need to take any action.”
That is the letter. Now, the dentist was thrilled a year ago. Unfortunately, the good dentist ended up falling off of the wagon. He is a really nice guy and it happens.
Greg, when you were at the IRS, did you see a lot of repeat tax-payers? As in, when you were there, did you see a lot of repeat tax-payers that it was almost like a revolving door?
Greg: Yes. I seen them all of the time. It seems like the same people over and over again. You try your hardest to get these people into compliance, just like we do now. The first thing we always stress with our clients is that we have to, what I call ‘stop the bleeding’. Fixing your taxes is just like basic first aid. It is the a, b, and c to stop the bleeding before you try to treat for shock or set broken bones. You have to stop the bleeding first, before you try CPR. It is the same thing here. You have got to stop accruing new taxes and we try to figure out why you owe taxes year after year, after year. We come up with a solution that firstly fixes your current taxes. If we don’t fix your current taxes they are just going to come back ‘open’ next year. Then, you are going to have to repay us again to do it all over.
We prefer to do it right the first time. We are not always successful, but we sure as heck try. We want to fix it right the first time so that when we see a client it is once, and only once. We walk away thinking that they are fixed for life. At least, we hope they are.
Again, that is the biggest difference. We need to stop the bleeding and concurrent compliance has a super priority, over trying to pay the back taxes. That is the way the IRS feels as well. As long as you are current now they can work with you. They are happy to work with you as long as you are current, but you have got to stay current.
If you have got payroll taxes you have to make those deposits. I am trying to get my businesses to make the deposits every pay day, and on pay day they pay their employees. If you are not staying current, you will never get out of this mess.
Lawrence: So, let’s go to another example. So far, we have talked about the dentist and someone in the construction industry. I don’t know what the gentleman who wrote the testimonial does, but I was just aware of that file. He is a really nice guy and I actually called him to say, ‘Thank you for taking the time to hand-write a testimonial like that’.
Let’s try one that is pretty recent. As of Thursday, 19th, which was literally a couple of days ago is you are listening to this show on Saturday. We had a nice lady. She is in the medical sphere and she has talked about what Greg was saying, as in a history of IRS problems that date back to 2002. It is a long time ago. Sixteen years ago. She owes, as of July 19th, just shy of $238,000. The good news is she has been current since 2011 and through to 2017. She is great. The bad news is that she let it go and she has got a levy now against her wages. After Danielle, one of the other PA’s in our Florida office ended up speaking to her she was getting about $15,000 per pay period levied. (? 00:14:22) once a week or every two weeks which was a lot. She has got several different jobs and one was slow and she didn’t get all of the shifts she wanted, and there was a big mess. Danielle called the revenue officer and the revenue officer agreed to release the levy. I want to bring this up because not all revenue officers are going to be accommodating. They are not all going to bend over backwards to try and help.
I think we have talked about this, many times. There are certain restaurants that you go into and the waiter or waitress could just have a chip on their shoulder, no matter what day it is, and it could be a Thursday, or a Monday and they are just rude and obnoxious. It makes for a miserable dining experience even if the food is great. Have you ever gone into a restaurant and the maître d’, or the hostess is just down right rude and obnoxious, and it almost makes you not want to go there? It is human nature. That is my point.
Certain revenue officers, and ones that we deal with frequently, and especially in South East Florida, you have offices in Miami. There is a Plantation office off of 595 on Pine Island. Then, you have a West Palm office. These are for this listening audience. There are so many people in those three offices that are so nice, accommodating, friendly, reasonable, and practical. I mean, every positive adjective that I can think about and there is a nice handful of them, but on the other side you have another handful that are the anti-Christ. They are the antithesis to case resolutions. These are big words, in my opinion. They seem to be more problem resolution against resolving the problem. Whereas, you want to have a case resolution approach, but they seem to want to cause problems. It makes no sense to me.
I want to bring up an example that just happened, but it is not a Florida file. Greg, you as a revenue officer, see this now as a power of attorney and it is just mind-boggling to me, but there is such a difference between how one IRS employee views something, compared to how another one views it.
Danielle is working a file and the file has some history. The revenue officer is not being all that friendly, in our opinion. There is certainly a little bit of disconnect between the revenue officer before we got this file. It is only three months old to us. There is some history. The prior power of attorney didn’t get along very well with the revenue officer. There was a lot going on there. Unfortunately, the revenue officer was literally putting this client through so many hoops and has done this for years and years. We came in, thinking that we will get everything that is needed and do everything the right way, and he still was not willing to be reasonable. Well, Danielle ended up going to appeals and within about a week of some conversations back and forth with a very smart, very nice, and very case resolution-oriented appeals officer and we were able to resolve the case.
Now, it took literally a week, and we got everything over that was needed. The difference between how this was resolved in appeals compared to the difference of how the revenue officer wanted to get it resolved and how many hoops he was putting everyone through, which as, in Danielle’s opinion, really unnecessary. I mean, it was pretty crazy. It was almost as if, saying that you were going to live in a three-stories high rise, compared to having to walk to an eighteen-stories high rise and this guy was making you climb the stairs to the eighteenth floor as there was no elevator, compared to living on the ground floor in a three-stories house. I don’t know why I have come up with that, but what I am saying is that it was such a difference between how it was worked. The client was absolutely thrilled with the outcome and this all came together on Thursday, 19th, which was when it was wrapped-up. The revenue officer didn’t even know about it yet.
My point for explaining this is that there is, a lot of times, if a revenue officer isn’t willing to be helpful or reasonable. Greg, you try to do it now in your career in the private sector, but, unfortunately, you see it all too much where you should be able to work a case with a revenue officer, but, because he or she won’t, or because the manager is in lock-step, or it could be an acting manager which is another issue, in our opinion, because they don’t want to rock the boat with their colleagues, but do you see that a lot, where appeals is much more reasonable and take a much more case resolution-approach, in your opinion? It blows my mind how, if the average person listening to the show out there doesn’t know what to do, and didn’t now how to handle it, and they could end up with a horrific situation. I just don’t know why that is. Maybe, as a former thirty-year revenue officer, you have some insight? Is it just personality? I mean, what is it?
Greg: It is personality. I had one, recently. It was a doctor who had ever $300,000 but he could make significant payments. The first thing I did was got him current for 2018. I got him set where he is now making monthly estimated tax payments of $8,000 per month, just to stay current. That is no problem for him to do that. That will keep him current. So, I went to the revenue officer, who was a real hardcore fanatic, so to speak. We have had lots of run-ins with this RO in this office before and he was just not going to give us an inch.
Anyway, I had a run-in with this RO, even though I had a plan already worked out and I had the financials. I had everything good to rock and roll. We proposed a five to six-year instalment agreement to pay off the back taxes, while he was paying $8,000 per month on his current taxes to stay current. It should have been a slam-dunk case, but the tax payer owed over $300,000 and even though this would be paid in full, he was not going to give me an inch. I had to file off an immediate appeal to prevent him from issuing levies on this account needlessly. The CDP hearing was yesterday. I had pre-faxed over all of the information to the appeals officer that I had dealt with before in the past, and the whole hearing took approximately 90-seconds for him to say, “This looks good. I will send you over the paperwork. We will agree to what you are proposing, no problem. I wonder why the RO wouldn’t do it?”
Lawrence: This is a classic example. It doesn’t make any sense, and I am sorry to interrupt. I haven’t given the phone number out enough.
Local: 561 864 7800 Toll free: 800-TAX-LEVY
Yes, ‘Levy’ really is my last name.
Greg, getting back to that story, why is that? Whether it is that revenue officer, or not, I mean, it makes no sense to me whatsoever, why something like that goes on. It is shocking to me. So, I don’t get it. I will never get it. Why do people want to make life miserable for other people? When we come in, or whether it is some other tax resolution firm that comes in, you want to try and diffuse the situation if there is some built-up tension, which is a polite way to put it that is politically correct, but you want to take the emotions out of it. That is what we try to do. We don’t have any skin to gain with these clients. They are not our relatives, thank God. They are clients and we like to treat them like family because that is way our office runs. I am a big fan of customer service, but it is a scenario where the revenue officer should not try to take these things personally. Sometimes, I have got to tell you, it feels like that. It really does. That is why you need someone to advocate for you.
Greg, do you ever commiserate with your former colleagues in appeals and say, “You know, appeals would have a lot better of a life and a case load if certain revenue officers were to, in my opinion, reform their job differently, or do it a bit better and consistent with the rules. They don’t want to look, and they don’t want to talk. It is so strange to me. I don’t know. It is very frustrating, and I don’t want to dwell too much on that.
On good news, how did that work out for you? Can you answer in 90-seconds? Did you get everything that you asked for?
Greg: I got absolutely everything. Within five-minutes he had faxed me over the paperwork. I sent it to the client to sign it, and it could be input by next week. So, the client was absolutely thrilled. He is doing handstands and he is more thrilled that he will never have to deal with this revenue officer ever again. That is because we fixed his problem the right way, the first time. No-one ever told him to make current estimates first and make them on a monthly basis. It doesn’t have to be quarterly. You never get penalized for making too many estimates. You only get penalized when you don’t make enough and that starts the whole snowball effect which grows bigger and bigger going downhill. So, we try to fix your problems to make it as painless as possible.
Back to you.
Lawrence: Let’s end on a pretty wild story. Here is a client that came to us as a referral. They owe a significant dollar amount. I believe it is in excess of 2 million dollars. They are a very nice couple. I talked to them at length yesterday. They try to do things right with charities etc., and they are just nice people. The revenue officer is absolutely one of the more reasonable people that we have come across in a long time. It is another file that Danielle is handling. Danielle was explaining that we are trying to get financial together and it is a bit of a mess. They were trying to do things themselves. Their books weren’t the cleanest of the bunch. They have had some struggles with accountants and bad advice, and book-keepers and a lack of book-keeping. They have over 100 employees. They just had a mess of books, but the revenue officer was extremely nice. “How much time to do you need? Get me an accurate 433B, and an accurate 433A. Get me what is needed”, and really bent over backwards. There are two parts of this file that are going on. I am going to tell you, because it is significant to end the show as we come to it, but as of May 11th, a few months ago, this client owes $3.5 million. It is a lot of money. The revenue officer is reasonable which is mind-boggling to me. On a $3 million liability, you get a reasonable revenue officer, and on a gentleman, who owes $40,000 because he went through a bad divorce. He had child support and (? 00:24:49) withholdings, but he revenue officer was just really taking an extremely aggressive posture. Again, I think that is personality.
Let’s recap as we come to the top of the show. We have Greg Mahaffy as one of the team members at the Levy Office. He is a thirty-year veteran revenue officer. We have Claire, who worked the file for the gentleman from South Florida. She was the POA. The gentleman owed about $160,000, he said, but I have not confirmed that, but he settled for under $2,000. Again, I want to stress this as we wrap-up the show, not every client is going to qualify for an offer and compromise.
Also, penalty abatement have been a good thing this week too. We have secured a few thousand dollars, if not more, in penalty abatement’s. I know of one that was just under $4,000. That is a really nice feeling, to be able to call someone and say, “Hey, you just hired us and within a couple of days we were able to get the IRS to abate penalties”.
Sometimes, the IRS has what is called, ‘first time penalty abatement’, which means exactly that. You potentially get a first-time abatement.
Besides Greg Mahaffey, we have a great staff that consists of former IRS revenue officers. We just hired another one. Her name is Mindy. She was a group manager for eight years, after a twenty-seven career as a revenue officer. We have the CPA and we just actually brought on another CPA in our Michigan office. His name is Miran. We will have him on the show. We have a great support staff. I really want to give a shout out to my staff.
Earlier this week, I was on the phone and clients were so complimentary about our admin. staff. I want to give a shout out to Stephanie, who really has just been tremendous. She gets into the office before 06.00 A.M. every day. Along with Greg, they are the early birds in our Michigan Office. It really is nice to have such great feedback from clients about the staff.
- If you have an IRS problem.
- If you haven’t filed in a few years.
- If you owe the IRS, whether it is $20,000 or $3 million…
- If you are in the middle of an audit.
- If you have had a knock at the door from the IRS.
Please, hire representation. Hire someone who has been around for twenty years. Hire someone who has got a deep bench that can handle your needs.
We are open for seven days per week. The Levy Office is here for you.
Local: 561 864 7800 Toll free: 800-TAX-LEVY
Signing-off for now from the Levy Tax Help Show are Lawrence Levy, and Greg Mahaffey, the former IRS revenue officer, in the house. Enjoy the rest of the weekend, South Florida. You take care.