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. (800) TAX-LEVY. That’s (800) 829-5389. Now the Levy Tax Help Show.
Lawrence Levy: Good Morning, South Florida. and welcome once again to the Levy Tax Help Show. We hope that everyone is enjoying the great weather in Florida as we know. I think we’ll say the summer has sort of broke. Looks like we are also clear of the hurricane season. We’ll cross our fingers and make sure that we’re okay with a few more weeks left but Florida dodged a little bit this year, but we’re not here to talk about the weather. We’re not here to talk about hurricanes. We’re here to talk about what do you do if you have an IRS or state of Florida tax problem? Well, let’s stop because if you have a problem, you should pick up the phone and call us at 800 TAX-LEVY and yes, Levy really is my last name. Before we get into the substance of the show. I want to talk a little bit about a guy that’s been in the Levy team for a while. He used to work at the IRS for over 30 years, primarily as a revenue officer, but also did a couple of years working in the Offer in Compromise unit. Let’s say a good morning and hello to Greg Mahaffey back in the house. Greg. Good morning.
Greg Mahaffey: Morning. Lawrence. How are you doing this bright, beautiful sun shiny morning outside.
Lawrence Levy: Like they always say, it’s always sunny in the Levy office. Let’s talk about a few recent case studies that we do and I want to also give a shout out to a couple of CPA’s that I had met the week before last. There was a, uh, a Florida Institute of CPA’s, a convention we’ll call it a bit of a trade show. And there was classes and continuing education credits being given. And I walked in, I was one of the presenters, one of the guest speakers in there, and I walked in and there was a couple of guys standing talking to one of the vendors and I walked up and I said, we’re considering using this product I highly recommended it.
Lawrence Levy: And the guy says, oh wait a second, are you that guy? After I introduced myself, he said, oh, are you the guy on the radio? And I said, yes I am. And he listens to the show and I tell you, it really made my day. So for everyone who listens, in my opinion, either you’re an accountant or a CPA and you’d like to learn about IRS Tax Resolution or you are a miserable person that likes to hear about other people’s miseries when they have financial issues and dealing with the IRS or your potential client and you just want to learn about suggestions and options. And in the Levy office, we have a very deep bench and I always talk about deep benches, but I do not know very much about sports my friends. My wife and my kids, my coworkers, they always joke around with me and just I know l nothing but deep bench on the Levy team is a word, a phrase I use a lot and we currently have three former IRS. Greg, you were there. How long?
Greg Mahaffey: Over 32 years.
Lawrence Levy: And then Mindy, she was, what, 34 years I think about that. And Mindy was a revenue officer like you and she ended up with the last, I think seven or eight years. She was a group manager. And by the way, I want to, uh, I don’t do this very often. I’m going to do it on, on today’s show. It was a very nice lady that was out of Michigan. what the IRS calls posted duties. She was a manager as well and worked with Mindy and unfortunately she, uh, this week she lost her battle. This past week she lost her battle with cancer and she was always very nice to our clients. She was always very polite her name was Beverly. We called Bev and she was just a really nice lady. So we want to send out our condolences to her family and her loved ones, but if you’re listening down, Bev from the heavens. Now you were always a very practical, reasonable, fair manager that over the years you were very helpful with resolving cases where we had a problem. You were really great, goto person, so if you’re listening down Bev from the heavens. I just want you to know you did a great job and we really appreciate what you did so we will miss you certainly and our thoughts and prayers to you and your family. But let’s move on past that. And let’s also talk about another former IRS Revenue officer Claire Coffee, Who’s on the team and she’s actually been on the show. Yep. Coffee like coffee. You drink and Clara with a revenue officer for about 16 years and then another 15 years, her last 15 years she was in the Offer in Compromise group. So between Claire and Mindy and Greg, we have literally almost a hundred years of experience. That doesn’t count the CPA’s on staff, the enrolled agents on the staff. So non-IRS, right. If you worked at IRS and your work, there’s so many years, you get what’s called your, your EA card, enrolled agents, but we have other non IRS, former employees that are EA’s along with a tremendous team of bookkeepers and case managers and our administrative team is top notch, doesn’t get better than our admins. We love them. Greg, you couldn’t do what you do with that, our admins, right?
Greg Mahaffey: Oh yeah, definitely.
Lawrence Levy: We love every day. Let’s talk a few minutes here about a recent case. Greg. It was a trucker, so if anyone’s listening to this show driving and you’re an owner operator or you’re in the trucking transportation industry, that’s been a very big demographic for us. Uh, for people who are truckers, owner operators are 10 99. And in particular, Greg, you were able to get one of those files closed out as what’s called currently non-collectible this week. And let’s talk a little bit about the, the option of currently non-collectible and how that works. Because oftentimes clients, I always ask what does currently non-collectible mean and why don’t you give the explanation? Since Greg used to work at the IRS.
Greg Mahaffey: Oh, the first thing to keep in mind is currently non-collectible means the case is closed from active collection at the IRS. Doesn’t mean your debt is forgiven. You still owe the money, it just means the IRS made this termination. That currently you are in a hardship situation and you’re unable to pay the current, the back taxes at this time. Usually what they do is they look at your income versus your assets and your expenses and then they look at the assets that you have and they have to weigh various different factors and everyone’s situation is totally different. Uh, sometimes if you have a large retirement fund, the IRS, they have you go and draw from that fund, but they don’t like doing that because that creates a new tax liability.
Lawrence Levy: And Greg, I want to extend that far away.
Greg Mahaffey: Sometimes you’re going to need that fun to live on. And I’ve had cases which I’ve gotten the IRS to allow people to keep up to $300,000 in their retirement account. We’ll put them in currently not collectible status,
Lawrence Levy: Which I want to be very clear about that. Each case is unique though, so while you may have had someone who has assets and has liquidity in those assets, it’s not gonna always work like that, but the case that I’m talking about in particular, just so we know the timeframe on that because it’s really recent and it’s pretty quick as far as what took place. Client hired us literally the end of August, August 27th to be specific and in the mail this week we got a letter dated the 3rd, which was a Wednesday, and I’ll read the letter right from the Philadelphia Pennsylvania service center.
Lawrence Levy: “Dear taxpayer, thank you for your call on September 26. The case is closed currently not collectible. We temporarily closed your claim for the period lifted above because we determined that you can’t pay the amount you owe at this time. However, you still owe the IRS.” It’s a decent, decent amount of money. By the way, for the tax periods above, it’s over $80,000. “This amount includes penalties and interest. Calculated through that email, you’ll receive an annual reminder notice. You don’t need to take any action at this time,”. So you actually get a letter in the mail, case closed and that’s what it says currently non-collectible, and that doesn’t mean it goes away, but depending upon when the statutes are going to expire, depending upon what’s going to happen with your future earnings, currently non collectible is one of the options that the IRS does have out there for taxpayers who get themselves into a jam. So that’s just one of several examples we’re going to go through. If you are a local, I mean local to South Florida. If you’re listening to this, we want you to come on in or somewhat old fashion. Although I think we’re technologically savvy, I’m probably have everyone in my office. I probably am the worst at the computers, but that’s okay and I can admit that. And like I said, I know nothing about sports, but we’re old fashioned. We want you to come on in. We are located on Federal Highway, about a half a mile south of Linton, on the east side of the street. People always say you are right where all the car dealerships are in Delray. Yes, we are right across from the Toyota dealership. A local phone number is (561) 865-7800 and toll free, 800 TAX-LEVY and people always ask, but yes, Levy really is my last name.
Lawrence Levy: I want to give you another example because it’s sort of a real life. What goes on with a nice young guy who called us and I’ll tell you what day it was a on the second, so earlier this week and he said, yeah, I’ve been wrestling around with the IRS for a couple of years now. He didn’t remember exactly what year it was, but he prepared his own tax return, and Greg, you don’t know anything about this file by the way. He prepared his own tax return and he believes he messed up. Didn’t reflect a stock transaction the right way? IRS came back, he believes it to be what’s called a cost basis issue and this has been going on since 2012. Relatively young guy, nice Guy, single, not married, no kids, but he just wanted to get this moving. So literally within, it was about 16 hours of him hiring us. Seventeen hours, I should say, less than a day. We ended up calling the IRS, confirmed what was going on with his file. His file coincidentally is in currently not collectible, so he’s not in any., It doesn’t have any jeopardy issues. You have to worry about these going to have his wages levied, like my last name, his bank account levied like my last name. So give them that peace of mind. And then Arnold, one of the power of attorneys in our office right here in Delray, he’s gonna walk down the hall, he’s going to talk to one of the accountants in the office and say, Hey, regarding this guy’s file, this is what we need to do. So in the Levy office, it’s a team effort oftentimes because there is oftentimes a blend between accounting, tax preparation, bookkeeping needs with IRS tax resolution work. In Greg, when you were working at the IRS, didn’t you see off the lot and often, not often. Amount of the time and a lot where a taxpayer, as you would refer to them, we refer to them as clients would come in and their books were a mess or they had no books. They didn’t like their accountant, they didn’t love their CPA or they didn’t have a CPA, so you would come in to your office everyday, probably scratching your head, working at the IRS thing. Oh my God, why are these people just not get their books in order now? I’ll tell you what, I’m going to the second with this but I’m going to talk about a really nice client of ours that is a Florida file, but Greg, did you see that a lot when you were at the IRS? Just where oftentimes the lack of accountability, lack of bookkeeping, was the root, the problem of their IRS issues.
Greg Mahaffey: Yeah, no kidding. Because a lot of times overstating the taxes and the balances do. In other words, you’re your own worst enemy. If you don’t have your books in order. You end up having file incorrect forms. IRS makes a wrong assumptions. All of a sudden now the IRS is thinking that you’re rolling in money and you should be able to pay these taxes post-haste when in fact you probably don’t owe to begin with, once, afford to hire professionals such as us to do your books and to keep up your bookkeeping and do whatever’s needed to be done so that whatever the final balance due is, it is accurate and you can be comfortable at night that you actually do or do not actually, owe the correct amount of tax. Many people try to do it on their own just to save a buck and that ends up costing them thousands and thousands and thousands, and then they don’t keep up their books and they keep falling behind. They just make the situation worse and worse and it’s a never ending cycle.
Lawrence Levy: Well, and let’s, let’s take that to another level and how that plays in to our tax resolution world. So now if you don’t have an accurate financial statement for a business or you’re self-employed, you don’t know what you’re making and you get yourself into a jam with the IRS and you owe back taxes. Well, one of the first things that we need to do is find out what do you make. I can’t tell you over the past 20 years how many people have come into the office, looked him right in the face, smart people, lawyers, doctors, electricians, plumbers, owners, of a daycare facility, restaurant owners, and we say, what do you make? What’s your income? And I can ask you, what do you make? Or I can ask what’s your income with regards to your business? And a blank look comes across their face is if I’ve asked them what’s the in Pythagoras Theorem, what’s the quadratic formula? Right? Maybe a blank look, come over your face to face with that, but how about what do you make, Greg? If I ask, what do you make? You’ll be able to look at your paystub . You have to be able to say, here’s what I make, but a lot of times our clients, Greg, you ask them, what do you make and they don’t know, right? How many times does that occur? Well, everyone listening, that’s wrong. You need to be able to know what your income is. Of course you maybe I’m feeling what your expenses are, what’s your mortgage or your rent payment, your car payment, your health insurance. They have any prescriptions they have out of pocket medical expenses. You have a kid that’s in college. Do you have a kid that’s in private school? Do you have a kid that you need to support because they’re not working? You’ll know what your expenses are. That’s usually a little bit easier to define. The income is the problem, but we need to know what’s your income minus your expenses and that’s going to tell our staff, the POA’s in my office, what they can do to resolve your IRS problem, and we had a case here in Florida recently. In fact, it was just this week on Thursday morning we were having this discussion. Very nice guy, family owned business, and they were doing their own books for a while. They got themselves into a little bit of trouble. There was some family issues and we’ll leave it at that and finally they said, you know what? We’re going to have you guys do the books. We want you to do the books. We want you to take over doing the payroll so things can get done the right way, and that as Greg mentioned, I can’t tell you how many times we see clients who are performing their own in-house payroll services that are trying to do their own books, whether it’s the old fashioned way on scratch, whether it’s on QuickBooks, however they’re trying to do it. We want you to understand how critical it is to have a accounting firm do the books for you. I can’t stress that enough and it’s no different than for me. If I need to hire an electrician to fix a wiring problem or I’ll give you a better example. I had a toilet that was clogged. Don’t know why or what was going on, but I’m not going to go out to home depot buying one of those augers or a snake and trying to figure that one out. I called a company to come out, a plumbing company, come out and fix it. I can’t tell you how many people try and do it themselves and Greg, when you were at the IRS, you would also see a lot of taxpayers that would come in that wouldn’t know what they’re doing. They have no idea what was going on right.
Greg Mahaffey: All the time. And again, it’s because they are a, uh, they are an expert in their field such as maybe there the world’s greatest plumber, world’s greatest electrician and world’s greatest architect, when it comes to books and records and handling their taxes and the payroll screwed it up to the Max. But they need to finally have a come to Jesus moment, so to speak, and realize that you can hire someone to do this for you because the long run, it will save you thousands over the years. Not to mention a lot of headaches.
Lawrence Levy: Well, I also want to talk about, we’ll talk about a plumber, this is the plumber and we’re going to talk about he had owed taxes and I’m going to see if I can give you how far back this goes. If you’d give me a minute here. This goes back to that. I had it handy. Uh, okay. Here we go. He owed taxes back to 2004, five, six, seven, eight, a total in quite a bit of money and over $100,000. And this gentleman was a plumber I should say, but now actually has a business doing a, I think he, he’s a W2 and he has a small little business but a W2 employee now sort of stop the bleeding. Originally we were able to get the gentleman’s gentleman and his wife that plumber into currently not collectible and I’m pulling up the notice here. So December of 2016, so not quite a couple of years ago. We were able to get the client into currently non-collectible the case closed. Currently not collectible letter was dated December 7th of 2016. One of the other POA’s in the office, Bianca, who works closely with Greg, uh, she is in the middle of trying to wrap up, if that makes sense. an offer in compromise. So the client owes the plumber, he owes a really nice guy, married with a couple of kids. He owes about $120,000 I think when all of a said in done and right now the IRS and Bianca are trying to wrap up an offer in compromise and there’s numbers going back and forth of just over $11,000. And in the IRS world, what happens is the offer and compromise is submitted and it gets assigned to what’s called an offer specialists. That’s what Claire used to do. Greg, you worked in the after unit for a couple of years, right? Two years.
Greg Mahaffey: Two and a half years.
Lawrence Levy: Right. So at that point in time where Greg was, was, uh, was what they call it, the post of duty. Sounds like it’s a military thing. In fact, we had a revenue officer refer to what’s called her tour of duty earlier this week, which we’ll talk about that in a second. The offer in compromise, let me ask, well, why do people refer to it as a tour of duty? Why is that military component? Any thoughts on that? I’ve always wondered.
Greg Mahaffey: No idea that some, something that’s carried over at throughout all the government, you know, uh, your, uh, the hours and days of the week that you’re working with
Lawrence Levy: Greg, your tour of duty in the Levy office is. It’s 7:00 AM till 6:00 PM usually in most Saturdays. So on Saturday did. There you go. That’s your tour of duty.. Anyhow. So right now Bianca is in the middle of a Offer in Compromise negotiation and there is negotiation involved. There is discretion, there is some subjective thought process that goes into it. With regards to the value of a vehicle, how many miles it has on it. Is it used for the production of income, the age of the vehicle? There’s a lot of things that go on in an offer in compromise. So right now it hasn’t been finalized yet, but there’s a tentative offer amount of about $11,000 and change. I don’t know the exact amount, although I may be able to pull it up here on the computer, but the problem is an offer in compromise is great, but only if you can fund it. So even though they all 110,000 and they would be completely tickled pink in order to get rid of it, the problem that they’re going to have is funding the offer amount and unfortunately if you don’t have enough money to fund it, there are other ways to go about paying it off.
Lawrence Levy: So, I was going to be $12,817. This was as of a couple of weeks ago, but if you don’t have $12,817 and you have to pay a percentage down, 20 percent down and then you have five months to pay the remaining balance. After the date of acceptance. Let’s say this takes another month or two to get through the system, so maybe by Christmas’ish they’re going to get the acceptance letter. Then they’ll have January, February, March, April, and May. They’ll have till around Memorial Day to come up with the remaining dollar amount, which is about $10,000 and it’s a great deal because they’re wiping out $100,000 plus of a IRS debt, but if you don’t have the money to come up with it, it’s not a great deal at all. It doesn’t even make any sense. And unfortunately you’re stuck in a position where you got to figure out a plan b. There are options out there. If anyone’s listening today that’s got an IRS problem, if you haven’t filed in a few years, are you in the middle of an audit? What about the Florida Department of Revenue? Lately we’ve had a lot of cases, uh, dealing with the Florida Department of Revenue and we deal in the civil tax controversy world. We do not deal in any of what’s called CI criminal investigations, whether it’s Florida and that sometimes had a tendency to go criminal faster than I IRS by far. We don’t really see, but it’s not our, not our space, if you will. We don’t see too much in the IRS criminal world. Just not something that we see that often and I’m sure it happens, but we just say God, don’t see it that our clients had doesn’t. It doesn’t happen too. If you have an IRS problem and you’re listening to this show, make this your call to action. We’re coming up on a pretty big important date and Greg, that’s October 15th, right?
Greg Mahaffey: Oh yes. Time to file those 2017 returns. If you ever bothered to file an extension to begin with That is a drop dead date, there is no second extension. You have to file it, get it filed. Even if you have to go back later and amended it, just file something so you don’t get hit you to file penalty.
Lawrence Levy: And you also want to make sure that you’re filing an accurate tax return, but you have a week left, so if you’re hearing the show on Saturday, you have until Monday the 15th. If you hear it re-airing on Sunday on the Hurricane, the sister’s sports station to 850 WTFL radio, then you have about eight days left, but either way you want to get your tax returns filed. October 15th is the extension deadline for not only the 1040 is your personal return, but also for C Corporations, so if you filed an extension that is up as well. The S Corp’s hopefully should have filed those. They were due September 15th, but that fell on a weekend, so you got to the following Monday. That’s a big deadline coming up and before the year end you want to have some tax planning, make a call to our office. We’re happy to talk and we love the weekend appointments. Generally speaking, we have coverage. One of the POA’s is in typically on Saturday, Greg and we also have someone in typically on Sundays and we are happy to take your calls. In fact, we love the weekend client interaction. I can’t tell you how much we love it. We think that our logic is we want you to be able to enjoy your week. We want you to be able to focus on what counts. You know, I’m a dad. Greg, you’re a dad. You’re also a grandfather and a husband and I have my life to and during the week besides work, I have my kids basketball, I have my kids this, I have something for that. I got to go somewhere with my wife. There’s always stuff going on during the week on top of work, so the weekends oftentimes are a little bit less hectic, believe it or not, so we enjoy the weekend interaction and we are a very early start office. Typically we have staff in a right around 6:00 AM usually, so we have at least a full 12 hour coverage from 6:00 AM till at least six PM and oftentimes we’ll have client calls at 6:15 at 6:30 AM because we want to try and get us out of the way so that you as a client and focus on your day, whether it’s getting the kids off to school, whether it’s going to work, whether it’s focusing on what you should be, which is your life, your health, your family, your loved ones, your business, your job. Last thing you want to be dealing with is a IRS problem. The last thing you want to be dealing with is have to talk to us, although I’ll tell you, it happens during the day on Thursday about midday. Danielle, what one of the POA’s in our Florida office. She was on the phone with a client, doctor do the doctor, we call them for the scheduled call and he said, look, I’m still with the patients. You got to give you 10 minutes but what you to do, hey, sorry, got an IRS problem here and I got to talk to the power of attorney on the phone. So of course Dannielle said, no problem doc, we’ll give you 10, 15 minutes. So we have to be flexible like that as well, and that was a good real life example with his doctor. He owes quite a bit. It’s almost $300,000 that he owes. Very, very, very polite man. Very, very, very nice. But guess what? IRS doesn’t really care about your personality. If you’re nice. If you’re not so nice, everyone’s got a job to do and the IRS has options out there for you. Whether it is currently not collectible, like we talked about, whether it is an installment agreement, whether potentially an offer in compromise is an option for you or what about penalty abatement? Uh, we’ve got a tremendous amount in the hundreds of thousands of dollars this year alone. I don’t even know the number, but we had a small one this week, which we’ll talk about small, relatively small for us. Over $2,100 of penalties that got wiped out just this week on one of the files and it did this show for a half hour. You can’t get through what goes on in the Levy office in a day, in a week and a half hour. We can compress it, but we do try and make it content driven. So today we talked about currently non-collectible. We often talked about the plumber that goes over $100,000 that we’re in hopefully the final stages of trying to wrap up what’s called a offer in compromise and hopefully get rid of about $100,000. But not everyone’s going to qualify for that. If you have liquidity, if you have equity in an IRA in a savings account, you lost a loved one and you inherited some funds. All of that is gonna make for a challenging IRS scenario, but you need to know what you’re doing and you want a firm with over 20 some years of experience. We know what the options are and we try and make sure that we educate all of the clients as much as we can and that’s a big thing in the in the office. We want to communicate with the clients all the time, whether it’s going to be an offer in compromise or not, whether you’re going to get rid of penalties by worked with what’s called reasonable cause or you get what’s called First Time penalty abatement. There’s a lot of options that are out there. You just need to know what to do and you got to give us a call. The phone number locally is (561) 865-7800 or toll free, (800) TAX-LEVY and yes, Levy really is my last name. Greg. I bet you never thought in a million years when you were at the IRS, you’d be having your paycheck signed by guy last name Levy. Huh? That’s the one nice twist. Yeah, yeah, yeah. There you go. Imagine that. Alright, well signing off for now from the levy tax off. So we had the famous former IRS revenue officer, Greg Mahaffey and Greg. Thank you for all you do. Sure. That gentleman that you got placed in the currently not collectible was pretty happy about that. He was a former veteran just like you were by the way, Greg, you in the navy. Thank you for service to our country, but I also want to give a big shout out to all law enforcement. I know we had another unfortunate incident this week was the law enforcement involved in a shooting. It’s a very dangerous world out there in today’s society, so we wish all first responders and law enforcement all the best and thank you for your service to keep us safe Signing off for now from the Levy Tax Help Show. Greg Mahaffey and Lawrence Levy in the house and enjoy the rest of the weekend. South Florida. You take care.