Levies, wage garnishment, 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 Levy: Good Morning South Florida and welcome once again to the Levy Tax Help show. Before Thanksgiving but before we talk about Thanksgiving before we talk about what is going on in the Levy office this week, let’s also give a big shout out to the veterans and those who served and I wanted to make sure that we said good morning and hello to Greg Mahaffey who was a veteran in the Navy and also in the Gulf War and worked at the IRS for over thirty two years. Greg can you give everyone a little bit of background about your service to the country as a veteran, before we get into the tax side of it since it was Veterans Day.
Greg Mahaffey: I was in the reserves at the time and as we know back in 1990 / 1991 things hit the proverbial fan over in the Middle East when Saddam Hussein invaded Kuwait and basically tore apart the whole country, enslaves its people and so forth. So, I was called up for in support of Desert Storm actually Desert Shield. But by the time I got over their Desert Storm was in full blown, going all heck, breaking loose over there. So, I was actually serving aboard the ship called the USS Niagara Falls. A supply ship. We were off the coast to Kuwait City in the middle of the oil slicks, minefields in the middle of all the oil well smoke and all the other fun stuff. There was my 18-20 hour workdays were the norm back then. So, we were in the middle of another norm right now seems like it around here.
Lawrence Levy: Well thank you so much for your service to the country. I’m glad that your ship hit a mine. You always say right.
Greg Mahaffey: Yes, the ship actually hit a mine, but it did not go off. Luckily it was a dud. We went back later with the rest of the fleet and the mine hunters and they found the mine and actually detonated it. Our ship is credited for blowing up four mines in the Middle East even though we were a supply ship but we had a UDP team, that’s underwater demolition team stationed on board. So whenever since we were transitioning the Gulf constantly going up one side down the other, we would frequently run into mines in our ship was credited for destroying, five mines during that war.
Lawrence Levy: You had the underwater what was it the UDP .
Greg Mahaffey: Yes, A underwater demolition team UDP. They we’re stationed on board our ship.
Lawrence Levy: Here we have the LEVY team that would be the Levy team right. And the phone number for the Levy team, the team you always want on your side. I always say you want a Levy on your side not one against you and don’t fear a levy, you hire a levy. The phone number by the way. Talk about the Levy team is 800 TAX – LEVY. And yes, Levy really is my last name. We get that a lot actually. Hey what is that name you have. And is it Levy and I say yes it’s a Levy originally from England my father was and we always say with a soft “e” levy as opposed to a more East Coast twang and Levy. So, we say Levy much like at the IRS, Greg. Levy was a pretty common term at the IRS. Was it not? Oh yeah. It’s still little early. And that’s why I say you want to avoid. You want to avoid the Levies. You don’t want a levy. That’s why we say you want a levy on your side not one against you and I’ll say it again, you don’t fear a levy. you hire a levy. Greg, when you were at the IRS, you were for a few years in the offer and compromise unit when there was one when you were based out of a what’s called post of duty which sounds military-ish but that’s the IRS refers to it in Michigan. You worked at a offer in compromise you worked in an offer compromise unit right.
Greg Mahaffey: Yes, I was actually offer specialist about three years of my 32 -year career.
Lawrence Levy: And in general, can you explain to people how offer in compromises work. Because we’re going to talk about a really good success story from a gentleman who had an accepted offer in compromise just about over a week ago from this office that from start to finish and a guy with a lot of money. Over seven hundred thousand dollars he was able to excuse me I’m choking on coffee. He was able to get his IRS debt resolved via an offer in compromise for about eighty-five thousand dollars against what was and I think again it’s north of seven hundred thousand dollars. But Greg, explain a little bit about how the offer in compromise program works.
Greg Mahaffey: Offer in Compromise Programs where the IRS knows that a lot of taxpayers are out there are so heavily in debt for back taxes, there’s no way they will ever be able to fully satisfy their taxes but they want these people to get back into the system. So, they develop the offer in compromise program which basically will give people the ability to start over and settle their taxes for a fixed dollar amount. Offer in compromises are not let’s play, let’s make a deal. Offer in compromises are based upon a numeric calculation the IRS uses which they determine what a taxpayer is collectible for over the lifetime of the taxes. Secondly a mathematical formula that offers specialists use which they add up the equity and assets that the taxpayer has and they add that to their ability to give an installment agreement to the IRS. They actually come up with a numerical value that they determine is taxpayers’ reasonable collection potential, in IRS jargon that called the RCP. So, if your offer exceeds the RCP and if you meet many other criteria because it’s very difficult to get an offer if you don’t know what you’re doing. If you meet the rest of the criteria and your offer exceeds their RCP, generally the IRS will accept your request for an offer in compromise. Once you pay that amount your taxes are basically not forgiven but they are reduced to that level of the offer amount. There are many caveats with an offer in compromise. One of the biggest things about an offer is you must stay current for the following five calendar years after an offer is accepted. That means if you owe taxes in the next five years and you don’t pay those taxes, guess what happens. You have defaulted your offer. The IRS reassess all the old back taxes and you’re back to square one and your life is being made even more difficult at that point. That’s why it’s important that you a contact professional such as us, we can make sure that you will qualify for an offer. You have a program set up. You are current with the current year taxes which is a requirement just to even be considered for an offer in compromise and you make sure that you get a professional to do this for you and that you will not default going forward. So that’s what we specialize in here at the Levy team.
Lawrence Levy: So this client that we want to talk about to kick off the show. The gentleman hasn’t had the best of tax compliance histories, in fact he owes, I just found the number as of mid-September of this year the amount that he owed was over a million dollars. About a million forty thousand to be specific. We had come in with an offer of sixty-four thousand dollars and the offer specialist was incredibly nice. She was great to work with, so my staff said. Very pleasant down to earth and based upon her analysis she came back with an increased offer amount of just about twenty thousand dollars, so she wanted to increase to slightly over eighty-five thousand dollars, and the way Greg explained it, I’m going to water it down a little bit. So, the guy owes over a million, I’ll call it a million since it is a round number. Guys owes a million dollars and it’s what do you make, what you spend and what you make is what it is. That what you spend to the IRS you have certain caps on what they allow you to spend. That’s called national standards. So, what do you make, what you spend. Now if you spend more than IRS allows, the IRS said you have disposable income because you should be not spending this much on your rent or your mortgage. You shouldn’t be spending this much on food and your clothes. You’re paying too much in the car payment by what we believe to be the standardized number. So, when you go through the math and the arithmetic in it you take what you make, what you spend, and is anything left over so disposable income, that’s criteria component number one. Then you go to the second component which is equity and assets. So, what do you have that’s got equity? It could be a Harley. It could be a Jet Ski. It could be a boat. It could be a retirement fund. It could be a home or a condo that has equity in it and their specific math that you do to calculate the equity. Well In this guy’s case, he owed a million dollars and the IRS came back with their calculation of eighty-five thousand and change and he accepted it. This is a incredibly classic but unique case whereby we filed this in March of this year, I think was March let me double check that. We filed the offer in compromise on, sorry it was May actually. It was May when it was filed to be specific it was early May. Yeah it was before the 15th of May and the offer acceptance letter came back with a date on it, wow this was literally about six months to the day. Literally six months to the day almost which was on a million dollars this guy owed. Now I want to be really clear. So, we’re listening out there. Not every client is going to qualify for an offer in compromise. You may make too much. You may spend too much or you may have too much. And if any of the above is true, guess what. You very well may not qualify for an offer in compromise and you have to go to a plan B or a plan C and then a derivative or a variation of plan B or plan C in order to work with the IRS to make your life a lot less stressful and have you sleep well at night. So, offer in compromise is while everyone who hires us would like one. It doesn’t always work out that way but in this guy’s case, and by the way as of the airing of the show I’ve not called him or talked to him yet. Someone from my office did I presume but I’m sure this guy’s going to have the happiest of holiday seasons. He’s had tax problems that literally go back about 14 or 15 years and to be able to be finally done with them he’s going to just have a joyous holiday season which now the holidays are upon us in full swing with Thanksgiving next week with Hanukkah and Christmas and New Year’s coming up shortly and then guess what, we get right into the new year. Then you get the W-2 is in the mail you get your year-end mortgage statements in the mail you get your year-end reporting income documents in the mail and we are in tax season. So, while we have a little bit of a breather another four to six weeks left of the year why not take the time this weekend if you’re listening to the show and you can’t sleep at night and you’re tossing and turning, and you wake up and you’re worried and you’re stressed. Why not make this the weekend before the holiday of Thanksgiving to make this your call to action. Pick up the phone. Greg is always in on Saturdays. We’re always available Saturdays. Someone’s in the office, in the Levy office, literally seven days a week. The Levy office, much like Vegas, we never sleep. At least I can tell you that I don’t sleep as much as I would like to sleep. That’s just the way it goes. The local phone number is (561) 865-7800, (561) 865-7800. I want to talk a little bit Greg about another file that resurfaced itself will call it this week. It was Thursday. A doctor. Really nice guy. The guy probably owes. I don’t know the amount but it’s probably up there with the same five hundred thousand seven hundred thousand dollars maybe a million, maybe more than this gentleman who had the offer in compromise, So the doctor’s back in your lap Greg and he had debts. We looked at it today, I’m sorry. We looked at it on Thursday when he was in the office and he had debts that went back to I want to say 02 and 03 and the IRS has what they call cease heads. And that’s an acronym collection statute expiration date. And from the time he had first hired us he had at least two of them drop off which amounted to over a quarter million dollars. So, depending upon how the cases go, you have statutes that may drop sometimes look let’s be very candid about it and transparent. Sometimes you just have to go into a payment plan because you make too much money, in fact on that same Thursday we had a client right here from Florida that owes the IRS I think was about one hundred and twenty seven thousand dollars and he is going to go into a payment plan and pay them back and a few thousand dollars a month because he makes good money and he’s happy. He’s happy to be done with this. And Greg over the years don’t you see where someone’s just happy now to get their life back in order and they just want to sleep better at night.
Greg Mahaffey: Yeah definitely. And more important than that. Not only sleep better at night but sleep better going forward because here at the Levy office we will make sure as best we can, that you fix your tax problems that got you into this mess so that you never have to hire us or anyone else ever again. So not only do we let you sleep at night, but we allow you to keep sleeping going forward.
Lawrence Levy: And that’s really part of it too. As we see so many clients we had a we had a gentleman come into the office right here in Delray. It was Wednesday, yeah Wednesday late in the day. I’m sorry. Yeah it was, losing my mind here. Sorry Tuesday late in the day not to mention when listening. Gentlemen comes in the office at 4:00 in the afternoon nice young guy and he had to go back and refile. It was by four or five years of tax returns because they were done wrong. He self-prepared the returns and it was just a mess. Young guy, probably in his late 20s maybe early 30s. And then conversely the week before last week we had a couple come in that are a bit older and the husband was preparing the tax returns for him and filing married separate for his wife and they were all messed up. So, the moral of that story is don’t go and file your own tax returns. You wouldn’t go and well I wouldn’t say that much. I wouldn’t go and try and you know fix a light fixture, hang a light fixture, I’d call an electrician. I wouldn’t go and try and replace my toilet. I’d call a plumber. If you have a cavity. You’re not going to go and fill your own tooth. You go to the dentist. You do not want to do these things yourself. I can’t tell you how much you want to stress that. You want to seek professional advice. Give us a call at the Levy office if you have a tax problem in the civil tax world at (561) 865-7800, that’s (561) 865-7800. Greg when you were at the IRS didn’t you see just a ton of people that would try and either handle it themselves or they were hiring people who didn’t know what in the heck they were doing.
Greg Mahaffey: Saw it all the time unfortunately. People think well I’ll just look up in the phone book for an attorney. An attorney can help me. Not all attorneys can do tax work. In fact, few attorneys actually get into this profession. Most attorneys are general practitioners. And again, you need a professional who knows what they’re doing when it comes a tax resolution. Average attorney knows what the law says but they don’t have any idea how the IRS works, how the IRS standards are or better or worse than that. What your rights are as a taxpayer. You need to come to a professional tax resolution service. In fact, a lot of our clients are attorneys. How’s that for an irony. You need a professional who knows what they’re doing. So, you come see us first.
Lawrence Levy: And Greg you’re actually working, talking about that, you’re working with an attorney that owes, I think it’s north of six hundred thousand. Certainly, north of five hundred thousand. This guy owes a half million dollars and you’re in the midst of trying to get the revenue officer and the group manager to put him into what’s called currently non-collectible.
Greg Mahaffey: At this time where his expenses exceeds his income through a series of unfortunate events in his life or his life is to really south. He’s been involved in a nasty divorce, he has a huge amount of child support that’s court ordered payments that has a super priority over his life right now. His life is basically halfway collapsed when he came in here, we had to start with trying to redeem a house that was in foreclosure where he found the buyer. In order to do that we had to get a discharge a federal tax lien from the IRS because there was enough money left over to pay the IRS anything. And I was able to successfully do that. Next thing we’re doing now is we’re getting him current, we’re getting set up on a program to stay current. Once we had that then eventually, we will go for the offer in compromise on his life. First things first we have to get in place and currently not collectible because he doesn’t have the proverbial pot at this time, we try to regroup his life and try to start over and that’s what we specialize in here. We help people start over and get a fresh start and go forward from here. As we say go forth no more in this case go forth and owe no more to the IRS.
Lawrence Levy: Let’s shift gears from the IRS for a second to the Florida Department of Revenue. We had a client that’s local here in southeast Florida, really nice guy, and on the 9th which was a Friday, a week ago the client says, “Oh my God, the Florida Department of Revenue froze my bank account. How can I make payroll? How can I do this. How can I do that”. Well it was, and I’m going to try and give you some real time here. It was around 2:00 o’clock in the afternoon on Friday the 9th. I’m trying to give you the exact time. Yeah probably around 2 o’clock and one of the power of attorneys, a guy named Arnold in my office. Great guy he’s been there a long time with us. He was able to get in touch with the rep from the Florida Department of Revenue and literally by I’ll try and figure out what time this is at 4:20pm. Within a matter of two hours just about maybe two and a half. If you want to be generous, we were able to get his levy released and he was able to enjoy the weekend and make sure his staff was able to cash their paychecks. So, in a matter of two hours that happened. Now let’s be very clear again, very clear. It doesn’t always work like that. It doesn’t always happen like that. You don’t always get someone who’s going to answer their phone at the taxing authority side. I can’t tell you how many times we call and we call and we call and no one returns a phone call. It just goes on and on and on and you have to try and touchstone your way in or get in touch with the manager. That’s a pretty frustrating thing. And Greg you run into that a lot right with just a lack of a return phone call. It’s crazy to me. I got to tell you it just is so bizarre. Can you imagine if the IRS or the state called our office, and no one returned a phone call? It’s shocking to me but it happens. In this case on a Friday was a great way to go into the weekend for this gentleman who his wife is going through some medical struggles is a nice way to put it. And she’s a real nice lady and they’re fighting through it thankfully. But what a nice way to be able to help someone on a Friday. And it’s the Thanksgiving time of year. So I want to not only say thanks to my staff, without the power of attorneys, without the admins, without the tax preparation side of it, the bookkeepers, the case managers, our management team, we wouldn’t be where we are and be able to help the clients like we do and we are literally running from sometimes as early as five thirty in the morning. We literally have staff in around 6:00 a.m. and it goes all the way through until sometimes seven eight nine 10 o’clock at night. It’s pretty, it’s pretty crazy. But without the great staff that we have, I really want to say thank you. We wouldn’t be as successful in helping clients as we are. And it doesn’t always work out to everyone qualifies for pennies on the dollar or you get your penalties wiped out. It’s not always a deal like that unfortunately. But Greg as a human being, as a husband, as a father, as a grandfather does that make you feel good to be able to help people.
Greg Mahaffey: Yeah. Which is why I’m still doing this. That’s a realization I came to after I came back from the War in 1991. I can actually use that job at the IRS to turn around and help people. I came to the realization that everyone there is a crook who owes money to the IRS, not everyone is a bad person. In fact, very few people are. So that was an epiphany I had from going off to war. When I came back. I had a new lease on life and I decided to use that job to help people. And I still continue that to this day.
Lawrence Levy: Well you know it’s nice because you can hear the passion in your voice and you can hear how concerned you are about the clients and about making them sleep well at night and customer service which is a huge component of my business model to make sure that people understand that doesn’t always work like that and sometimes you’re not going to get away from the penalties that are going to be assessed against you and sometimes you’re not going to get the offer in compromise and you’re going to pay the tax. You’re going to pay the interest and you’re going to pay the penalty. That’s just the way it goes. And if you don’t qualify for the relief whether it’s relief of the penalties or whether it’s relief on a different side of it whether it’s relief in an offer in compromise world, you’re going to have to pay but isn’t it relieving to know that your problems are resolved even if you have to pay at least you can have peace of mind and go on with your life like that. So, getting that peace of mind is huge. So, thank you to our staff. That is tremendously incredible with the client base but also thank you to the clients out there because you’re very appreciative I can’t tell you how nice it is to be able to get these emails or the text to say thank you for giving me my life back. I talked about it I think with last week’s show or the week before. But isn’t it great to be able to have a situation where someone says, I’m Greg thank you so much? I always bring back the example of the gentleman who had cancer and you got his offer in compromise. One of the very first ones you did at the Levy office and how thankful is he, how great does he feel.
Greg Mahaffey: Yeah, definitely is a big relief because he was battling the IRS for over 10 years on his situation. He’d been current for the last seven years. And yet the IRS was hounding him constantly. It was an ongoing war with a revenue officer down there in South Florida who thought he was the worst thing since sliced bread. But we still got the offer pushed through. She fought against it. We got an offer specialist, offer specialist had the same attitude, we prevailed in appeals. We found a common ground. We found the proper solution and taxpayer found his relief finally.
Lawrence Levy: And you know that’s a good example because oftentimes revenue officers, unfortunately, they have a bias and they shouldn’t quite frankly but they come into it with a what I’m going to say is a unbiased approach and it’s not right and it’s not fair and it makes the case a lot more cumbersome because then your job Greg is the power of attorney is to explain the history, the background, the facts and just try and be sensible and pragmatic in the case approach. And unfortunately, it’s not always met with the same practical approach as you take or we take and it’s frustrating and then we have to tell the client. Boy, this one’s really a lot more challenging than it should be. And oftentimes we scratch our heads and say why? Why is it like that why can’t it just be smooth sailing. Why does it have to be such a nightmare of an experience. The example that we used earlier today by the way, that was a perfect example. Client came to us, owed a million dollars just to recap it from the top of the hour here client owed over a million dollars we submitted an offer in compromise in May. It got assigned to a very reasonable offer specialist case didn’t even have to go to appeals and it was agreed upon for eighty-five thousand dollars and the guy had an acceptance letter about ten days ago. Now imagine that, now whereby we have another file that’s just at a logjam for no reason. It’s really mind boggling to me how and why there’s such a different approach in the analysis. But Greg, you and I talk about oftentimes and there’s a lady named Claire Coffee here at our office that used to work in the often compromise unit for over I think it was 16 years, she was 16 years of the revenue officer and 15 or 16 years in the Offer in Compromise unit and she doesn’t get it either just as really personality. But Greg you can go with your wife or I go with my wife to a restaurant and we happen to have a waiter or waitress who just has a chip on their shoulder and it’s a bad experience and you are miserable and unfortunately your experience was not what you wanted to enjoy a meal with your with your spouse. It happens. I think all over and that’s human nature. So we try and take the emotions out of it. We try and remove the client so that we act as that buffer so that things can get accomplished in a more practical down to earth, less emotions being exhibited manner and doesn’t always work like there’s plenty of time Greg where you get frustrated with the person on the other end of the phone and just can’t believe it. And unfortunately because you were there at the IRS for 30 years you know what’s right, you know what’s wrong, you know what’s fair, you know what’s equitable. You know what’s a reasonable case resolution given these circumstances and it’s frustrating occasionally. Greg your experience coming from the IRS is a tremendous asset to the Levy team. And before we sign off for today I want to again circle back to belated Veterans Day holiday and a well wishes and a thank you to those who have served and also want to reiterate again a big thank you to our staff on the Levy team. I can’t tell you how fortunate I feel and blessed to have such a great staff behind us. We’re local, we’re the best, been around for a long time. If you’re in the local Delray area we’re right on Federal Highway about a half a mile south of Linton on the east side of the street. We are right next to Enterprise Rent-A-Car and right across from the Toyota dealership and the sign it says 1 800 TAX-LEVY and yes Levy really is my last name. If you have an IRS issue and you haven’t filed give us a call. If you owe the IRS a hundred thousand dollars, a million dollars, fifty thousand dollars give us a call. We want to say another big congratulation to the gentleman who owed over a million dollars and just got his offer in compromise accepted about 10 days ago so he’s going to have certainly a happy holiday season. Signing off for now from the Levy Tax Help show, always sunny in the Levy offices in Delray Beach. Enjoy the rest of the weekend South Florida and you have a safe and happy Thanksgiving holidays. Lawrence Levy, Greg Mahaffey. We’ll see you next time on the Levy Tax Help Show. You take care of South Florida.