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Levy Tax Help Show - Transcript - 01/17/2019

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Liens, Levy’s, 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. Called 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 against to the Levy Tax Help Show. Not only are we in what I’ll consider pretty nice weather months in southeast Florida. we were in the government shutdown and on the show today we have a couple of E A’s, enrolled agents that on the Levy team and let’s start off where we talk about the government shutdown and how that’s impacting the tax resolution world and how that may or may not impact the conventional e-filing launch and the tax season coming up on us. Let’s start off and welcome and say good morning and hello to one of the latest additions to the Levy crew. Eric Schwartz is in the house. And Eric you are a enrolled agents correct.

Eric Schwartz: Yes that’s correct. Morning Lawrence.

Lawrence Levy: Good morning. And you also wear multiple hats in the levy office as POA when you can be a power of attorney but in the meantime you’ve been focusing your energies on catching up some of our clients since Christmas around the holiday time. You’ve had a lot of files that you’ve had where you’ve had delinquent tax returns to catch up on. Gentlemen hadn’t filed what was it five or six years.

Eric Schwartz: Yes.

Lawrence Levy: Corporate and personal and you’re playing a little bit of what we call the quickbooks catch-up, the quickbook shuffle with planning quickbooks catch-up and you’re taking the raw data and having to input into quickbooks for a real nice client by the way who hasn’t filed in a long time but he wants to catch up and just get his life back in order so that’s I’ve been spending a lot of your time because the government is in the shutdown mode.

Eric Schwartz: Yes. Yes that’s correct.

Lawrence Levy: So your quickbook skills are top-notch, you’ve been really brushing up on him day in and day out and now we’re virtually seven days a week because we are into the official tax season. We still have deadlines, you as the listeners still have deadlines out there. The January 15th deadline was applicable for those of you who had to make a quarterly payment. The January 15th deadline was applicable for those who have payroll tax liabilities that you pay on the 15th of each month. So the IRS deadlines that you need to keep to you need to keep to even though the IRS is shut down. Let’s also say good morning and hello to a former IRS employee of over 32 years. Greg Mahaffey is in the house. Greg how are you sir.

Greg Mahaffey: Well it’s frigid up here in Michigan today but at least you’re having good weather down there.

Lawrence Levy: I will tell you it’s been a lovely week. The weather’s been OK you know for Floridians you’re going to get a little bit of a cold front come through to them cold is 50 degrees you see people wear like hats and earmuffs. It’s pretty comical being a guy that was not born and raised in a southern climate like Florida. But when I hear the talk about the weather we are here to talk about what do you do if you have an IRS tax problem and the past week or so. I have had a handful of interviews from media. Radio, TV, In fact obviously right here on WFTL we’ve had a couple of spots that they’ve done because people are asking what’s going to happen because of the government shutdown. What’s going to happen to the people who are planning on filing their tax returns, the end of the month beginning in February like normal and they want and they need their refunds what’s going to happen. Greg you worked at the IRS for over 32 years and I’m sure you’ve come across shutdowns from time-to-time where you’re as they’re now that the term is almost common. Sadly enough furloughed workers right. And you were furloughed in your career. A few days here perhaps a few weeks here and there but nothing like over a month of course. However from what you think as a former IRS employee, not that you have some insider knowledge. Not that you have a crystal ball but what do you think’s going to happen with the launch of tax season especially we have now the new form changes, changes to some of the tax laws and the rules and the itemized deductions. So this of all years is a pretty odd year if you will where there’s a lot of changes in play that’s going to, in my opinion add to the complications. I think it’s some challenging times but as a former IRS employee what are your thoughts. Greg

Greg Mahaffey: I think it’s going to be a disaster out there. Everything is behind the eight ball so to speak. Even after the IRS does reopen they had to gear up. You have to get the new forms out. They don’t have those ready to go is only preliminary drafts. They have to play catch up with everything. It’s going to be a major nightmare to get caught up for everything. And that’s why we had to scramble big time here to get ready for when they do open up because when they do open up they’re going to be trying to play catch up and they’re going to be trying to work too far too fast too quickly and as a result there’s going to be potentials for disasters out there.

Lawrence Levy: [00:04:46] Well let’s cross our fingers that you’re a disaster theory is not as disastrous as you may want it to be. I’ll take a more optimistic approach although again whether it’s skepticism or we’re gonna be a little bit optimistic in our approach. What we’ve heard is that the IRS is going to be recalling over thirty six thousand workers to process tax filings and refunds and that’s what we’ve heard now. We’ve also heard that the union and Greg you were part of that union and I’m trying to find the name of it the National Treasury Employees Union right.

Greg Mahaffey: Yes NTEU short.

Lawrence Levy: The NTEU. It looks like they filed some type of a legal action against the government alleging that employees should not be forced to work without pay. And I believe that a judge again from reading some of the things on line didn’t want to be involved in it basically and said he wasn’t willing to get involved. In fact I think that the comment was at its best it would create chaos and confusion. It would be profoundly irresponsible for him to issue an order that would result in thousands of federal employees staying home from work or not doing their job. So I think the courts at this point have not gotten involved. So really the question is you know, can the IRS workers who are not being paid be forced to come back and look we’ve all heard in the news whether it’s the TSA workers that can’t afford to get to the airport to do their job because they don’t have enough money to put gas in the car. I’ve seen some online stories about IRS employees. There was one I read I think the gentleman was diabetic and didn’t have enough money to pay for his insulin. So you know now whether it’s IRS and that’s what we focus on. But now the IRS employees who have gone without pay. It’s an interesting dynamic because quite frankly it’s almost the same thing that some of our clients face challenges financially when they lose their job and they’re having a tough time making it. So now you know how is this going to impact the tax season filing. Are they going to work. Greg is your theory right. Is it going to be a little bit chaotic. Is it going to be a lot chaotic. Is it going to be smooth sailing. Well we just don’t know. In the clean you know time will tell as they say. And you’ve been in the accounting world a long time right Eric.

Eric Schwartz: Yes I have over 30 years.

Lawrence Levy:  So in your 30 years and you’ve got a pipe up a little bit closer to the mike. In your 30 years you’ve never seen anything quite like this either it’s pretty unique to say the least. Oh absolutely unique. Yes. And not only is it unique this go round but you also have a compounded with the tax law changes. Can you highlight a few of the tax law changes before I give out the phone number here just to the listeners have a general idea. Well watered down in layman’s terms.

Eric Schwartz: Some of them some of the changes include no more personal exemptions will be allowed but there will be a generally a doubling of the standard deduction. That’s the first thing. A cap on the state and local income tax deduction of up to 10000 thousand dollars.

Lawrence Levy:  10000 right. So that means that if you were previously deducting your property taxes of a number thirteen thousand dollars. Lucky 13 can’t do it your cap to 10. Right.

Eric Schwartz: Exactly yes.

Lawrence Levy: And that’s that’s that’s a big impact on a lot of states not obviously Florida that have you know higher property all the Florida property taxes are high. Don’t get me wrong but they’ve been trying to see if there was work on anything New York was trying to figure out if there there’s a workaround and it doesn’t seem like there’s work arounds on that with New York and the IRS in particular. I read an article on that one yes.

Eric Schwartz: Yes you’re correct.

Lawrence Levy: So. And then also are there any other changes I know the for those of you that are divorced and you were receiving alimony or you were paying alimony or spousal support. What’s the deal with that now.

Eric Schwartz: If you’re paying alimony you can no longer deduct it. But if you’re receiving the alimony you don’t have to report it as taxable income.

Lawrence Levy: So it’s almost like child support has been. So it’s a it’s a non taxable event. The spousal support now.

Eric Schwartz: Yes. Yes you’re correct.

Lawrence Levy: So to the person paying it you used to be able to deduct it on page one of your 1040. And to the person and you’d actually list the person’s name and their social number. Right. Who is receiving it and the person receiving it. It was a taxable event in fact oftentimes in divorce cases. That was a negotiable item that you’d say well I’m going to pay you more in alimony because I want the deduction and less than child support. And that was. And now that’s changed the dynamics of that playing field as well.

Eric Schwartz: Yes. Yes you’re correct.

Lawrence Levy: So there are some changes and the moral of that story is you want to consult a licensed professional like we have enrolled agents and CPA’s. You’re also an enrolled agent Greg and you have a different enrolled agent’s card or qualification because you got one because you worked at the IRS a certain number of years. Eric on the other hand had to take a test right Greg.

Greg Mahaffey: Yeah he has to take a test but we both had the same requirements as our CPE every year having to requalify, having to reregister and coming up to the standards of the IRS as we must obtain.

Lawrence Levy: Right. But the difference is you didn’t have to take the test. You got one because you worked at the IRS. Eric had to study. Pass the test. Meet the requirements in order to get his EA card his EA license right.

Greg Mahaffey: Right. Right. I did it the hard way.

Lawrence Levy: Yes. I knew I was getting a smart alec common idea. And by the way talking about smart-alec comments, you’re most deserving of a compliment. Thank you for your service to the country. Greg was in the Gulf War. Where were you in the military. Eric.

Eric Schwartz: No. No I wasn’t in the military.

Lawrence Levy: So Greg, It was Arnold. I’m sorry. Yeah. The gentleman stood next to another one of our ways was in the Navy as well. Greg you were in the Gulf War on a supply ship off of the coast of Kuwait City in the oil slicks and minefields right.

Greg Mahaffey: Oh yes in the middle of the stuff.

Lawrence Levy: And so you were working at the IRS and got called up from the reserves and ended up going in. How long were you deployed in the Navy.

Greg Mahaffey: About three months. I was over there the entire length of the active shooting war. A little bit extra beyond that. And as soon as the shooting stopped they got most of us reservists back.

Lawrence Levy: Right. Well talk about getting back. I’ve been reading some of these articles to that certain IRS employees that are what they call exempt or I believe the term is called Mission Critical. So right around Christmas Greg, you had a client actually the day after the shutdown started. You had a physician who owes over a million dollars in back taxes. The revenue officer had issued my last name and issued levies right before the shutdown occurred and of course now you can’t get through the revenue officers however in a emergency situation IRS does have their exempt employees, what we call, what they call mission critical. We refer to them basically as territory managers so you were able to track down a Territory Manager who by the way was incredibly nice. She’s a very nice lady. She’s very helpful. She’s very customer service oriented. She’s polite, she’s professional she’s everything that someone should be no matter if it’s in the IRS world or otherwise she’s just an absolute incredibly professional down to earth person who cares about customer service and trying to always do the right thing. Needless to say without saying her name you were able to track her down and you were able to have her step-in and help and she was able to release all the levees correct.

Greg Mahaffey: Yes and there was a lot of levies that had to be released here.

Lawrence Levy: Now as it was there was a lot of work in fact even as of this past week you still have some residual fallout, that you still have to clean up some of these things from what occurred. But anyone listening out there if you have an IRS tax problem what you see or hear in the news is that your appointments consider them canceled. If you’re in the middle of an audit and you have deadline dates right. The deadline dates we’re telling our clients we’re trying to meet that deadline dates, mail things but you can’t even fax anything to the IRS. The fax machines the E fax that they use these days, there’s dead fax line that you literally can’t get through to the facts. So we’re mailing in power of attorney forms for clients in the past four weeks the old fashioned way usually electronically send them or fax them in, we’re mailing some of these in. So there’s a lot that’s going to happen. Imagine how when the light switch is turned on it’ll get turned down there’s there’s no question the government’s going to come back and it’s going to be I think a headache. I’m not sure going to be a disaster but my question out there to everyone and if IRS if you’re listening could you give us an answer. Feel free to to call the office and let us know so we can get the word out to the public but what’s going to happen to all these deadlines. Are things going to be rescheduled. Right. Everything’s going to get pushed back. Are you going to get new scheduling letters for what’s called a CTP an appeals hearing. If you had deadlines to get documents in. Is that all going to be is you’re going to be some courtesy, is there going to be some pragmatic practical human approach to it so that there is going to be some leeway until everyone gets back in a bit of a more normal groove. Now Greg I actually had Arnold one of the POA’s in the Delray Beach office ask that to another territory manager that you had to actually help track down as well. I asked that very question and his answer as a TM, as a territory manager was I hope I hope that there’s going to be some excuse me there’s going to be some human touch, some human thought process and that there’s going to be some flexibility in deadlines and extensions. But we are using this time to take advantage of the government being it will call it in sleep mode. It’s no different than your computer it goes in sleep mode. The IRS is in sleep mode so we’re trying to have all of our files as much as humanly possible, ready. A lot of client interaction and everything as well prepared as we can so that when the light switch does get put back on we are as well-prepared as humanly possible. Then you’ve got to think about it. Right. Greg you are a father. You are a grandfather. You are a husband. Right you have a life outside of your you know day job if you will at the Levy office and a lot of these IRS employees they have the same. You were once a revenue officer for 32 years. We have Claire who works here as well, Claire Coffey. She worked as an RO for about 16 years and then for the other 15 or 16 years she worked in the ofter in compromise unit and she’s got a family as well. So imagine how, these IRS employees again that there’s other parts of the government that are shut down. But our focus is on the IRS because that’s what we do for a living in this office. But imagine how they’re impacted as well and imagine how their lives have been impacted over the holiday season so the timing of it is not good on all fronts. The holidays, the new year, the new tax laws, the new tax forms, the launch of e-filing. A lot of people rely on their refunds as a forced savings mechanism. If you have questions about any of what we’ve been talking about so far few in the middle of an audit, if you have a back tax problem and you don’t know what to do. If you haven’t filed in a few years, listen this is a really really really, I kid you not. There’s a lot of sayings that are being used this time but this is a once in a lifetime event that the government is going to be shut down for this long. It is literally history making 2018 – 2019. This probably is going to make some you know high school history class for perhaps my younger son whoose is 12 years old when he gets into high school. It may make the agenda it may make the curriculum. Who the heck knows. But give us a call. We’re local we’re the best. We’re right here at Delray Beach on Federal Highway about a half a mile south of Linton on the east side the street. We are right next to Enterprise Rent-A-Car. We are right across from the Toyota dealership. It’s a freestanding building that says Levy Tax Professionals right on the sign up federal. Come on and work here seven days a week Saturdays, Sundays. We love and I mean love the weekend clients interaction a Sunday morning at 730 as is good to us as a Monday morning at 9 a.m. We enjoy the weekend interaction with the clients. It’s something we’ve always done. We are happy to meet even on the holidays, no matter if it’s Christmas, New Year’s, July 4th, you name it we love it. Now technically the IRS will be closed anyways on Monday in honor of the Martin Luther King holiday so we can open Monday and we’ll see how it goes before we have another show. A week from today and then we get into what’s supposed to be the launch. I think it’s July, January 29 is that no one’s supposed to launch Eric.

Eric Schwartz: I think January 28.

Lawrence Levy: So you know the end of January is when the tax season is especially full to launch with e-filing. Is it good to go off without a hitch. No. Time will tell. But let’s talk about what you should be doing right now. The local phone number by the way again. (561) 865-7800 and 1-800-TAX-LEVY and yes Levy really is my last name. Greg the advice as a former revenue officer to our client base, to the taxpayers that have a civil tax problem what should they be doing right now. While the government is in sleep mode, hibernation mode, shutdown mode whatever you want to call it. The revenue officers are not there issuing my last names. There’s no levies, there’s no leans. I mean there’s some perhaps leads that are being filed there’s some mail going out automated mail if you will but what is the advice you would give as a power of attorney. Also as a former revenue officer during the shutdown.

Greg Mahaffey: Take advantage of this time. Get everything together. If you’re working with us by all means get us the financial information that’s needed. Go ahead and get there’s delinquent returns get a man so we can get the returns prepared. Take advantage of the situation now. You need to adjust withholding if you don’t have sufficient withholding for 2018, go back there change your W$’s for work and be proactive. It’s easier and safer to file and less stressful if you know you’re going to get a refund every year versus owing. If you have estimated tax problems. Talk to us. We’ll set up alternative schedules you can follow. I try to get a lot of my self-employed to make monthly estimated tax payments. It’s a lot easier to make a lot of smaller payments than it’s one big one every quarter. We can get creative with this stuff and stay within the laws and we’re here to help. By all means do not put it off because when they come back they’re going to come back roaring trying to make up for lost time and as such individual cases may get shuffled in between and it may take them a while to respond if they start issuing levies and we start appealing those levees and it may take a while to respond. Take advantage of it. Give us a call. Let’s get it done. Don’t procrastinate. Back to you Lawrence.

Lawrence Levy: Eric you like when Greg says back to you Lawrence. it’s Like back to you in the studio. Back to you Lawrence. But I will tell you that a lot of people are still concerned about what is going to happen in fact. I’m reading online as I’m talking here. The Treasury Department’s updated shutdown plan for the IRS released earlier this week on Tuesday provides for now one from thirty six thousand to forty six thousand employees or 57.4 Percent of the agency’s workforce to be working during the tax filing season. It also confirms that the IRS will issue refunds during the shutdown but that doesn’t answer all the questions people have. You know there’s some concerns because this year, it’s certainly challenging because there’s a lot of these new changes by the tax law that are going to maybe impact what forms you file how they look how they’re going to look online. So there’s a lot of things that are up in the air at this point. And Eric as a 30 plus year accountant as a enrolled agent what would be your advice as far as the tax season goes. Come on in. Drop us off your W-2. Give us your info as normal and we hope that we can and we’ll get more info as time goes on. We hope that we can just hit transmit an e file as normal. But what’s the advice.

Eric Schwartz:  The advice is just like Greg has said to be proactive. Call us with your questions. We’re here to help you make your estimated payments on time we can help adjust your W4 with holdings and to get your tax documents. And if you’re self-employed get your financial statements to us. We can prepare them or we can review them. We want to help.

Lawrence Levy: And you are right by the way. It is January 28 not January 29 and refunds are supposed to be issued during a shutdown. Over last week and the IRS announced that there is the online software going to be available through IRS.gov. That’s going to open for business even if the IRS doors do remain closed. So there’s a lot of things that are still in an unknown limbo land status but if you have an IRS tax problem let’s end the show with that as we come to top of the hour we’ll give the phone number out one more time as we’ve got about five-six minutes left here. The local number is (561) 865-7800 and the toll free 800 TAX-LEVY . And yes in case you wondered, Levy really is my last name and you know the tag lines by now. Don’t fear levy higher levy. You want a levy on your side not want against you. Right pretty crazy lines. But I will tell you that be proactive if you are facing an audit because you got a letter. Give us a call if you have delinquent tax returns and you haven’t filed in a few years. Pick up the phone. Give us a call. If you owe back taxes whether it’s income tax or payroll tax give us a call. By the way on a separate but related note, the states are open Florida Department of Revenue. Business as usual. All to say this is a federal shutdown. And believe it or not we’ve had to call some of our clients and explain that the state and the federal are completely different and they really have nothing to do with each other whatsoever. It’s interesting that that we have to explain that sometimes. But listen I was talking to on Thursday I was talking to a physician and explaining to her a little bit about why take a paycheck versus make estimated tax payments, don’t commingle make it easy on yourself. And she said you know jeez as a doctor I just can’t believe I don’t get it. And I said no you’re wrong. I said as someone who go to see a doctor I don’t treat myself if I’m sick and need to I go to a doctor if I need to get a prescription for whatever it may be God forbid people go to doctors. That’s what you do you seek professional advice so don’t be down on yourself because you aren’t very good at accounting and taxes. That’s what we’re here for. So everyone’s got their spot in life. And that was one of the things actually this week. We had in this week we had an attorney real nice guy that came into the office and he wants just to do things the right way and he wants to get himself back on a better track. So we’re going to make sure that 2019 is done smoothly and with our clients it always is not as smooth as we would like it to be sometimes but we try and be very thorough and we try and hold your hand with polite silk gloves so that we guide you down the right path of how to stay in compliance. And Greg when you were at the IRS you saw that a lot where people would just fall off the wagon real estate agents, self-employed people, you could be a lawyer, you could be a doctor,, you could be a realtor you could be a plumber or electrician, a roofer, self-employed anything for that matter and if you don’t stay in compliance you literally are just going to fall off the wagon even if you get into some sort of plan. We had it happen you know too it happens to some clients a lot. You get him into the installment agreement then things come up and they get into a pickle again. It happens.

Greg Mahaffey: Yeah that’s why we take the total approach here when it comes to our clients. We make sure we find out why you fell off the wagon and what needs to be done to keep you on that wagon so that going forward your first priority is staying current never again owing the IRS anything until you stop the bleeding as I call it. You’ll never get out of tax problem Just gonna postpone it postpone it may get worse and worse in subsequent years. That’s why when we craft a solution for a client resolution we make sure that the first thing we take care of is future taxes. If you don’t care take care of your future taxes. Just postponing the problem down the road kicking the can down the road and making it worse for yourself in the long run.

Lawrence Levy:  And you’ll never. And you’ll never get out of it. As we literally have about a couple of minutes left. I just want to end on a couple of things. We ended up having one of our clients who one of their family members had a cardiac issue and when we hear of things that go on with our clients of friends or families I want to take a moment out and I want to wish anyone out there well who may be experiencing any medical issues because money typically can’t solve that and we want to wish you well because when you’re facing an IRS issue or problem. I was actually talking to a client who said his wife had cancer and when she was getting treatment they spent more money on food and eating out or ordering in because they just weren’t cooking and she’s facing her cancer treatment. And that’s just a reality of life. But trying to explain that sometimes to the taxing authorities can be challenging. Now you have some IRS workers who have experienced some potential financial distress as well because of their employer and it’s nothing that they created. The revenue officers like you Greg like Claire. I’ve had a lot of former IRS employees work for me over the years. We’re all human beings and we all try and do our job in the civil tax controversy world. We don’t deal in any of the criminal side of it. Criminal investigations by the way, we’ve heard and read but it’s not our space are still ongoing sort of normal track. So the real bad guys that are out there, they’re still getting hunted down and that’s the moving along. But we want to wish everyone well if there’s medical issues that they’re facing and certainly for anyone impacted by the government shutdown. It’s not just the workers. There’s a whole domino effect. Mortgages are being delayed and morgages is being delayed the realtors are being delayed the home inspections being delayed the contractors to fix the problem from the inspection it’s a whole domino effect so there’s not just a workers there’s a lot of people that are out there that are potentially impacted. And if you really take time to think about it, it’s not just the workers it’s a lot of things that’s going to have a domino trickle down effect. But look it’s the government and they’re working through it and we’ll cross our fingers that there’s gonna be better days on the horizon and that there’s gonna be a little bit more of a clear path to come to a resolution so that things can go on as normal. But we live in United States of America. We’re all happy that we’re here and we’re all blessed to live in the country that we live in and once again I want to say thank you to Greg for your service to the country. If you have an IRS tax problem, please use this time when the government is shut down. Please use it wisely please use it to your advantage please take advantage of the IRS sort of taking a nap at the present time. Give us a call. The phone number 800 TAX-LEVY and yes Levy really is my last name. Thank you Greg for all you do for the office as a power of attorney and same to you Eric, It’s a pleasure to have you both in the office and work with you. Side by side and remember Florida. Don’t ever fear a levy you want to levy on your side, not one against you, don’t fear Levy, you hire a Levy you signing off for now from Levy Tax Help Show Eric Schwartz Greg Mahaffey and Lawrence Levy in the house. Enjoy the rest of weekend South Florida you take care. We’ll talk to you next week.

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