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 & 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.
Greg Mahaffey: Good Morning South Florida. Yes it’s the Levy Tax Help Show. You have got Greg on the phone and believe it or not, boys & girls, Lawrence has laryngitis out there. He has lost his voice. So I’m here carrying the show today with our other representatives that we have working for you out there. We have Dave Kropp who is a CPA on staff. We have Stephanie. That’d be who’s actually one of our admin types. We’re here to rock and roll for you this morning. How you doing this morning, Dave?
Dave Kropp: Good morning. How’s it going?
Greg Mahaffey: Well, we got lots of good news here for everyone out there about what we have to offer for the public out there on the Levy Tax Helps Show. It’s definitely been a very eventful past two weeks here on the Levy Show. How you doing this morning, Stephanie?
Stephanie Deaibes: Good, how are you?
Greg Mahaffey: Okay.
Lawrence Levy: And Greg, you know, I’m here to let the listeners know that I’m still alive, but if you can hear from my voice, I’m going to try and not say enough when I had to have Greg pinch hit for everyone. Uh, I thought it would be an interesting little twist. So as Greg mentioned, we have a Dave Kropp who, Dave, you’re celebrating literally just this past week, the 10 year anniversary with the Levy office. So I want to say publicly thank you very much for all of your work over the years as our lead CPA. It’s been incredible Stephanie is our lead Admin, I got to tell you, the clients love you. You’re really a great asset. So Greg, why don’t you start off this week and talk about what you did yesterday. So as a former IRS revenue officer, he worked at the IRS for how many years?
Greg Mahaffey: Over 32 years. And now let’s take it from here, Lawrence, because it sounds like you’re about ready to lose it at your end.
Lawrence Levy: Well, yeah. Well my voice I may lose. But as a revenue officer for 32 years, you used to do what you ended up doing Friday afternoon, which was a walkthrough. And then after you explain what the walkthrough was for our client. Can you also then, Dave, I want you to talk a little bit about, since we’re in the middle of tax season now, not middle, but it just started officially since the IRS is back up and running. Maybe Dave, you can chime in a little bit about the new forms, some of the things that have been changed and so forth. So Greg, tell us a little bit about how a walk through goes. So if you’re a business owner and you owe back payroll taxes, a revenue officer from time to time is going to want to actually go out and physically see the business, see the assets. Uh, and that’s called a walk through of the business. And Greg, you did that when you were in our RO, correct?
Greg Mahaffey: Yes. All the time, and I’ll take it from here Lawrence. What happened was when you have payroll taxes that’s fully and you’re trying to get an installment agreement or some other kinds of resolution from the IRS, the revenue officer is required by their manual guidelines to go out there and actually look at the business operations. It’s more than just going through the profit and losses and the financial statements and so forth that actually looked to see what is going on at that business and that’s what I did yesterday with one of our larger clients here. He’s into deep poc here only through no fault of his own and he ended up getting stiffed by a couple of large receivables which caused them to fall behind on this payroll taxes. And while we were asking the IRS to wait, they are requesting. They understand how the tax payer got into this mess and what they’re going to do to get out of it. As part of that process, the IRS is required to put themselves in the shoes of the taxpayer. They actually go into a business and look over the operations. They look over what is going on. They look over the assets of the business, they see who’s working, what’s going on, what kind of assets are there in order to compare that to everything that’s on the financial statements and looking at the cash flow analysis and basically trying to understand how that business operates. Where asking the IRS for some lenience. See here we may be requesting penalty abatement or we may be asking for an installment agreement or we may be asking for in business hardship. There’s many different options out there, including offer in compromise over the winter. All of the details later. Basically we actually went through, we had the financials prepared for this client. We had everything ready to go. I actually showed up at the clients an hour before the revenue officer was due to arrive just to make sure everything is nice, neat and ready to go. So we put the best presentation forward in this case.
Lawrence Levy: Look Greg, I’m going to interrupt for one second, so a lot of what goes on and Stephanie maybe can speak to this, but before we do. Steff, since you are a lovely female voice here and certainly far better than my voice today, can you give out the 800 number for everyone listening?
Stephanie Deaibes: 1 800 TAX-LEVY
Lawrence Levy: And local phone number is (561) 865-7800 and again as Stephanie mentioned, 800 TAX-LEVY. We are located on Federal Highway, about a half a mile south Linton on the east side of the street right across from the Toyota headquarters. We are right next to Enterprise Rent a Car and on the other side is a fantastic barbershop and also Finnegans we eat out as well. And I get my hair cut at the barber shop next door from time to time, but we’re not here to talk about my haircuts. We are here to talk about what do you do if you have an IRS tax problem and basically, like we were saying earlier, in the Levy office, we have former IRS revenue officers. We also have, enrolled agents, which could be like a former revenue officer. So Greg has his EA, which Greg, after you work at the IRS for so many years, you get what’s called an enrolled agents designation when you retire. In the office too, we also have Claire Coffey and unlike the coffee or the tea , I’m actually drinking tea, right this second, a Claire is also a former IRS revenue officer and she worked at the IRS for over 32 years, maybe 33 years. The last half of her career she rounded out is what’s called an offer in compromise specialist. So Stephanie, when you are doing a lot of the document gathering, uh, and for these clients that are listening, potential clients that are listening today, how critical is it that you have a really good set of books because oftentimes one of the big things is, the IRS is going ask like Greg used to be and Claire used to be, basically a few questions. What do you make and what you spend? Stephanie oftentimes part of your job and then it’ll dovetail into Dave Kropp as a CPA. But Stephanie, part of your job is to try and gather the documents so that the Power of Attorneys and our staff can get an exact handle on what the clients make and oftentimes that’s a little bit of a struggle. Correct.
Stephanie Deaibes: Yes, definitely
Lawrence Levy: And it’s a struggle because, and you see it a lot Greg too, especially when you were at the IRS, but even now working in the private sector when you have a client of ours that just doesn’t have very good bookkeeping. In fact, on Friday morning, I was talking to a client from that, he basically set a business up for his wife and he was hands off and unfortunately their bookkeeper, their accountant was not hands on. So therefore it led to things not getting filed. Taxes not getting paid and really a big cluster that is now culminated over the course of literally about seven years or so. So it’s real critical to get your accounting and your bookkeeping, in a stabilized easily documented fashion. And Dave, you and I actually were talking on Friday about another client where the accountants before they came to us, and this is multiple years of returns and you have these project files after 10 years of work in here, here, you’re pretty used to this stuff, but can you just shed some light as to what was going on and how you were able to find out how they basically duplicated either income or expenses and just what a mess that was.
Dave Kropp: Well, they, the, the accountants at the client’s Quickbooks which already had data in it and went through the bank feed. So they ended up duplicating the vast majority of the transactions that were already in there. And then try to do journal entries to correct that. And so it was just, you know, three sets of data basically when you only should have been one in there.
Lawrence Levy: Which that I’ll equate to a big mess to say the least. Right. And if you have, if you have that big mess and if you haven’t filed your tax returns in several years, we had a client come into the Delray office earlier this week. It was on, I believe it was Tuesday, if I’m not mistaken, on a Tuesday and he hadn’t filed taxes in a number of years and he just wants to get his life back on track. Really nice down to earth guy. And that’s what we see a lot here in the Levy office. We see a lot of people who have tax problems. They haven’t filed, they may be in the middle of an audit, they owe back payroll taxes, they owe back income tax. In fact, Stephanie, this week you’ve been interacting this past week, you’ve been interacting with a really nice young man who was looking to get married. And he owes, I want to say about $100,000. And unfortunately he had not the greatest experience with another tax resolution firm and so we want to make sure that, you know, his experience with us is far superior and it takes a lot of time because the gentleman, he did had a lot of questions for you write Steff?
Stephanie Deaibes: Yeah. Definitely a lot of handholding and we want to make sure that he’s comfortable with us.
Lawrence Levy: Exactly. And I’ll tell ya, and I’m going to say it out loud between Dave Kropp, who’s been here a decade and I can’t say it enough. Congratulations on the, on the decade. And Greg, you know, I’ve, I’ve known you since, Well my, well my father was alive. So you always say that since diapers, right? Greg?
Greg Mahaffey: Yeah, definitely. I’ve known you since you were in diapers and you were just running around the office here and your father would yell at you “Lawrence, get out of that file”, gets we go way back there, don’t we?
Lawrence Levy: We do. And then who would have ever thought, you know, when you’re the guy that fires off the levies when you were working at the IRS, you’d be having your paycheck signed by a guy named Levy. And Stephanie, can you give out the 800 number again for everyone, please
Stephanie Deaibes: 1 800 TAX-LEVY
Greg Mahaffey: The local phone number is (561) 865-7800 and again we’re located at 2881 South Federal Highway, Delray Beach, Florida, and it’s nice and bright and sunny out all the time down here in Delray Beach.
Lawrence Levy: It’s always nice in Florida and how we try and make it where the clients have that comfort level basically. And oftentimes they come to you with a lot of stress and a lot of pressure. In fact, one of the clients that I was talking to this week, uh, their child was unfortunately born with some health challenges. And as a father myself, I have two boys and actually both of my boys have been on the show before. As a father, it really hits home to me when you hear this. And unfortunately the child’s health problems also contributed to the, basically lack of ability to focus on the business. And that’s understandable. And that’s human. Greg, when you worked at the IRS and you would see the sad, tragic stories like that, or someone who was facing some serious medical issues, whether it was cancer or a heart attack, you know another severe illness that was debilitating. Did you have a heart as a revenue officer? Did you show compassion and you took a practical approach where you understood that someone didn’t necessarily have the ability to maintain their focus because they were distracted by a medical complication?
Greg Mahaffey: It happens all the time and that’s part of the job too that we have here. We have to put the IRS in the taxpayer’s shoes so they can fully appreciate where they’re coming from. No one gets into tax trouble because they want to. Very few people get into tax problems because they just didn’t want to pay and they don’t care and they think it’s a big game to play with the IRS. No one happens like that. Things happen which are beyond the control. Some people make mistakes, some people getting into problems through no fault of their own. It happens in life, but what we have to do is we help clients pick up the pieces, you had to put their lives back together, reorganize and do what needs to be done, get back on track, and that’s what we try to provide to the IRS. That means where we can all work together. We put the person’s life back in order, starting with their taxes. We try to help everything that we can and that’s what we had to do here. Let the IRS understand how he got into trouble and what we’re doing to ensure that this never happens again. That’s the biggest priority you have out there, not necessarily how you’re going to get the IRS paid back, but how are you going to stay out of tax trouble going forward from here and that’s what we pride ourselves on here at the Levy Firm. We basically help you stay out of trouble going forward in the future. It does no good just to solve the current crisis. Have your account put in a hardship or get it closed out. If you just have it reopen and owe more taxes going forward from here, that’s why you need our bookkeeping services. That’s why you need us to help you with your accounts on top of what I do for a living, which is to help with a proper resolution to get the IRS off your back once and for all.
Lawrence Levy: Let’s actually shift it and that’s right. We’re all here as a, big team and we have a great staff from the receptionist to the admin staff, to the POA’s, to the accounting staff, to everyone that’s part of the team. It’s really, it’s a tremendous team that we’re fortunate to have and on a day like this where my voice is a little bit hindered, shall we say, and I’m slipping on some peppermint tea. It’s nice that we have experienced team that can pinch hit for this radio show. And Dave since this in your career. How long have you been a CPA by the way? How many years?
Dave Kropp: Twenty five.
Lawrence Levy: Twenty five years. We’ve almost had you for half year career, so I feel I feel blessed Dave Crop, but this is one of the first years in a long time that you’ve seen some pretty substantive changes, not only cosmetically, but also some changes. Sorry I’m sipping on this coffee, everyone, I really apologize. We’ll see how this sounds, but there’s been not only cosmetic changes but also changes to itemizing also changes to what you can itemize and not. There’s a cap on the property taxes on the $10,000. Can you just give everyone a quick two to four minute version of some of the changes, whether they’d be cosmetic or otherwise.
Dave Kropp: Okay. So the tax cuts and jobs act has modified many common features of individual and business returns. The standard deduction will nearly double under the new law. So there were about 30 percent of people we’re itemizing on their tax returns. That’s expected to plummet to about 10 percent. The other thing to look at is, to consider it, you know, employee business expenses. If you’re itemizing and deduct and employee business expenses, that entire deduction has gone away. So you’re gonna want to talk to your employer and try to get reimbursed for any of those expenses because you’re not going to be able to deduct them any longer. On the business side, the biggest change really is the corporate rate dropping from 35 percent to 21 percent at a C Corp. Yep. Right.
Lawrence Levy: And again, a lot of this is pretty technical, so in this show we try and water it down a little bit, but the moral of that story is, seek professional advice and we always want to strongly recommend that whether you have a tax problem that you don’t go this alone. That you always want to seek professional advice, whether it’s for unfiled tax returns, whether you owe money, whether you are a business owner and you got into a pickle and in a jam and you end up owing back payroll taxes, uh, or whether you’re just the average a plumber, electrician, real estate agent, lawyer, doctor, you name it. We’ve seen just about everything literally from restaurant owners to retail sales to auto repair stores. You name it. We’ve seen it all. Builders, contractors and every single client you could ever imagine has probably walked through our doors and uh, unfortunately, as Greg was mentioning earlier, people get themselves into a tax problem, not because they want to, but there’s a number of reasons, perhaps some better than others of course. But that’s what we’re here for. We deal in the civil tax controversy arena. Stephanie, why don’t we give the phone number out one more time because supposedly I’m always told we don’t give it out enough. So why don’t we start with the 800 number.
Stephanie Deaibes: 800 TAX-LEVY
Lawrence Levy: and the website. You want to give that one out.
Stephanie Deaibes: www.levytaxhelp.com.
Lawrence Levy: There you go. That’s usually, by the way, when I say the www, my kids laugh at me say that much more. levytaxhelp.com without the www. But that’s okay. And the logo, phone number Is (561) 865-7800. And if anyone has any tips to help what we’ll call a laryngitis situation, go away. I’m all ears. Give us a call. Toll free. 800 TAX-LEVY. If have any of those tips, uh, of course I’ve heard the cargle, the salt water and drink a lot and have the tea and the honey, so I’m working on it everyone, so my power yet
Greg Mahaffey: just let us carry the load and we’ll finish this conversation. How about that Lawrence.
Lawrence Levy: Yeah, rest the vocal cords. So let’s talk a little bit, about the government shut down and I want to start first, if we could, we’ll go ladies first. Stephanie from your perspective because you’re really in the trenches, so to speak. And then you see a lot of it, the scheduling, the delays, uh, revenue officers not getting back because they’re really behind on their task and their duties. Have you seen a pretty significant impact from the government shutdown that lasted over a month?
Stephanie Deaibes: Only in delayed responses. Things like that,
Lawrence Levy: right? We’re seeing that as well a lot. I just want to bring that out there. I think that Greg would, when you were at, and we talked about this on last week’s show, but when you were at the IRS, there was obviously a few times you had to shut down. So it was a far shorter period of time, right?
Greg Mahaffey: Yes, definitely a lot shorter than this disaster that we’re just going through right now. Everyone’s still picking up the pieces. So right now the IRS is supposed to be understanding and holding off any enforcement activities. That’s not always the case. IRS has individuals just like the rest of us too. They had their own way of doing things at times. So it seems because it’s like going to a restaurant. Sometimes you get the greatest waiter in the world and the crappiest food and sometimes just the opposite. Sometimes you get the boast of best of everything here. Same thing with the IRS. Sometimes you get very understanding revenue officers and sometimes you don’t and when you don’t, and even when you do, you need a professional on your side to help get you through this. They provide with the best representation possible we’re ,there to protect your rights at all times. So the IRS gets out of line, the revenue Officer gets out of line. You have someone there to defend your rights and know what to do, know what the policies and procedures are for bringing them back into order here, so to speak. So that’s why you need to hire us as a professional. And again, we’re an all-around service here. We analyze your problems, we see what got you into trouble, and then we figure out what’s the best way of getting you out of the trouble. Usually, once again, we have to get financials because that’s what the IRS is going to need. That’s why you need to hire us out there. Dave, getting back to you on the, tax law changes, uh, how many 18 returns. I’m sure you’re right in the middle of them right now. What’s some of the biggest shockers that you’re seeing out there when it comes to 2018 new laws and the new taxes as we’re doing dealing with this?
Dave Kropp: Well, you’ve touched on some of this stuff before about the itemization is almost totally going away. And there are some of the other popular deductions are also being eliminated, such as home equity loans, uh, moving expenses. Um, the other big item is alimony will no longer be deductible, so anybody getting divorced, you know, they’re grandfathered in, but ended getting anybody getting divorced going forward will no longer be able to deduct that alimony.
Greg Mahaffey: And that’s going to be a big hit for a lot of our clients.
Lawrence Levy: That’s significant because alimony and child support, used to be a somewhat negotiable in a divorce, if you will. So you’re saying Dave, now that the person paying the alimony can’t deduct it and the person receiving it, it’s not to nontaxable event. Now?
Dave Kropp: Correct.
Lawrence Levy: Now, that’s a pretty significant one actually. The form itself, you know, we’ve obviously seen how it looks. It’s a pretty significant change and I don’t know if anyone who’s listening has seen the new form, but that took a little bit of getting used to the way it prints, right? Dave?
Dave Kropp: It’s basically a postcard. I mean anything out of the standard item is on a new schedule now. So some people literally are just going to have this postcard to file if you just have a W2, if you don’t have any other deductions or things of that nature.
Lawrence Levy: Yeah. And a lot of these changes, they’re tricky. Uh, I’m not sure if I’d say complicated, but they are tricky and you Want to make sure that things are going to be handled properly on your tax return. So if you’ve ever tried to do your own tax returns, which we see a lot, in fact, this week, Stephanie a file that you’re on, when we were talking to a client on Tuesday evening, it was about 6:00 in the evening and the gentleman grosses a million dollars, uh, and he unfortunately has been preparing his own books as well as preparing his own taxes. And he had three locations, one of which he owned and he wasn’t necessarily picking up the rent the right way and handling the landlord tenant relationship the right way. So there were some significant things that needed to be addressed there. And after talking to him, explained to him, pointing out to him, where uh, it was airing. In fact, I’ll give you another good example. He was what we call a sole proprietor, and I’ll let Dave speak to this. So Dave, you don’t know anything about this file, but the gentleman that’s a sole prop, meaning he files is what’s called a schedule C and he was giving himself a W2 and we said you can’t do that. You shouldn’t be doing that. Dave, can you explain why a sole proprietor should not be giving themselves a W2 and then explain what they should be doing to handle money they take out of their business?
Dave Kropp: Well, the self-employed, they pay the self-employment tax, which is really your payroll tax that you pay through your W2. but when you’re the sole proprietor you don’t take the W2 because of that self-employment tax.
Lawrence Levy: Right? So basically if anyone listening out there, and we see this, we have seen this over the years. Steff, you’ve seen that a lot where a sole proprietor. So a schedule C the owner, if you will, he’s taking a W2 which is, which is improper. I wouldn’t say illegal, but it’s not proper accounting. As my father from England would say, um, I’m not sure how it’s going to sell in my voice, but it’s not proper and improper. Uh, but if you have any questions about any of this or the new tax forms, you give us a call at 800 TAX-LEVY. And by the way, Stephanie is Levy really my last name.
Stephanie Deaibes: It is
Lawrence Levy: And are your paycheck sign by a Levy. Greg, you would’ve never thought in a million years you’d have a paycheck signed by someone with the last name, Levy. I’ve never asked you and bow, by the way before I forget because David’s stuff are, uh, this. Is this your first time coming on the show? I don’t. Maybe Stephanie. It is right after. How many years? Eight years. Nine years. Eight years. They finally committed. Now you’ll be a regular, right? Stephanie, the cohost of the Levy Tax Help. Show, uh, Dave, you were on years ago or if I lose my mind, I know
Dave Kropp: I was on it before,
Lawrence Levy: Right? I’m possibly losing my mind. My wife thinks I am and my wife’s, you know, when she sends me to the grocery store, I for sure they’ll go home with the right a grocery list, but a Greg, we want to also say a big shout out to you and thank you for your service to the country. You were in the navy right in the gulf war.
Greg Mahaffey: And I was actually in the reserves minding my own business at the IRS as a revenue officer. I joke with my wife on a Friday and right after we were in the middle of Desert Shield, I pretended to be my commanding officer looking for petty officer Mahaffey. And she panicked and I took my phone off the hook, but we’d go into that story later. But basically I made her think I was being called up for active duty when I really wasn’t at the time. So here I was minding my own business, playing a joke on my wife. Two hours later, I got the real phone call from my real commanding officer saying I was recalled to active duty in the reserves for Desert Storm.
Lawrence Levy: Oh, I never heard that story. Actually
Greg Mahaffey: Playing a joke on my wife the worst time possible, and she said it was god getting back at me for doing that to her, and she’s probably right. But anyway, I did that as part of my 32 years with the IRS. That’s the only break I got. Also a employment tax examiner, an offer in compromise specialist. I also did work for a while in the ATAC group which deals with overseas phony transactions and basically works hand in hand with the criminal investigation and exam functions as well as part of a task force at the time. So I did that for a long time as well. But again, getting back to that one example, you need to know what you’re doing as far as your business entity is concerned. There are different business entities out there, there’s LLC’s, there’s corporations, there’s limited liability companies. There’s Limited liability company’s taxes. S Corp or a C Corp, you have to know what you’re doing, which is why you need a professional on your side. Do it right the first time. If you don’t do it right the first time, you come in, we help get you get everything fixed up
Lawrence Levy: and that’s where you have a whole team behind you. Stephanie, let’s try and end on a real positive, a happy, happy note as I like to call it and with some positive success stories. Let’s run through some recently that we’ve had and some are significant dollars and we want to talk about it and I want to be very clear though, but not everyone is going to qualify for that offer in compromise. We hope everyone does, but they don’t. That’s where you settle for something less than one hundred cents on the dollar. So one of the first ones is a gentleman that owed the IRS over a million dollars and Stephanie. Do you remember what he settled for? It was just under a million. $40,000. Remember that one?
Stephanie Deaibes: Yes. We are able to negotiate an offer in compromise for $85,824.
Lawrence Levy: So take that guy. And that was right before the holidays, if I’m not mistaken. You think he had a happy holiday season that bad? He ended up selling over a million dollars and he was able to settle for $84,000. I’m sorry, $85,000 and change. Another client owed $374,000 and he settled for how much, they would just under $43,000. No, no, that no was. That was another one that was a gentleman that had cancer. That’s one Stephanie, he ended up, um, he owed 374. And he I don’t know that he or she, but they settled for just over $19,000 on that one.
Stephanie Deaibes: $19,181.
Lawrence Levy: And then let’s talk as we wind down the show here, there was a pretty big success story last year that we had where a gentleman, he was able to get a $138,000 was it in penalties wiped out right? And again, doesn’t always happen like that? Not everyone’s going to qualify for penalty abatement, not everyone’s going to qualify for an offer in compromise, but you have to know what you’re doing. The IRS has significant rules that you must follow in order to make sure that you fit in their criteria. Greg, Dave and Stephanie, thank you very much for, at least carrying most of the show today while I’m trying to get my voice back. So, rounding down the show today, a south Florida is Everyone else who listens to a podcast or streaming in iheart radio. If you have an IRS issue, do not go it alone. Give us a call. we’re local, we’re the back, right on Federal Highway. We want to see you in the office the local number (561) 865-7800. And Stephanie give the 800 number real quick.
Stephanie Deaibes: 800 TAX-LEVY
Lawrence Levy: Then we always like to say, you know, the taglines are Stephanie, right? Don’t fear a levy. Hire a Levy You want a on your side not one against you. Exactly. Don’t fear Levy, hire a Levy. I was signing off for now for the Levy Tax Help Show. We have Dave dropped once again celebrating his 10 year anniversary, in the Levy office, the famous former IRS revenue officer, Greg Mahaffey in the house, and also a fantastic lead admin. Stephanie, who’s been here a long time as well. Do you have any issues? And you can’t sleep at night. Give us a call. We will help you sleep better at night. Let’s cross our fingers that next week. My voice is back to normal. Enjoy the rest of the weekend, South Florida. You take care of it. We’ll talk to you next time.