Welcome to the Dr. Friday Radio Show! In this episode, we have tax expert Dr. Friday take on the latest tax updates, answer the caller’s questions, and talk over the following topics:
- How To Get An Offer in Compromise With the IRS
- Dr. Friday’s Tips on Getting In Contact With the IRS
- How Long Does it Take the IRS to Process An Electronic Payment?
- Did The IRS Recieve My Paper Payment?
- How Long Can College Student Be My Dependant?
- More Than 2.1 Million Paper Tax Returns are Still Waiting for Processing by the IRS
- Putting Money Into You 401K When You Owe Money To The IRS Is Not Allowed
- Tennessee Sales Tax Holiday on Clothing, School Supplies, and Computers begins July 29-July 31
- Tennessee’s General Assembly Approved Sales Tax Holiday on Food & Food Ingredients August 1-August 31
- October 17 Deadline for Filed Tax Extention
- Getting Back On Track With the IRS with Dr. Friday
and much more!
Dr. Friday 0:00
No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or financial woes. She’s the How-To Girl. It’s the Dr. Friday show. If you have a question for Dr. Friday, call her now. 615-737-9986. So here’s your host, financial counselor, and tax consultant, Dr. Friday.
Dr. Friday 0:29
Good afternoon, this is Dr. Friday, and moving along here. It’s a crazy Saturday for me, I imagine all of you guys are probably out there working, it’s a pretty day outside. But anyway, today we’re going to talk a lot about what I love talking about, which is taxes. Also a little bit about the offer and compromise process. Because we’ve had a lot of individuals that are getting to a point, I think, you know, 2020 was a very difficult year for many people. But people are now getting back on their feet, and they’re wanting to deal with the IRS.
Dr. Friday 1:05
And they’re like, I don’t know where to start, I don’t know how to start. And just for everyone that’s maybe never heard of who I am Dr. Friday, or just tuned into the radio show. I’m an enrolled agent licensed by the Internal Revenue Service to be represented in taxes. So basically, it’s all I do.
Dr. Friday 1:21
So if you have received the love letters, or if you have, you know that you have unfiled tax returns, you know, there are issues that need to probably be dealt with. This is what we have to start with when we talk about doing an offer in compromise is not just a matter of filing a 433 A or B depending if your business or not.
Dr. Friday 1:42
It really comes down to first and foremost getting you in compliance, it is so important that you are in compliance because the first thing the IRS really is looking for everyone always thinks it’s the money. But that’s not true. What the IRS is really wanting is for people to start filing their taxes on time.
Dr. Friday 1:59
And yes, of course paying their taxes. But if you have gotten behind, a lot of times divorce, other things have happened in life, and you ended up getting yourself behind, it happens. And what the IRS would want you to do is to file back up to six years, sometimes further in that, depending on if they have assessed your taxes already for you. If they filed, the IRS can file taxes on your behalf, never probably a good thing.
Dr. Friday 2:25
But sometimes they will go back usually for the entrepreneur, at least in my world, it’s usually people that have received 1099s, you haven’t filed your taxes yet. So they’ll be nice enough to file you as single zero and no deductions. And then they’ll send you a collection notice saying, “This is what happens, this is where you’re at.”
Dr. Friday 2:43
So, that being said, what you basically need to make sure you’re doing is file all the taxes, make sure if you don’t have the tax documents to do it, you can obtain a lot of those documents. And then we can also do a recreation to the best of our ability. If you’re a truck driver if you’re a restaurant owner or a used car salesman, I mean all of them.
Dr. Friday 3:05
There are statistics and numbers that we can use as a basic rule of thumb to pull bank statements and see if we can recreate them. And that’s why I always urge especially self-employed individuals, you making sure that you’re writing checks using credit cards, and even credit cards are difficult. Because just because you went to Office Depot doesn’t mean that that Office Depot is going to be a tax deduction.
Dr. Friday 3:29
How do I know you didn’t go there and buy you know, something for your kids for school or you know, personal used items. You don’t know that. So actually keeping the receipts, tracking your information, and I get it sometimes life gets difficult to Todd, you don’t know exactly what you have to do. So you, you keep moving forward and do what you have to do. That’s not a problem.
Dr. Friday 3:51
You know everything is going the way it should go. And you’re in a good shape. But what you don’t want to have to happen is, you know, you haven’t filed taxes for five or six years. And now you want to try to make a deal. Well, the first thing you have to do is get those years all filed, you need to get in compliance. If you’re a business owner, you may have to make sure you file the 941 the 940s you know W2’s you want to make sure that you have you’re in compliance for all things personal and business that way then when you get ready to go and do you know, a true offer in compromise or make a deal with the IRS.
Dr. Friday 4:26
I mean, we all know you hear the ads will save at 15 cents on $1 I’ll be honest, we have had many of those but we’ve also had ones that are more like 75 you know they pay 75 and the IRS gives them a 25% break. We have some people that won’t qualify at all, because these are the things you need to understand you can have all the people on the radio telling you, “Oh we can sell you for 10 cents on the dollar.”
Dr. Friday 4:51
They’ll help you no matter if they know your situation or not. The first thing most of those companies do is ask for money. think that the problem is even something that you can make a deal with? “Sure, we’ll help you with the IRS. Sure, we’ll get you an offer and compromise, file a waiver.” But sometimes these things aren’t possible.
Dr. Friday 5:12
If you have equity in your home, for example, that equity in your home is money that the IRS says, “Hey, wait for a second, you went ahead and paid your mortgage, but you didn’t pay us.” So who do you know who’s entitled to that equity? Well, the IRS is gonna say they are. I mean, if you’ve got money in a 401k, and you put that money in during the time that you were behind with the IRS, again, you paid into the, you know, 401k, instead of paying the IRS, these were personal choices, and the growth on that money or the money in there is money that the IRS is saying wait for a second, that is something we can use because you didn’t pay us.
Dr. Friday 5:47
So understanding what the IRS is looking for and wanting to obtain is part of the game, you’re going to have to learn to play if you’re wanting to do something with the IRS. It’s really not that complicated. But it really is the fact that a lot of people just come in or I hear people talking and they’re like, “Oh, I can just go make a deal.” But not everyone’s going to get a deal. Some people aren’t going to get that 10 cents on the dollar deal.
Dr. Friday 6:12
But if you’re serious about wanting to make a deal, get yourself on track with the IRS and get everything back the way it was prior to having these issues, then our firm can help you. That’s what I do all the time. But I try to be pretty straightforward and honest. Because when you get into some of these things, people get very upset because they’re like, “Well, I thought we were going to make a deal I thought the IRS is going to take I have some offers that have taken us three years to get through.”
Dr. Friday 6:39
Because the first one gets kicked back the second one, they found something else. And we have to either fix something or correct something, or we have to reevaluate the offer itself. So that way, we make sure we’re making the offer based on what the IRS is saying, is a viable offer. So all you know, if you’re listening, and you have issues with the IRS, or with the state of Tennessee, or with most states, there are deals or offering compromises or payment plans that are acceptable for most of those.
Dr. Friday 7:09
But making sure that you have someone that’s working with you and telling you exactly what the truth is part of what it takes to do what we need to do. So again, if you need help with something like that you can contact off. And we’ll be more than glad to help you, you know, dealing with those issues and trying to get you back on track. And also showing you where you can start because most people are like, well, we’ll have to pay back the past.
Dr. Friday 7:35
Well, sometimes the past isn’t even what we’re concerned with, it’s really sometimes paying forward. The IRS wants to make sure if they make a deal with you, you’re not going to come back next year or the year after. I mean, if you make a deal with the IRS, you have to stay current for five years.
Dr. Friday 7:52
Or they’ll disallow they’ll just go back and say well, you blew it here and now you owe us all the money that you owe this before plus this. So they want to see you actually become more responsible, make sure you have enough money come out.
Dr. Friday 8:07
You know, and again, sometimes some of the issues that we deal with, it’s really a one or two-time situation normally dealing with something that’s happened, the divorce being a big one, that leads somebody into just having some bad time dealing with the IRS making sure that the IRS is on the same page and communication with the IRS is essential, but also extremely frustrating. I know that if there’s anyone that works for the IRS, hopefully, you’re listening because, you know, we, you know, for 20 years, I’ve been working and doing taxes. And you know, it’s never been this hard to get an agent on the phone and I know many of you listening.
Dr. Friday 8:50
The first thing you do is try to call the IRS to find out what’s going on. And you know, I have people who are so frustrated because they’ve called 3, 4, 5 different times. There are some things on the internet where I guess people have said, well, here’s a great way to try to get a hold of someone at the IRS HIT button one to hit this call this number.
Dr. Friday 9:07
And I mean, and I know it’s probably worked for some people, but unfortunately, once it’s probably put out on the IRS or put out on the internet, you know, everyone’s trying it and now that number doesn’t work or it’s as backlogged as everybody else. So, you know, we really do need better ways to communicate with the IRS because I have probably, maybe 10 cases where we have submitted something through the mail because that’s the only way we can submit it. Yet collections are still collecting yet the responses are going to be no collections on these individuals.
Dr. Friday 9:42
So there’s but they’re still so far behind and processing either amended tax returns. I think they passed something the other day or they sent out a news report. So, if you had filed 1040 X in 2020 or in the year of 2021 for the year of 2020, they’re saying that they’re down to like, I don’t know less than a million to process, if you E-file them, that they’re fair, they’re working on 90-day processing.
Dr. Friday 10:10
But if you mail them, it’s like nine months to process. So if you’re dealing with a situation where you have the IRS thinks you owe money, because something was either changed or whatever, and then that money is not due, because you corrected the information, but the IRS now what’s gonna take nine months, and there’s no way to get a nine-month hold on your account, let you know that right now, the most that I’ve ever had is 45 days to get them done.
Dr. Friday 10:37
And then obviously, you know, you’d have to call again, and who do you call because you can’t get a hold of anyone. So I know the frustration, guys, they are trying to do more and more on the internet. But you know, in all honesty, it’s still a little frustrating for all of us as individuals trying to reach the IRS and trying to make sure that you’re doing so don’t give up.
Dr. Friday 10:57
And always if you know, if you have an issue with the IRS and you’re trying to communicate, my personal opinion is certified a copy, get a paper trail of you responding to whatever the letter is, even if you have to do it two or three different times. So every time they send you a collection, notice and you don’t owe them money or you’re waiting for a response. So a waiver, whatever, and you’re not receiving it certified copy of the request again and again.
Dr. Friday 11:27
So that way, they can say you did not communicate because you know, the next step would be a lien or levy against either paycheck or bank account. And you do not want to have that happen, because then it’s hard, especially if you owe the IRS money, very difficult to get your money back. The only reason they’ll do it is under hardship.
Dr. Friday 11:44
And sometimes what we might consider a hardship the IRS does not consider a hardship at all. So you really do want to keep that communication, if you can’t get through the phones, just a hint is certified copies of whatever the response is. Now, if your responses you can’t afford to pay, that may not be the response that they’re going to take. If you can’t pay, then you need to set up a payment plan.
Dr. Friday 12:07
Or if you’ve got a chance on a tax return, then you need to file an amended return. Or if you’re waiting for something to be corrected, you’ve already filed everything and you’re waiting for a correction and let you know keep sending a letter documenting the situation so that you don’t end up with them coming out and taking money that you don’t owe because then it’s a matter of chasing that money back down. And that’s very frustrating.
Dr. Friday 12:31
All right, guys. We’re going to take our break and hopefully, I’ll be in front of my normal microphone then. And then we’ll be able to take calls and if you want to you can give us a call at 615-737-9986 here in the studio. We’ll be right back with the Dr. Friday show.
Dr. Friday 12:58
We are here so if you want to join the show, you can 615-737-9986. Okay, so we were talking about if you have an offer and compromise. Also looks like we have Theresa on the phone. Theresa you there. Hello, sweetheart. Sorry for this confusing day. But thank you for calling.
That’s all right. Thank you. Thank you for taking my call. That sounds sort of like the IRS. One of my family filed it filed in March and was supposed to get a refund and that hasn’t been deposited into the checking account yet. And then another file also in March was E-filed but had to send in a payment and that check hasn’t been cashed yet. So there’s all of this revolves around the slowness and the buildup with the IRS.
Dr. Friday 14:00
So as far as the refund, I would probably double check on irs.gov just to see if it’s been held up because of review, or if they’ve changed the return and therefore they’ll have to mail a check. Because many people said they did not receive all their stimuli, for example. The IRS is not agreeing with us, even though we pretty much can document it. We still haven’t figured out how to chase that down.
Dr. Friday 14:27
But when it comes down to it, that one may have the situation the other one where there’s money due. If that check has not been cashed, I would definitely either certify or go to irs.gov and make a payment because even though the E-filed and the payment hasn’t come out, the IRS is going to say they never received the payments because with E-file it should have been instant. If they mailed the check, then it’s going to be up to the person to prove that they have proof of the IRS receiving it and not cashing it.
Dr. Friday 14:56
So my concern with that one is additional penalties and interest because they would have paid on time if it had gone through, and they probably could write a waiver or get a waiver on it. But again, I would still pay it sooner versus later, if they’re expecting to pay it, I would either certify a second check or I would go to just irs.gov, click on Pay and make it through a credit card or a check.
Oh, my so we have. And if they get the other payment.
Dr. Friday 15:25
Well, you can make a stop payment, if it’s a check, you can make a stop payment on that other check. Or, you know, that would be the best way at this point. Because the IRS should never take I mean, unless there’s something holding up with the return itself, they usually take the money even if they’re not entitled to it.
Dr. Friday 15:43
I mean, they’ll cash any check or withdraw any amount of money that you tell them to, then they expect you to come back and get the refund. So, you know, in this particular scenario, my concern would be that there are penalties and interest building up on something that they meant to pay in full or make a partial payment, whatever it might have been, at the time of filing it, and it would have been on time if they filed in March.
Yeah, yeah. Go paid in full.
Dr. Friday 16:09
Yeah. So I would definitely chase that down. And, again, trying to reach a human at the IRS is less than a nice experience.
It’s just that way, it hasn’t been possible for me. I’ve tried.
Dr. Friday 16:25
I would definitely suggest if it was a check that they issued, then it should if it was an electronic part of the tax return, then I guess I would make sure that it actually did go through and to it should have happened within you know, to within a week or so even if it was electronically done.
Dr. Friday 16:41
So my concern is to the IRS received the check electronically I mean, the payment, you know, and the tax return, do they know for sure the tax return was even received by the IRS, even though they E-file that? Did they have confirmation? Can they, you know, it’s not easy to pull your transcripts would be the fastest way to find out because if it was in in March, it should show that the return was filed at that time with or without payment on the transcripts. Again, trying to find a way around not calling the IRS because the IRS is going to take you too long.
Okay. All right. Well, thank you for your help.
Dr. Friday 17:20
no problem. Thanks for calling Teresa. All right. So if you do want to join the show, you can again 615-737-9986 Teresa’s story is not much different than many of the ones that you know, you guys listening, and my own personality, you know, dealing with the IRS trying to get answers, trying to find out why something did or did not go through. And again, you don’t want to make two payments to the IRS because one of them’s going to bounce, and then you get hit with a fee against, you know, bouncing something.
Dr. Friday 17:53
So I can relate to that. So again, if you pay it email@example.com, the advantage to that is you have a document you can pull out and then you can match that to your tax return. So that way, you know the money got there as fast as it possibly can with checks. Nowadays, I know I have a whole list of individuals that really do. I mean, they still carry checkbooks, which is something we don’t do a lot of.
Dr. Friday 18:18
But if you have, you know in writing checks to the IRS, it’s just that they’re so far behind in mail, my concern is always they say they use the date that they received it the postmark date is what the IRS uses. So if they don’t open it up two months later, you still you know, supposedly get the data that they receive, but it’s always more of a concern if they’re actually going to post it properly. If they get it two months afterward, they finally open up the envelope and then you know, while on now, now my checks cleared. And I would be a little nervous that the IRS hasn’t taken my money in three months.
Dr. Friday 18:54
You know, because we all know they do like to take their money. So just Yeah, I would be a little bit more the refund one. Again, if you go to irs.gov click on Where’s My Refund, and I know a lot of you guys have done that. It just says that it’s processing, it just says that, you know, we’ll get back with you. And you know, in theory, the IRS has a year to process your returns.
Dr. Friday 19:19
I know we’re all used to 21 days getting our instance you know, money back all that kind of situation. But in the real world. The IRS does have but you know, in all honesty, they usually do it within 21 to 35 days, we are so trained for that. So you know it’s not happening but just I would not just leave it I would try to find other ways.
Dr. Friday 19:43
Like I said I would get if you’re not already personally I would be signed up for the transcript so you could go into your own with your own IRS account. You can look in there. It will tell you if you owe money it will tell you if there’s been a refund it also tells you When you receive your stimulus, and all that, so if you, you know, if you’re saying you didn’t get it, and the IRS is saying they sent it on this day, the one thing we have found out is plain and simple.
Dr. Friday 20:11
The IRS mailed a check out there saying that that’s the date you received it. And you’re saying I never received the check. And that’s where the communication is now apparently, keep in mind, the IRS is way behind on mail still. And so if that’s the case, and I’m thinking, “Well, hey, if these checks got bounced back to the IRS, how is that being posted? If they’re a million letters behind in the mailroom or something like that, I mean, I can only imagine how much mail the IRS receives.
Dr. Friday 20:42
But you know, and they’re in all these checks are sitting there because they got returned because of a bad address, or people return the checks or whatever, then you have to wonder how long it’s gonna take for them to update their system because of her check. You didn’t receive it, they say they mailed it, it gets returned back to the IRS, and it’s not been posted back into your account, the IRS isn’t going to give you the money until they can prove they that the check they originally issued did or did not clear the bank.
Dr. Friday 21:11
That’s going to be the trick. So you have to make sure that you have that information. And you know, your best bet is obviously what we’re trying to do paper trails on this site are plain and simple. Getting all the bank statements that you have access to any and all even if the IRS you don’t think has ever put any and all of them trying to backdate and like I said, if you pull your transcripts, it will say when they roughly sent that money to you, and then you can look around all those accounts, see if there’s any chance that that money showed up in any of those bank accounts.
Dr. Friday 21:41
Also, if at for some people, if you were claimed on someone else’s tax return, keep in mind that money could have gone into their bank accounts. So it’s not always just you because you know, some people sometimes in 2019, or 2020, you were still a dependent or your you know, whatever the situation might have been.
Dr. Friday 22:01
And in 2020, maybe you became independent, but they still had you listed under that other person because the way this is filed, you might need to make sure that your information is correct. I mean, again, if someone else received the money, and they claimed you as a dependent, the IRS isn’t going to give you a check if they received one is that simple? All right. So the phone lines are open at 615-737-9986. We’ll be right back with the Dr. Friday show.
Dr. Friday 22:38
All right, we are back here in the studio. And we have Melissa and Pat both on the lines. Let’s start with Melissa, I think she was first. And we’ll see if we can get what we need to have. Hey, Melissa, what’s happening?
Hey, I have a college student. And my question is how is there a limit? For how long you can file your taxes? And well, we pay?
Dr. Friday 23:07
That’s a great question. And I guess the answer is yes. Basically, they allow you to claim from 18 or the first year up to the age of 22. After that, if they’re going into graduate school, or maybe they’ve changed degrees, and even though they’re still in college, that that point, they’re not going to qualify most likely for a lot of the college credits, you do have the lifetime college credit, but most of the time, at that point, you’re not going to really qualify.
Dr. Friday 23:36
They basically say I’m over the age of 22. You should be you know, basically, they’re in graduate school or whatever. I mean, gosh, knows I’ve got more than one that has taken a little longer because they changed degrees, but you still can claim them and still have college. There’s nothing. Are you still there, Melissa?
Yeah, I mean, he’s an athlete also. So he’s here to play because of COVID. So he’s gonna go at least an extra year to play his forte. Right? Right. He will be it’ll be 22 next year.
Dr. Friday 24:13
And that’s fine. He can I mean, again, he can stay. I mean, as far as any age individual can be someone else’s dependent, but qualifying for all the college credits and different things like that. It really just depends on if he started later because COVID messed up a lot of different things for people. So you’ll get four years theoretically of college and at that point, then you’ll you know, you’ll have to go into lifetime credits.
Yeah, so after that, it’s not gonna benefit me to claim that.
Dr. Friday 24:43
A whole bunch not as much. No, in all honesty.
Is there a benefit for him to do taxes?
Dr. Friday 24:52
I guess it will depend on I mean, there won’t be any additional credits for him after the four years either way. You know, but if you’re still supporting him, you’re still gonna get the $500. I mean, if he’s a full-time student, he’s probably not working, therefore, you know, it’s probably going to stay dependent on you until he gets out of college. Most likely.
Yes, he doesn’t work while he’s in school.
Dr. Friday 25:19
Right. But you know, it sounds like he’s no problem. Thank you appreciate the phone call. All right, let’s get Pat. Hey, what’s happening?
Hi, Dr. Friday, thank you for taking my call. My sister and her husband did an offer and compromise for money they owe to the IRS. The IRS put a lien against their name. Before the offer and compromise were approved. They made their last payment, and they have paid the offering compromise in full. My question is, how long does it normally take for it to be to show that it was settled and the length to come off?
Dr. Friday 26:09
The IRS says 30 days afterward. And then if it doesn’t happen, then your wants, you’re gonna want to file or contact the lien department, which is one of the few departments that actually still have human beings that answer but not I mean, they only talk to you if you actually have a lien, which I try never to have with my clients. But that being said that they can file a request to make sure the lien has been removed.
Dr. Friday 26:34
If they have a lien number, you know, an actual number to the lien, they can actually call the lien department, if they don’t, then they’ll just need to see what they need to do to get it released. But normally, it’s 30 days, but like everything else I have that has not yet been released in people have paid more than 60 days ago. And they’re the exact same type. These are on the people’s credit reports.
Dr. Friday 26:56
Now we were told by one IRS expert or revenue officer, that in some cases, it depends on how often Equifax or whatever pulls that information. Like if you don’t pull it, I mean, they haven’t updated because it’s based on their update, not the IRS updating with them. So in a sense, you may have to request Equifax to, you know, pull the information again, or I think there’s some way of having them verify it, and then when they verify it would come up is not available, you know, as paid in full. So it’s kind of a catch-22 that the IRS could have already released it. But Equifax or one of those haven’t really pulled the records, therefore, they’re still showing it against them, even if it’s not out there.
So do they need to wait 30 days before?
Dr. Friday 27:42
Definitely have to wait 30 days before they do anything. And then after the 30 days, they can either go directly to the three different credit reporting places and ask them if they can contest that entry and then that makes the credit companies have to go back and pull the information again. And then that should show it released is what the revenue officer told us. Or, you know, but I would they have to wait 30 days before anything can be done.
Okay, well, that answers my question. Thank you so much.
Dr. Friday 28:23
I appreciate you very much. Thanks for calling. All right. And those are great questions, guys. Because to be quite honest, even though you’ve done the offering compromises, a lot of times, you still end up with some of the residual, you know, situations, I have one that you know had. A lot of times when you owe the IRS, they send something to the employer that says that you have to be claiming single and zero, the highest amount that can be withheld, even though this gentleman was married with three children.
Dr. Friday 28:55
And, you know, we did the offer and compromise, we got it settled, we paid it. But his employer said that the IRS told them that he had to do that. And unless they get something from the IRS telling them that they don’t, they can start changing that, that they’re not going to change it in their system.
Dr. Friday 29:13
And from the employer’s standpoint, I totally can understand that. Unfortunately, the IRS has absolutely nothing available out there that says, “Okay, now that you’re paid in full, you can tell your employer, here’s a release to them, now you can start filing as married into” or whatever the requirement would be for this individual. So there is some work-in-progress situations that you might have to deal with in the case of this one.
Dr. Friday 29:43
You know, it happened, you know, we had to give them in my opinion, a little more information that I would want my normal employer to have to prove that there was no debt due to the IRS so that there were no regulations against them. But if this person had worked for this company for 20 years, so they know they had been there a long time. So they chose to do that.
Dr. Friday 30:03
Otherwise, it really would have just come down to who’s getting refunds every year. And, you know, when you’re raising three children, the last thing you really want is the IRS to be giving you six or $7,000, at the end of the year, when you need that money throughout the year to actually, you know, take care of the kids. So it leads to a unique situation. But those were great phone calls.
Dr. Friday 30:23
Because, again, every time we try to deal with the IRS, and I mean, I wish I truly wish because, you know, we all have problems that we need to have, easily, in many cases, a simple phone call could resolve many issues, or at least lead people in the right direction. What should I be doing next? What’s the proper, you know, policies? Whatever.
Dr. Friday 30:45
And we just need to find a way and I know many people come into my office, and the first thing they say is, “Well, the IRS was supposed to hire like 10,000 people.” I’m not sure if those will actually ever got hired. If they did, maybe they’re still in training. Because, as of yesterday, Friday, that was yesterday.
Dr. Friday 31:03
As of yesterday, I could not reach through the tax practitioner hotline and or the regular, regular collections number I could not reach an individual to speak to and we tried like four times, we tried early in the morning, we tried the middle of the day, we try late and afternoon, their phone lines were just blowing up and one of my employees went through the internet and try one of those, as I said earlier, where you know, you call this number, and then you press one and then you press two, and when you press one or whatever, trying to get into the system.
Dr. Friday 31:38
And when she got to the very end, it actually had the exact same sounded like the exact same recording, all circuits are busy, please call us back later. So I’m not helping a lot from any of you that may be dealing with IRS issues just as we are. But again, what we are doing here, the times that we are unable to reach, I will tell you two things.
Dr. Friday 31:59
One, the IRS in Nashville, the office in Nashville is open. So there are individuals there, you may be able to set up an appointment online, under irs.gov put in tax, tax office, local tax office, I think is what you want to put it in the search. And it will bring up the search and there’s a 1-800 number or 1-888 number that you can call and find out when the next available appointment is and actually set up an appointment to see someone or speak to them.
Dr. Friday 32:28
Now, I have had a couple of people tell me that they’ve gone all the way into the appointment and they were unable to resolve the issue because the person sitting at the desk could not deal with whatever you know some of the issues that what you know what you would hope to be able to deal with.
Dr. Friday 32:43
But at least you get to sit in front of a person in many cases, they would have the authority to make some documents in your notes and things in your file to make sure that your information is correct. And that you’re not still operating under something that you might be able to get fixed. So that’s the first thing.
Dr. Friday 32:59
Second, documenting. You need to be able to write a basic letter and say, explaining what it is that you want to be done. And why do you know why you do or do not own this or you need a payment plan or you need to be putting into non-collectible.
Dr. Friday 33:13
Whatever you’re wanting the IRS to do, you need to be able to document and every time you get a letter, sometimes you’ll get three or four letters in one single day. My suggestion is to certify a letter because sometimes there are different addresses one in the top right, sometimes some in the body of the letter, and every address that comes through, I would send a copy of this letter explaining your situation and a copy of the collections or whatever, until hopefully somebody will call you or trying to get a hold of you to deal with your situation.
Dr. Friday 33:44
I know for a fact that you know I mean I deal with the auditors many times and they are there and they’re working hard but unfortunately unless you have an open case, they can’t even open a case for you. So even if they wanted to try to help with some of my cases or whatever, they don’t have the authority to do that.
Dr. Friday 34:03
They can’t just go into anybody’s tax account just because they work for the IRS. Thank goodness we wouldn’t want them to really be able to do that guys. So again, if you want to join the show or you have a question or a statement, maybe you’ve dealt with dealing with some sort of IRS issue or you’ve dealt with one and you’ve got some tricks up your sleeve I would be more than glad or hope that maybe it will help one of our listeners you never know the phone number here 615-737-9986. And we’ll be right back with the Dr. Friday show.
Dr. Friday 34:45
All right, we are back here live in the studio on this wonderful crazy Saturday. Hopefully, you guys are having a great time out there. Not so bad on the weather a little bit of a stormy morning but you know did cool down a little bit so I can’t complain on that one. So if you want to have a good Saturday, hopefully, you’ll be able to do that.
Dr. Friday 35:06
So, again, talking about IRS issues this week, because let’s be honest, a lot of those love letters have been coming in, at least in our office. Some of them are just generic ones that basically talk about the different things that we still need to do. But some of them are changed letters, which many times really can confuse individuals when it comes to change, you know, why did you change my tax return? What do you need from me?
Dr. Friday 35:33
Do not ignore any of these letters, guys, I can’t say that enough. Do not ignore the letters. I know, sometimes it’s just like, “Oh, my God, they just keep telling me this stuff. Why do they keep bugging me, I can’t pay you. So just, you know, just leave it alone.” But, you know, again, communication is part of it.
Dr. Friday 35:51
I mean, you really don’t want the IRS to be your collection agency if you have the ability to do it through a credit card or through some other or even just making a payment plan. But sometimes paying backward, people get so focused on the past that every year they end up paying more in the future.
Dr. Friday 36:08
So you know, right now you should be making sure 2022 is going to be paid off. before anything else happens. 2022 needs to be paid. So that way, if you’re trying to make a deal, if you’re trying to have a conversation with the IRS, you’re trying to make a payment plan or anything like that, the first thing we need to do is make sure that all payment plan is in place, which means pain first for the year we’re in so we can’t do anything about the past, it’s over, it’s done.
Dr. Friday 36:37
It’s you know, there’s no correcting it. If you haven’t filed taxes, we may still be able to figure out what you truly have with us is possible with the IRS has assessed you. But if, you know, if you have filed your taxes, you had some back debt, whatever it is, it is what it is. And so the bottom line still comes, you need to set up a payment plan, you need to become non-collectible, you need to do an offer and compromise that is really the three basic outlines, and there is a partial payment plan where you wouldn’t pay as much in the first year may be trying to redo some of your bills to get yourself in place.
Dr. Friday 37:10
But other than that, you basically need to consider what your options are when it comes to that because you’re the only one that’s going to know because the IRS is going to look at your finances, they’re going to look at what you do. And they’re gonna say, well, they can afford to pay us $600 a month and you’re sitting there going, I can’t afford to pay $6 a month, what are they seeing that making a difference.
Dr. Friday 37:31
Some of it is controllable, let’s be honest, you don’t need us morning Starbucks every day you don’t need, you know, certain things that may be miscellaneous deductions that are coming out of your bank. And yes, the IRS is going to look at your bank when you’re looking at a payment plan, especially if it’s if you owe more than $25,000, they’re going to most likely want copies of bank statements, they’re going to look at those bank statements, they’re going to see all of your debts for iTunes or anything else eating out nails hair, all those are accessories, they don’t care about those you could be paying them instead of doing those things.
Dr. Friday 38:05
So unless there’s something in there that you have, otherwise, they’re going to be saying, Okay, let’s see, you bring home this much money, you’re spending the money for rent, utilities, you know, they’ll give you a little housing allowance or giving some car allowance. If you’ve got a car payment, they’ll accept that life insurance, health insurance, all of those are good, but putting money into a 401 K if you owe the IRS is not really allowed.
Dr. Friday 38:29
They’re saying why are you putting money there when you should be paying it to us, you know, your retirement isn’t? The IRS has the responsibility to deal with right you you’re making a payment. So you might want to stop your IRA or your 401 K contributions because then the IRS because the IRS can take those funds as well.
Dr. Friday 38:48
Now, theoretically, regular IRAs or 401, k’s are basically protected. No, you know, but if you have an inherited IRA, then the IRS does have the ability to use those funds to pay off the tax debt. But normally a normal IRA or 401 K is shielded from any type of collection. Therefore, the IRS doesn’t have the ability to get in there.
Dr. Friday 39:11
But your home equity, definitely credit cards, absolutely money in the bank positively. You know, even any bank account you have your name on. So parents, if you haven’t paid your taxes, not intentionally or whatever, but you have some tax debt, and your name is on your children. So your children’s bank account or on your parent’s bank account, because your parents say oh, I want you to have you know, the ability to make money in case something happens to me.
Dr. Friday 39:42
Not a good plan. Now sometimes you don’t have an option, to be honest, because if a child is going to open up a bank account, and they’re under the age, I think of 16 or 18. They have to have a parent or an adult that will help them get that bank account I think, but again, in most of those cases you can put up a shield.
Dr. Friday 40:01
But if you have your ability to sign if you have the ability to deposit or withdraw money, and I have people say, I’ve never taken any money from this bank account, I’ve never put any money in if it’s a child’s bank account, I don’t know if that’s always the case that sometimes mom and dad have to move a little money over for emergency funds, and especially if the children are in college. But that being said, you know, just be careful.
Dr. Friday 40:25
And then your parents, there’s no reason an adult child has their name, basically, unless there’s unless you’re in business or something together, because then you can have a pod, or they can vote, which is a power of attorney or not. So it’s paid on that a POA or a pod. So the money in the bank, if something happens to any one of us, will go to the person that the pod is on, but you can also appeal power of attorney.
Dr. Friday 40:47
So if you become incapacitated, that individual can walk into the bank with that power of attorney. And then they have the ability, to sign checks and do things with when and if necessary, especially for people that may or any of us that becomes incapacitated, but you do not need them in there on a signing car. Because if something happens, I’ve had a Ross cook on my show many times.
Dr. Friday 41:10
And I always remember him saying about a divorce where apparently the person got divorced, and their name was on their mother’s account, and that that account got drawn into the divorce because apparently, it was an account that had access to that money. Now, again, my understanding was that they were able to prove only her Social Security, no money was going in there.
Dr. Friday 41:34
But had he put any money in that account throughout the time that they could approve, and I’m pretty sure the ex was going to try to go after that money. Very quickly. If necessary, they were going to definitely try to say, oh, the money is in mom’s account is partly my money. So you need to give me 50% of that. So just Just be careful. I mean, you know, I mean, there are ways of shielding our assets. But I realized as we get older people like to always make sure that there’s someone that there that can take care of, you know, essential bills and things.
Dr. Friday 42:05
But there are ways that can protect you and the person that you’re looking at to have the help you do this information or whatever else. All right, guys, we have made it through this crazy, crazy Saturday. Don’t ever do my radio show from a car. That was tough. Alright, so if you want to, you can email my office at firstname.lastname@example.org, you can certainly give us a call on Monday morning at 615-737-9986.
Dr. Friday 42:39
As you heard at the beginning of the show, I am an enrolled agent, I am licensed by the Internal Revenue Service to do taxes and representation, which basically means that’s all I do, which means you know if you’ve got a question, you haven’t filed taxes, you’re doing taxes, or maybe something’s come up, you know, you’ve lost a loved one or you’ve had a divorce or you’ve received a 401 K distribution, any of those things, many of those can be taxable.
Dr. Friday 43:06
And you want to make sure before you go and spend the money or take money out of a retirement account, you need to make sure you understand how much of it’s going to be taxed. So that way you don’t turn around and say, “Oh no, why is the IRS looking for money?” I had one where they had sent the distribution and 1099 said death benefits are 100, some $1,000. And actually, the son called me and said, “Wait for a second, we never got this money, we got the financial person and it was rolled over into a spousal IRA.”
Dr. Friday 43:35
But the form doesn’t tell us that. So without filing all that proper information, this individual is going to owe like 30, some $1,000 on that distribution, very important to make sure you have the forms documentation and contact to the proper people when you’re doing your taxes. So that way you don’t get caught with having to pay 30,000 When you never even touch the money because it was rolled over just making sure that the information is correct.
Dr. Friday 44:00
So again, if you have some love letters, or you’re wanting to try to get yourself out of the hot seat with the IRS, it’s not that complicated. The first thing I have to do is do a free consult. And you can do that by picking up the phone at 615-367-0819 Or if you’ve got some questions and I can help you hopefully you can certainly email those questions to email@example.com.
Dr. Friday 44:25
That’s firstname.lastname@example.org. And again, if you want to figure out who I am, you can certainly go to drfriday.com and look at my websites or just call us at 615-367-0819 I truly hope you guys are enjoying this Saturday. The weather at least here in the Spring Hill area is not raining at the moment so that is totally awesome. Because that way I can go back outside and play in the mud. Alright, I hope you guys have a wonderful will Saturday and as we always say in Australia, call you later.