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In this episode of the Dr. Friday Show from May 11, 2024, Dr. Friday covers a range of tax-related topics, including updates on tax laws, advice for handling tax issues, and answers to listener questions. She provides insights and guidance to help navigate the complex world of taxes.
Topics covered:
- Tennessee franchise and excise tax refunds for filings after March 31st, 2020
- Handling amended tax returns and dealing with IRS delays
- Gift tax exemptions for 2024
- 1099-K threshold changes for 2024
- Depreciation rules for vehicle purchases in 2023 and 2024
- Tax implications of selling a primary residence
- Handling taxes for a deceased relative as an executor
- Importance of estate planning and power of attorney
- Communicating with the IRS and setting up payment plans for tax debt
Transcript:
No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your
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, 737-WWTN.
That’s 737-9986.
So here’s your host, financial counselor and tax consultant, Dr. Friday.
All right, good day.
I’m Dr. Friday.
This is the Dr. Friday Show, and we are today going to be talking more about state tax.
I know a number of you have received the letters from the Tennessee Department of Revenue talking
about refunds, a portion of your franchise and excise tax that could be being refunded,
anything that was filed after March 31st, 2020.
You do have to file for your credit or refund claim, must be filed between May 15th and
November 30th, 2024.
This is an alternative minimum tax measure that minimizes the franchise tax using only
a portion of net worth taxes ending in or on before January 1st, 2024.
The bill was authorized refunds for franchise tax paid using an AMT or an alternative minimum
property calculation reduced by the amount of tax that would have otherwise be owed under
the proportional net worth calculation.
Bottom line, plain language, they’ve changed the way we’re calculating the franchise excise
tax.
So, this is really the guys that are paying $100, self-employed, single members in many
cases, not to say it wouldn’t apply, but most of those cases, you’re not paying all those
taxes.
This would definitely apply to larger companies where you were paying a portion of your net
worth on the books, and now they’re changing the way it was calculated, claiming it was
not constitutional, and so they’re able to go back three years, basically, and make this.
So, you have available refunds for the tax filings on or after January 1st, 2021, for
the tax period on or after March 30th, 2020.
Claims must be made on the forms that the tax commissioner will prescribe solely for
the purpose of refunds.
So, it’s not going to be something that you can easily just go out and say, “Hey, I amended
the return.”
No, they’re going to have refund forms.
There is going to be some publications for the refunds, and then claiming waivers.
Businesses claiming a refund must waive any claim or right to sue, alleged in the state
of Tennessee.
The franchise commission is unconstitutional and fail by … There are several cases out
there, just to let you know.
So, many people have jumped on saying they’re going to sue because it wasn’t unconstitutional.
Actually, that’s how it got brought up, because the courts were getting some really good CPA
firms, and their clients took it on.
And of course, then attorneys jumped in to represent.
But this is a opportunity, a small window.
So, if you do pay franchise and excise, I suggest going back to your accountant, your
enrolled agent, your CPA.
If you do it yourself, you’re going to wait.
Now, again, they haven’t yet really opened up some of the forms.
We haven’t received all of the exact steps that we’re going to use to do these refunds.
We will be going back and auditing or reviewing many of our places.
But if you are one of those individuals, and you want to make sure, because if you’re a
smaller one, we may not think about all the little ones.
So again, just if you pay franchise and excise, my suggestion is review it.
See if it even applies to you.
Did it even have an effect on you?
If you had losses, because during these years, many of these people had losses, doesn’t mean
your net worth wasn’t calculated and that there wasn’t tax due, but these would have
been possibly smaller or lower years, or even NOLs that rolled forward, which may have eliminated
or reduced some of these.
So it just comes down to what’s going to apply in your individual situation.
But that is the big topic for today.
So if you’ve got questions, maybe not concerning F and E tax, because that really does only
apply to my self-employed individuals or people that run their own businesses, but you have
other types of getting your refunds.
Again, I have a number of people that say they haven’t received their refunds yet.
We’ve also had a, I guess it was a newsletter sent out by the Internal Revenue Service.
It came back telling us that on some cases, they’re matching, again, matching social security
names, address, I mean, names and social security numbers to tax returns filed.
They are also matching children to those to make sure someone else hasn’t already claimed.
So if any of those reasons are on your thing, and also employers or information, I had one
that came in just yesterday.
And sometimes these matches don’t happen in the same year.
Sometimes it is what holds up, but sometimes it’s also like I had one where they had done
a lot of cryptocurrency, but it wasn’t like they were hiding it.
They did it through multiple wallets, but it wasn’t reported on the tax return.
We prepared it, but we didn’t have that information.
So when we got the love letter from the IRS showing that there had been some Robin Hood
in crypto, we were able to amend and correct.
Of course, the IRS says, “Hey, we’re predicting you might owe this much more in taxes.”
In this case, it will not be that much because he actually didn’t make any money on his currency
exchange.
But that being said, you will get those love letters sometimes, and they could be after
a year or so.
And then once that happens, it’s difficult because when you file an amended tax return,
then you could take, according to the IRS, 120 days for them to process.
We have had some that’s over 365 days and still processing.
Make sure if you have that situation, first thing, confirm either on irs.gov or take the
bite and call the IRS and find out for sure that they have a copy of the amended return.
Also ask when they received it, because if it’s been more than 120 days, you might want
to ask them what’s the delay because honestly, I’ve had them where they basically told us
they’ve received them.
We have proof that they had them in the system and then they fall out.
And we never get any information on why they rejected the amended tax return.
Had one again this last week where we’ve been dealing with it for two years.
She called the IRS and she says, they told me that the date, the date was not correct
and didn’t make any sense to us since we had the current date.
It was an amended return at the time that the amended return was prepared.
But the person, the revenue, the person that answered the phone, the IRS agent called and
they basically said, well, they can’t see it.
All it has was a note saying something about dates, but she couldn’t tell us what date,
if it was a date that they received it or a date that was on the return or signature
date.
There’s a lot of dates people.
So again, not always very helpful when it comes to that time of understanding what the
IRS is wanting.
So then we usually go back to the drawing board and we resubmit.
We make sure all the dates are correct.
We make sure the information is as straightforward as we can provide it with the documentation
behind it.
And then we resubmit it because you might wait and then keep in mind, you only have
really three years if you’re expecting a refund to get that information straight.
If you can prove that the IRS has delayed it, well, then you do have some wiggle room
on that, but it still doesn’t change the fact that you want to make sure that everything
is to the best of your ability, correct?
And then follow up on it.
Even if you get a voucher back from the mail service that says that they’ve received it
and at this time or whatever, it doesn’t, again, there’s no guarantee that they’ve put
it in their system.
So you have to be the aggressor on those amended returns.
As far as I’m concerned, we actually can now e-file many of the amended returns.
In the case of this last one, though, we had a situation where we could not get this go
through and we keep trying and they keep saying the original return was never accepted, but
we know it was because they got the refund.
So again, not always going to make a lot of sense, but you must stick with it if you’re
going to try to deal with the IRS on your own, because it’s not something that’s going
to be for the faint of heart or the ones that want to just walk away.
I mean, I’ve had cases that’s taken us two and three years, not like we’re doing something
every day, but we’re continuously following up and finally, finally getting that resolution
to the problem.
And then one case, it actually came right back around, like another office picked up
the same information and then they opened the entire thing again.
The good news is if you’ve ever worked with the Tennessee, especially the Nashville tax
advocate office, I will tell you that they’re the best.
The advocates, they advocate for us, but they are a great way of getting information because
when you get someone from the IRS, they half the time won’t tell you what you want to know
or they don’t have the authority or anything else where the tax advocate office does have
all of that.
So even though sometimes they, I mean, they’re only, so they take a little while to get it,
but the resolution, every time I’ve actually managed to get it set up, has followed suit
so that they’re able to, even if it’s not the resolution I want, resolution is done
because we understand what the situation is.
All right.
So if you want to join the show, 615-737-9986, 615-737-9986.
We’re going to take your calls talking about taxes, tax changes, anything that you might
have.
If you haven’t filed taxes for a number of years as an enrolled agent, that’s something
we deal with all the time.
We have constantly people that haven’t filed for 5, 10, 15, even 20 years.
And in some cases we, yes, we have to go back all the way to that 20 years because certain
things haven’t happened and time clocks haven’t started where we might want to make sure that
happens, especially on tax years where they’ve had large sales or 1099s or there’s been assessments
by the IRS, right?
Because if the IRS filed the tax return for you, I am sure it’s the best that they could
do, but they will claim that you’re single, you’re zero and you have no deductions.
And if you’re a self-employed individual, that’s never going to be good.
And especially if you’re a father with three or four children and they’re not allowing
you to claim that because of the way they filed your tax returns.
Again, not going to be, but there are ways of fixing that.
Once you get that fixed, then you may be able to go into the offer and compromise situation.
And on that note, we also want to cover that offer and compromises.
So there’s, you guys hear a lot of stuff on the radio.
Heck, you’re hearing me right now.
But one of the things you want to be careful with is the people that you call and they
are dealing with the IRS, they’re negotiators, just like myself.
But the difference between me and them is one, you’re going to meet with me, two, we’re
going to put together an actual resolution and we’re not going to tell you, Hey, you
need to pay me this much money upfront before I even know if I have a case, if I can even
fix what you have going on.
If I can make the deal, why are you paying me six grand because you owe 40 grand or 50
grand.
And they see, Oh, well, if we can save them 10%, they’re going to be happy.
No, I don’t.
I mean, that’s, we want to be happy with what we can actually get the best of why pay that
much money to an individual if nothing’s getting done.
And that’s the problem we have with many of these organizations.
So you need to make sure if you have a tax resolution issue and you want to be dealing
with someone you can actually meet, talk to, and make sure the paperwork is being filed
and actually have that conversation, not only moving backwards before it, I had one that
just came back and apparently somehow 2021 did not show up in the IRS website.
They kicked it out because you have to stay current for five years after you’ve made a
deal with the IRS.
And we’re like, almost at that five year mark.
And now they’re saying, no, 2021, we’re going to back it out.
So we’re going back and we had proof that had been filed or we had made the attempt.
There was a situation, but we were able to deal with it.
And that’s what we stay on top of too, because it’s not just now, but it’s also the history
and moving forward.
We have to keep all of that going.
All right.
So if you want to join the show, you can 615-737-9986, 615-737-9986.
We’re going to take our first break.
When we get back, we’ll get to some of your emails or phone calls 615-367-0819.
We’ll be right back.
All righty.
We are back here live in studio.
And again, if you want to join the show, 615-737-9986, 615-737-9986.
I know many of you guys are possibly still working because we have till June 17th to
file many of the tax returns that fall into Robertson, Weekly, Cheatham, Gibson, Stewart,
Davidson, Dixon, Montgomery, Rutherford.
And so if you’re under that extension, then you’ll have that.
And then I’m waiting to see if anything’s going to change for even though Murray County
got hit hard.
I don’t know if it’s going to have any effect on last year if you were under extension or
not.
But right now they are not under the prior extension.
There’ll probably be something possibly later for this year.
But that being said, what you want to make sure is that you are filing your taxes.
Make sure you’ve done the best of your ability and then get them done.
If you’ve started a business, you do want to make sure that you are filing also the
obligated member situation where small businesses are required to not just small, all LLCs and
corporations must now report that to the foreign banking.
There’s an additional step that you have to do when you’re registering for a new company.
Most of them only have like 60 days.
So if you’ve started an LLC in 2024 and if you started in April, then you have till May,
June, basically the end of June or whatever date you had.
If you started before April or March, March and April, you’re probably safe.
January and February, if you’ve opened one at that point, you’re probably late.
They say the penalty can be up to $500 a day for not complying.
It’s a pretty serious penalty.
We don’t see, I mean, we see a lot of penalties, but we don’t often see that kind of crazy
penalty.
So if you’ve got questions or you need help filing this, let us know what we can do as
far as your obligation and what you might need.
But if you have started a new LLC in 2024, you are going to want to get on top of it.
If you’ve had an LLC prior to that, then you’re good until January of 2025.
You have the rest of this year to get all of your LLCs, sub-S corporations, corporations
registered.
I believe it’s a one-time deal.
I don’t believe it’s something we have to do unless you’ve changed members or updated
your shareholders.
But it is one of those situations where we’re going to be following, you know, what’s going
to be required by, you know, changing.
Again, this has to do with foreign banking.
So we, you know, it’s a little different than what we all usually deal with because normally
we don’t have anything to deal with this.
And I think it’s a way, honestly, I think it’s basically a way for them to make sure
that all members, all shareholders are operating in the United States because if they’re earning
money in the United States, then most of the time they aren’t filing probably properly
the 1040s because there is non-resident 1040s.
So you just want to make sure you have that, you know, that information in there and make
sure your entity is straight because the penalty can be pretty tight again.
So if you’re not sure.
Also obviously we’re going to have anyone that was under the extension for up until
June 17th.
Keep in mind, June 17th is also the second estimated payment is due on that time.
So we have that situation.
So if you hear my puppy dog, sorry about that.
But you all be making your first and second if you fell under that situation.
So you will be again making your first and second.
If you did not make your estimated payments, you’re going to be making those on that time.
That also applies for 940 ones on individuals with payroll.
But most of us, most my clients of course continue to make their payments on time.
But just making sure if you had made it and maybe you were a little late for some reason,
you would have a reason to have the penalty waived if you were in those counties.
Again, just really just making sure that we’re staying on top of it and following through
with what we need to talk about on any kind of new tax laws.
We really don’t have a whole bunch we’re going to be talking about.
Had someone asked what 2024 new tax we are waiting still to be quite honest.
Depreciation bonus depreciation.
A lot of that at this moment is still kind of being held up.
We’re waiting to see if they were going to actually pass that law and get it back to
100% bonus depreciation.
At this moment, it’s not really they have come out with the numbers for 2024 as far
as the standard deductions and why we need to know that is because when we get ready
to work out our numbers for if you want to do a Roth conversion or you’re going to be
paying tax on a higher entity of some sort, maybe you have a capital gains that you sell
something.
So in 2024, they have a single individual individuals to 14 six add another seven.
It’s about 750 above head of household and standard will be 21 nine about $1100 up from
there so and you will double so you know be 29 to I guess it would be for married couples.
So that will be another good thing that we’re working on Washington during this time.
Obviously everyone’s trying to work on who’s going to be elected.
So I don’t feel they’re actually pushing too hard on what they need to be doing as far
as passing the new tax laws that we need to have.
But at the moment, we’re moving forward with what we do know and it’s easier to have that
conversation.
Also, I’ve had quite a number of people come in the office talking about gifting, gifting
money to helping kids to do some changes on the gifting if there’s going to be so again,
it’s $17,000 for individuals.
So if you have a child and you want to gift them $17,000, you can do that without a gift
tax return.
If you’re married, both of you can gift that child 17 each.
And then that way you’ll be able to maybe you’re helping put a down payment pay off
student loans.
Sometimes all of that is going to work on what’s best 1099 case.
Great question.
1099 case, not a lot changed from 2023 going into 2024.
So either 20,000 or more than 200 transactions, that’s going to be the 1099 k.
At this point, there is a conversation again, there they were initially looking at announcing
the delay of the $600 threshold in 23.
And they are previously still remaining.
So 2024, they’re saying $5,000, you could be getting a 1099 k $5,000 or 200 transactions
is on the table.
But again, that’s been kicked already two years down the line.
So we will see what they do.
In 2024, they’ll may I’m hoping there’ll be a lot more information.
Clean vehicle credits, not a lot of vehicles out there for us to be able to claim that.
But if you happen to get one that falls within that availability, you do have to, you know,
have the certificate has the car tag numbers on it, the identification number for the car
and what type of vehicle it’s going to be earned income credit, no change to 2024.
At this moment, they are basically the same as always after the act in 2021.
Basically they have to be over the age of 25 under the age of 65 to get earned income
credit.
So if you’re dealing with that, you can also get some of that on the situation where you
have.
So I have had seniors that are raising their grandchildren, and they’re always asking why
don’t I get it because they have changed the rules.
So over 25 under 65.
So if you are a grandparent and you might qualify, but you will not be able to get the
earned income tax credits under that situation.
The child credit six to 18 expired has expired 2023 initial amount is now $2,000.
You know, you have to do the situation.
If you overpay on a student loan, can someone receive a refund back to them?
Not if, if there’s still a balance, they’re going to offset.
That’s a question that came in.
And the answer to that is if you’ve overpaid on your student loans, they’re not looking
on, they’re just going to apply it to the principal.
They’re not going to give you a refund.
At least none of the companies I know if you’re actually making a bigger payment, you’re just
paying down more of the principal, unless of course you’ve paid off the student loan.
And then at that point they would refund any amount due, but most likely you’re just making
an extra payment, kind of like a mortgage where a lot of us will send in a couple hundred
dollars or a thousand dollars or whatever more.
And that way we pay down the house faster because that portion will go to principal
only, which is actually a good idea considering student loan interest, depending on who you’re
with might be a good idea to just keep making an overpayment because then eventually you’ll
be out of that debt.
And with so many extensions out there and stuff nowadays, it just is one of those crazy
questions that I have a niece that I think still making student loans.
And I get it, you can run them out for 30 years.
I’ve had people come in and they just basically, I mean, they went to college, they worked
their whole career continually making on and off payments when they were required.
And now they’re into getting close to retirement and they still have balanced due.
It just doesn’t, I mean, some of these, I guess some of these loan companies, it seems
like they would make the payments for based on 10,000 or 10 years or something like that.
And I think they do, but I think what happens is there’s hardships.
And so you’re able to make a smaller payment, which barely covers the interest, a lot like
the IRS, but the IRS really only has 10 years to collect.
These guys can go on for 30 years.
I have a person 30 years, they’ll pay in a student loan interest, student loans.
And I’m not too sure, I’m assuming at some point it’s not going to be collectible, but
I could be wrong because I don’t think it’s with the federal reserve.
I think it’s with a private lender of some sort.
So it would be interesting to find out what happens with student loans in the big picture.
It just seems to me it should be over a period of time.
If you graduate, you have five years or 10 years to pay back those loans.
Otherwise, you know, they turn, they need to be rolled into something.
I don’t know, a payment plan that actually eventually zeros out because it just makes
no sense for 20 years to be paying on something.
And still in some cases, she only owed like 15, but because of all the delays and the
interest rates and everything, she still owes like eight.
So in 30 years, she’s paid like 8,000 of the principal back, but yet she’s paid a ton more.
So it doesn’t, I’m not going to say I’m an expert on that one.
But anyways, off of that subject, we’re going to get ready to take our second break.
If you want to join the show, you can 615-737-9986.
615-737-9986.
We’ll be right back with the Dr. Friday show.
Alrighty, we are back here live in studio.
One of the things we also want to talk about, because I know a lot of people sit down and
say, Hey, I’m going to go buy something at the end of the year so I can reduce my taxes
for, you know, if I go buy a $70,000, $3,500 Ram, because I need a new truck.
I do construction is a hundred percent used for business.
And you could use a hundred percent in that year.
Keep in mind, 2023, we only received 80% in 2024.
Right now, if the law stays as it is, we’re going to get 60%.
The rest of it will be depreciated over a number of years, depending on what it is,
but they were trying to push that to, or expand it out to 2025.
It did not yet happen.
There is a bill out there that they’re working on the tax relief for American families and
work deck of 2024.
It has not passed yet.
We are hoping a lot of delays in our in fact, a number of extensions that happened because
of it as well.
So we’ll get more onto that one and see what we have.
All right.
Let’s see if we can get Alan on the show.
Hey Alan.
How are you doing?
Thanks for taking my call.
Sure.
Thanks for calling.
What can I do for you?
Yeah.
Well, I was wondering if you have a home and you listed for say $250,000 and you sell it
and you only owe $50,000 on it, you pay that off and then you find another home for say,
let’s say a hundred thousand and you buy that to live in and you have a hundred thousand
that’s left over and you put it in the savings.
Will you have to pay taxes on that?
So let me, yeah.
So just back up home that you list, is that your primary or have you lived in it two out
of the last five years in this example?
The one that was selling, yes.
Okay.
So the good news is if you sell the house for 250,000, you’re not going to pay any tax
and you do not have to go buy another house.
You don’t have to do anything.
I’m assuming you paid something for the house originally.
Let’s just say it was 50,000 originally.
I think you probably paid more, but if you paid 50, then you get an exclusion of 250
for a single person, 500,000 for a married couple.
So you don’t have to do any, you could take that money, put it in your pocket, go get
a second mortgage, do whatever you want on a new property, but you don’t have to pay
any tax if you sell it for 250 as a single person or less, you’re basically all, whatever
profit is going to be in your pocket.
Yeah.
So it says me and my wife, we sell our house for 250.
Yep.
Pay off the mortgage that say owed 50 on it.
Right.
And then you don’t have to do anything else.
You can go, you don’t have to buy that other house to save taxes is all I’m saying.
You can go pay another house.
Yeah, well you, you’re exactly right, Alan.
You wouldn’t need a house, but I’m just saying, so basically once you sell the house for 250,
you don’t owe any taxes.
So what you decide to do with that money, put it all in the bank, go buy another house,
rent for some time.
That’s all up to you.
Zero tax will be due.
Okay.
I appreciate you.
You don’t have to send a file or an end to the IRS saying that there will be at the end
of the year.
But make sure that you sell the house.
There will be something you’ll put on your personal tax return.
Just showing what you’re, what you sold it for and what you paid for it.
If you’re a social security, you don’t do taxes anymore.
You wouldn’t have to make sure that when you do the closing, that the closing agents know
that it’s your primary home.
Most likely you won’t have to do anything.
Oh, I appreciate all your help.
No problem.
Thanks Alan.
I appreciate your call.
Thank you very much.
Bye.
Let’s go ahead and go to Tori in Nashville.
Yes.
A few people listening.
Hey Tori.
Hello there.
I hardly know enough to even ask this question because I am 60 years old and I’ve never done
my taxes, my own taxes in my whole life.
And I am the executor of my aunt’s will and she died last year.
Everything was fine.
She always had somebody at a company do her taxes.
So I just sent them all the information off to them, had them keep doing it.
And so the lady told me not only did she have to do state this time, but she also had to
do federal.
I’m not sure why I didn’t ask.
I should have asked, but I didn’t.
And now- Where was your aunt from?
She is in Alabama or was in Alabama.
And I’m in Tennessee.
And so she told me, you know, she, she sent me the copies of stuff.
She’s only getting like $60 back, but it’s been like three months and I still haven’t
gotten it.
And now I can’t get in touch with the person who did her taxes.
So is there a way to trace your return?
Well two things.
So when you, when she filed the final return for the aunt, I mean there would have been
a federal, always a federal and a state.
I mean, unless the aunt didn’t require filing at all and then she wouldn’t have had a tax
person in the first place.
So there should have- I don’t think she did.
She was 89 and had worked for the state.
I don’t think she- Yeah.
I don’t think she owed taxes.
I’ll give you that.
Alabama’s pretty good for seniors, but there would have been a state tax.
Maybe what she meant is that there was some money due.
Because normally again- That’s what I’m all for.
So that being said, you have a copy of the returns first, right?
I do.
Okay.
And you said there was a small refund coming back from the fed or the state?
Yes.
From the fed.
I’ve already gotten the state.
Okay.
So on the federal, there should have been a form called a 1031, which would have said,
or 1301 I think it is.
Anyways, it says that who’s going to take the money, because obviously your aunt is
deceased.
So the money either goes into an estate or to you that you then will take responsibility
for proper distribution, whatever.
So that being on the tax return, I would make sure that’s included just to make sure, because
otherwise the IRS is going to send you a sweet little love letter coming back saying you
didn’t include it.
And then assuming that that was properly included, then you should be able to go onto the irs.gov
and see the status of the refund.
Okay.
What kind of information do you have to put in to get?
You would just have to have the aunt’s name, social security number and the amount, date
of birth and the amount that she was getting back.
Okay.
I can do that.
Yeah.
I can do that.
I had to pay, I think she paid $150 to have it done to get $60 back.
Yeah, I know.
That’s the sad, but that was probably one of the few years I will say, you know, of
course, your aunt or whatever always did them anyways, but that was the final year.
So that would definitely, assuming that was the last year she was alive, then that needs
to be done just to make sure everything’s closed out from the IRS side.
So it’s a smart move on your side.
Okay.
Well, thank you very much.
No problem.
Thanks for the phone call.
I appreciate it.
Okay.
All right.
Bye-bye.
Bye.
All right.
Those are great questions.
And it’s always hard to, you know, I think it’s funny because a lot of times when someone
passes away, they always tell you, okay, you’re going to be the executor or you’re going to
handle this, or hopefully they tell you in advance.
So you’re at least prepared when someone reads off and says, oh, you’re the person that’s
going to be handling it.
But there’s an assumption that we all know how to handle those.
And thank goodness, I guess, for the internet in many cases, because many people probably
do a lot of Googling and figure out what their responsibility is.
But what the last caller did was right, was the nice thing is she did follow, either she
found out or she knew to file those as final.
Because one of the things we have to do is make sure that the IRS is in good standing.
Not to say if the person that’s deceased has no income or no real assets and they owe the
IRS, well then obviously you don’t care about that because you can’t pay somebody.
You don’t have to pay off the IRS on behalf of that person.
That same thing goes with credit cards and certain things that are non-secured.
So you wouldn’t have to go after those certain debts.
So you want to always make sure if it goes through probate, obviously, then it opens
up, it has to be printed in the newspaper.
And then they’re going to run that information and make sure that you’re in compliance.
And if anyone that wants to, which is why, I mean, theoretically, even trusts are probated,
but it’s a poor overwhelm.
It really just basically says everything that’s been in the trust is going to be handled through
the trust and the poor overwhelm catches anything that isn’t there.
So you have that documentation, but it does give a little less, the assets aren’t listed
like with a will.
So again, big fan of trust because I guess partly is I’m a bit of a control freak.
So even if I’m not here, I would like to believe that what my wishes were if I was here are
going to be carried out.
I don’t always feel with a will that happens.
Now I’m not an attorney, so don’t call me for legal advice.
That would be someone like Russ Cook or Jack McCann.
They’re great attorneys and what we work with all the time.
And they would be able to help you with setting up and handling all that.
We handle the tax side of all those types of entities, but not the legal side.
But again, making sure, especially if you have multiple families, I’ve sat in many meetings
where his family, her family, our family, and making sure that all of those assets are
going the direction you want, even if you’re not the last person alive, even though you’re
leaving your spouse or your significant other in control, you want to make sure that your
wishes are there and covered.
And also a power of attorney for medical as well as financial, because if there’s no one
that has access to your bank, how are you going to continue to pay your mortgage or
bills that have to be paid while you’re either incapacitated or God forbid dead.
So you just want to make sure that all of those are checked off so you can just chill,
enjoy life.
And if something happens, it happens.
Right.
All right.
So we’re getting ready to wind down to the last section of the show.
So if you’ve been holding your breath, you’re like, Oh, I’ve got a question.
I don’t know if you know what, there are no dumb questions.
They’re really odds, because if you ask me anything about a car, I would probably sound
really, really silly because I only know to put Petro in it.
And you know, in my DEF, that’s like the only things I have to worry about.
Everything else is handled by my mechanic.
Well, let’s think about that when it comes to taxes.
This is the one subject.
So if you’ve got questions, you’re not too sure what you want to do.
615-737-9986.
You guys can’t see us, but my engineer is hilarious.
615-737-9986 is the number here in the studio.
We’re going to take again, a quick break.
I am an enrolled agent licensed by the Internal Revenue Service.
Do you do taxes and representation, which basically means guys, that’s all I do is taxes
or represent individuals in front of the IRS, which means I do not work for the IRS.
I work for you and help represent you so that you have someone that understands the tax
law so you don’t get caught into saying something or doing something that maybe you didn’t intentionally
do.
So again, 615-737-9986.
We’ll be right back with the Dr. Friday Show.
All righty.
We are back here live in studio.
This is the Dr. Friday Show.
Again, I’m an enrolled agent licensed by the Internal Revenue Service.
I do taxes and representation.
I understand I’m going to probably get embarrassed here in a second.
Let’s bring Tim on the line.
Dr. Friday.
That’s my boy.
I know that accent anyway.
I just want to tell your audience that this lady is incredible.
I mean, she really, really is.
I knew nothing about a state and all of that kind of stuff.
My parents went down at the same time.
She helped me from day one about everything.
I kind of semi-cheated on her and I had to admit it.
The lady who called in just recently about her aunt’s estate was very similar to my question
with my mother’s estate.
I went to see Dr. Friday this week, y’all, and I’m telling you, I left there so relieved
and so thankful to have her.
Don’t waste your time with these law firms that say, “Oh, they can get your taxes down.”
Don’t even waste your time.
Just forget it.
You need to call my buddy, my buddy, Dr. Friday and let her handle it for you.
She is the man.
All right.
Thank you, Tim.
I love you.
Thank you.
All right.
Talk to you later, buddy.
Bye.
Okay.
As you guys always know, I’m so good with those kind of things, but I do.
I mean, there’s no better compliment than a client willing to get on a public radio
and say, “You’re awesome.”
I mean, how often does that happen in life?
So, thank you, Tim.
Appreciate it.
But, you know, I mean, a lot of times it is confusing.
Taxes are confusing.
A lot of things in life are confusing.
One of the few things I’m really good at is trying to simplify taxes, trying to make it
where at least we have steps, how are we going to resolve it.
And it’s, you know, again, it’s not fast.
It’s frustrating.
I had a couple come in and they were getting ready to leave town and they had another person
handling a tax situation, but they’re still getting the love letters that say, “Intend
to levy, intend to seize,” you know, and there’s nothing more frustrating than that happening.
And then they turn around and, you know, and the person not really communicating as well
as they would like, which Tim left out of his conversation that we had.
I was so busy in taxes, I wasn’t communicating as fast as I should have with him is one of
the reasons he claims he cheated on me, but he didn’t.
But that being said, communication is important, especially when you’re getting these love
letters.
And so they hired us to just to make sure, you know, that nothing happens.
And so we went to the tax advocate office and they’re great.
Again, they got back with me, I think within 48 hours of me sending this kind of express,
“Oh my gosh, we need help,” kind of thing, a 911 to them and they responded very quickly
and were able to get a hold.
They did see, but they’re trying to figure out where they stand on this situation.
My point being is that, you know, I do my best.
I really do try to make sure I treat people the way you guys all treat me.
I mean, treat people the way you want to be treated is always the best thing.
And after 28 years of doing this, I’ve been blessed with awesome clients.
So that being said, if you need help, if you need someone that’s going to, you know, if
nothing else, explain, let’s see what we have.
If you have tax debt, you have an audit going on, most audits, many of the audits are paper
audits.
And then, you know, that you’re moving forward and you’re like, “Okay, what do I need to
do?”
Because sometimes people get so locked into the past, “Oh my gosh, they want 40,000, they
want 60,000, they want 150,000,” whatever the number is, it’s a number at this point.
And you know, even though it’s all penalties and interest and all this other, but every
year you’re adding to it because you’re so worried about throwing money towards the past
that you’re not concentrating on stopping the bleeding, which means moving forward first,
right?
We got to look forward.
The past isn’t going to change.
So what do we need to do to get you making sure enough money’s coming out that you’re
making all the proper quarterlies and you’re meeting the requirements that you need to
be doing and then dealing with the past?
Because if you’re trying to make a deal or a payment plan or anything else, you have
to show you’re making proper estimates.
And one thing you want to do is if you have to overpay the future to make sure you have
enough, and then whatever’s overpaid, they’re going to keep anyways.
So you know, if you have that and they see that, “Hey, you know what?
They got 20/20 for it.
We don’t have to add it to a payment plan.
We’re out of that.”
And then 20/25, they see the consistency because so often, statistically, people set up and
defunct payment plans more times than you like.
It’s probably like 62% or something of people that set up a payment plan will defunct over
the lifetime of that plan, which is 72 months.
And that’s often because life happens.
So if you’re able to keep current, the past is only going to…
I mean, no matter what, you have 10 years of collections, 10 years of pain, usually
72 months of pain, and that’s either going to go away or it’s not.
It’s going to fall off or it’s going to get paid.
That’s just the facts of the matter.
Sure.
There may be some way of making a deal, dealing and dealing with situations on it.
But really when you’re dealing with the IRS, there are rules.
There is a path.
There is a stepping.
It’s not something that you have to worry about.
I mean, there really is a straight answer, but part of it comes to is also what you’re
doing with your money, right?
Because if you have money that you’re putting in 401k, but yet you owe the IRS, does that
really make sense?
I guarantee you, talks to any good financial planner, they will say, stop paying the 401k
and start paying the IRS because the IRS then could say, your savings are ours because you
didn’t pay us, but you put money into a retirement plan.
Well, the company’s matching 6% or 3%.
Doesn’t make a difference.
People, the government needs to get paid off because they’re the world’s worst loan offices.
Second part you want to do is make sure that if you’re making monthly payments on other
things that you have those in control.
I mean, if you, if you’re driving a $1,500 a month car and yet you have no reason to,
and I say reason, because there are certain industries that they might allow you to do
that.
If you’re selling million plus homes, it may be better that you’re driving a nice car,
but also on the other hand, be good if you’re paying your taxes, if you’re selling those
kinds of homes.
So you need to have that conversation and then, you know, write it off.
But if you having that car, but you don’t really have the means to pay for that car
because you’re using IRS money to make the payment, then the IRS could actually say,
you know what, we’re willing to make a deal with you, but you need to get a car that’s
worth less than, you know, this dollar amount.
You need to have these situations.
They can’t make you sell your home.
And if you only have one car, they can’t make you sell that car, but they do have limitations
on what they consider normal car expense, auto expense, and I don’t know, it’s like
450 for a car payment.
It’s, you know, for a single person, it’s like $1,700 for, you know, rents, utilities,
et cetera.
So if you’re outside of those numbers, outside of that criteria, they can give you, I mean,
you can do a partial payment plan and see if you can refinance or do something.
If you own any other cars, if you have more than one car, unless you’re married and, you
know, each person’s allowed one car.
If you have children under the age of 17 and the cars are in your name, theoretically,
they will consider them your cars.
So you, I mean, those cars are second and third.
If you’ve got two or three kids, those cars are yours and therefore those cars are actually,
could be sold based on the IRS.
So there’s ways around some of this.
I’m not trying to freak people out.
I’m just saying that there are ways around it.
Having your name on your child’s bank account, which may I point out is a silly thing that
the IRS says, because you can’t open a bank account for a minor child unless an adult
is on it.
But if you do have IRS issues, I have personally had a case where they took all the money from
the bank accounts, including the children’s, because his name was on all of them.
We were able to get the kids money back, but of course that took 90 days.
But you know, again, all of those things come into play.
Making sure you understand how it works for you is really, you know, then you can figure
out how do we make this the best plan for you?
That’s what our job is.
That’s what we work together to do.
So if you want to set up an appointment to talk either about your tax issues or getting
a payment plan of some sort, 615-367-0819.
That is my direct number.
615-367-0819.
You can also check us out on the web, drfriday.com.
Been doing this for 28 years now in the Nashville, Brentwood is where we’re at, Brentwood area.
But if you, you know, if you have a question and you don’t really want to call or you just
want to email, you can Friday at drfriday.com.
Friday at drfriday.com.
Again, I am a licensed enrolled agent licensed by the internal revenue service, which means
I’ve taken all the tests to be licensed by them.
I do not work for them.
I need to make sure that’s clear because so often people will say, well, you’ve worked
for the IRS.
No, never have worked for the IRS.
I have talked to a lot of people that work for the IRS.
I have never done that.
So as an enrolled agent, that’s what I do, guys.
I do taxes and representation.
So if you need help, you need clarification, you need a path, then you need to call our
office 615-367-0819.
615-367-0819.
Also email Friday, that’s my first name, Friday at drfriday.com.
Friday at drfriday.com, or just check us out on the web, drfriday.com.
Again, drfriday.com.