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In this episode of the Dr. Friday Show, tax expert Dr. Friday takes on a variety of questions from callers seeking advice on tax issues, inheritance, and financial matters. Dr. Friday provides insights and guidance to help listeners navigate the complex world of taxes and finance.
Topics covered:
- Changes in Tennessee tax laws for small businesses and franchise excise tax
- Handling inheritance of bonds and the process of cashing them out
- Reporting class action settlement money received by a deceased individual
- Lending money to a friend for home improvements and potential gift tax implications
- Filing requirements and penalties for late payment of taxes
- Setting up payment plans with the IRS and the importance of compliance
- Dealing with IRS audits and the need for professional representation
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.
Good day, I’m Dr. Friday and the doctor is in the house.
It’s a nice rainy Saturday, I guess.
Not really raining here in Spring Hill, but it’s supposed to.
And if you want to join the show, if you’ve got tax questions or maybe you’re working
on 2024 questions, or maybe you’re even thinking, do I need to amend my franchise excise because
I was an early filer?
The phone number here in the studio is 615-737-9986.
615-737-9986 is the number in the studio.
And I will say many of us filed extensions for many of our businesses and franchise excise
if they had something to do with depreciation, because we did know that something was coming
down the line.
But in some cases, you don’t always know, and some clients just like to get it paid
and done with.
But you might be an individual that needs to reevaluate, especially if you have assets
and the state of Tennessee was not complying with bonus depreciation.
We always had separate situations.
So I know for a fact I have one or two that we will have to go back and amend those returns
so that they can get some of their refunds back because they’ve actually physically overpaid
due to the fact that the tax law did go in effect after the tax season had already begun.
So again, if you are an individual that has a small business and maybe you have assets
or different things like that, there are many things that may have changed.
But one of the main ones is that Tennessee is now following the federal law for bonus
depreciation.
So that can lead to an important situation on that.
All right.
So Kevin here in Nashville, let’s go ahead and get him on the line.
Hey, Kev, what can I do for you?
Hi, thanks, Friday.
A question about taxes in general.
I’m considering getting my CFP and I’m wondering, are there any courses or certifications you
would recommend for someone who would want to broaden his client base?
So I could give maybe not like some like just general tax advice.
Right.
So CFP is a certified financial planner.
I mean, you do financial planning on the one side, but obviously you need to know taxes
to do good financial planning.
Right.
Yeah.
So, yeah, I mean, there are a couple good programs, National Association of Enrolled
Agents.
You don’t have to be an enrolled agent to take many of their courses.
That’s actually back in the day how I became an enrolled agent was I heard there was such
a organization hadn’t known anything about enrolled agents in the day.
But yeah, that would be an organization.
There’s also the Tennessee Association of Enrolled Agents.
I know we have a seminar coming up next month where you can take, you know, get CE credits,
find out more about current tax laws and also get to know some of the enrolled agents or
tax people, because at least in my practice, I’ve been at almost 28 years, but I work with
a lot of financial planners because, you know, there’s always those moving parts of AMT tax
and different things.
But I think it’s great that you do learn a little bit more because I’ve met some financial
planners, to be quite honest with you, that just rely a lot on software.
They’re not actually knowing a lot of that information.
So I think it’s a great idea, Kevin.
Hopefully that information will help.
And if you have any questions, you always call my office.
Okay.
So National Association, start with the National Association of Enrolled Agents.
Right.
NAEA.org, I think is the website.
Okay.
Just a quick question.
Would you recommend like actually working for the IRS?
Or is that too?
I mean, yeah, I mean, personally, obviously I’m on the other side, right?
So I represent taxpayers against the IRS.
But I mean, some of my many of my friends, mostly, you know, obviously auditors that
have either worked and there’s some enrolled agents that were at one point revenue officers
or agents in their history.
I don’t know.
I mean, it does help, obviously, if you get if you actually work on the audit side, you
would truly understand a lot of the tax laws, at least what’s currently on the books.
But I personally, I’ve never worked for the IRS and always like to be on this side of
the table.
Okay, perfect.
All right, Friday, thank you so much for your for your advice.
No problem.
Thank you.
All right.
If you have any questions, you can certainly go to W, you can call the studio 615-737-9986,
615-737-9986, taking your calls so we can actually see what you want.
Or we can help you out with some of your tax questions.
It was actually a good question.
You know, so often we don’t get to hear about some of those.
So I think anytime you want to I mean, I have I have clients that actually will take seminars
on taxes every year because their taxes are somewhat complicated.
And they like to understand what the current tax law like I was talking when I opened up
the show.
We have had tax law changes in the state of Tennessee.
One was the carryover credits where they’re now, you know, any credit that was earned
after on or after December 31st, 2028 is going to be automatically applied.
That wasn’t always the case.
We had to make sure we applied it.
So it makes it easier because sometimes people forgot they had a credit and then it was rolling
forward and then they would pay taxes.
The other big one that’s going to affect many of my clients, of course, is the the assets,
right?
The bonus depreciation, because you had you didn’t have a bonus depreciation here in in
Tennessee franchise excise.
So it will be nice to have some additional.
And it’s also easier when you’re doing your federal return and your state return.
It’s much simpler to follow the same process than it is to have to have two separate processes,
one for federal and one for state.
So those are definitely one of those.
And that went into effect in 2023.
So again, if you filed your taxes and you did your normal and it was before the change,
then it would be important to go back and make the changes on the state side.
And then for you, larger employers that might actually have family leave or medical leave,
they’re moving some of the federal credits also to the state.
Again, most of you hopefully have a enrolled agent or CPA that’s handling your taxes and
they should be on top of all of those changes.
But if you did file early again, I really want you to make sure that you make those
changes so you have it.
Let’s hit Deb real quick.
Hey, Deb and Smyrna, what can I do for you?
>> Hi, thanks for taking my call.
I’m completing a final 1041 and the estate name received a 1099R and box one was checked
and box seven distribution code was T.
>> Okay.
I believe this was a, was this a Roth?
>> Yes.
>> Okay.
So, I mean, was there anything in box two?
>> No.
>> Okay.
So, theoretically, there’s nothing to report.
I usually do under other income, I usually make a memo of the 1099R with the federal
ID number and then obviously under the taxable amount, I put zero because it is a Roth distribution,
therefore no taxes, but I do usually list it in there so that way if there’s something
that comes back later, you know that you actually did receive it and you did report it, just
that there is nothing to report theoretically as far as taxable income on the 1041.
>> Okay.
The other question was the estate did receive interest income, you know, it’s like 130 bucks.
Would that carry that number down on the form anywhere?
>> Right.
That would actually go under interest and dividends.
I mean, there’s a schedule there that you would carry over.
Depending on the trust, you may have a 100 or a $300 exclusion.
If it’s a 300, I mean, if it’s a regular, the seat, traditional trust, I should know
the proper term and it’s just left my brain.
>> Would it be the qualified dividends allocable to the estate and I put it there which is
in box.
Well, it’s not really a box.
It’s just a line.
Is that where I would put it?
>> Right.
Yes.
You will carry it down from there and then obviously if you’ve got qualified dividends
and interest, there should be a place where you see bank interest or interest.
There should be one line on that and then that would carry down.
Again, you said $137.
Theoretically, again, not knowing the type of trust, but you do get an exclusion that
should be down there right before the taxable amount.
I don’t know, say 100 or 300 or 600 and whatever the exclusion is, you can back out and then
you only pay tax on the remaining $37.
Worst scenario, maybe zero depending on the type of trust.
>> Okay.
And since I have to mail this in, would it hurt to send a copy of that 1099 all?
>> No, you don’t need to send a copy of that with the report, no.
>> Okay.
All right.
Well, that takes care of my issue.
Thank you so much.
>> Thanks.
All right.
Thanks.
And yeah, again, for anyone that’s wondering what she’s completing, a 1041 is for a trust
or an estate.
And she said it was her final, so she was closing out on an estate situation.
So again, making sure that you get, and you do want to make sure you file a final one,
even if there is no income to report, because you want to close that federal ID number.
Very important to do.
That way you don’t keep getting love letters.
The IRS knows the estate is closed and you’re able to move forward in your life and not
have to worry about all of that.
And that’s pretty straightforward to do.
So good job in handling that.
If you want to join the show, you can at 615-737-9986.
You can also email Friday@drfriday.com if you’re not a person that likes to make those
phone calls, because we all know that, let’s be honest, it’s not always easy to make phone
calls.
Hopefully that you have filed your taxes, but keep in mind that Robertson Weekly, Cheatham,
Gibson, Stewart, Davidson, Dixon, Montgomery, and Sumpner are on extension automatically
until June 17th.
So if you forgot to make an extension, or maybe you didn’t pay your bill yet, because
you usually would pay the bill on April 15th and you have this automatic extension, you
need to make sure you hit that deadline or make sure you have the preparation done before
then because otherwise, you know, the penalty happens.
And we’re going to take a quick break here.
When we get back, we’re going to hit the phone lines.
Also, we’re going to talk a little bit about, even though you get this automatic extension,
that you could be getting penalties by not paying it on time.
But let’s go ahead and take a quick break so we can hit the phone lines.
When we get back, you are listening to the Dr. Friday Show.
I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.
We’re going to take this break and we’ll be right back with the Dr. Friday Show.
All righty, we are back here live in studio.
And if you want to join the show, you can at 615-737-9986.
615-737-9986.
And let’s go right to the phone lines.
We’ve got Ken in Eagleville.
Hey, Ken, what can I do to help?
We’ve got what started off as a simple handling of a survivorship and it’s turning into a
nightmare for us.
It may be simple for you, Dexys, and I need your help.
A series of events.
My wife’s brother died in February of ’23.
We filed his taxes for ’22, like we should, and also filed more or less a closed account.
His whole estate was payment on debt.
All accounts was payment on debt.
So there’s no will.
Everything was transferred over to the DOD.
But what is happening now is a month ago, we get this check for $13,000 of my dollars
that after things closed out and the check, he was in a class action suit situation.
And yeah, and he, of course, his check was made out to him or my wife, his or, not his
or.
And so he’s dead.
So she cashed it.
Now do we claim that $13,000 on ours as income or can it go back as part of the estate?
Well it sounds like there really wasn’t much of an inherited state because it was all POD.
So in essence, it’s POD to her, the class action.
She will be the one that’s going to pay the taxes on it.
So then we have to, well, being as only 13-3, that’s below my estate and below the minimum
for filing.
So do we even file?
Well if your income is below all of that, then the answer is no, you won’t have any
taxes due on the 13-3.
But I don’t know if you have other income other than social security.
I’m guessing.
I have no idea, interest, dividends or anything.
That’s my question.
We definitely have to file.
But the point is his estate, the 13-3- But this didn’t come to his estate.
This came to your wife.
The estate was already POD.
So the estate doesn’t exist in essence.
And if you ran it through a 1041, you’ll pay a higher tax than you would on your own personal
tax because it starts at 24% on an estate tax.
So it’s not likely.
And the fact was it was paid basically to your wife.
Now did she have to distribute that money to somebody else after she received it?
Yes, her brother.
Well her brother passed away.
So there was another brother?
No, no, no.
This is the second brother, a living brother.
Okay, a living brother.
Okay, got you.
So I mean, in theory, what she’s going to need to do since it had her name and the deceased
brother’s name on the check, correct?
Yes.
Okay.
So she’s going to have to, before she does any distribution, she needs to calculate her
taxes.
So that would be money that would be held until you can calculate how much your guys’
joint tax on that, and then she would split whatever his share of that after taxes.
There’s no way of transferring that over to him as additional tax that I know of.
To summarize then, we claim it as income to us, and then we’ll make the distribution later.
But right now, we claim it on our taxes with our regular income.
That is 100% correct, yes.
It’s not treated as inheritance.
No, it’s not treated as inheritance.
Okay.
I really enjoy your show.
Been listening for years.
It was the first time I called.
Thank you very much.
Well, thanks, Ken.
I appreciate it very much.
All right.
Let’s hit Mike in Nashville.
Hey, Mike, what’s happening?
Hey, hello.
Just got a couple of quick questions.
I’ll try to be brief.
Sure.
One is about an insurance settlement that a friend of mine received, about $20,000,
and I should say he was going to receive it, and they said, “Well, who’s your contractor?
I’m a sole proprietor.”
I said, “Well, just go ahead and make it out to me,” naively, of course.
So the check came to me from the insurance company.
I since forgot about it.
It’s already been two years.
What is my recourse here?
So you received the insurance check.
Are you his contractor?
Did you do work for him?
Technically not yet.
He’s kind of like held off, so no.
I didn’t do anything.
I just basically passed the money on to him.
So I was just going to be a…
I got you.
So you received it and gave the money to him.
So theoretically, you needed to…
Your recourse would be to have transferred the 1099, because in essence, you refunded
him the money you received from the insurance company.
That’s correct.
And since it didn’t come directly from the insurance company, which would have considered
a settlement to offset maybe roof damage or something else, you can do it as other income,
a 1099 miss, because he didn’t work for you, there was no earnings, but you would do it
as other and then you need to transfer it back.
It really becomes his issue since it really looks like from the business standpoint, it
was a refund because services were never rendered.
Right.
And I guess the bottom line here is I’d forgotten about it.
It didn’t even…
Because I file a loan form every year because I’ve got rental property.
And so I didn’t even report it.
Now I’ve received insurance proceeds before and that’s my next question.
Well, really, it’s not the next question, but it related to this property.
So I had two capital gains on two sell properties back in 2022.
I filed an extension.
I owed money, of course.
I waited, gosh, way too long, incurred interest and penalties probably in the tune of 15 to
20,000.
Now, here’s where I’m going with this.
I paid the actual amount of the capital gain, which was like in the nineties.
And I paid that because I kind of heard through maybe something, it could be misinformation
that well, during COVID, they’re going to waive a lot of interest and penalties.
I have since not received any notice since the very first notice a year and a half ago,
two years ago.
Well, 2022 did not fall into that waiver, just to let you know.
There was stuff in 2020 where the government was closed because of COVID.
And therefore there was waivers out there because people couldn’t get communication.
And even in early 2021, we had a few, but mostly it was the year of 2020.
So I will say if you were to sign on to id.me with the IRS, you will probably see that their
collections and their interest in stuff is still accumulating.
Right now, if you’ve been a good little taxpayer, Mike, for the last few years, and you haven’t
had any kind of waivers or penalties assessed, and you’ve asked for forgiveness, my suggestion
would be is to call the IRS and say, Hey, you know, they can see the penalties, right?
I mean, they can see them right in their computer and ask them if you can have first time forgiveness.
They know what that is.
Yeah.
And let me just say this real quick.
I think I was advised by an attorney.
I went and got an attorney.
He claimed he could do all these creative things to maybe settle with the IRS since
I’ve incurred all these interest and penalties.
And again, I owed somewhere in the 90s or close to a hundred on the two cells of the
property.
But the point is, he said, don’t call the IRS.
Well, again, I called him and the guy, he said, is this your first time?
And I said, well, yeah, but there was an incident six years ago or something.
And so he recorded something.
But anyway, I haven’t gotten any more notices.
It’s been almost two years.
It is possible that you actually got the waiver.
So I won’t tell you that the balance is zero, Mike, only because interest is never waived
and you only paid the original amount.
But it would be a lot less, right, because the penalties are what hurts the most.
So again, I mean, personally, if you’ve got an attorney representing you, then obviously
make let him I’m never would supersede your power of attorney.
But at this point, he could be delaying it.
And that doesn’t help you any because there is no magic way to make interest disappear.
So if you already got the waiver, you’ve done his job and there’s not going to be a lot
of other magic because you probably have assets enough to pay the bill that’s left.
You know, I’m guessing.
I went away from him almost a year ago already.
And I said, because I paid him like all this money, he charged me five hundred refunded.
And I said, let me just handle it.
I don’t want to pay ten thousand dollars.
And so I went on to pay the capital gain itself, but not the penalties.
I would I would do a follow up just to make sure that something like little festering
and interest charging on interest, you know, which they can do or even penalty for not
paying the interest.
And you’ve already gotten the waiver.
So, I mean, we’re probably talking, you know, a thousand bucks or something, not like what
you had before.
But you don’t want to leave it out there just because the IRS hasn’t notified you.
OK, yes.
So don’t you’ve done the hard.
You’ve made it go away.
OK, yeah.
So but but but go ahead and volunteer and get in touch with them.
And you say exactly exactly because, you know, it’s probably a few dollars and you’d rather
not keep it growing just because they haven’t sent you a love letter.
OK, OK, OK, that’s good.
OK.
All right, buddy.
Thanks for the phone call.
Appreciate it.
Thank you.
Bye.
All right.
So we’re going to go to Dan and Brentwood.
Hey, Dan, what can I do for you, sweetheart?
Hi, Dr. Friday.
Thanks for taking the call.
Appreciate it.
Good.
A bit of the unique question, hopefully of use to somebody besides myself.
And it has to do with lending friends money.
Have a friend.
OK, needs windows to her condo.
They’re going to cost $15,000.
The state has a program, a grant program that will give her back $10,000 of that.
So she meets certain criteria, which are OK.
Now, if I lend her the $15,000 with the contingency of getting the $10,000 grant money back upon
delivery of that and let the remaining $5,000 be a gift, what documentation do I need for
that for the IRS?
And what IRS landlines might there be on that?
You’re not really playing with anything from the IRS, in all honesty, because you can gift
her $17,000 without any paper trail.
So then you’re doing that, right?
So you’re giving her 15.
So from the IRS standpoint, there’s nothing there.
You would have to pay tax before you gift versus the other way.
And since basically you’re looking at 5,000 as a gift and potentially in the perfect world,
you get the $10,000 back.
No guarantees in life.
So I’m saying that.
But it’s all it’s a wash anyways, assuming that there’s no problem with the grants.
And I mean, and I’m assuming the state has no issues long.
She got windows and the windows apply, then life is good, right?
She got her new windows.
You got the you know, she got him for five grand additional versus the other and you’re
a good friend that’s basically helping her out.
So there would be no tax consequence in this scenario.
Great.
I just wanted to make sure there weren’t any landmines.
Thank you.
Yep.
No, you did.
Awesome.
All right, buddy.
Appreciate that phone call.
Thank you.
And if you’re watching this, you can join the show.
We have some cool questions.
I’m liking this today.
615-737-9986.
We’re going to be right back with the Dr. Friday show.
All right, we are back here live in studio and we have Josh and Dixon that’s been holding
through the break.
So why don’t we have Josh join us on the show?
Hey, Josh, what can I do for you?
Hi, Dr. Friday.
Great show.
I just wanted to know if you can patch some bonds that were inherited from a relative,
my aunt, without being the executor, was never an executor on her estate.
All right.
So are the bonds in your aunt’s name?
She purchased them.
They have her name on them and I have the paperwork.
Okay.
That was given to me by my father.
He passed away.
When he passed away back in 22, my mom inherited all that.
Yeah, I guess she inherited by default.
Whatever was his.
Her name’s not on the bond list.
I’m mentioned, my brother’s mentioned, and three cousins, two cousins and my dad are
mentioned.
So my dad’s dead.
It’s just me and my brother and two cousins are mentioned on the paper of inheritors and
the percentages, everything’s all printed on there.
Well, I’m going to tell you, bonds can be, I would actually probably go to someone like
my Hank Parrott.
He does all my financial stuff.
I know he deals with bonds because I do know I have purchased bonds for nieces and nephews.
And I know that if something happens to one, there is a list that goes down, but a lot
of times they want the bonds changed or have a true direct descendant situation.
It’s not as simple as taking it.
And nowadays you have to send the bonds in to cash them in, most of them.
So you probably want to call the bond company.
Maybe that’s also a second base.
I did.
Okay.
So I’m going to go to the last one.
They said, are you the executor?
I said, no, there is no exec.
There was never an executor for her estate.
So, yeah, so basically she said, well, you have to, what do you call that?
Probate it?
Not nominate, but yeah, you have to, somebody has to become executor first.
Right.
And then that person.
So they basically make the estate have to go through probate to actually get the bond
in.
So that’s the first step.
And then the second step is to actually get the bond in.
And then the third step is to actually get the bond out of the estate.
And then the fourth step is to actually get the bond out of the estate.
And then the fifth step is to actually get the bond out of the estate.
And then the last step is to actually get the bond out of the estate.
And then the last step is to actually get the bond out of the estate.
And then the last step is to actually get the bond out of the estate.
And then the last step is to actually get the bond out of the estate.
and 15 it’s got to be split four ways, five ways, five ways. Okay so yeah I’m
assuming then you probably need to open up probate or at least open up where
someone could be so that way they have the authority to talk to banks and
to get these all cashed and then that person would also be responsible for
distribution of all the funds that you know would be required. So you guys would
be so you know yeah. And like a newspaper or has to be an ad or something for so
long? I mean normally if you open up probate the courts actually do require
that it’s distributed make sure there’s no collections or any outstanding debts.
Yeah who does that? The executor? The courts usually yeah the executor but
normally it’s done through the courts at least here that’s pretty straightforward
where you basically just run I mean they tell you right where to run the ad in
the state of Tennessee so it’s a pretty easy thing to do. How much is it about to
become exec to get a paperwork to become the executor and file all that? Is it a big amount of money?
I don’t know I mean I would think you know again you’re on a different state so my
suggestion would be is to see if you can find an attorney or someone in that
state just to get those answers done. Yeah because he’s dragging his feet he
doesn’t need the money but I do and I’m like well I could just do it myself. If I could do a
remotely would be great and then when I get that percentage I have to do I have
to pay a tax in Tennessee on that or just to the state of? Yeah you’d only be
the state that it’s inherited as well as the feds. We don’t have an income tax
here. Okay. I wouldn’t have to pay so I wouldn’t have to pay that state. You
would have to pay in the state most states require if the money is earned in
that state or the person deceased died in that state that that taxes would
still be due in that state in most cases. Again I don’t know what states we’re
talking about so but I’ll take a unfortunately on the show but that’s a
great question if you need some more help I have no problem my office a call
we’ll see if we can help out okay. Yeah I’ll do it thank you ma’am I appreciate
it. Uh-huh all right if you have a question you can join the show at
615-737-9986 615-737-9986 taking your calls talking about taxes sorry that
last one got a little bit into the legal things and I don’t I want to make sure
you understand I am NOT an attorney so I don’t know what what different states or
even what state of Tennessee really requires with the exception of helping
some clients with the states but you my personal opinion would be go to an
attorney because they’re the ones that would know how to handle all of that
without question. But again if you are a small business owner and you have
franchise excise in the state of Tennessee you may want to review your
2023 return only because if you had assets that you did bonus depreciation
on the federal side you may not have gotten it on the state side as well as
if you have other there was some other changes also we all know about the
business license or many of us do but if you filed your business license and
didn’t you know made less than $100,000 and you paid something other than the
$22 that are usually due or whatever again you want to make sure that you
have that correct and you don’t overpay taxes and you know and again even for a
little bit larger companies that do the paid family leave and medical leave
there has been some changes on the franchise excise side of our business
so all those you just want to make sure you have those going so that you have
the ability to make sure your your base and your property and many of these
things moved to 2023 some move backwards there is some changes that’s also coming
in at 2024 so you know good time to make sure you’re reviewing and handling all
of the new state changes no one wants to pay a dollar more than you have to
obviously again we also have the extension for individuals that live in
Robertson weekly Cheatham Gibson Stewart Davidson Dixon Montgomery and Sumpner
that had the extension so if you lived in those areas you did have an extension
you have until June 17th what I did want to bring up I had a gentleman that had
as a tax person tell him he only had to you’d have to worry about it till June
17th because he had the extension but keep in mind that doesn’t stop making
proper quarterly your quarterlys are due on June 17th again it extends but if you
didn’t pay in 2023 all of your properly quarters in this case the gentleman had
had one time distribution and he owed taxes and so if you didn’t make the
quarterlys properly the the penalties and interest will still happen it would
have happened on April and now it will happen in June but if your idea is that
you don’t have to pay any penalties or interest until you know June 17th but in
theory you may have owed penalties and interest anyways because of the way you
may have managed thinking that well I only have to pay at the end of year once
the tax law basically says you have to make four equal payments based on the
year before if the year before you owe $10,000 and this year you owe $20,000 you
did not make the four quarterly estimates now some people say well it’s
a one-time I sold a house I made some capital gains but then the law says 90
days after you’ve made the earnings you need to make an estimated payment now if
the 90 days happen to fall on April 15th and that’s great but that’s not likely
since 90 days would have been into the new tax year so in most cases people you
should have already made most of your payments so delaying it till June 17th
could be costing you penalties and interest that’s what I’m trying to say
penalties and interest could be coming at you if you haven’t paid in you’re
thinking oh I can wait till June 17th some people can because they didn’t you
know they owed $500 or they made all the proper quarterlies or they made a hundred
and ten percent of the year before so they are not in jeopardy but many times
the people that are avoiding had a big distribution of some sort and then that
turns into a situation where you’re really just dragging your feet thinking
you shouldn’t have to pay it there’s a lot of ads they say oh I think you know
I can make ten cents on the dollar I can negotiate for you keep in mind that isn’t
for individuals that actually have the money sitting in the bank to pay the IRS
just because you have it and they’re thinking well I can make a deal does
that make sense doesn’t really make sense does it because you have the money
all right we’re gonna take our last break here so if you want to join the
show now would probably be the time to think about doing it 6 1 5 7 3 7 9 9 8 6
again for some of you never heard me before I am dr. Friday and enrolled
agents with the Internal Revenue Service I do representation and taxes been doing
it for 28 years and going strong and if you have questions or if you need help
with dealing with IRS or the love letters I’m the person you need to call
and you can contact my office on Monday but today if you’ve got questions or
you’ve got love letters or something coming up and you need help dealing with
it then this is the number you want to call right now 6 1 5 7 3 7 9 9 8 6 and
I’ll see if I can help you on the radio if not we can always set up an
appointment at the office to do more private or simple meetings for you all
right we’re gonna take a quick break when we get back we’ll take your calls
6 1 5 7 3 7 9 9 8 6
all right we are back here live in studio the last part of the show so if
you’ve got a question now would probably be the time to call otherwise you can
always catch us at the weekdays at our office but if you need something 6 1 5
7 3 7 9 9 8 6 6 1 5 7 3 7 9 9 8 6 here in the studio and again we are working
on completing our 2023 taxes so if you have not completed your 2023s and you
need help you can always go this call at the office otherwise make sure that you
get them filed I know we have extensions but again extensions don’t always extend
the money and therefore the money is what really matters we don’t want to pay
a dollar more to Uncle Sam than we have to and so in doing that we want to make
sure that we have everything in the right place and if you have I mean this
year I had a really unusual one where she came in just on Friday and again she
had cashed out a long-term care policy never received anything and then they
send a letter basically saying just you know the other day that oh wait we
forgot we should have sent this to you and it was you know an additional tax of
you know several thousand dollars and so she just received that and we’re you
know obviously amended and paid the taxes but things happen that way and
sometimes out of our control other times we know of things that happen but
sometimes we forget during the year so I would always say if you have any
opportunity to make sure that you have the ability to double check and make
sure everything you know that happened in that year maybe even keep a cheat
sheet you know something that says hey I sold something I purchased I changed
jobs that is always a big one for us when people change jobs they forget to
to what’s the easiest way you know they basically forget that they had the job I
know it doesn’t seem but you know you’re so busy and you’re not sure and so when
it comes down to it you forget and then you’re like oh wait that’s right I did
work here and now Uncle Sam is saying something different than what the other
you know what your taxes say and then they’ve changed your taxes and either
you don’t get the refund that you think you should have had or worse you owe
more money and that is a very scary situation when you know when you think
you’re having a refund and then Uncle Sam sends you a love letter saying no no
no we you owe us money and then you’re sitting there going why and so that’s
and and they’re not very good at explaining those letters in all honesty
we get them all the time and you know for multiple years or multiple
situations and one of the biggest things you find out it’s basically just says
we’ve changed your return and many times people don’t even understand why that is
what’s happening where is it at and then you know you’re sitting there going oh
wow now I owe them and I don’t understand or or they’ve taken more than
half of your refund and it normally will say in in fairness it will normally say
that they have applied it to another open year but many of my clients when
that happens they come in and they’re like well I didn’t know I owed any money
for that year so you know again one of those situations where you’re like oh
wow I’m a I’m a little surprised but you know take it from there and see what you
have that’s really all I can say on that situation and it’s make sure that if you
have a payment plan that needs to be done have a question here they haven’t
filed prior years but they are obviously trying to get current and so doing so
they basically said hey I haven’t filed any taxes but I owe them for 2023 so can
I just set up a payment plan well here’s the problem Uncle Sam is going to turn
around and say you’re not in compliance if you’re not in compliance you’re not
going to be able to set up a payment plan so even though you have done
something on this one and you’re like okay well that’s great I can make it
yeah if you haven’t if you haven’t you need to go back and you need file at
least six years of taxes you need to be in compliance and if they have assessed
you in any of those other years had a client we just found out that had been
audited but he never knew of any audits in 2015 well you know normally we
wouldn’t have to do 2015 but 2015 is an open audit so it means we need to go
back in and deal with that one since it’s also a fairly large tax balance do
and then you can set up all of this into some form of a payment plan we cannot do
that if it’s not going to be in the same scenario so you know if you’re trying to
do it you can set up payment plans online really easily to be quite honest
with you but if you’re not in compliance they’re not going to set it up so that
is an important situation you want to make sure that you’re in compliance that
and if you can’t we can help you get all your tax documents we can help you put
that together and get that all squared away but you know if you don’t if you
don’t have all of your taxes filed the government’s sitting there going well
wow I don’t know if that’s gonna really work for us right I mean that’s they’re
thinking well if it’s not if we’re not in compliance and you want to pay for
one year but how do we know you don’t owe for all of these years how do we
know you don’t have a situation where you actually owe for multiple years and
you’re just trying to pay for the one year you know that’s a problem so you
just need to make sure that whatever you do that you have the situation and
you’re able to file those different years and make it work if you can’t then
you know it’s going to be interesting to see how it comes out but most cases the
IRS is not going to set up that payment plan and so you’re going to end up with
more love letters saying intent to levy and site to seize them to do something
because they’re like you’re not following the rules rules are not always
black and white but they are often black and white so we want to make sure that
you actually have everything you know so if you’ve got questions let’s say you
have love letters coming in maybe you’re in a payment plan but you know that
you’ll be paying for the next 10 years and you’re not sure if you know maybe
jobs have changed situations have changed and if that’s the case then
guess what you may be able to alter that payment plan if it’s causing financial
situations if it’s hurting you if the financial hardship is as part of it then
they may say yep that’s a good idea let’s see if we can work on that and see
if we can help make that happen then you know we can also help you achieve what
you want to achieve on that if you need something else as far as being able to
just deal with maybe get get a little breathing because the IRS is been you
know hounding you there are ways of helping to negotiate to slow down you
know I know sometimes representation does get a bad rap because sometimes it
doesn’t seem like it’s something that really is that difficult that’s why I
like to tell people you know you can go and do this yourself you can make this
you know one time penalty go away you may not be able to do multiple years or
you may not be able to deal with other issues but you know there is this on the
table let the people go ahead and do that based on charging them a thousand
or fifteen hundred dollars because well let’s be honest you have to spend an
hour or two on the phone which obviously is going to have to be paid by someone
so the best thing to do is to be able to turn around make sure you have it set up
the right way and then you can deal with it but you know just because there’s a
fear dealing with the IRS does not mean you should not be you know dealing with
them I know sometimes people and if I’m representing you I don’t want you
calling the IRS because I don’t want you changing what I’m telling them and you’re
telling them sometimes that can confuse the revenue but if no one’s talking to
them if you don’t have representation or you feel your representation is just
not doing anything then we need to make sure that you’re in the right place and
you’re going to be able to do what you need to do and you’re you’re moving
forward to be able to get yourself out of the situation you’re in today it’s
hard it doesn’t seem fair sometimes and I know I’ve had more than one person in
this many years of doing it there they’re always angry because you know I
paid my house off but the IRS wants to take it from me now well I mean again
keep in mind if you have no debt on your house and you owe the IRS their thought
is you used our money to pay your house off you could have been paying us but
you decided to make mortgage payments doesn’t seem like a far reach so you’re
not going to get the deal you think you’re entitled to because all you have
is your house now that being said there are caveats to any of those situations
it could be that that’s the only asset you have and you’re close to retirement
maybe you would be able to use that argument that the money in the house is
a retirement therefore you can’t afford to pay there are different arguments but
you really need to understand how it works and what you’re going to do all
right so we’re winding down the show here we go if you need to call us on
Monday morning you’re going to call six one five three six seven zero eight one
nine six one five three six seven zero eight one nine you can also email Friday
at dr Friday comm check us out on the web dr Friday comm all of those are
available so if you need to have someone take a second look get a perspective on
how or what you have going on maybe you’re just at that precipice that’s
going to be okay I either have to go over this edge or I’m going to make a
deal or make it work you might need some help doing that and that’s what I can do
I can help you make a deal with the IRS if the deal can be made I’m not one of
those companies just gonna say oh yeah we can do anything not always can deals
be made just keep that in mind again phone number six one five three six
seven zero eight one nine email Friday at dr Friday comm and the website is dr
Friday comm I hope that you guys are enjoying this Saturday spending some
time outside enjoying the fresh air and as we always say in Australia cop you
later