What Not to Say To The IRS If You Owe Them Money

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KATRINA MADEWELL:  And that’s our Darrin Mish.

DARRIN T. MISH:  Welcome to the IRS Solution Attorney show I am THE IRS Solution Attorney Darrin T. Mish, thanks to Pat George for that killer intro.  It’s because I have a very special announcement if you are a long time listener to the show you’ve probably heard or at least gathered that my family and I moved out to a farm in the last couple of months and I have a 12-year-old daughter Rachel and she and I have just decided that we really want chickens, because that is a farmer kind of thing, right?  Cause we want eggs and so on and so forth so we got some, we ordered some chicken eggs on Ebay, about 20 days ago and put them in an incubator and today we had our first chick hatch.

KATRINA MADEWELL:  Wait, you can order chicken eggs on Ebay?

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DARRIN T. MISH:  Absolutely, absolutely. So today we had our very first chick hatch so I am officially a farmer so the jeans that I am wearing right now and the cowboy boots that I wear every day and goes along with the intro song that Pat George just came up with.

KATRINA MADEWELL:  He’s so dressed up with his dressy shirt and those cuff links.

DARRIN T. MISH:  I do have a cuff link shirt on.

DISCOVER SEVEN SECRETS THE IRS DOESN'T WANT YOU TO KNOW


GET STARTED!

PAT GEORGE:  What do you live a 100 miles away from a publix?

KATRINA MADEWELL:  Maybe they order their food on Amazon.

DARRIN T. MISH:  So anyway that’s the big announcement.  I do have photos and we have one, this little girl or not really sure which yet is a day early.

KATRINA MADEWELL:  Is it the chickens that lay the little eggs?  Or just regular eggs?

DARRIN T. MISH:  Well, I have 2 sets actually.

PAT GEORGE:  Well ,you will know soon enough in the morning at 6 o’clock comes whether its talking or not.

KATRINA MADEWELL:  For sure.

DARRIN T. MISH:  So in order…

KATRINA MADEWELL:  What’s the incubation time by the way?

DARRIN T. MISH:  It’s 21 days and so to get here to the studio I have to wake up at oh dark thirty right now but not as early as Pat but it’s still dark outside and so you know we live in a rural area and I hear this bird chirping and I’m like wow it’s kind of early like the sun isn’t even up, I don’t know why that birds chirping so I don’t think anything of it I get ready and I get into the truck and I’m about, I don’t know, I am about 5 miles away and I start getting text photo’s from my wife that there is a baby chick that hatched.

KATRINA MADEWELL:  Oh, so you didn’t get to see it yet.

DARRIN T. MISH:  I haven’t seen it yet but I do have some photos.

PAT GEORGE:  If you heard that as soon as you woke up how close do you sleep to the chicken coop?

KATRINA MADEWELL:  That’s what I was thinking. Where is the chicken coop?

DARRIN T. MISH:  Well, we had put the incubator in the, in the master bedroom because number one the master bedroom is enormous but also…

PAT GEORGE:   You are a farmer.

DARRIN T. MISH:   Yes but also so I could keep an eye on it.

KATRINA MADEWELL:  If you got the chickens in your bedroom you might be…

DARRIN T. MISH:  You might be a redneck if…but it’s actually a little bit challenging the incubator has to be, has to be a constant temperature and the humidity is supposed to be constant and that’s a challenging thing because you have to check it at least twice a day.  So that’s the big announcement it has nothing to do with tax problems it has nothing to do with the IRS.

KATRINA MADEWELL:  They would probably die in my house.

PAT GEORGE:  You know he’s got turkey’s, chickens before you know it he is going to have hot air balloons landing in his field.

KATRINA MADEWELL:  Yes he probably will cause I know they moved somewhere up north they used to go like right over my house and it’s too congested now so they’ve moved somewhere up your way.

DARRIN T. MISH:  I wonder what the legalities are of the hot air balloon that has to put down on your land.

KATRINA MADEWELL:  We had one land on our, we had one land on our street before.

PAT GEORGE:  You could get a free ride.

DARRIN T. MISH:  Like in the Wesley Chapel area you see them quite frequently on very very still mornings.

PAT GEORGE:  I live in the city so once I saw a group of party balloons go over the neighborhood, that’s the closest I get to any craziness in my neighborhood.

KATRINA MADEWELL:  We used to hear them like all the time on Saturday mornings, you would hear this whooosh right over your house and you are like, oh gosh, there’s a hot air balloon, like one time it was so loud and I got up and went outside and looked and they were literally…

PAT GEORGE:  Have you ever had the chance to ride one?

KATRINA MADEWELL:  Yeah.

PAT GEORGE:  Yeah it did that ssshhhh noise, it was really cool over plant city grove on a Sunday morning and you actually, you do that noise and people are looking around first and then they look up and you go good morning cause you are right above their head.

DARRIN T. MISH:  You are only a couple of hundred feet, right?

KATRINA MADEWELL:  That was like,  that was one of my grandfather’s dreams he always wanted to go on a hot air balloon ride so for him and my grandmother for their 50th wedding anniversary, I bought them a hot air balloon ride and my grandpa, my grandmothers like I’m not riding that thing and my grandfather was like, he couldn’t wait he was so excited, he was like a little kid on Christmas morning like up on his toes like I was going with him and that was the second time I had went and he was so, like he was tickled pink for a week.

PAT GEORGE:  I know why you got those properties so you could take more deductions on your IRS deductions.

DARRIN T. MISH:  You know that would go on a Schedule F form.

KATRINA MADEWELL:  You green belt it.

PAT GEORGE:  It’s why he did all of this.

DARRIN T. MISH:  Yeah, we probably will be green belting it.

PAT GEORGE:  He knows.

KATRINA MADEWELL:  Yeah, he’s seen enough.

PAT GEORGE:  You are going to see a lot of cattle grazing you know and you get that deduction.

DARRIN T. MISH:  There might be cattle in my future. One never knows and there are probably horses, too.

KATRINA MADEWELL:  One year we were doing something, I think we were at a Florida Realtor convention or something and there was someone else that happened to be there in the bar area that we were hanging out and he was talking about cattle in Florida and he was like Florida is a big cattle state. A lot of cattle comes out of here.

DARRIN T. MISH:  We could Google it  but as I recall it Florida is like the number 8 cattle producer in the country which is really interesting cause you always think about cattle growing out west in Texas and Oklahoma and…

KATRINA MADEWELL:  Somewhere else.

DARRIN T. MISH:  Those areas but if you start to pay attention to it as you drive around the more rural areas and even in the northern edge of Tampa you see more and more cattle and part of that is our green belting laws. You just need a couple of cows out there so that you could get the agricultural exemption but there’s a lot of cattle, I mean if you think about it, they don’t have to put up with the cold weather right.

KATRINA MADEWELL:  Yeah.

DARRIN T. MISH:  And so I think there are happy cows probably make good hamburgers.  So the topic for today’s show is not that we had a chicken hatch, the topic of the show today is what not to say to the IRS if you owe them money.

KATRINA MADEWELL:  It’s actually a pretty good topic for the show we have never covered this but it’s pretty much right on time like it’s very legitimate if you had a call or a letter from the IRS, like that would probably be one of the first things on my mind is, oh, I probably need to deal with this but what do I not say that could get me in trouble?

DARRIN T. MISH:  You know people especially people that are handling the cases themselves obviously right cause they have no go-between, they have no you know rep to go ahead and be the go-between.  They will often just say way too much to the IRS they think well I’m going to deal with this person from the IRS who I owe 50 grand to or whatever, I’m going to deal with them just like I would deal with any other person, any other human being I’m going to be honest and forthright and I’m just going to tell them everything that I want them to know or everything that they ask me and I’m not going to say for even a second that you should ever mislead or misrepresent but…

KATRINA MADEWELL:  What if the revenue officer shows up at your office and they are asking a lot of questions I’m sure.

DARRIN T. MISH:  So the best advice that have, it’s a little bit self-serving or could at least sound self-serving is that if a revenue officer shows up at your place and wants to talk to you I don’t think you should talk to him other then to say hey it’s so great that you came by, I’ve been meaning to deal with this for a long time. I have a rep or I am going to get a rep thank you very much and stop talking. Becuase you don’t know, you have no idea why they are asking you the questions they are asking you and you have no idea what the correct answers are you are going to be under stress right, your adrenaline’s going to be pumping because you have been putting this off for 17 years and all of a sudden there’s, it’s real, the person’s in front of you, maybe they are in your living room sitting on your couch you know….

KATRINA MADEWELL:  What kind of questions do they ask when they pop up, do other people ever mention?

DARRIN T. MISH:  Well, the first thing they are going to ask is, so do you have the ability to full pay this liability today, I’m sure there are people that do…

KATRINA MADEWELL:  That’s the first thing that they ask?

DARRIN T. MISH:  I think that is pretty much the first thing they ask.  The next thing that they are going to ask is what are your sources of income, how much is that income, what are your expenses, what assets do you have? That’s really important because if you know if you have the money or if you have the means to liquidate an asset to full pay, the IRS is going to ask you to do that immediately, they are going to ask you what the value of your assets are.  So they are basically going to put you through with no notice, they are going to put you through a financial audit of sorts to determine what your ability to pay is and what their ability to collect the money is.

KATRINA MADEWELL:  So if you tell them that you are going to hire counsel or representative or somebody to help you with the matter like from an attorney perspective, legally, do they have to say, do they have to respect that and go ok I’m going to leave you alone to talk to them?

DARRIN T. MISH:  Well certainly if it was a criminal sort of case right and you invoke your rights to an attorney, the law says or at least case law says that they immediately stop questioning and let you seek counsel before they continue questioning.  I’m not so sure what the deal is in the IRS setting. I don’t think there is any penalty if they continue to insist that you speak to them.

KATRINA MADEWELL:  There’s probably not a whole lot of case law on that either.

DARRIN T. MISH:   What I’d like, what I’d like to see in a perfect situation is I’d like to see the homeowners say what I’d said you know hey I’m so glad that you are here I’ve been meaning to deal with this for years I have an attorney I will have him or her call you and then slam the door.  Which sounds a little rude, right, but it’s not super polite to show up on your door and say hey I’m from the IRS, I’m a revenue officer I’m here to collect money.

KATRINA MADEWELL:  It’s not like they made an appointment to show up.

DARRIN T. MISH:  Right, so, one of the biggest reasons that I would offer that advice is, you know you are just going to be under stress and you are going to say things that you are going to regret.  I’m not saying you are gonna swear at them or anything like that, that’s not what I mean. I mean you are going to be scared.

KATRINA MADEWELL:  Like bibble babbling.

DARRIN T. MISH:  And you are gonna say stuff that may be inaccurate, you are going to say things that are…

KATRINA MADEWELL:  Might not come out right.

DARRIN T. MISH:  Right, I mean there’s, you are not going to be thinking about what’s going on and  I just think it’s a lot better to have a rep if you can or if it’s appropriate so that that rep can be the go between you and the IRS, and we can talk about that in the next segment.

KATRINA MADEWELL:  Yeah, we’ve got a least 4 tips coming up for you, the wonderful person listening thank you for listening to the IRS Solution Attorney show and today’s topic is what not to say to the IRS.  When we come back we are going to dive head on into that.

PAT GEORGE:  We learn so much on this show now we know what came first the chicken or the egg.

KATRINA MADEWELL:  Or the egg. In this case, it was the egg from Ebay.  Alright, we will be back in a minute.

(commercial break)

KATRINA MADEWELL:  Wow, there’s a lot of voices in that one.

DARRIN T. MISH:  I actually, I actually met the writer of that song, I believe it was not John Denver it was somebody else and I have actually spoken to her before and she get’s paid royalties to this day, she probably just made a penny. She is local too.

KATRINA MADEWELL:  I’ll take it.

DARRIN T. MISH:  Anyway here we are back on the IRS Solution Attorney show I am THE IRS Solution Attorney Darrin T. Mish.

KATRINA MADEWELL:  I’m your co-host, Katrina Madewell. Thanks for sticking around.  If you’ve got questions or you have the IRS knock on your door we would love to hear from you today but we are going to tell you what not to say to them if and when they come and we are 888-404-1010. Again makes sure that numbers in your cell phone and you are not driving calling us, 888-404-1010.

DARRIN T. MISH:  Absolutely, if you are driving go ahead and call us like everybody talks on the cell phone all the time, that’s a disclaimer I don’t really mean that.

KATRINA MADEWELL:  Pull over, dial the number then you can talk to us on your bluetooth.

DARRIN T. MISH:  Be an adult, do whatever you want.  But to recap the first segment the reason for the bumper music is I had a big announcement, the big announcement was that I am now a first time, part time farmer….

KATRINA MADEWELL:  Chickie, chirp, chirp.

DARRIN T. MISH:  Hatched our first chicken eggs from an incubator today, we’ve had one successful hatch so far.

KATRINA MADEWELL:  I just saw the picture to it’s really cute.

DARRIN T. MISH:  And we will keep you posted next week on how many chickens actually hatched.  We have 32 eggs under incubation in 2 waves one week apart.

KATRINA MADEWELL:  I’m guessing they might wake you up over the weekend.

DARRIN T. MISH:  We shall see.

KATRINA MADEWELL:  Since they are in your bedroom little farmer boy.

DARRIN T. MISH:  We shall see, so the purpose of the show or the topic of the show today is what not to say to the IRS and we also were talking about what to do if a revenue officer shows up on your doorstep.  My best advice is to thank them for coming by, let them know that you are very interested in, interested in resolving the problem and that you have hired an attorney or a rep of some sort and that rep will be contacting them and say nothing else. That would be my best advice, that’s my fantasy advice.

KATRINA MADEWELL:  So what if they are like, they you know, maybe it’s not a huge amount but they are like startled that they pop by and then they say that and then they change their mind, decide they are not later, any ramifications for that or no?

DARRIN T. MISH:  No, they can still call the revenue officer and say hey I…

KATRINA MADEWELL:  I’ve changed my mind let’s work it out.

DARRIN T. MISH:  I’ve changed my mind let’s talk you know and so on and so forth.  So let’s talk about what not to say…

KATRINA MADEWELL:  Some of those people are jerks, though.

DARRIN T. MISH:  Well I’m not sure I can comment on that, there are definitely revenue officers locally and nationally that are more difficult to work with than others, there are also revenue officers that are super cool, easy going, understand you know what we are doing here and what we are trying to accomplish but that’s kind of rare, I would say the cool revenue officers are outnumbered by I don’t know a factor of 7 or 8 to 1.  I mean so, and then there are some revenue officers that absolutely just almost impossible to work with because, my best example is I just say they pound the table with their fist and say pay me yesterday.  I mean that is the attitude you get is they just pound the table, pay me yesterday. Obviously, I can’t pay you yesterday, yesterday is already over let’s try and figure out how I might be able to pay you or my client might be able to pay you.

KATRINA MADEWELL:  Tomorrow.

DARRIN T. MISH:  And so you see that quite a bit in younger revenue officers where they are still kind of learning and they are doing everything by the book I think, they are trying to do everything by the book and so they don’t understand the practical ramifications of how to get a case settled.  I have a funny little story about that, when I first started practicing law my first job I was a public defender in Hillsborough county in Tampa, worked for Julian Holt who is still the public defender there and I get thrown into a court room pretty early on. I was in a juvenile courtroom which is actually Circuit Court which is higher than county court but I’m in this courtroom and I get handed a box of files, bunch of new clients, write arraignments and I’m, actually it was a trial docket come to think of it and so I got I don’t know 10 cases set for trial that morning and I don’t know what I am doing so I can’t get them worked out.

KATRINA MADEWELL:  Don’t you shadow somebody for awhile before you just hop in?

DARRIN T. MISH:  I got to watch somebody for 5 days but during that 5 days they showed me everything in the organization right so I mean I didn’t get a lot of pretraining.  So I show up that second Monday morning for, I’m supposed to be ready for trial, of course I’m not…

KATRINA MADEWELL:  You don’t even know how to get ready for trial.

DARRIN T. MISH:  I’ve never even tried a case how can I be ready for trial? But I don’t know how to plea negotiate, I don’t know how to plea bargain at all, I have no clue and so I announce ready for trial cause I can’t announce not ready for trial because that is just not how the system works either so I announce ready for trial and all these cases, the judge he is about to have an aneurysm on the bench, he gets so mad he hauls us all in the chambers and he screams at me, cause I obviously don’t know what I am doing and I deserved it.  He screams at me and he screams at the state for not helping me get the cases worked out.

KATRINA MADEWELL:  Wow.

DARRIN T. MISH:  Which I thought was amazing.  We ended up…

KATRINA MADEWELL:  You are like at least I’m not the only one being yelled at today.

DARRIN T. MISH:  And all these lawyers are like 25-26 years old I mean you know none of us are like seasoned grizzled veterans right…

KATRINA MADEWELL:  You are all male you are green.

DARRIN T. MISH:  I mean these guys have like 90 days more work experience than I do or maybe 6 months.  So we get all those cases worked out and you know we carried on and went forward and from that day forward even though that judge was pretty mad at me I considered him a mentor and I learned a lot from him.  But I guess the point of that story is I was trying to do everything kind of by the book. I didn’t really understand the practicalities of how to get a case resolved, how to get to a solution that pretty much everybody was, at least if not happy with everybody was at least equally dissatisfied right so I mean it was equally, it was equal.  And I think young revenue officers sometimes have that problem too. I mean you can’t pound the table and say pay me yesterday, you can’t pound the table and say pay me today for most people.

KATRINA MADEWELL:  So out of curiosity with that story how long is there training do you know?

DARRIN T. MISH:  The revenue officers?  I think it’s fairly significant I think they have training officers too.  I wish one would call in.

KATRINA MADEWELL:  That would be, we will have to call the IRS here and ask them.

DARRIN T. MISH:  There might be, you know there’s probably revenue officers who listen to the show just to hear what might…

KATRINA MADEWELL:  Alright, if you are a revenue officer and you are listening we are just curious what your training is like, how long it takes, if you shadow other revenue officers before you actually go out in the field and get cases and you don’t have to say your name but we just want the answer..

DARRIN T. MISH:  It would be great if you did that would….

KATRINA MADEWELL:  I mean you don’t have to be on the air either if you don’t want to you can tell Pat George but we are curious what the answer to that question…

DARRIN T. MISH:  You could give us the pseudonym that you have been officially approved to use.  Did you know they use pseudonyms?

KATRINA MADEWELL:  What does that mean?  No.

DARRIN T. MISH:  They are authorized to use a fake name, so these guys that I have been working with for 10-20 years them…

KATRINA MADEWELL:  It’s their fake name.

DARRIN T. MISH:  And I know them by name, it might not even be their real name.  There’s no way to know unless they tell me.

KATRINA MADEWELL:  I wouldn’t give my real name if I worked for the IRS I would be like Julie or something.

DARRIN T. MISH:  Ok not to go too deeply down this political rat hole…

KATRINA MADEWELL:  I’m just saying.  Oh boy, here we go.

DARRIN T. MISH:  Isn’t it just a little bit scary that we have a government organization where the employees don’t have to use their own name because of, I mean it’s scary on 2 levels, it’s scary because of fear of ramifications potentially I think that’s the rationale…

KATRINA MADEWELL:  Yeah in this day and age people are crazy.

DARRIN T. MISH:  But what kind of accountability do we have as citizens when our government can’t be trusted to use their real names.

KATRINA MADEWELL:  I get what you are saying but the topic that we are talking about is people that owe a lot of money to the government so in that  particular case you know it’s a very vast possibility that they could ruin someone’s life especially if they don’t hire someone like you and there’s a very vast possibility but that might drive somebody crazy to where they would do something that could be on national news.

DARRIN T. MISH:  Ok so just recently, just this week we had a listener who, who told me quite frankly that if we don’t get to the point fast enough so let’s talk about at least one of these things.

KATRINA MADEWELL:  Let’s get to the point real fast no more…

DARRIN T. MISH:  To never talk to about the IRS.  I don’t think it’s a good idea to threaten bankruptcy to the IRS.

KATRINA MADEWELL:  So don’t threaten bankruptcy?

DARRIN T. MISH:  There are certain extremely limited instances like in the negotiation of an offer in compromise where a threat of bankruptcy is very important and can be very useful but it’s kind of like using a loaded gun if you don’t have training you don’t have any purpose or, there’s no reason for you to have a loaded gun and I’m not an anti-gun guy.

KATRINA MADEWELL:  But it makes sense.

DARRIN T. MISH:  But you know you need to know at least the 4 rules of gun safety and you know you need to make sure you don’t shoot yourself or someone else and it’s kind of the same thing with bankruptcy you can’t, one of the worst things you can do if a revenue officer shows up at your door is to say oh you know the heck with you I am just going to go file bankruptcy, if that’s a bluff and you are not going to do it you should not say that because what’s going, what potentially happen is the revenue officer could, the revenue officer could escalate the collection actions that they are going to take and go straight…

KATRINA MADEWELL:  Cause they don’t want you to..

DARRIN T. MISH:   Because they don’t want you to file or they are going to try and get what they can get before you file for bankruptcy.

KATRINA MADEWELL:  And the other thing too, common misconception we actually haven’t talked about this in awhile is that not all but a lot of IRS debt can be discharged in bankruptcy right?

DARRIN T. MISH:  It can and thanks for bringing that up but there’s some very complicated timing rules with regard to the discharge of taxes and bankruptcy.  Over the course…

KATRINA MADEWELL:  And bankruptcy laws have changed a lot too.

DARRIN T. MISH:  Over the course of my career I have seen so many instances of malpractice by bankruptcy attorney’s in filing, you know bankruptcy cases to early and the taxes were not discharged so I’ve seen that many, many times so if you are thinking, if you are the taxpayer that owes the money to the IRS, if you are thinking maybe you are going to file bankruptcy we are going to use that as a thought that you have, explore the possibility you know with some facts behind it, but I don’t think it’s a great idea to threaten the IRS that you are going to file bankruptcy.

KATRINA MADEWELL:  So the second tip is never lie to the IRS, why, why is that so?

DARRIN T. MISH:  Well, I think this goes without saying….

KATRINA MADEWELL:  Oh you are not going to be able to answer right now.

DARRIN T. MISH:  You are right, when we come back…

KATRINA MADEWELL:  You hear that music…

DARRIN T. MISH:  When we come back we will talk about why you should never lie to the IRS.

KATRINA MADEWELL:  And we will jump right into it and not talk about chicken and eggs I promise.  Be back in a minute.

(commercial break)

KATRINA MADEWELL:  Oh, my gosh Pat where do you come up with this stuff?  That’s pretty good.  Now Heather’s really going to like the show.  Darrin’s wife texted him during the show saying that this is the best show ever.

DARRIN T. MISH:  I’m glad that she thinks so.  So, back to the topic of the show and it is…..

KATRINA MADEWELL:  By the way let us know what you think do you like the random side chicken talk or would you prefer that we just stick to the IRS stuff let us know 888-404-1010, 888-404-1010 or you can let Pat know.

DARRIN T. MISH:  If you are just tuning in now we have to recap what the heck we are talking about.

KATRINA MADEWELL:  Chicken talk.

DARRIN T. MISH:  This is chicken talk 1010 a.m.

KATRINA MADEWELL:  Really the IRS Solution Attorney show, but Darrin’s now a farmer so he likes to share his farm stories.

DARRIN T. MISH:  Quick recap I had some eggs in an incubator with my, as a project with my 12-year-old daughter and today our very first chick hatched so it’s a happy time here in the 1010 money talk studios.

KATRINA MADEWELL:  It’s like a baby was born in the house.

DARRIN T. MISH:  Absolutely a little chirping baby, hopefully, we have 32 eggs so.  Actually, they don’t sound quite like that yet.

PAT GEORGE:  They will soon.

KATRINA MADEWELL:  The topic is what not to say to the IRS and the first one was never threaten bankruptcy unless you actually mean it and even then get some professional help cause there is an art to that, right, that is what I heard.

DARRIN T. MISH:  I’m going to throw one A in here that was number 1, 1A is you probably should not tell the revenue officer that you are a big fan of the IRS Solution Attorney show  because I think we just lost all credibility with our chicken noises.  But the next one will be….

KATRINA MADEWELL:  Maybe.

DARRIN T. MISH:  The next one that we talked about right before the end of the break was never lie to the IRS.  I mean you know, folks this really should go without saying but I’m going to go ahead and say it Don’t Lie to federal officials it’s a bad idea, now despite…

KATRINA MADEWELL:  Is it against the law?

DARRIN T. MISH:  Despite that there are certain politicians that are running for president probably both of them who obviously have lied to Federal officials and…

KATRINA MADEWELL:  Oh you think?

DARRIN T. MISH:  You know Martha Stewart actually went to prison remember that?

KATRINA MADEWELL:  Yes I do.

DARRIN T. MISH:  And she went to prison for lying to a Federal official.

KATRINA MADEWELL:  Is that why they arrested her?

DARRIN T. MISH:  Not for whatever it is that she was accused of doing I don’t even remember I think it was insider trading…

KATRINA MADEWELL:  It was insider trading yeah.

DARRIN T. MISH:  But she did not go to prison for insider trading, she went to prison for lying about some insignificant aspect of the case or I think…

KATRINA MADEWELL:  I guess that answered that question.

DARRIN T. MISH:  And so you know it is technically a crime, it’s more than technically a crime to lie to a Federal official you know even an IRS agent and all of the financials that we submit to the IRS are all, when the taxpayer signs them those are all signed under penalties of perjury so perjury…

KATRINA MADEWELL:  It’s like signing an affidavit when you sign your tax return right?

DARRIN T. MISH:  Well, yeah, when you sign your tax return you are basically attesting to the fact that it’s true and complete to the best of your knowledge. You don’t want to lie to the IRS it’s not a good idea, it’s also not necessary ever.

KATRINA MADEWELL:  What do people lie about like what have you seen where they you know they come later and now you are representing them, what kind of stupid stuff have they lied about?

DARRIN T. MISH:  I’m rolling my eyes right now because I have clients in my office all the time who say well what if I, you know, what if I hide this money over here or what if I, you know what if I don’t, well we had a caller to the show I don’t know a few months back where she kept using the phrase well I don’t show the income, like what does that even mean I don’t show the income, I mean we know what it means right, it means…

KATRINA MADEWELL:  We are not putting it in the bank. I don’t know do I report on the taxes?

DARRIN T. MISH:  What if I don’t put it on my tax return and I lie about it, I just don’t think it’s a good idea because I can’t imagine an amount of money that is worth the risk of going to prison right I mean…

KATRINA MADEWELL:  That’s probably not even that much money.

DARRIN T. MISH:  No, for some of these people I mean they are lying about very little and I’m not trying to be critical about my clients at all or my prospects or people that are my clients, I’m not trying to say that, that is not the point of what I’m trying to say here. I’m just saying don’t lie to the IRS because it’s not a good idea, it’s not necessary and so much of what people try to lie about is, is verifiably false.

KATRINA MADEWELL:  So, either lie about assets that they have or don’t have or money that they have or don’t have.

DARRIN T. MISH:  Exactly I mean they lie.  No, I was say this quietly…

KATRINA MADEWELL:  But you can not answer anything right like we suggest in the first segment is don’t say anything, hey I’m going to obtain counsel for this thank you for coming by.  Slam.

DARRIN T. MISH:  Right or I don’t remember or I don’t know right now, those are all…..

KATRINA MADEWELL:  I’m a little frazzled at this moment cause you just showed up unannounced.

DARRIN T. MISH:  You know I don’t bring clients to audits on purpose because…

KATRINA MADEWELL:  They will open their mouth.

DARRIN T. MISH:  Because they are going to be freaked out, they are going to be scared and they are try, this is normal human behavior ok, if an auditor asks them a question they are going to try to answer the question. No matter what that is what people do we try to talk our way out of situations right so when I go into an audit I don’t know the answers to 90+% of the questions…

KATRINA MADEWELL:  Which is a good thing.

DARRIN T. MISH:  And I just tell the auditor I don’t know, but I will find out.  I just get out a yellow pad and I just start writing down the questions and then I’ve got like a week or two to get back with the auditor and give him the answers.

KATRINA MADEWELL:  But then you can think about your answers versus just randomly answering something under pressure that might not even be exactly the way you meant to say it.

DARRIN T. MISH:  Exactly. It gives the client and I an opportunity to discuss what the appropriate answer is, never lying, being as accurate as we can, but making sure that we don’t put something out there that’s not true or not right.  I don’t think it’s a big risk for most people that they are going to get arrested and you know imprisoned for lying to the IRS but there is that possibility, it can happen, it’s not, so it’s just not a good idea to lie to the IRS cause it’s perjury and it’s, not in every case it’s not perjury in every case but it’s just not a good idea.

KATRINA MADEWELL:  So the third one I can really relate to you know coming from the mortgage background and being in the real estate business, it’s the same type of thing like when you apply for a loan and they run it through automate underwrite them you give them exactly what they ask for, not everything, so give, don’t give them more information than you have to.

DARRIN T. MISH:  Right.  You know the IRS really loves taxpayers with big mouths and the more scared they think you are the more you are going to talk and the more that they are going to get you pretty much blab.  Especially in the context of the revenue officer he’s going to come out to your house or your business, he’s going to catch you off guard, you know the little story about that when you were pregnant and the revenue officer showed up and you had a little payroll tax problem and it freaked you out and scared you.  Quite honestly you were like in your 20’s right?

KATRINA MADEWELL:  Oh, yeah.

DARRIN T. MISH:  And you probably sang like a canary you know you were probably saying whatever needed to be said because it was scary, unexpected…

KATRINA MADEWELL:  Listen I was pregnant with my first child, I, you know, my business partner bailed, I didn’t even know the taxes weren’t paid and here I have this lady showing up and I probably should have asked her if she was even real, like if she was really an IRS officer.  But I was in my 20’s right you don’t know what you don’t know at the time.

DARRIN T. MISH:  Yeah, if I didn’t, you know if I didn’t have all this experience doing what I do if somebody showed up at my office I would be freaked out.  I got….

KATRINA MADEWELL:  I think I started crying actually.  I don’t break very easy but I think I started crying.

DARRIN T. MISH:  Well, I mean….

KATRINA MADEWELL:  And then she did feel bad for me because I was really pregnant like 8 months out to here pregnant.

DARRIN T. MISH:  So Katrina’s advice is when a revenue officer shows up at the door start crying.

KATRINA MADEWELL:  No it wasn’t.

DARRIN T. MISH:  Even if you are a man you should claim pregnancy so if you have a beer belly that helps you know….

KATRINA MADEWELL:  Stop it.

DARRIN T. MISH:  And…

KATRINA MADEWELL:  Oh my gosh.  Though she did take pity on me cause she could see that I was young, she could see that I was super pregnant and she could see that I was scared and she was nice to me, I could have got anybody though.

DARRIN T. MISH:  And you didn’t owe that much money either right?  It was like $20,000 or something?

KATRINA MADEWELL:  It’s a lot of money when you are 23 or however old I was.

DARRIN T. MISH:  I’m just trying to say like in the overall scheme of the cases in that revenue officers inventory you probably not….

KATRINA MADEWELL:  And the one’s that you do are… It was not like I owed $200,000 or 2 million bucks.

DARRIN T. MISH:  And you probably said something like I am so sorry I didn’t know and I’ll pay.

KATRINA MADEWELL:  I don’t think I said that but I just think I said I don’t know I am trying to remember what I said.

DARRIN T. MISH:  I am super bright and you want me to go into labor right here right now?

KATRINA MADEWELL:  I think, no really like honestly the bookkeeper did get run off and I thought everything was the way it needed to be and didn’t realize it wasn’t.

DARRIN T. MISH:  So circling back to never give the IRS more information then you have to.  If somebody from the IRS calls you, it’s very likely one of those scam calls.  Now we just saw on the news in the last week or so there was a big you know like bust over in India where they arrested a whole bunch of these guys that were doing these phishing calls where they call you from the IR, they say they are from the IRS and they say that you have to pay them money or the cops are going to come and pick you up.  So pretty much if an IRS employee calls you on the phone just out of the blue and you have had no contact with them, that’s probably not the IRS because they typically don’t do that, you are going to get letters in the mail first, you are  going to get a home visit first that kind of thing, they never email by the way.

KATRINA MADEWELL:  They do have badges, I remember seeing a badge.

DARRIN T. MISH:  They do, they do.  Revenue officers have like a, more like an ID card…

KATRINA MADEWELL:  Yes.

DARRIN T. MISH:  And they do not carry guns. IRS criminal investigation division agents they have guns…

KATRINA MADEWELL:  Men in black.

DARRIN T. MISH:  And they have gold badges and they travel in  pairs and if they show up and you are the target of the investigation absolutely, categorically do not talk, you are probably already hosed but you don’t talk.

PAT GEORGE:  I will tell you what happened to me last week my son goes to get the mail and he brings in a stack of mail and he goes oh advertisement, advertisement oh ok here’s a letter from the IRS to you and a letter to mom,  I jumped out of the chair and I said you are kidding me, the scary, I still, I’m getting chill bumps and it was a receipt of my taxes that I paid, it was just a receipt it’s, he says what’s the matter what’s, I go whenever you get a letter from the IRS pay attention.

KATRINA MADEWELL:  Be very scared.

DARRIN T. MISH:  So Pat’s experience is like very typical, right?

KATRINA MADEWELL:  And he didn’t even do anything wrong. It was just a receipt.

DARRIN T. MISH:  Yeah we get stacks of IRS mail at the office everyday like literally a stack I don’t know 4-6 inches just lots. When there’s a letter that has my name on it specifically if  it has my name and my wife’s name like I do I stop and I rip it open what is this, what is this…

PAT GEORGE:  What exactly has happened.

KATRINA MADEWELL:  What are they doing now?

DARRIN T. MISH:  This needs to be dealt with now. Usually it’s nothing. Usually it’s like hey we took your refund and applied it to some liability that you owed or there was some minor problem on your tax return that needs to be fixed or something like that.

PAT GEORGE:  You got to start looking real quick and it says it’s not a bill and I’m looking down at the bottom balance, balance going zero, zero, zero.

KATRINA MADEWELL:  Whew, just dodged a bullet.

PAT GEORGE:  Yes.

KATRINA MADEWELL:  Can hear the relief in Pat’s voice.

DARRIN T. MISH:  So if you are speaking to a revenue officer and they are asking questions and you are not going to get a rep ok and you’ve decided you are going to answer their questions just be straight to the point, answer the question, don’t volunteer any more information and let them ask the questions.  It’s kind of like when you are a witness on the witness stand during a trial.

KATRINA MADEWELL:  Which most of us have not been a witness on a witness stand for a trial.

DARRIN T. MISH:  Yeah but if you’ve not then what’s going to happen is if you have a lawyer he’s going to coach you and he is going to say look at the person asking the question, answer just the question do not volunteer any more information and I would always tell my witnesses to turn and look at the jury when they answer the question because…

KATRINA MADEWELL:  Don’t look at the person asking the question?

DARRIN T. MISH:  Not, that was never my advice don’t answer the prosecutor’s question, you know don’t look at the prosecutor when you are answering the question, look at the jury because the jury is, is the, are the people who are determining whether you are telling the truth or not so and what’s one of the biggest indicators that we use as human beings to see if somebody is telling us the truth.

KATRINA MADEWELL:  They look away they are lying.

DARRIN T. MISH:  Yeah, if they look away they are not telling you the truth if they look you in the eye that’s considered at least a non-verbal queue of honesty right?

KATRINA MADEWELL:  Don’t look down.  They can tell a lot about people when they look you in the eyes, I can.

DARRIN T. MISH:  Yeah absolutely and we use a lot of non-verbal communication in our everyday life we  just don’t think about it.

KATRINA MADEWELL:  And we have one more tip before we jump into some of our listener questions and we are going to talk about that when we come back but the 4th tip is, never admit to intentionally doing anything wrong and we will elaborate on that when we come back. Right, Darrin?

DARRIN T. MISH:  Absolutely.

KATRINA MADEWELL:  Alright you are listening to the IRS Solution Attorney show if you missed any part of the show it is available over on iTunes and any Android player just search for the IRS Solution Attorney show, you also have an App?

DARRIN T. MISH:  Don’t forget the App, iTunes, Android, The IRS Solution Attorney.

KATRINA MADEWELL:  And if you have an IRS question you can get Darrin at 888-get-mish.

DARRIN T. MISH:  That’s 888-438-6474, 888-438-6474.

KATRINA MADEWELL:  And he’s on Twitter @darrin_mish and on Facebook and we will also answer some of those questions when we come back, back in a minute.

(commercial break)

KATRINA MADEWELL:  Here we come back. This time there’s some country artist down the hall at QYK or Q105 we will just have them pop in and sing a little bit and play a little bit before the show.

DARRIN T. MISH:  You know what I like about country music is I guess there are some songs with some unwholesome sort of you know topics just like every other kind of music but for the most part it’s really just, there’s a little story and it’s usually pretty wholesome.

KATRINA MADEWELL:  Yes, or there’s a tear in the beer and the dog died and the wife left.

DARRIN T. MISH:  Yeah and that’s ok.

KATRINA MADEWELL:  It’s always one of those.

PAT GEORGE:  Well the GM came in earlier and said who rode the horse here and I just pointed Darrin’s still on the air. I’ll…

KATRINA MADEWELL:  That was a long ride over that bridge.  Alright so we left off well let’s recap our topics real quick, the topic for today’s show is what not to say if you have an IRS person come into your office or your home or just approach you.

DARRIN T. MISH:   Yeah what not to say to the IRS.  And the first 3 real quick, we’ll recaPat George:  Never threaten bankruptcy, Never lie to the IRS, Never give the IRS more information that you have to and number 4 is, never admit to intentionally doing anything wrong.  Now again this kind of should go without saying right, you should never say oh by the way you now I really, I lied on that tax return from 4 years ago or whatever but people do.

KATRINA MADEWELL:  I fudged my expenses.

DARRIN T. MISH:  People do it and it just makes you like scratch your head like, what did you think you were accomplishing by doing that?

KATRINA MADEWELL:  I didn’t mean to not show that income as an example from earlier.

DARRIN T. MISH:  Yeah, yeah, yeah from the lady that called a few months ago that, and I hope she is listening it was a great call.

KATRINA MADEWELL:  I thought it was like show and tell you know if I didn’t show it.

DARRIN T. MISH:  She called in and basically said you know I got all this rental income, I’ve been off the radar for 20 years from the IRS, I’ve got some rentals…

KATRINA MADEWELL:  I’m running.

DARRIN T. MISH:  She said she was running, she says I’ve got some rentals but I don’t show that income and we went round and round for about 5 minutes about well…

KATRINA MADEWELL:  You show…

DARRIN T. MISH:  You have to show the income, you have to put that income on a tax return if you don’t you are committing a crime you could go to prison, but bless her heart she, I think she hung up, she is like well I am not going to do that.

KATRINA MADEWELL:  Maybe she is still listening.  Anyway.  So, we will answer some questions that we got from listeners and then we will jump into our train wreck of the week as we do every week towards the end of the show and the first question we have is from Lance he wants to know if the tax rate gets lowered will that effect his arrearage?

DARRIN T. MISH:  This is really an interesting question Lance I think what you are asking is so if the tax rates, let’s say the tax rate that you are paying right now is 25% and then any President comes in and he lowers it to 15% is that going to lower the old bill?  Answer negative no it’s not it’s not going to have anything to do with it because you were taxed at that rate in that year, you know at that time, and there’s lots and lots of instances in the law where the date of the incident or the date of the act is controlling it’s what the law was at that time, there’s very, very few laws that we have in this country that are retroactive.

PAT GEORGE:  You are very optimistic about a new president coming in and lowering our taxes.

DARRIN T. MISH:  I think you are right, I don’t really think that’s going to happen but…

KATRINA MADEWELL:  Sounds good in theory.

DARRIN T. MISH:  But it was just a good analogy you know.

PAT GEORGE:  It made me feel good for it. I will admit there.

KATRINA MADEWELL:  I’m wondering too if maybe Lance’s question is pertaining maybe to his tax bracket change that could be too.

DARRIN T. MISH:  Maybe, maybe well certainly if there’s a tax rate change and your bracket could change for sure.

KATRINA MADEWELL:  But it still would apply like if you owed taxes at the time this tax bracket when the tax debt is incurred right?

DARRIN T. MISH:  Yeah but the operative fact is the income in the year in question what the law was during that year in question, I really have a hard time imagining even in my fantasy world that Congress would pass a retroactive tax law that says oh yeah if you owe tax  for 3 years ago we lowered the tax rate I don’t see that happening.

KATRINA MADEWELL:  But it’s a good, but they would get a new system and clean up all the crap I guess that would be a good way to do it. They could just flush out the system and you know, but you know the Government is not that efficient so it’s probably not going to happen.  Kurt also has a question I already know the answer to your question but Darrin’s going to answer it he wants to know can you help people with tax problems if you live outside of the US?

DARRIN T. MISH:  Absolutely there are Americans that live all over the world they are called Expatriates and America is only one of 2 countries in the world where we are taxed on our worldwide income so that means if you are living on a beach in Thailand and you are earning you know $3.00 a day technically you have got to file a tax return and you have got to report that income now there is a foreign income exclusion I think it’s around a $105,000 per year now which means if you are living overseas you don’t have to pay taxes on that first $105,000 I’m not sure on the number but it’s something like that…

KATRINA MADEWELL:  That’s pretty decent.

DARRIN T. MISH:  And but what happens a lot is I get a lot  of calls, I’ve represented clients on every continent except for Antarctica, I’m working on Antarctica so if you are in Antarctica and you have a wage levy call me I might hook you up for free just so I can say every continent on the planet but anyway they call because they haven’t filed a tax return, they have been living over in Thailand or Germany or whatever for 9 years and they’ve never filed a tax return and it’s just come to their attention that  they are supposed to we can help you with that problem if that’s a problem that you have.  Well, it’s about that time, the time for the IRS train wreck of the week, this is the segment of the show where we talk about someone who came into the office and  frankly their situation was a train wreck, it was a mess and usually they leave with a happy ending.  So today was a case where, it was a really nice couple, they are a little bit older and there approaching their retirement years or they should be in their retirement already but they are still working and they hadn’t filed for many, many years and here’s what happened, the IRS as you know, Katrina, if you don’t prepare a tax return the IRS will quite frequently prepare it for you….

KATRINA MADEWELL:  They will do it for you isn’t that nice of them?

DARRIN T. MISH:  It’s called a substitute for return or an SFR and this couple had had a lot of stock trading, they had a lot of you know…

KATRINA MADEWELL:  Day traders?

DARRIN T. MISH:  They weren’t day traders but they still had a lot,  they had a big trading account and so the IRS had prepared a tax return for them and when they prepared that return for them and this is fairly common, it reflected that they owed quite a bit of money, the balance on that was $130,970.41 to be exact, ok, so it was a 131 grand…

KATRINA MADEWELL:  They want all 41 cents too.

DARRIN T. MISH:  And they came into my office and they are like Darrin that’s ridiculous I mean all those sales where not profit, they said, they must not have calculated basis and that’s true the IRS did not calculate the basis.

KATRINA MADEWELL:  But they just didn’t file?

DARRIN T. MISH:  They didn’t file and it took these, this couple quite a long time I think it took them about 18 months to fully cooperate with us and get that tax return filed it was for tax year 2006, I’ve got great news we’ve filed that tax return, the IRS accepted it and the amount due right now is $1041.71. So it went from 131 thousand to one thousand so, you know that’s just the, the power of knowing how the system works.

KATRINA MADEWELL:  Sweet.

DARRIN T. MISH:  Right I mean they have that right absolutely to file that original return, IRS accepted it, it was an accurate return but the return that the IRS had prepared that SFR was an inaccurate return by definition and everybody in the system knows it and I just really like happy endings like this I mean this couple was really, really stressed and it was causing a lot of trouble in their marriage and I can’t imagie they are upset with this outcome.

KATRINA MADEWELL:  Oh no are you kidding?  I think you know a bonus would be intact it would be like Darrin, Darrin I want to take you and Heather to (inaudible).

DARRIN T. MISH:  One never knows.  I was waiting for old McDonald.

KATRINA MADEWELL:  He’s a little slow.  I told him to play Kenny Chesney.  Thinks my tractors are sexy. I will be right on time for you and Heather.

DARRIN T. MISH:  So next week on the IRS Solution Attorney show we will try to update you on how many more of those 32 eggs actually hatched.

KATRINA MADEWELL: And we might actually get to some of those stories about the 20 million Americans getting the Obamacare letter.

DARRIN T. MISH:  So make sure to tune in next week Thursday morning 9 am on 1010 am.

KATRINA MADEWELL:  888-get-mish we’re out.

 

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