What Are Your Rights As A Taxpayer

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KATRINA MADEWELL:  Well, good morning and welcome. You are listening to the IRS Solution Attorney show.

DARRIN T. MISH:  With your host, THE IRS Solution Attorney, Darrin T. Mish.

KATRINA MADEWELL:  I’m your co-host Katrina Madewell, thank you for joining us today. I am kind of excited about this show because we’ve been talking about this for a long while. Now we are finally doing the show.

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DARRIN T. MISH:  The last few weeks we’ve been talking about kind of softer stuff. Not quite as useful if you have a tax problem but today we are going to talk about What Are Your Rights as a Taxpayer.

KATRINA MADEWELL: And we’ve been talking about that for a long time because here and there we will mention the taxpayer advocate service, right?

DARRIN T. MISH:  A lot of people think, what are my rights as a taxpayer? I have no rights; the IRS is going to come down and hammer me if they say I’ve done something wrong and you don’t have any rights and it just is the way it is. Today’s show is all about how that is not actually true and you have certain rights that they go through at length. We are going to have some comments on what they are and what that means.

KATRINA MADEWELL:  So, let’s start with the first one, which is the right to be informed.

DARRIN T. MISH:  So, taxpayers have the right to know what they need to do to comply with the tax laws. They are entitled to clear explanations of the laws and IRS procedures and all tax forms, instructions, publications, notices and correspondence. They have the right to be informed of IRS decisions about their tax accounts and to receive clear explanations of the outcomes.

KATRINA MADEWELL:  Which that could be tricky just in itself.

DARRIN T. MISH:  This is kind of funny, you have the right to be informed. I guess the way the IRS is interpreting that at this point of time is your right to be informed is being covered by getting notices. This is how much you owe. I think they violate this right quite a bit and I’m not sure systemically how to fix it because…

KATRINA MADEWELL:  They’ve informed you.

DARRIN T. MISH:  The IRS notices are so hard to understand if you are a lay person. They have been since I’ve been doing this work for getting close to 20 years now and that…

KATRINA MADEWELL:  They don’t even name the notices like CP1000.

DARRIN T. MISH:  Well, they name them like that but you wouldn’t believe how many notices we get where there is just a balance due and it doesn’t even reference a tax period. It’s just like you owe us $5,211.92 and then you flip it over to see ok for what tax year and it’s like gone…

KATRINA MADEWELL:  You can’t even tell.

DARRIN T. MISH:  Or sometimes we get notices where it will say this is for tax year 2011 and there will be an asterisk, not an amount due but an asterisk.

KATRINA MADEWELL:  What does that mean?   You don’t know either that’s lovely.

DARRIN T. MISH:  What I think it means is there is a tax balance due that was not calculable at time that the notice was generated. So, you are supposed to call to find out how much you owe.

KATRINA MADEWELL:  They should at least put a TBD don’t you think like something.

DARRIN T. MISH:  What’s happening is as the IRS tries to become more automated. They are falling short and that’s because Congress honestly won’t fund them accurately.

KATRINA MADEWELL:  Means you also have the right to be informed about your decisions right you see this one a lot. Do they send it to you as their attorney or only the…?

DARRIN T. MISH:  Yeah, they ask me every single time I get on the phone with a new IRS employee about a new matter. They ask me if my client has received a publication 1. Which kind of one of the things that we are doing right here today is we are going over publication 1 and talking about what are your rights are as a taxpayer. You can even hear in the language that we are using that it’s not terribly easy to understand.

KATRINA MADEWELL:  And the next one is almost laughable cause they say the right to quality service. What does that mean?

DARRIN T. MISH:  You have the right to quality service as a taxpayer. So, taxpayers have the right to receive prompt, courteous, professional assistance in their dealings with the IRS. To be spoken to in a way that can be easily understood. To receive clear and easily understandable communications from the IRS and to speak to a supervisor about inadequate service.

KATRINA MADEWELL:  Well, they should be able to revamp that whole thing.

DARRIN T. MISH:  So, I often make jokes about they shouldn’t call it the Internal Revenue Service because there is not a whole lot of service going on. There are taxpayer assistance centers across the country that are called that. IRS offices are called taxpayer assistance centers. There’s one in Tampa, there’s one in St. Petersburg that we are sitting close to here at the studio.

KATRINA MADEWELL:  Stone throw away.

DARRIN T. MISH:  There is one in Lakeland and they are all over the place. Several years ago, Props 10 now, the IRS put out a memorandum. It was around this time of the year and I’ll never forget this memo because it said in the interest of providing better customer service taxpayers will no longer be able to walk into taxpayer assistance centers and receive service. Taxpayers will now be required to call the toll-free numbers to receive service.

KATRINA MADEWELL:  How is that in the interest of better customer service?

DARRIN T. MISH:  Well, it’s like Alice in Wonderland that’s what I always say about the IRS. It’s a bizarre world here is you are going to call these toll-free numbers with 2-3 hour waits to receive better customer service. Right now, if you call those toll-free numbers at certain times of the year. If you got on the phone at 9 am you could be on the phone literally all day and hung up on before 5 at the end of the day.

KATRINA MADEWELL:  At the end of the day.

DARRIN T. MISH:  That could happen.

KATRINA MADEWELL:  And you know this because you probably experienced it.

DARRIN T. MISH:  We have a little different system in the office now than we had for years. For years, I would sit on hold doing other work just waiting for them to come on the line and then they would hang up on you without ever getting to talk to somebody.

KATRINA MADEWELL:  Why because it’s 5 o’clock?

DARRIN T. MISH:  Or because it just times out. There is a pre-determined. Nobody can wait longer than 3 hours because it screws up our stats or something. So, it literally says, there’s some recording that says something like sorry the wait time has been so long we can’t help you click.

KATRINA MADEWELL:  If you would like to make a call…

DARRIN T. MISH:  And so you can imagine that if you were a taxpayer and you owed the IRS money-this is probably a once in a lifetime thing-now some people owe taxes for 10 or 20 years and it might go on for a long time. But this is my job and I don’t have one taxpayer I’ve got a lot of taxpayers. So, it makes my blood pressure go up if I must wait on hold with the IRS. So, we have other staff that helps me they wait on hold and then they connect me when the phone goes through. We do a lot of things not by phone especially at the first level if we can help it because…

KATRINA MADEWELL:  Have they progressed to email yet or no it’s all in writing?

DARRIN T. MISH:  The IRS has internal email but…

KATRINA MADEWELL:  But I mean you can’t email them…

DARRIN T. MISH:  But you cannot email them but get this-this is great…

KATRINA MADEWELL:  Can you imagine what a debacle that would be…

DARRIN T. MISH:  Listen to this-this is great. They do fax because they consider fax to be more secure than email. I sort of get it I guess, but they use e-fax which goes over the internet.

KATRINA MADEWELL:  Same thing.

DARRIN T. MISH:  And I found out yesterday talking to a revenue officer on the phone that they use voice over IP which also goes over the internet. It’s sort of interesting they are all worried about security. I think they should be but they are using the internet that I think is, I don’t know I’m speculating, hackable especially the phone calls.

KATRINA MADEWELL:  Oh, I’m sure all of it. I just think it’s interesting that there’s no paper trail on their end. They don’t have, there’s no accountability for email anyway.

DARRIN T. MISH:  So, the next right that you have as a taxpayer is also sort of interesting. The right to pay no more than the correct amount of tax. I think we could all agree that that’s a great aspiration.

KATRINA MADEWELL:  What do they consider the correct amount of tax?

DARRIN T. MISH:  Well here’s what the explanation says it says taxpayers have the right to pay only the amount of tax legally due including interest and penalties, I hate that part.

KATRINA MADEWELL:  Oh including interest and penalties…

DARRIN T. MISH:  And have the IRS apply all tax payments properly.

KATRINA MADEWELL:  Couldn’t you just strike through that interest and penalty part…

DARRIN T. MISH:  So let me tell you, let me tell you a little then yet about a personal problem that I had with the IRS in the last few months. I have a pretty much defunct corporation and it had to pay a penalty for late filing of a return or something. It was around $200 and I make the payment out for $200 and for some reason I write the EIN on the check but I don’t put the coupon with it. I don’t know, I was probably mad when I was writing the check so I put it in the envelope and I mailed it to the IRS.Well it doesn’t get applied to my account, it just disappears. Now it’s only $200 so it’s not like the end of the world but to

Well, it doesn’t get applied to my account, it just disappears. Now it’s only $200 so it’s not like the end of the world but to me, it was the principle of the things. Like, I’ll be damned if I’m going to pay another $200, you all need to find this money and put it on my account. So, what they do in these situations is they say give us a copy of the back of the check and that will have all our internal coding on it. Then we will be able to figure out where we misapplied the money. So, I gave them a copy of the back of the check and then here is what I get, we can’t read the numbers on the back of the check, and again you are making a face like yeah so….

KATRINA MADEWELL:  You want me to fix that how…

DARRIN T. MISH:  So I had to go to great lengths to blow the back of the check up and clean up all the noise and stuff so they could read the numbers. So, they could properly apply my tax payment. I think they were violating my right to pay more. No more than the correct amount of tax because they wanted the $200 twice. You wouldn’t believe how much trouble I had to go through to get that properly applied, I had to involve the taxpayer advocate who spent I don’t know how many hours on this. They had to track it down and take it from the wrong taxpayer and put it on my account all over $200. Come to think of it I filed a collection due process hearing on that case, I filed an appeal on that case over the $200 because I was so mad.

KATRINA MADEWELL:  I can only imagine how much that person got paid per hour and how long it took them to track that down all over $200.

DARRIN T. MISH:  I guarantee it cost the government more than $200 to conduct that hearing. Ultimately the settlement officer told me to get lost. It wasn’t his job but here we, and I hadn’t read this in a while, but right there it is in black and white right number 3, the right to pay no more than the correct amount of tax, I should have said that. That’s what I’m going to say in the next hearing.

KATRINA MADEWELL:  He’s going to bring in that snippet of a tax code and go this is what it is.

DARRIN T. MISH:  Well it’s not really a tax code it’s their Internal Publication but none the less.

KATRINA MADEWELL:  Yeah, their book.

DARRIN T. MISH:  So number 4 is the right to challenge the IRS’s position and be heard.

KATRINA MADEWELL:  And that’s exactly where you come in. But we are going to have to wait to talk about the IRS’s the right to challenge them and have that position be heard and that’s how Darrin can help you. You can get him at 888-get-mish.

DARRIN T. MISH:  Or at getirshelp.com it’s 888-get-mish which is 888-438-6474.

KATRINA MADEWELL:  Alright stick around when we come back we are going to talk about the right to challenge the IRS we will be back in a minute.

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KATRINA MADEWELL:  Welcome back you are listening to the IRS Solution Attorney show.

DARRIN T. MISH:  With THE IRS Solution Attorney Darrin T. Mish.

KATRINA MADEWELL:  I’m your co-host Katrina Madewell and I cut you off right at the right time that was pretty. I know you were ready to dive into that and I’m like whoa hold the phone.

DARRIN T. MISH:  Today we are talking about your rights as a taxpayer. You have the right to be informed by the IRS so you have the right to understand their notices and stuff, I think that that is routinely violated. Number 2 you have the right to quality service, well that is without a doubt routinely violated but you do have that right to quality service.

KATRINA MADEWELL:  They don’t have souls.

DARRIN T. MISH:  You know here’s what’s interesting about that it says the right to quality service it doesn’t say high quality service it says quality service. So, it could be poor quality service…

KATRINA MADEWELL:  Depends on what your standards of quality are.

DARRIN T. MISH:  Exactly. You have the right to pay no more than the correct amount of tax. I told a little story about how my $200 that I sent into the IRS got lost for about 6 months and I made them spend about $500 or a thousand dollars finding my $200. That brings us to number 4 where we have the right to challenge the IRS’s position and be heard. So, here’s what the publication says. It says the taxpayers have the right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions to expect that the IRS will consider their timely objections and documentations promptly and fairly and to receive a response if the IRS does not agree with their position.

KATRINA MADEWELL:  Alright so in lay terms the right to challenge the IRS’s position and be heard how so since you can’t go into the IRS office anymore.

DARRIN T. MISH:  There is a provision to the US Constitution, it’s in the Constitution in a couple of places called due process. So as US citizens and residents we have the right to due process when we have disputes. Due process means you have the right to be heard you have the right to object so the Government essentially cannot just unilaterally say in this case you owe us 5 grand and you can’t argue about it, you just must give us the money…

KATRINA MADEWELL:  Pay up.

DARRIN T. MISH:  So there’s mechanisms within the law and within the code to challenge those positions. I will give you some examples would be to file appeals. If you are going to undergo an audit and you can’t come to an agreement with the auditor, you have the right to file a protest and you have the right to have an appeal. If that doesn’t work you have the right to go to tax court where you have a court that will listen to you on what your grievances are and the court will decide if you owe the money or not.

KATRINA MADEWELL:  When would somebody go that far they decide to appeal it and then actually take it to court?  Like what’s an example for someone to take it that far?

DARRIN T. MISH:  If you had big money let’s say, let’s say you are a real estate agent and you’ve got…

KATRINA MADEWELL:  Of course, you are a real estate agent.

DARRIN T. MISH:  Because real estate agents are so good at filing and paying their taxes on time and they are good record keepers too.

KATRINA MADEWELL:  Well, you know.

DARRIN T. MISH:  So let’s just say you are a real estate agent and you’ve got a hundred grand in mileage deduction, I think like you, yours is probably pretty high.

KATRINA MADEWELL:  Oh it’s ridiculous.

DARRIN T. MISH:  You don’t have to give me a number but I’m, you drive a lot…KATRINA MADEWELL:  3000 miles a month.

DARRIN T. MISH:  Which is why you drive that silly little car.

KATRINA MADEWELL:  Yep.

DARRIN T. MISH:  Let’s say you had a $100,000 in mileage deductions and you get audited and the auditor says, give me your mileage log to prove what you claimed on your return. And you are like what mileage log?

KATRINA MADEWELL:  Yeah, they are not going to like that very much.

DARRIN T. MISH:  So, the auditor’s going to try and disallow all your mileage, you are going to say no. I mean, you know my mileage log fell out of the car one day and I lost it.

KATRINA MADEWELL:  I had the top down on my convertible and it flew out.

DARRIN T. MISH:  There is a case called Cohan where if you are in an industry that by definition is going to have that type of deduction you are allowed to estimate what that is and you are supposed to be given the deduction. Now, mileage is a little bit of an exception but let’s ignore that for a second. Obviously, a real estate agent that is showing properties is going to have mileage, right?

So, if the auditor tried to disallow it all then you would want to dispute that. Then, let’s say you lost on the audit appeal because appeals didn’t like your answer. But before the IRS can assess that tax against you, you have to agree to it. Which is what happens when you sign the tax return, you are agreeing to the assessment of the tax on the return.You either have to agree to it or you have to be given something called Notice of Deficiency which is a new notice. Hey, you owe us this money unless you file a tax court case and if you don’t file a tax court case then you owe the money. You sort of lost your opportunity to complain. You will still have more opportunities, but you lost the tax court opportunity.

You either have to agree to it or you have to be given something called Notice of Deficiency which is a new notice. Hey, you owe us this money unless you file a tax court case and if you don’t file a tax court case then you owe the money. You sort of lost your opportunity to complain. You will still have more opportunities, but you lost the tax court opportunity.

If you filed a tax court petition, eventually in a year or two you would end up in front of a tax court judge who would listen to all the facts and circumstances related to that tax year and what kind of business you were doing. You could call witnesses and you can introduce other evidence to show, no I showed…

KATRINA MADEWELL:  I was with Mr. and Mrs. Jones.

DARRIN T. MISH:  I showed 57 houses a month…

KATRINA MADEWELL:  We wrote 9 contracts.

DARRIN T. MISH:  I know you guys work hard because I looked at a lot of houses in the short time. I was looking at houses and somebody paid a whole lot of gas for that deal. Anyway, that would be an example of how you it might make sense to go to tax court. Because you have these big deductions that aren’t being allowed at all so there is a lot of money at stake.

KATRINA MADEWELL:  Yeah, that would make sense. So, what about the right to appeal an IRS decision as an independent forum? We’ve talked about this.

DARRIN T. MISH:  So, it says the right to appeal an IRS decision in an independent forum. Taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions, including many penalties, and have the right to receive a written response regarding the office of appeals’ decision. Taxpayers generally have the right to take their tax cases to court. Here is what it means is, this is true that you could pretty much appeal most things that the IRS does, there are some exceptions. It used to be better, they’ve kind of cut down but you used to be able to appeal everything they did, which is cool because…

KATRINA MADEWELL:  Well, wait, you just said I had a right to appeal and now you are telling me I don’t?

DARRIN T. MISH:  You only have the right to appeal most decisions that they make, not every decision they make. About…

KATRINA MADEWELL:  Aren’t they kind of breaking their own rules?

DARRIN T. MISH:  Several years ago, you could appeal everything they did and now they have limited it somewhat. The most popular appeals would be, if you get a final notice of intent to levy where they are talking about seizing your property or your paycheck or your bank account, you can appeal that before it happens. If you get a Federal tax lien filed against you, you can appeal that. Now that is weird because a Federal tax lien…

KATRINA MADEWELL:  You mean you don’t owe it or what?

DARRIN T. MISH:  The Federal tax lien gets filed so the damage is done and then you get to appeal it. I don’t really agree with that but that is how it works. If you have a levy you can appeal that if you have an installment agreement that’s, you propose an installment agreement and that’s denied. You can appeal that. If you have an offer in compromise that’s rejected, you can appeal that. Most of these things, despite what this publication says, you don’t have the right to go to court. I mean some of them you do and some of them you don’t, but it’s so expensive to litigate these matters in a traditional court like a Federal court that…

KATRINA MADEWELL:  Oh. you cut off. I don’t know what happened there Darrin. You said most of the time…

DARRIN T. MISH:  Most of the time it’s so expensive to litigate these things in Federal court that it’s not really a right that you have. I mean if you have a dispute with the IRS over $2700 and…

KATRINA MADEWELL:  You are not going to spend 15…

DARRIN T. MISH:  You are not going to spend 50 grand to go to court to fight over it just because it would make an economic sense. But these appeals to just the IRS office of appeals are free and so that’s not a real expensive venue.

KATRINA MADEWELL:  So this is a term most people are probably not familiar with because I am not, even though we have done the show a lot. The right to finality.

DARRIN T. MISH:  So, you’ve never heard of finality. That sounds like a law school order for sure. The funny thing about law school is when you first start. I mean you’ve got a bachelor’s degree but the vocabulary is so vast that literally, this is kind of pre-internet so I’m dating myself, but I had a black’s law dictionary that I used to have to carry around in my back pack. It was at least 6 inches thick because there were so many new words that I have to look up. You can’t even just read this stuff, you must look, you are looking at the dictionary constantly.

KATRINA MADEWELL:  Just trying to read the paragraph.

DARRIN T. MISH:  New vocabulary. So, the right to finality means that the taxpayers have the right to know the maximum amount of time they must challenge the IRS’s position as well as the maximum amount of time the IRS must audit a particular tax year or collect the tax debt. Taxpayers have the right to know when the IRS has finished an audit so…

KATRINA MADEWELL:  So it’s all about time.

DARRIN T. MISH:  This really deals with audits mostly. Now the funny thing is this kind of goes back to the right to be informed. This stuff is supposed to be simple, but it’s not simple because in most cases you are going to need either an accountant or a lawyer to explain this stuff because I guess you could read the publications.
KATRINA MADEWELL:  I think it would probably knock most people out be like bedtime reading material for sure.

DARRIN T. MISH:  It’s full of complex language and that kind of thing and so most people are not going to understand what’s going on too much.

KATRINA MADEWELL:  So the next one that we see everywhere but is the right to privacy.

DARRIN T. MISH:  So taxpayers have the right to expect it. Any IRS inquiry examination or enforcement action will comply with the law and be no more intrusive then necessary. They will respect all due process rights including search and seizure protections and will provide where applicable a collection due process hearing. Alright so let’s unpack that…

KATRINA MADEWELL:  Yeah for sure.

DARRIN T. MISH:  Right to privacy. The IRS is not allowed to release your private information to anyone else. Your spouse if you file a joint return they can release that but that’s only because it’s the spouses tax information to alright there are some exceptions. If there is a revenue officer and he is trying to find you and he can go to your last known address and he can contact somebody who answers the door and say hey I am looking for Katrina Madewell you know, I’m from the IRS do you know where she is?  Now that doesn’t really disclose anything about your particular tax situation but it’s kind of a clue that you might have a problem.

KATRINA MADEWELL:  That doesn’t sound very private to me.

DARRIN T. MISH:  It might be a clue that you have a problem, but they are allowed to do that to facilitate their duties to track you down and find you. It also talks about due process rights like we talked about in the earlier segment of the show. But there’s all kinds of fundamental constitutional protections that they can’t violate.

KATRINA MADEWELL:  Gotcha. So, we’ve got a few more of these to go through let’s take another quick break here we are half way through the show. When we come back we are going to talk about the right to confidentially. Back in a minute.

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KATRINA MADEWELL:  Welcome back. You are listening to the IRS Solution Attorney show, thank you for sticking with us this morning and sticking with us through the break.

DARRIN T. MISH:  I am THE IRS Solution Attorney Darrin T. Mish.

KATRINA MADEWELL:  I’m your co-host Katrina Madewell. Today’s show we have been promising you for a long while, we are talking about what your rights are as a taxpayer.

DARRIN T. MISH:  So we talked about many of them so far but to recap, we will just go over them again. You have the right to be informed, you have the right to quality service, chuckle, chuckle, the right to pay no more than the correct amount of tax, the right to challenge the IRS’s position and be heard, the right to appeal an IRS decision in an independent forum, the right to finality and the right to privacy. We have covered all of those so far today in today’s show.

KATRINA MADEWELL:  Then confidentiality, you would think that would go hand in hand with privacy.

DARRIN T. MISH:  I was going to say the next one is the right to confidentiality. That’s really packed in there with privacy. I mean taxpayer’s have the right to expect that any information that they provide to the IRS will not be disclosed unless authorized by the taxpayer or by law.

Taxpayer’s have the right to expect appropriate action will be taken against employees and return preparers and others who wrongfully use or disclose taxpayer return information. So, this thing kind of has two things going on. It says the IRS is not going to give out your personal information to people who don’t deserve it.

KATRINA MADEWELL:  Yep they are going to take action against some employees.

DARRIN T. MISH:  Well we are also going to pop people who steal your identification, you know your identifying information and…

KATRINA MADEWELL:  Which that doesn’t happen that goes on the back burner.

DARRIN T. MISH:  It doesn’t happen. That’s kind of the criticism I’m about to levy here is that ID theft in the tax system is rampant and it’s particularly bad in the Tampa Bay area. All the IRS usually does is they do a pro forma investigation that usually takes a year or a year and a half where they just freeze the taxpayers account for that particular year and then they do nothing about tracking down the people who actually perpetrated the fraud I’ve heard stories in the Tampa Bay area of, we had these rings of people who used to be drug dealers, who realized that dealing drugs was dangerous and risky and stealing people’s Social Security numbers and filing false returns was easy, easy money.

I’ve heard stories in the Tampa Bay area of, we had these rings of people who used to be drug dealers, who realized that dealing drugs was dangerous and risky and stealing people’s Social Security numbers and filing false returns was easy, easy money.

KATRINA MADEWELL:  You would think if you took money from the Government especially via fake tax returns that they would be on it. I would think that’s like poking a bear with a stick or whacking a hornet’s nest.

DARRIN T. MISH:  I have a buddy who is a Tampa Police detective and he’s in auto theft. He told me this story, they got this guy Pooky, and Pooky is driving around in a chromed car. The whole car was chrome. This is expensive and it’s flashy. He’s in a low-income neighborhood and they think he is a drug dealer.They are trying to figure out where Pooky is getting his money and he is under surveillance. They can’t find Pooky doing anything wrong, he is not doing drugs, he’s not hanging out

They are trying to figure out where Pooky is getting his money and he is under surveillance. They can’t find Pooky doing anything wrong, he is not doing drugs, he’s not hanging out at the street corners and they can’t figure out what he is doing. He’s not engaged in any drug activity at all. So finally, they figure out he’s got a busted taillight or something and they pull him over, it was probably a pretext stop which means they probably should have stopped him, they pull him over and they find the car is full of IRS refund checks.So

So Pooky wasn’t dealing drugs, Pooky wasn’t stealing cars, Pooky was defrauding the IRS.  Now, this isn’t even the best part of the story, the TPD goes to the IRS and says hey we’ve got Pooky with a car full of fraudulent IRS refund checks, what are you going to do about it? The IRS says, oh well, that would violate his right to confidentiality and privacy so we are not going to do anything.

KATRINA MADEWELL:  What?

DARRIN T. MISH:  So they do nothing.

KATRINA MADEWELL:  Better than we see too. On my end and you will probably know more about some of these things but something will happen. Like the person lives here in Florida, but the crime will be committed somewhere else in another state. Then they are doing this thing where they are pointing the fingers at each other going, well, I’m not responsible, call New York police department or call California or call somewhere else.

DARRIN T. MISH:  I had a credit card ID theft problem where I probably talked about on the show before where somebody stole my identity and opened a charge card at a computer company. I’d never done business with the computer company. I get this statement for 7-8 grand and I called the computer company and said, hey man, I don’t know what this is. But I didn’t spend this money and they treat me like I am lying.

We boil it down to 7 or 8 computers were delivered to someplace in the Bronx. I have never been to the Bronx ever and so I spent an awful lot of my own time getting that unpacked. I don’t owe the money to the computer company and the charge card company but then I want something to be done so I called Tampa Police. They tell me maybe call the Sheriff’s office. So, I call the Sheriff’s office, they say well call New York, I call NYPD how do you think that went?

KATRINA MADEWELL:  Oh, yeah, can’t be worse than Tampa.

DARRIN T. MISH:  I called NYPD and they are like call the FBI, I call the FBI, FBI was cool as heck and he is like, yeah, but sorry this is going on all over the place. I call the Secret Service he’s just as cool as the FBI. Secret Service handles credit card fraud by the way, and they are all real nice to me but they all say look man…

KATRINA MADEWELL:  Low on the totem pole.

DARRIN T. MISH:  Ain’t nothing going to happen. So yeah, I mean talk about the jurisdictional runaround. I think I talked to 5 or 6 different law enforcement agencies and they all told me like whatever, the bank is the victim here not you.

KATRINA MADEWELL:  But then do you find too that nobody wants to take the police report.

DARRIN T. MISH:  I got somebody to take the police report, I think I got local law enforcement to take the report.

KATRINA MADEWELL:  But they don’t, they don’t want to do it they are like point you to New York and New York is like right.

DARRIN T. MISH:  Yeah, but they didn’t do anything about it and I didn’t have any loss because I didn’t have to pay for it. My loss was in the time I spent. It was a lot, it was probably 20 hours before it was all done.

KATRINA MADEWELL:  And this one shouldn’t be a surprise which you have the right to retain representation.

DARRIN T. MISH:  This is my favorite one on this list…

KATRINA MADEWELL:  I can’t imagine why.

DARRIN T. MISH:  The right to retain representation. Taxpayers have the right to retain an authorized representative of their choice to represent them in their dealings with the IRS. Taxpayers have the right to seek assistance from a low-income taxpayer clinic if they cannot afford representation. We are going to ignore that second part, probably doesn’t apply to most people. You have the right to retain an authorized representative of your choice. This is sort of true and untrue. You couldn’t represent me because you don’t have the right professional credential. Now I can represent you because I do have the appropriate credentials. So, it’s not like, what if I wanted you to represent me…

KATRINA MADEWELL:  Not authorized sorry.

DARRIN T. MISH:  No, well you are authorized by me.

KATRINA MADEWELL:  Not authorized by them.

DARRIN T. MISH:  You are not authorized by them. What this really means is you can hire or retain an attorney, licensed in any state. A CPA licensed in any state or an enrolled agent which is a Federally licensed tax accountant that’s licensed in all states by the Federal Government to represent taxpayers so those are the 3 types of representatives. Now sometimes husbands and wives can represent each other. Sometimes parents can represent their kids and things like that but the limitations are skinny but you do have the right to retain representation and that’s a Constitutional right. Also, the money that you spend on representation is an allowable expense.

KATRINA MADEWELL:  Got to love that one.

DARRIN T. MISH:  That part I really like too.

KATRINA MADEWELL:  I know it’s off topic so we won’t spend a lot of time here, but talking about an attorney to a CPA to an enrolled agent, what’s the pro’s, con’s, benefits in hiring one of those individually.

DARRIN T. MISH:  Ok, I’m going to commit some stereotypes here. CPA’s are going to try and solve every tax problem by doing the math better. CPA’s are accountants, they are very black and white people, they are going to try and sharpen the pencil and they are going to try and fix it with the math. This is not a knock on them and sometimes, some guys are good at fixing the math. A lawyer is not, unless you get, there are some combined CPA attorney’s but I’m not a CPA I’m just an attorney, I’m just an attorney.I was trained differently than a CPA. I have a CPA who works with me in my firm and if we must

I was trained differently than a CPA. I have a CPA who works with me in my firm and if we must track the numbers, that’s going to be his job. His part of my job. But I’m only going to try to attack the procedural aspects of the case. If you ask me what 2+2 is, I’m going, the CPA is going to say 4 and that’s going to be the end of the discussion, you ask me what 2+2 is I’m going to say, what do we need it to be?

KATRINA MADEWELL:  How did you get that.

DARRIN T. MISH:  It might be 3.8, it might be 4.2 I don’t know, it’s like where do we need to go. That’s going to be the biggest difference. Lawyers are taught advocacy in law school and then subsequently in practice. Our ethical duty is to be a zealous advocate. A CPA has not corresponding duty in my understanding.

KATRINA MADEWELL:  And so where does the enrolled agent play a part in that?

DARRIN T. MISH:  An enrolled agent is going to be more on the accountant side of this thing…

KATRINA MADEWELL:  Is it true that they are all ex-IRS employees?

DARRIN T. MISH:  I was going to say some enrolled agents get the credential because they have taken a test. And some enrolled agents get the credential because they’ve just spent X number of time working for the IRS.

KATRINA MADEWELL:  You think there is a benefit in that like they know the inside scoop. He is shaking his head no.

DARRIN T. MISH:  They might know the inside scoop but most retired IRS employees who become enrolled agents and represent taxpayers that I’ve met, what I have heard is they tend to be extremely conservative and extremely pro-government. Now does this surprise you?

KATRINA MADEWELL:  You get a retirement check from the government.

DARRIN T. MISH:  They are all on pension from the government. They worked at the IRS for 20 or 30 years beating up taxpayers and then, you think they are going to put on a new hat and suddenly beat up the IRS. It just ain’t going to happen. I’m sorry it’s just not going to happen. I do know some revenue officers here in the area who have retired and now they represent taxpayers and that’s pretty much accurate as far as my understanding. They are pretty much pro-government hacks and they don’t really have their fingers on the pulse on what kind of offers are going through for example because they don’t know.

KATRINA MADEWELL:  They are out of loop.

DARRIN T. MISH:  They weren’t exposed to that when they were working and because they weren’t handling offers back then.

KATRINA MADEWELL:  So the last one is the right to a fair and just tax system.

DARRIN T. MISH:  Ok, so this is violated every single day. Taxpayers have the right to expect the tax system to consider facts and circumstances that might affect their underlying tax liabilities. Their ability to pay or ability to provide information timely. Taxpayers have the right to receive assistance from the taxpayer advocate service if they are experiencing financial difficulty or if the IRS has not resolved their tax issues properly and timely through it’s normal channels.

KATRINA MADEWELL:  That’s debatable.

DARRIN T. MISH:  I think that with counsel the IRS system is somewhat fair and just somewhat. I see a lot of injustice. We talked about how I had the client that accepted offer in compromise and then hey paid within their time allotted. Then the IRS said they didn’t pay and I sent them a letter and I showed them exactly where they paid and how they paid and they paid on time.

Then they still terminated the installment agreement, or the offer in compromise, and made it all come due because they had done it. They internally screwed up. I don’t think that’s fair or just and so there’s an example right there, in that case, you need counsel to fix that.

KATRINA MADEWELL:  Right. So, Matt wants to know, what if you feel like your rights as a taxpayer has been violated? Well, some of these things that we have been chatting about.

DARRIN T. MISH:  Well, good luck with that Matt. If your rights as a taxpayer have been violated, probably 9 times out of 10 all you are going to be able to do is try and use the proper procedure to kind of steer the case back in the right direction. Now if you think your rights have really been violated like a revenue officer has threatened you with prison or something that is egregious or violates…

KATRINA MADEWELL:  Which they are not allowed to do…

DARRIN T. MISH:  They are not allowed to do then you could go to what’s called TIGTA. T-I-G-T-A it stands for taxpayer, treasury, I don’t know. Anyway, it’s basically internal affairs for the IRS. It’s TIGTA and you can make a formal complaint against an IRS employee. Call TIGTA and they are supposed to investigate it and prosecute if necessary.I like the TIGTA guys, they are studs and I’ve gone to lunch with them and stuff like that and they are good. They have a weird mission, they have a twofold mission, they are Internal Affairs for the IRS and they are also like the secret service for the IRS so they have like this love-hate tension with IRS employees.

I like the TIGTA guys, they are studs and I’ve gone to lunch with them and stuff like that and they are good. They have a weird mission, they have a twofold mission, they are Internal Affairs for the IRS and they are also like the secret service for the IRS so they have like this love-hate tension with IRS employees.

KATRINA MADEWELL:  I bet. Andy, to answer your question quick, yes, Darrin helps people in Georgia. We must take a break because we are at the end of our segment. You are listening to the IRS Solution Attorney we will have Darrin comment on that when we get back and talk about a couple of things we didn’t get to last week and the train wreck of the week. Back in a minute.

KATRINA MADEWELL:  Welcome back thanks for listening to the IRS Solution Attorney show we are glad to have you with us today.

DARRIN T. MISH:  Yes, we are as the IRS Solution Attorney I am pleased that you are listening.

KATRINA MADEWELL:  We hope you got some value out of today’s show we are talking about your rights as a taxpayer.

DARRIN T. MISH:  We went through a whole bunch of your right’s as a taxpayer and I don’t think we are going to recap them here.

KATRINA MADEWELL:  But you can get the whole thing in its entirety on a podcast.

DARRIN T. MISH:  You can. It’s been officially changed, the name of the podcast to The IRS Solution Attorney as our app has been changed to The IRS Solution Attorney as well.

KATRINA MADEWELL:  Look at that, we are consistent I love it.

DARRIN T. MISH:  You can follow us on Facebook at The IRS Solution Attorney or on Twitter @darrin_mish , you can visit my website at getirshelp.com as well. Our phone number there at the office is 888-get-mish that’s 888-438-6474. One of the things I think the overarching I mean we went over all the rights as a taxpayer, right?

KATRINA MADEWELL:  There was a lot of them.

DARRIN T. MISH:  One of the things that we learned or that I at least commented on was a lot of these things are sort of broken. It’s not exactly working out the way it’s supposed to but does that surprise us? I mean does Government do anything all that well? It’s not surprising that government’s not enforcing taxpayer rights all that well. The good news is that these were imposed after 1998. Before 1998 you didn’t even have these rights as a taxpayer and they pretty much did whatever they wanted.

KATRINA MADEWELL:  So people like you weren’t really employed in this field is that what you are saying back then?

DARRIN T. MISH:  Well there was just a lot less that we could do, you couldn’t really appeal and the revenue officers would just go and seize your stuff just to punish you…

KATRINA MADEWELL:  Just because.

DARRIN T. MISH:  So there was a big reform in 1998 and there were hearings before Congress. They tried to get the IRS under wraps a little bit.

KATRINA MADEWELL:  So I know we are hopping around and we ran out of time on last week’s show but we did have a couple of questions to answer. Do you want to tag or say anything else on Andy’s? He wanted to know if you’re licensed to help clients in Georgia?

DARRIN T. MISH:  I get this question an awful lot. I really like the question, here is why. I alluded to the third segment of the show an attorney licensed in any state can represent taxpayers in any state so I have clients from all 50 state. I’ve represented clients from, US taxpayers from all around the world.

KATRINA MADEWELL:  Except for Antarctica. Am I right?

DARRIN T. MISH:  Except for Antarctica. Right now, I can think of clients that I have in California, Washington state, to many in Texas to list, just all over the place.

KATRINA MADEWELL:  So we had a couple of questions from last week we didn’t get to. John wanted to know if income tax was the determined unconstitutional. Is there any chance of that happening again?  Remember we talked about that last week?

DARRIN T. MISH:  Yeah, I think his question is, is there any chance that income tax could be determined unconstitutional. I think that it’s very unlikely that it would be considered unconstitutional. The system is so big now. There are so many people who get paid from the US Treasury. How in the world would they pay all those people if they determined that the Federal Income tax was unconstitutional?  I think there is some decent arguments that I won’t go into that it is unconstitutional. I think now we have this bloated, this huge government that if you were to say that it’s unconstitutional, we are no longer going to collect income tax I don’t know how you feed that beast.

KATRINA MADEWELL:  Well, Kathy’s question is pretty spot on too but she wanted to know, does she have to pay her family’s Obama care tax now that Trump is in office?

DARRIN T. MISH:  Well, Trump hasn’t…

KATRINA MADEWELL:  At this very moment in time…

DARRIN T. MISH:  Once Trump takes office that’s ok, Obama care is not going to be overturned immediately. Now, what’s likely to happen if Obama care is overturned? Is there is going to be some provision for either the forgiveness if the penalties that have been opposed in the past or not who knows?

KATRINA MADEWELL:  Remains to be seen at this point. That is an interesting question, Kathy, but I think it’s one we can’t answer, yet right?

DARRIN T. MISH:  We don’t know and most people’s ACA penalties are not that significant but if yours is I mean I guess you are going to have to wait and see.

KATRINA MADEWELL:  Should we talk about the IRS announcing the 2017 mileage rates?

DARRIN T. MISH:  Well just generally speaking they’ve announced the new mileage rates and it looks like they are going down which is kind of bizarre.

KATRINA MADEWELL:  So they are going to pay less?

DARRIN T. MISH:  Yes, they are going to pay less, gas prices are less and have been less for a while now.

KATRINA MADEWELL:  I like that one.

DARRIN T. MISH:  It’s not great but it is kind of fair I mean gas prices are $2.25-$2.50 something like that and in the years past they have been as high as 4 bucks.

KATRINA MADEWELL:  Yes ridiculous that’s when the whole Prius came about.

DARRIN T. MISH:  Higher if you live out in California or….

KATRINA MADEWELL:  It’s about that time.

DARRIN T. MISH:  It’s about that time. It’s time for the IRS train wreck of the week. This is the segment of the show when we talk about somebody who came in and they were frankly just kind of a train wreck. They had a big IRS problem ultimately, we had to bring them in the fold and put our protective arms around them, figure out what the answer was…

KATRINA MADEWELL:  Give them a hug and a kiss.

DARRIN T. MISH:  What their solution was to their mess they created. Believe it or not, I am a big proponent of personal responsibility. Even though I can be an enabler in a way because I help to alleviate them of their personal responsibility. The best clients are the people who kind of come in and they go yeah, I really screwed this up. This is all my fault, I did these things wrong and I want to do what I can that’s right to remedy this situation now. In this case, it’s an elderly dentist. I believe he is in his 80’s now.

I represented him and his wife off and on for 10 or more years. They were retired and they didn’t have a lot of money. They had a lot of tax debt at the time. You could just see the writing on the wall. They had properties up in Michigan. He had his little dental practice building up in Michigan. He had a big house up in Michigan and they were living down here in Florida. They just couldn’t support the lifestyle that they had when he was practicing. Which I think makes perfect sense. So, for 10+ years I was giving them advice, here’s what you need to do you should solve this.

The best clients are the people who kind of come in and they go yeah, I really screwed this up. This is all my fault, I did these things wrong and I want to do what I can that’s right to remedy this situation now. In this case, it’s an elderly dentist. I believe he is in his 80’s now. I represented him and his wife off and on for 10 or more years. They were retired and they didn’t have a lot of money.

They had a lot of tax debt at the time. You could just see the writing on the wall. They had properties up in Michigan. He had his little dental practice building up in Michigan. He had a big house up in Michigan and they were living down here in Florida. They just couldn’t support the lifestyle that they had when he was practicing. Which I think makes perfect sense. So, for 10+ years I was giving them advice, here’s what you need to do you should solve this.

KATRINA MADEWELL:  They weren’t listening?

DARRIN T. MISH:  They would pay me and they would never implement any of the advice. This went on and on and on and I almost got to the point where I almost dropped them because it was just…

KATRINA MADEWELL:  I can’t help you.

DARRIN T. MISH:  It just bothered me because you are just wasting your money with me and we are not solving this problem. It was tearing at me and ultimately Mrs. has since died which is sad cause she passed away and this was still a big mess.

KATRINA MADEWELL:  Is this when he finally decided to do something?

DARRIN T. MISH:  And finally he is well into his 80’s. He has to have a caretaker to bring him places and stuff and finally we decided to file an offer in compromise. Now we had already filed some bankruptcies and really whittled this thing down. He still owed $53,944 and he has no ability to earn. He’s got a small pension, he’s got some social security and he just really has no assets left.

KATRINA MADEWELL:  So let me ask a dumb question, why is he even dealing with that at this phase in his life?

DARRIN T. MISH:  Well there’s 2 answers. Number 1, because it was still bugging him and the IRS was still trying to collect and he had some nominal ability to pay it back according to them. The second real reason is because he didn’t deal with it back before when I was telling him how to do it before. He just wouldn’t do it, he just would not use any of my reasonable advice.

KATRINA MADEWELL:  So I take it they were pounding down on him and he said fine.

DARRIN T. MISH:  And this went on for 10, 12, 15 years. I have known this guy forever. We filed an offer in compromise. We offered $1479. When we did the math, that’s what it came out to be $1479 on $54,000 give or take.This was a rare case because when I filed the offer, waited about a year, the offer examiner called me up and said I’m going to recommend this to be accepted as filed. That is what happened so they settled for less than $1500 on 54 grand, the saddest part of the story is the Mrs. died while this was all pending and the great news is that finally after all these years it’s finally going to be put behind him.

This was a rare case because when I filed the offer, waited about a year, the offer examiner called me up and said I’m going to recommend this to be accepted as filed. That is what happened so they settled for less than $1500 on 54 grand, the saddest part of the story is the Mrs. died while this was all pending and the great news is that finally after all these years it’s finally going to be put behind him.

KATRINA MADEWELL:  I would have to get that monkey off my back a lot sooner than that. I’m just saying.

DARRIN T. MISH:  Yeah, he is kind of a slow learner, beautiful man love the guy kind of a slow learner.

KATRINA MADEWELL:  Well, thank you for joining us today. You are listening to the IRS Solution Attorney show. If you need Darrin’s help or you know someone that does you can get him at 888-get-mish.

DARRIN T. MISH:  888-438-6474.

KATRINA MADEWELL:  Again 888-get-mish thanks for joining us today we are glad to have you join in next week.

DARRIN T. MISH:  For today we are out.

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