KATRINA MADEWELL:\u00a0<\/strong>\u00a0That he is and I’m your co-host Katrina Madewell welcome to the show.<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0How are you doing today?<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0Doing great, doing great Darrin how are you?<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0I’m doing\u00a0wonderful.\u00a0 We have a pretty interesting topic today we are going to talk about the IRS Taxpayer Advocate Service what it is, what they can do for you and when you should use them.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0I like it I think it’s a great topic that many, many people can get value out of.<\/p>\n Click here to listen to other IRS Back Tax Help episodes.<\/a><\/p>\n <\/p>\n <\/p>\n Click here to watch or read more information on IRS Back Taxes.<\/a><\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0Absolutely.\u00a0 You know the taxpayer advocate service is actually an independent branch of the IRS, which sounds a little bit weird you know, Independent branch what does that really mean?\u00a0 Well it means they are part of the treasury department, they are part of the Internal Revenue Service but they are not governed by the IRS, in other words, their job is to act as a go-between, between the taxpayer and the IRS.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0So who are they regulated by?<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0Well they are part of the Internal Revenue Service I’m pretty sure their paychecks come from the Internal Revenue Service but I think it’s a little bit like when I was a public defender, you know I worked for the State of Florida as a public defender for a couple of years early on in my career and so one of my favorite, favorite things, least favorite things actually was when I was representing an inmate typically and the inmate would say well I don’t want you Mr. Public Defender because you get paid by the State of Florida, you and the judge and the state attorney are all on the same side and I don’t want anything to do with you.\u00a0 Quite frankly that didn’t upset me all that much because that just meant that I had one less case but I think that it’s a little bit like that in that the people who work at the taxpayer advocate service although technically work for the Internal Revenue Service, there’s what we call a Chinese wall.\u00a0 There’s a wall between the taxpayer, advocate and the service.\u00a0 So we will get into some examples later but when they handle taxpayer cases they actually have to call the IRS just like we do.\u00a0 Now they probably have a little bit better, faster you know phone number then we do.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0Hopefully they have the Bat Line.<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0Yeah hopefully they have a little bit faster…<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0The idea is though like the taxpayer should have rights and they are there to support them or help them right?\u00a0 Isn’t that the idea?<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0Absolutely you know and it\u2019s a good point…<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0I mean isn’t that the whole reason why they exist?<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0Exactly the office of the taxpayer advocate was actually formed after the taxpayer bill of rights to was passed by Congress in 1996 and so prior to 1996 the IRS, actually prior to 1998 actually the IRS had lots and lots of documented instances of just pure abuse. I mean just abuse at the hands of employees of the IRS and finally what happened is Congress just decided to put an end to it there\u00a0was\u00a0big hearings, they had experts come in, I know some of the experts who actually testified and they testified about these abuses that the revenue officers and different employees of the IRS were doing to taxpayers.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0It’s a little bit off topic but it’s a relevant question but I’m curious cause that is pretty recently like 1998 is not that long ago.<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0It depends on how old you are.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0Well yes here we go back to this conversation but you said they were put in place after 1998 I’m just curious what it took to actually get to that place that said\u00a0yep\u00a0there is definitely a problem we’re going to have to do this like I’m wondering there had to have been\u00a0like\u00a0a movement of some attorneys or some people who were really pushing.<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0Well I will give you an example of some of the abuses that were going on.\u00a0\u00a0Revenue\u00a0officer is an IRS employee who works in a field office and goes out to people’s houses and does like in person investigations, much more intense investigations then if you are dealing with the phone center so revenue officers used to really abuse people.\u00a0 I will give you some examples now after you know post 1998 a punitive seizure is illegal, a punitive seizure would be a seizure for example of somebody\u2019s vehicle and there really just seizing the vehicle to punish somebody for their alleged bad behavior you know their alleged behavior for not paying the taxes or not filing or what not and pre-1998 punitive seizures were very common…<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>So they would just go take whatever?<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0Revenue officers would just basically call the tow truck, they would go get into the tow truck, they would hook up all their vehicles and they would take them away and they would sell them for nothing and there was no net gain to the service, in fact in many cases it cost the service money to do this but they did that to punish people, you know punish taxpayers and to teach them a lesson.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0And the impact wasn’t that great I’m sure.<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0Well there was no financial impact.\u00a0 In some cases, I’m sure there was a negative financial impact to the government.\u00a0 Let me give you an example let’s say the car is worth $500, it cost you know $250 to pay the tow truck driver, then you sell it at auction and you get $100 or you get nothing.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0Yeah.<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0And then it costs some time for the revenue officer to be out there, let’s say it’s after hours.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0Which you are paying for.<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0Right so, so you know they would do punitive seizures and you know I’m happy to say they don’t do that anymore after 1998.\u00a0 So the passage of the law that created the taxpayer advocate in 1996 was one of the steps that Congress was trying to take to try to clean up this system.\u00a0 Prior to 1998 as well, there was no, there was basically very, very few safeguards and there was essentially a denial of due process.\u00a0 The IRS could just do things and seize things without any opportunity for\u00a0taxpayer\u00a0to dispute it, there was no redress.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0They realize this is not American, this is unconstitutional they are kind of playing God.<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0Yeah absolutely the IRS was just making lateral decisions.\u00a0 There is a great book about this that I’ve read where it was written by a revenue officer and all he did was tell stories of all the abuses that he did to taxpayers and you know he has complete immunity under the law, can’t sue him and good luck suing the IRS so post 1998 I’m happy to say these things are much less common.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0Yeah so I mean I just thought they existed a lot longer than that so that’s what I’m is that\u2019s less than 20 years that’s not that long.<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0Absolutely, you know it’s relatively you know in the overall scheme of the history of the United States it’s relatively recent.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0So their primary role is really just to support the\u00a0tax payer\u00a0and make sure they get a fair shake in the due process in whatever the issue is.<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0Well let me explain a little bit better what the\u00a0tax payer\u00a0advocate does, what they do is they offer free help to guide you through the confusing process of resolving some tax problems that you haven’t been able to solve on your own so they are not really there to give you due process that just came up in our conversation, they are really there, the way I typically explain what the taxpayer advocate does is they are there to resolve bureaucratic snarls, that’s what they are the best at.\u00a0 Let me give you an example I have a…<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0Love your choice of words, bureaucratic snarls I love it.<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0You know what I mean like when you are trying to get something done with the IRS and all you do is maybe you called 3 times you got 3 separate answers, nobody will help you.\u00a0 When you call the IRS you can’t typically speak to the same person, you get a new person, a new ID number and you are going to get varying answers because there’s really no way to ensure that quality control and so when you work with a\u00a0tax payer\u00a0advocate at least you have one contact person and then they will reach out to the nearest call center that appropriate.\u00a0 I will give you an example of something that they do really pretty well, if you have a missing payment, I have one of these right now, I have a check that I wrote to the IRS\u00a0 for $200, not a lot of money, but 200 bucks and they cashed the check and it hasn’t shown up where it was supposed to go and so what you do is you take a photocopy of the front and back of the check, you get that from the bank and then you can send that to the taxpayer advocate and they can help you locate that check and determine where that money is supposed to go.\u00a0 Sometimes the money gets misdirected quite honestly and the office of the taxpayer advocate will be a very good way, that’s free to get that done.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0Are they allowed to just misdirect it and change it?<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0Absolutely not. They are not allowed to just misdirect it but you know in the IRS’s defense as big an undertaking as it is to collect all the tax revenue for the United States of America I mean there is going to be stuff that goes wrong, there is going to be things, innocent mistakes happen and you know the taxpayer advocate can help you with that kind of thing.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>So how does the average taxpayer advocate service like how can they help the person listening?<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0Well what I say is we direct a lot of people to the taxpayer advocate for very, very small problems.\u00a0 So we get calls on a regular basis somebody owes $1500 or they have a misdirected payment for example or they want to know where their tax refund is, you know those are the types of cases that we send to the taxpayer advocate, we think they are better at handling smaller…<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0The simple things.<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0The simple things, the way that I like to explain it is the way you get involved with the taxpayer advocate is you fill out a form 911 you can download that from the IRS site…<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0Really?<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0Yeah it’s a 911 like an emergency, you download that from the IRS website at irs.gov and you fill it out. It’s really pretty simple\u00a0form\u00a0the top third is biographical, who are you like you know where do you live and what\u2019s your social security number? The second portion is what\u2019s the problem ok and the third portion is what do you want us to do about it?\u00a0 So the way that I typically explain this is when you are going to use the taxpayer advocate you want to explain your problem and what you want them to do in very, very, very clear terms.\u00a0 Example I typically use is if a 10-year-old can understand what the problem is and what you\u00a0want done, then you are in really pretty good shape now if you try to do what a lot of people do is make things convoluted and confusing and you send that in I don’t think you have a chance because human beings gravitate towards you know simplicity not complexity and so if you make it simple you have a reasonably good chance if it’s complex then you are just not going to be able to get the help you need because the taxpayer advocate although there to help you I mean they are not licensed to, you know they are not licensed attorney’s, CPA agents they are not there to handle the complicated stuff they are there to handle the really straight forward stuff.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0And they are probably handling just some of the small\u00a0stuff\u00a0in general, we talked about the difference in some of the revenue officers and so forth.\u00a0 You are listening to the IRS Solution Attorney show we have to take a quick\u00a0break,\u00a0when we come back after the break we’re going to talk about some problems you would never take to the taxpayer advocate service.\u00a0 Back in a minute.<\/p>\n <\/p>\n (commercial break)<\/p>\n <\/p>\n DARRIN T.\u00a0MISH:\u00a0<\/strong>\u00a0Welcome back to the IRS Solution Attorney show I am your host THE IRS Solution Attorney Darrin Mish.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0And I am your\u00a0co-host\u00a0Katrina Madewell. Thanks for sticking with us through the break.<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0Today we are talking about the taxpayer advocate service and what they are and what they do and how does it work.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0And surprisingly enough in the first segment we just talked about that they were just created in 1998.<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a01996 but…<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a096.<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0Yeah they have only been around for about 20 years and I really do think that they do serve a crucial, critical role in dealing with primarily bureaucratic snarls when you have a problem with the IRS.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0We talked about how that can help you and in a few minutes we are going to go into what are some things that\u00a0is\u00a0not a good idea to help you with.\u00a0 Before we do that if you would like to catch the show in its entirety you can do that the whole thing will be available on a podcast.<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0It’s called the IRS Problem Solver it’s available on\u00a0ITunes\u00a0and\u00a0other podcast sort\u00a0of networks.\u00a0 You can also download or app on Android and the\u00a0ITunes\u00a0store and it’s also called The IRS Problem Solver.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0I loved how he looked at me when he said because he is an IPhone user and I’m an Android user so he looks at me like what do you use exactly for your podcasts by the way?<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0Exactly that’s why…<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0And actually there’s a bunch of other 3d party apps sites like Pocketcast, Podcast Kicker\u00a0like,\u00a0I like Pocketcast.\u00a0 Very simplistic, nice little flow, the app I think is a dollar or two.<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0I think we have somewhere around 50 episodes on the podcast so there is a lot of information and we try to do shows that are about different topics every week.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0And you have your app.<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0Yeah absolutely it’s called The IRS Problem Solver app.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0And if you have a question or you just want to be a great guest or you have something that we should cover on the show you can reach out to Darrin at 888-get-mish we would love to have your suggestions and your thoughts and your ideas.<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0That's 888-get-mish, 888-438-6474 or you can visit the website at getirshelp.com\/blog\/.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0So we are talking about the taxpayer advocate service what they do, how they can help but there are certain instances and certain problems that you would never take to them right Darrin?<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0Yeah there are some problems that you wouldn’t take to them and I would say the bigger more complicated problems well let me give you a fact pattern that I don’t think fits the taxpayer advocate and it’s kind of common.\u00a0 So let’s say you are a non-filer, you are self-employed and you haven’t filed tax returns in 10 years or whatever and you think you are going to owe you know 10-15,000 dollars a year and\u00a0 so by the time you file that last 6 years of returns which is going to be what’s required you are going to owe 60 to 100 to 150,000 dollars something like that and then ultimately you think the goal is to file an Offer in Compromise<\/a> so you could make a deal to settle for less and you ultimately get that all resolved for you know much less headache and much less money.\u00a0 That’s not a taxpayer advocate case I mean straight up there’s way too many moving parts, there’s way too much.<\/p>\n KATRINA MADEWELL:\u00a0<\/strong>\u00a0A lot of complexity to that sounds like.<\/p>\n DARRIN T. MISH:\u00a0<\/strong>\u00a0Yeah there’s way too much architecture that has to be sort of built out in order to get that result, that’s something that you would go and talk to a pro about is somebody to help you get that done.\u00a0 The office of the taxpayer advocate, I’ll tell you where we would use them in the context of an offer and a compromise, so when you file an Offer in Compromise<\/a> you list all the years that you owe taxes for on\u00a0the form\u00a0656 and then what’s supposed to happen is once that offer is determined to be what’s called processable which means like you filled it out correctly and they have everything that they need…<\/p>\n![\"\"](\"http:\/\/getirshelp.com\/wp-content\/uploads\/2015\/11\/podcast-300x300.jpg\")
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