DARRIN T. MISH: That would be me. I am THE IRS Solution Attorney Darrin T. Mish. I’m joined today by my lovely and talented co-host. Click here to watch or read more information on IRS Back Taxes.
KATRINA MADEWELL: That’s me, Katrina Madewell. Welcome to the show, we are glad to have you today. It’s a little different out of the norm we have a guest today.
DARRIN T. MISH: Oh, we sure do and I’m really excited about it. But don’t we have to talk about the weather, chickens or something before we go straight to…
KATRINA MADEWELL: No…
DARRIN T. MISH: No.
KATRINA MADEWELL: We have to talk about our guest. We are excited to have her.
PAT GOERGE: We have to talk about the World Series.
KATRINA MADEWELL: Really.
PAT GOERGE: Well, we should talk about that you know, some of us are very tired cause we stayed up to watch it.
KATRINA MADEWELL: Now that is Pat George back there always keeping it real. Ok, go ahead. I didn’t watch the game…you fell asleep…
PAT GOERGE: Well, Darrin were you happy who won?
DARRIN T. MISH: I was happy. It’s always kind of good.
KATRINA MADEWELL: Who won? Who won?
DARRIN T. MISH: The Cubs, the Chicago Cubs broke a 108 year losing streak and it’s always kind of neat to see history, even if I hated the Cubs and I really don’t I don’t really have an opinion I’m a Dodgers guy but it’s still pretty cool.
PAT GOERGE: You know, I thought about this that they always talk about the curse and stuff like that but all of the people that have passed on now that never saw the cubs win.
DARRIN T. MISH: I just saw a Meme five minutes ago on Facebook that says there’s people rioting. Cubs fans rioting in heaven right now.
PAT GOERGE: Right.
KATRINA MADEWELL: So I don’t watch baseball, was this number 3? Was this game 3?
DARRIN T. MISH: No, that was game 7. That’s it. It’s over.
KATRINA MADEWELL: See, I don’t watch, obviously I’m not following it. So they won?
PAT GOERGE: How many bases are in baseball?
KATRINA MADEWELL: I know that my son played little league but I don’t follow it. Yeah, thanks, no.
DARRIN T. MISH: There’s five right?
KATRINA MADEWELL: That’s guy talk. That’s not baseball talk.
DARRIN T. MISH: Ok, so we will get to our guest. We won’t keep her waiting any longer. This is really exciting. It’s really exciting because I’ve been a fan you know sort of watching her in the background for a lot of years. Why don’t we go ahead and get Kay Bell live here on, is she live, she’s here?
KATRINA MADEWELL: Yeah, she’s on and the topic for today’s show we are going to make it her website which is Don’t Mess With Taxes, sound good?
DARRIN T. MISH: That sounds wonderful, Kay are you there?
KAY BELL: I’m here.
DARRIN T. MISH: Fabulous. So, you don’t know this, but I’ve been a loyal fan and a reader of your website for probably over 10 years. I’ve been in the IRS problem-solving niche for pretty close to 20 years. But, real quick let’s introduce you. Kay Bell is an award-winning journalist and blogger and has been writing about taxes for almost two decades. In addition to her knowledge of the tax law nuts and bolts, Kay has inside info the political aspect of taxes thanks to her almost 20 years in Washington D.C as a Congressional and house ways and means committee staffer and Government Affairs specialist for 2 fortune 100 companies. Kay blogs daily about tax topics at http://www.dontmesswithtaxes.com/ and is the author of the book The Truth About Paying Fewer Taxes. She is also a contributor to two other personal finance books as well as a writer for a wide variety of financial websites and clients in Austin Texas where she currently calls home. So Kay welcome to the show.
KAY BELL: Thank you for having me.
KATRINA MADEWELL: We are glad to have you. So.
DARRIN T. MISH: So Kay, your bio mentions that you worked almost 20 years in Washington D.C as a Congressional and house ways and means committee staffer what was that like and how did it influence your decision to become a journalist and a tax blogger?
KAY BELL: Well, when I hear that 20 years, first of all I can tell you that I started as a teenager. Well, that’s not really true.
KATRINA MADEWELL: I like that answer Kay I like it very much.
KAY BELL: It was, it was really exciting. My husband and I went up there right after we got married, we were from West Texas, we thought it would be exciting little change, we’ve stayed there a couple of years and come back home and then you know time just continues to roll along and it’s people you know, it’s the Cubs fans who have waited a 108 years you know it just catches up with you. I just sort of stumbled into working a Congressman who was on the Ways and Means committee and boom, there it was you know, I kind of got hooked on taxes.
DARRIN T. MISH: That’s fascinating so I bet it was a big change from West Texas to Washington D.C.?
KAY BELL: It was I. First of all I came from the desert area and here I am suddenly in the muggy built on reclaimed swamp land D.C. city that was a gazillion times larger than any place that I had ever lived, craziness but the fun there was I was there during the last mega tax reforms so when people talk about reforming taxes I always go back to 1986, the historic tax reform act of 1986 where I always thought historic was part of the official name of that law.
DARRIN T. MISH: You know, I mentioned before that I really love your site you know dontmesswithtaxes.com . So you are a proud Texan as well?
KAY BELL: I am and you know when we came back home to Texas and I thought about what I was going to do and my husband actually is to get the credit or blame depending on your point of view about my blog and I was trying to think of what to name it and you know it just seemed like flipping a couple of vowels was perfect from where I was going from Texas to taxes and it all seemed to work out.
DARRIN T. MISH: I really love and admire the pride and enthusiasm that Texans have about their home state I think it’s really fantastic. I think that my wife and I may someday retire to Texas because there is just so many aspects about it that I really admire, I love just the wide open spaces and I love the attitude of the people in Texas and how friendly they are.
KATRINA MADEWELL: And by the way, their real estate stuff is really wacky like because back when I used to write loans we used to do loans in Texas and wacky, wacky, wacky stuff like you cannot do anything without your spouse it’s pretty bizarre, right?
KAY BELL: It’s a community property state that’s one thing that I told my husband when we left Texas that even though we were going up, we lived in D.C for a little while and in Maryland, I said remember, we were married in a community property state and I don’t care what the law says, we keep community property wherever we go.
DARRIN T. MISH: You know I represent clients with tax problems all throughout the United States and I was actually born and raised in California so there’s community property you know in California as well but it’s funny now that I live in Florida when I have these, when I have these clients in Texas and you know California, Nevada and some of the other community property states, I always have to remember that community property exists. It doesn’t come up in every case but there are cases where you are like darn you know I got this darn community property thing I’ve got to deal with. I’ve got a case right now out of California where we have a liable husband and a non-liable wife and it’s just a mess because non-liable wife can technically be held on the hook for the non-liable, or the liable husbands you know taxes that pre-existed when they got married, so it’s really crazy, I always have to remember that about the community property issues.
KAY BELL: It has a nice interesting twist.
KATRINA MADEWELL: The bottom line is, I guess if you live in a community property state you want to be careful who you marry.
DARRIN T. MISH: Wel,l I think that’s right. And I just did the research on this particular case cause I had to dive deep into California law to figure out what the answer was and as I was reading I was like oh my gosh, oh my gosh. I’m pretty much positive that she did not know about this you know this statute because if she had there would be a big fat prenuptial agreement you know in existence which does not exist so it’s kind of a problem. But back to you Kay. What is it about, I mean you shared a little bit about being you know ending up with the job on the committee, the ways and means committee but what is it about taxes that made you decide to dedicate your life to reporting on them.
KAY BELL: I think basically it’s because we all have to deal with them at some point in our lives. Hopefully we don’t have to hire someone like you who has to work us out of trouble but we do have to deal with it and it’s the most immediate contacts that most Americans have with the Federal Government. It may be once a year when they, they get a refund from Uncle Sam or they end up having to write a check but it’s there it’s every day if you work, it shows up in your paychecks so we don’t think about it but the taxes start right when we are born, you know are parents are happy to see us but you know they are also happy suddenly they got another exemption on their tax returns. Now they get lots of credits and deductions so I mean taxes are there from the get go for us and if we don’t pay attention to them we can get in trouble so it just, it struck me as something that is integral to everyone’s lives even though we don’t think about them like I do almost every minute of the day.
KATRINA MADEWELL: So, Kay, I have a question for you cause I was listening to Darrin in your bio talking about how you were a journalist for over 20 years and you know turned blogger, how has that changed your industry and basically what you do when you know basically the blog platform opened up and I guess that freedom of speech was a little bit more free across everywhere. How has that changed things for you?
KAY BELL: Well you know that is one of the things I like about blogging is the immediacy and the internet has allowed people to share things for good and for ill, unfortunately, but that’s one of the reason’s why I like staying on the internet. I want to be out there to help try to clear things up because unfortunately if a lot of people get things wrong online so I get a lot of emails from readers who go, “I read on the internet you know xyz I can deduct this”, and I’m thinking yeah you got part of the story but you didn’t get the whole story so that’s why I always try to tell people when you do get information regardless of the source don’t just take that one piece of information as the truth, you need to check it out some because, especially with taxes there’s usually no cookie cutter or anybody it always applies to you personally. Itt makes me have to research things carefully, stay on top of the tax news and that’s kind of an exciting thing for me.
KATRINA MADEWELL: It’s funny that you say that Kay cause we have this running joke in our house about the, there was a commercial about the french model, oh where did you see that, oh I got it on the internet so that’s pretty right on time with what you are talking about. We are going to take a quick break when we come back in just a minute we are going to talk a little bit more about some of the current big stories that you are working on and a lot more so stick around. You are listening to the IRS Solution Attorney show our special guest today is Kay Bell with dontmesswithtaxes.com back in a minute.
DARRIN T. MISH: Welcome back to the IRS Solution Attorney show I am THE IRS Solution Attorney…
KATRINA MADEWELL: Mr. Darrin T. Mish.
DARRIN T. MISH: Mr. Darrin T. Mish. Forgot my name there for a minute.
KATRINA MADEWELL: And I’m your co-host, I will help you out when you forget it, it’s all one it’s all good.
I’m your co-host Katrina Madewell and again it’s the IRS Solution Attorney show. We have a very special guest today Miss Kay Bell she is out of dontmesswithtaxes.com.
DARRIN T. MISH: Absolutely.
KATRINA MADEWELL: And that is t-a-x-e-s taxes made that sound a little bit like Texas, did you note that?
DARRIN T. MISH: You did make it sound a little bit like Texas, but it’s taxes.
KATRINA MADEWELL: Without the accent. Ok, so Kay lets recap about the first segment what we chatted about.
DARRIN T. MISH: Well we were talking about what Kay’s background was and what not and how the website came about and why we should even be listening to her it’s because she has been in this, you know in this field for so long for 20 years. She apparently started when she was 11. Let’s talk about some of the big stories you are currently working on. I understand you have been covering the story in regards to how the IRS will be holding refund payments until at least February, or at least till February 15. Can you clue us in on that one?
KAY BELL: Um sure well the issue here is that with one of the tax laws that was passed last year, signing the law in December with the Protecting Americans from Tax Hike Acts which tax geeks know as the extenders which is renewal of all these tax laws that keep expiring. One of the provisions says that the IRS must hold certain tax returns until February 15th, tax refunds on those returns, until February 15th, if the people are claiming a couple of popular tax credits. These are the additional child tax credits or the Earned income tax credit. And both of these tax credits are situations where you can get a refund even if you don’t owe anything. Usually a tax credit can zero out your tax bill and a lot of them stops there if your credit was for $300.00 and your tax bill is 500 or let me reverse that your credit is 500 and your tax bill is 300 it will take that 300 and bring it to zero but you have 200 of that credit that you get wasted. If it’s refundable you get that extra 200 back as a refund if the name indicates. Lawmakers are concerned that there is a lot of fraud in connection with these two credits that people, they are complicated especially the Earned Income Tax Credit and people make mistakes or sometimes they make up stuff to get that refund so they wanted to give the IRS extra time to check those refunds returns and make sure everything was Kosher. They got to hold them this extra time so they can check them and then don’t send them out till mid February. So a lot of people who filed early because they are going to get refunds and who have these two tax credits on their returns are going to be disappointed this coming year.
DARRIN T. MISH: When does filing season typically start, it typically starts mid-January till the end of January anyway is that right?
KAY BELL: Right, you start the 3rd week of January and so it’s not a big delay although if you get your return in as soon as the IRS starts accepting them a lot of people get them in early February so it’s not going to be a big delay but if people are really counting on that to say maybe pay some bills that are due in early February, they need to make arrangements to not, to not have to rely on that money because it’s going to be delayed and the IRS is going to catch a lot of heat about it but try to get the word out that you know it’s going to come around tax season and people are going to be filing as soon as they get all their paperwork they going to send the things in and they are going to be going, where is my money? Where the heck is my money.
DARRIN T. MISH: Yeah and to be fair I mean the people that typically get the Earned Income Tax Credit for example tend to be low-income folks and they probably really are counting on that money and getting that money as quickly as they can. Is this going to put the, is this going to kill the rapid refunds for those two types of tax credits?
KAY BELL: I think it might. These refund loans have kind of died but those refund anticipation loans there’s a lot of concerns in consumer goods about these and how you know people are getting these and not fully understanding them and they end up paying more for them or the refund it not as much as they thought or the refund loan wasn’t. The concern about those have kind of taken those off the table in recent years so they have kind of morphed into refund credit cards but still they are not as permanent as they once were. I suspect there are going to be some people who will start hyping these again come January saying you don’t have to wait until mid-February come to us now we can get you this loan early and I think that’s going to cause some problems and concerns among the financial community. The personal finance consumer community.
DARRIN T. MISH: So, just to be clear, is this going to hold up some or the entire refund so somebody was entitled to the earned income tax credit or the additional child tax credit and they had a refund coming otherwise separate and independent is gonna hold that refund up the whole thing?
KAY BELL: Yes, it will hold everything up yes.
DARRIN T. MISH: Interesting.
KAY BELL: Yes, if you claim the either of those two tax credits on your returns they are going to hold the entire thing until February. Part of it’s administratively, it’s kind of hard to separate why x amount is contributable of the bill and rather than send two checks, they are just going to hold the whole thing.
DARRIN T. MISH: It does make sense for, you know from an administrative standpoint and efficiency standpoint to just hold the whole refund but I’m sure there are going to be people that are upset. The funny thing is that when you Google IRS here in the Tampa Bay area my website comes up, my phone number comes up and so I can only imagine there from the 3rd week of January to you know sometime probably the 3rd week of February or so my phone is just going to blow up with people who are not real happy about this particular change in the law so it’s good that we know so at least we can tell people what the deal is. That kind of leads me to this next question and that is can the taxpayer advocate help expedite these or is it just pretty much it’s February 15th or nothing?
KAY BELL: It’s pretty much February 15th or nothing. By the time the taxpayer advocate got involved in most of these cases would be well resolved by the time they got involved in that so it’s just kind of like take a deep breath, stick it out. Or you could do something now to kind of help yourself out if you know you are going to get a refund and your working and you are having stuff withheld, you might think about changing your withholding a little bit right now and get some of that money a little early. I know a lot of people love the savings over withholding but in this coming tax filing season where the IRS is going to get to hold onto your money, whether they want to or not, they’ve been ordered to do so by Congress you know you might want to start trying to get a little bit of that back early instead of letting them hang onto it until mid-February.
DARRIN T. MISH: Yeah so for clarification, if you are a wage earner meaning somebody who gets a paycheck and has taxes withheld then you might want to file a new W-4. A lot of people don’t know this but you can file a W-4, I don’t know if it’s as frequently as you’d like but more frequently the people file them for sure, you file that with your employer and for example if you were having, if you claimed 0 on your W-4 so that they would withhold the maximum amount and you are anticipating a big refund you might want to change that to 1 or 2 or depending on how many dependents you have so that you can get more back out of your paycheck like Kay is saying so you don’t have that forced savings. Especially if waiting until February 15th is going to put a crimp on your budget then you might as well just get the money now.
KATRINA MADEWELL: And not to mention the fact that you are giving the Government an interest-free loan let’s not forget about that part.
KAY BELL: Exactly, you know I also like to say Darrin, I always say you can change that withholding as many times as your payroll administrator will let you before that person starts locking the door when they see you coming.
DARRIN T. MISH: Yeah, I don’t think you can do it daily, but you could probably do it twice a year. I do have clients that for whatever reason they want more withholding in the first half of the year or the second half of the year and so they do that, that’s not real common.
KATRINA MADEWELL: That doesn’t make sense to me.
DARRIN T. MISH: But, I’ve seen it I’ve seen weirder things then, usually because of what I do I help people with tax problems usually what I see is tremendous under withholding, I see people who, just I just worked on a case recently where, this is wild, the employee actually wrote exempt from, from social security, from FICA and Medicare on the W-4 and the employer didn’t catch it and the payroll company didn’t catch it and this went on for like 3 years. The guy didn’t pay any FICA…
KATRINA MADEWELL: And then he became your client.
DARRIN T. MISH: And then somebody with the subsequent CPA finds the error when she is doing, you know she is reconciling the 941, the W-2’s and what not and they are like, Ok Darrin what are we going to do? I’m not going to share what I told them to do but they asked me what do we do and I’m like, wow, that’s kind of a mess and who in the world decided that, that exempt from FICA was even a thing but…
KATRINA MADEWELL: Maybe it’s like the service animals, the white elephant in the room that nobody wants to ask any questions on.
DARRIN T. MISH: I’m not sure so, the law that we were talking about with the delayed refunds, slightly delayed refunds when did that go into effect and how many Americans do you see being affected by that?
KAY BELL: As many to expect in December, I think December 18th is the specific date that it was signed into law you know again it was part of what we tax geeks call the tax extender bill which is a series of 50 or so tax laws that are technically temporary, they have to come up for renewal periodically, usually every year, every two years and this year they got through it relatively early for Congress, they got it done and signed into law actually mid-December and a lot of where made permanent but some things will still have to be reconsidered, I’m kind of digressing here, but yeah it when into effect on December 18th and it takes effect this coming, this year and the it affects the next following season.
KATRINA MADEWELL: Hey, Kay, hold the thought real quic,k we got to take a hard break here at the bottom of the hour. You are listening to the IRS Solution Attorney show we are on with Kay Bell you can follow her @taxtweet she is on Twitter we will be back in just a minute.
KATRINA MADEWELL: Welcome back, you are listening to the IRS Solution Attorney show I’m your co-host Katrina Madewell Mr. Darrin Mish is Attorney in the room and he is your main host for the show The IRS Solution Attorney show. Our special guest today is Kay Bell with dontmesswithtaxes.com and that is taxes. We have another question for you Kay. Can we talk about some of the other stories that you have working in your pipeline right now, we noticed that you are blogging about a 12 million dollars spent on the unusable email system can you clue our listeners in on what this was all about in case they may have missed the story?
KAY BELL: Sure, the IRS has been mandated along with all of the Federal Agencies to get their technology up to snuff and the goal is to have it done by the end of this year, one of those areas was the email system for the tax agency. They did some upgrades with their Microsoft systems and they discovered that it really wasn’t what the wanted but they spent the money on it so now Congress is taking the agency to task, as it should for spending this money for something that is not really working like they intended so it’s you know it’s one of those problems where the IRS has got to try to get up to date technologically and still do their main jobs and they are just kind of running into some problems and, and coordinating those two efforts.
DARRIN T. MISH: Does the fact that there’s so much partisan conflict come into play you think where in a Congress, Congress is in a feud with the IRS and has been for awhile now and Congress continues to cut their funding which also prevents them from being able to do these technological upgrades probably as efficiently as they would like. I’m no big fan of the IRS and I don’t make any bones about that, but I think that might be a reality. What do you think about that?
KAY BELL: I think you nailed it Darrin. It’s true, Congress has cut over the last few appropriation sessions, the money that the IRS has requested to do it’s job. It’s an easy agency to pick on you know even people who pay their taxes, they don’t like paying them because they always seem like they are paying to much so politically it’s a good point for members of Congress to make that they’re, that they are taking the evil IRS to task and but they also failed to point out like you say that they are cutting the money that the agency needs to do it’s job. There have been commissioners, former commissioners have sent letters to Congress saying come on guys we really need this money to do our job’s just like everybody but until we get through this type of partisanship it’s going to stick the IRS is just going to have to get ready to keep taking the hits, some of them well deserved some of them just for political posturing.
DARRIN T. MISH: I think that I’ve read statistics that for every dollar in the IRS’s budget they collect something like $49.00 that might be off but I remember it was a really big number. It does make sense that if you want to raise the revenue and lower the deficits and the debt and what not that it might make sense to get more money to the IRS. Perhaps with more oversight. I’m not really sure. One of the things that always kind of strikes me as funny is that the IRS you know won’t use email in dealing with taxpayer representatives and taxpayers and so one of the things they will do when we are obtaining you know tax transcripts, for example, is they will fax them. Now here is the irony, the irony is that their fax system actually uses email to transmit and mine actually requires email to transmit to me as well so it is going, that confidential taxpayer information is, in fact ,going over the interwebs anyway which is sort of an interesting issue.
KATRINA MADEWELL: I don’t know anybody that has a fax machine where it literally is still spitting out paper it just doesn’t anymore.
DARRIN T. MISH: Well I actually have…
KATRINA MADEWELL: You do?
DARRIN T. MISH: I have a physical fax machine and I have one of the e-fax you know sort of…
KATRINA MADEWELL: But you don’t receive any paper on that fax machine?
DARRIN T. MISH: We do from time to time but the interesting thing is is that’s also over a VOIP phone line…
KATRINA MADEWELL: Well, there you go.
DARRIN T. MISH: So, it’s going over the internet as well so even my voice lines at the office are going over VOIP so even the phone calls are going over the internet.
KATRINA MADEWELL: You know if the IRS were to revamp anything in their budget it should be, we talked awhile back about their system getting hacked. Protecting the taxpayer’s social from identity fraud and taxpayer, like I told you I’ve seen that numerous times where a client gets ready to buy a house and they realize someone else has already filed their taxes for them and collected the refund.
DARRIN T. MISH: It’s a huge problem I mean over 20% maybe even 30% of my clientele right now, that have tax problems have you know the ID theft sort of indicator on their file which makes it harder for me to represent them. Kay, I’m going to put you on the spot a little bit what do you know about that whole ID theft problem with the IRS and taxpayer confidential information?
KAY BELL: You know it is, it’s a big, it’s a big issue and the IRS after they got hacked to their credit were looking into it anyway they speeded it up, they are going now to what they call the dual authentication which most of us know now when we want to do something we, we go in online then we get a text from our, from whatever the site is, here’s the code you have to use now to get in there and the IRS is doing the same thing now they are going to dual authentication on most of the systems that get transcripts, which was the area that was hacked. They are requiring that now and before, when they are finished everything that you do online with the IRS as either a professional who is using the special systems that tax pros have to deal with the agency, electronically as well as just individual taxpayers they are going to have to do this doubling up this dual authentication to get in. They are trying to bring the system up to the standard of the private sector right now. All governments are always lagging indicators with technology and something that is as big as the IRS is typically in that area now, they are just trying to catch up but to their credit they are catching up slowly.
DARRIN T. MISH: Yeah, like I mentioned it makes, it makes it really inconvenient when we have taxpayers who have the ID theft indicator because it actually locks the power of attorney the tax rep, it locks us out of being able to use our typical you know sort of online services that we use to access their taxpayer information and so we have to make a phone call and not complaining but some of those phone calls are absolutely maddening but the people that are on the other end of the line who are trying to decide if I am who I say I am are just so poorly trained and it’s just, it’s a really frustrating experience. It takes something that that would take me typically somewhere between 3-5 minutes and turns it into a 45 minute to an hour procedure where somebody with a kind of a bad attitude is giving me a hard time about it. One of the things that we are doing is we are actually having some of the staff at my office take care of it because after almost 20 years of doing, dealing with the IRS on a one to one basis sometimes I’m not always the best person to talk to them. But we are here today with Kay Bell and her website is dontmesswithtaxes.com that’s not me talking with a southern accent that’s dontmesswithTAXES not Texas .com.
KATRINA MADEWELL: And she is also on Twitter @taxtweet you can follow her there and follow some of her posts and see what she is up to.
DARRIN T. MISH: Yeah, I have been following Kay on Twitter for many, many years on Twitter probably since just about when Twitter came out. Kay, I read on your blog a post that, where you spoke with some former IRS employees who were forced to use some second-hand computers at work, you know can you tell us a little bit more what that is all about?
KAY BELL: Well, again, this comes back to the money, show me the money. The system is woefully behind technologically so when it’s like a family, the youngest child gets the hand me downs and that is what, at least a few years ago the agency was doing when they got money to upgrade they had to decide which areas, which divisions needed the systems, the newer systems most and so they got the better equipment and then the usable equipment just got passed down so that the people who had the least technologically up to date systems, that got thrown out and everything just shuffled down the line. That’s how they’ve been working again cause they don’t have the money to do a full system upgrade but maybe Congress will eventually look at that and go, ok, we will dedicate the money and use it just for this you know.
KATRINA MADEWELL: So, in your opinion it’s a funding issue not a mismanagement issue? I’m thinking like even teachers, fundraise to get new Mac’s maybe that’s, I don’t know just a thought.
KAY BELL: I don’t know I don’t know if I want to see an IRS guy come to the door selling me you know cookies or something.
DARRIN T. MISH: So, one of the things you don’t know Kay what you don’t know Kay is we are in a studio that’s literally a hundred yards from the local you know taxpayer assistance center here in St. Petersburg, Florida and what just ran through my mind as you, as Katrina was saying that ok the revenue officer bake sale is this Monday morning.
KAY BELL: With a table out front.
KATRINA MADEWELL: Yeah, I have a feeling they would be selling brownies with a little something extra you know just saying.
DARRIN T. MISH: Well, I have a feeling that there wouldn’t be a real great turn out it’s just sorry the Internal Revenue service is just not one of the most sympathetic you know governmental organizations in our country. They just aren’t.
KATRINA MADEWELL: Darrin’s laughing cause I always throw those rogue little comments out there that aren’t super serious but they are pretty funny.
KAY BELL: You know you ought to be careful Katrina though because somebody, I’m telling you somebody at the IRS now is thinking that. This could work.
DARRIN T. MISH: Now listen we are not in Colorado, we are in Florida.
KATRINA MADEWELL: Is there an average IQ of the of the IRS officers? I’m just curious nobody has ever published a poll on that.
DARRIN T. MISH: Alright, so the average IQ of a human being is a hundred right?
KATRINA MADEWELL: Ok.
DARRIN T. MISH: So I have no comment, I don’t know how would I know.
KATRINA MADEWELL: That’s a good attorney answer, Darrin.
DARRIN T. MISH: The things, the thing about the IRS and I think Kay will agree with me is there’s some really terrific people that work there and there’s some substandard people that work there but I….
KATRINA MADEWELL: That’s every organization.
DARRIN T. MISH: But I think you find that throughout government.
KAY BELL: Yes.
DARRIN T. MISH: You know is there’s some people who you know probably shouldn’t have a job period and then there’s some people who you are like, wow, that person is really good and probably you know, probably could be working for us or somewhere else.
KATRINA MADEWELL: It’s no different here at the studio look we have Pat. There is a lot of other sub-par people we could have producing the show you know.
DARRIN T. MISH: Oh boy did you save your butt there.
KATRINA MADEWELL: He wants to talk about turkeys. He’s looking at your post that says reduce tax turkey’s with these easy November tax moves.
KAY BELL: Yeah I mean it’s, the year is almost over I can’t believe it, I woke up and it was November oh my gosh what do you do here. Most tax act unit take to reduce your tax bill you have to do by the end of the year so you know you need to start thinking about things we talked about earlier, adjusting your withholding. A good one to do is to bulk up your retirement plans. Put some money into your IRA even though you have until April, it’s still good to get it in early because of the compounding factor, if you have a 401K at work see if you can dump some more money into that. You could help lower your tax bill a little bit and you know you are helping yourself down the line so it’s a twofer there. You might even get to take a tax credit the savers credit when you file if you put money into your retirement plans.
KATRINA MADEWELL: So you know Kay we are only what is it five days away from the election and I know you are not going to have much time to answer this but I really wanted to ask you and Darrin’s like ready to stab me in the side how you think the political election outcome will affect taxes?
KAY BELL: Gosh…
KATRINA MADEWELL: You want to answer that on your blog or on Twitter?
KAY BELL: You know I’ll answer it everywhere I think it’s, if Hillary Clinton wins, it’s going to be a struggle again to get some major changes made simply because of the politics involved, if Donald Trump wins he’s going to me more amenable to what Paul Ryan former head of the Ways and Means and now speaker of the house…
KATRINA MADEWELL: Alright hang tight, Kay Bell with dontmesswithtaxes.com. She’s going to continue this conversation over there because we are out of air time to talk about it right this second we will be back in just a minute.
DARRIN T. MISH: Welcome back to the IRS Solution Attorney show I am THE IRS Solution Attorney, Darrin T. Mish.
KATRINA MADEWELL: And I’m your co-host Katrina Madewell joined by our very special guest today Kay Bell she’s with dontmesswithtaxes.com.
DARRIN T. MISH: So, before the break, you were talking Kay, the question to you was how is the election going to impact basically taxes going forward in depending on who wins?
KAY BELL: Yeah, um, short term it’s Clinton gets in and Congress stays controlled by Rebublicans not much is going to change because there’s going to be fighting and there will be tweaks but nothing big. If Trump wins we could see some more major changes but either way it’s not going to be immediate. The whole cogs of government grind slowly but you know it’s a good reason, another good reason for people to get out and vote it could affect your tax bill.
KATRINA MADEWELL: I can’t believe that we are only 5 days away from the election.
KAY BELL: Yes, finally.
DARRIN T. MISH: Thank the good lord.
KATRINA MADEWELL: It means my birthday is in 5 days.
DARRIN T. MISH: You know and I’m a talk show junkie I don’t just have my own radio show I listen to talk radio all the time and I just realized that it’s really stressing me out and this needs to be over one way or another I just need it to be over. Kay, we really appreciate you coming in, one last thing one last thought that I had that I would like to hear what your thoughts are I’ve been doing this since the first Clinton administration and my theory is that when a Democrat wins the White House what tends to happen is taxes tend to go up but the, the effort to collect the taxes tends to go down a little bit and when a Republican gets into office taxes tend to go down but the efforts to collect the taxes go way up. Do you have any thoughts on that?
KAY BELL: Well, it does go that way cause there is a tendency for enforcement on that side but again if they are going to do that this time they are going to have to give them money because even the tax enforcement side is falling and there are fewer audits and fewer efforts to collect, which is good for a lot of people but it’s not good for the treasury.
DARRIN T. MISH: Yeah, there’s a direct correlation between you know taxes collected and revenue I think soif you want to have a big government and it seems like both parties do then you’ve got to pay for it one way or the other. So, Kay, we’ve mentioned your website a number of times it’s dontmesswithtaxes.com. I’m a big fan of it and I think everybody listening should go out and take a look at it and we talked about your, your Twitter handle is TaxTweet is that right?
KAY BELL: That’s it, yeah.
DARRIN T. MISH: Ok is there any other way’s that people can reach you that you know you might be interested in having them do?
KAY BELL: I think those are my two main outlets. I’ve like been way to much time on Twitter just like one of the candidates. I’m on there all the time.
DARRIN T. MISH: Are you live Tweeting at 2:30 in the morning, though?
KAY BELL: Um no I’m….
KATRINA MADEWELL: That would be Hoot Suite.
DARRIN T. MISH: Well, thanks again Kay we really appreciate you coming by today.
KAY BELL: Thank you it was a pleasure.
KATRINA MADEWELL: Bye, Kay.
KAY BELL: Bye bye.
DARRIN T. MISH: So, I wanted to talk about a pretty interesting news story in the news right now and that is that there’s been an announcement by the IRS that over 7,000 people are going to lose their jobs because they are the people who actually process paper tax returns. That’s astounding to me, isn’t that amazing? So what that means is the e-filing has become such a thing, that 7,000 human beings are not going to be needed to open the mail any longer.
KATRINA MADEWELL: I’m surprised it took that long honestly. Really, I mean how long has e-filing been around?
DARRIN T. MISH: So, a long time about 10 years I think but there’s entire communities that are sort wrapped around you know these service centers. You know Austin, Texas is a big service center so you know thousands of people are going to lose their jobs there, Fresno California I think Memphis Tennessee is another one. These huge campuses that the IRS has and they use a lot of seasonal employees to go ahead and open these tax returns and these people are not going to be able to have those jobs anymore. And so in a way, I feel a little bit sorry for them and in a way I’m like good cause you know we don’t need those jobs if people are going to be E-Filing.
KATRINA MADEWELL: Somebody…
DARRIN T. MISH: So it’s about that time it’s time for the IRS train wreck of the week and this is the segment of the show where we talk about somebody who came into the office and frankly they were just a train wreck and they were just a mess and they owed a ton of money to the IRS and through our diligent efforts things worked out just fine. This one is almost unbelievable, but I assure you it’s true. Ok so I had a husband and wife who came in and wife was, she was nearly approaching retirement age I want to say she was 65 maybe 66 something like that and she had a husband who was actually suffering from cancer and through whatever reason they ended up owing $191,363.00 so over 190 grand and the IRS was levying their paycheck. Now, the missus who was the one working, was not making a lot of money and husband had cancer and he was sitting at home all day you know probably suffering in pain and the IRS started levying their paycheck and was making things even harder, I mean I can’t even imagine having my spouse go through cancer let alone having the IRS taking you know huge chunks of my paycheck and levying my bank accounts and things like that.
KATRINA MADEWELL: When it rains it pours though, right…
DARRIN T. MISH: So we, yeah so we, we were able to contact the IRS and get them put into what’s called hardship status, where the IRS agrees that you know they couldn’t afford to pay anything but the problem was they were still a long time left on the statute of limitations so the IRS still had a number of years to collect this money and so hardship status wasn’t really, it wasn’t really a solution it was more of a band-aid. I stopped the pain, the immediate pain which was the tax levies and what not but they really wanted a complete solution and I can remember that they were really super strapped for cash and Mr. because he was going through chemotherapy and what not, he was communicating with us quite a bit and he was not a happy camper, he was not a nice guy quite frankly and he was really, really hard to deal with and he was, you know he was kind of angry at the world. I’m not sitting here in judgement and saying that was even a problem it just the reality of the situation he was a hard guy to deal with and so when we filed the Offer in Compromise we offered 50 bucks and I have to admit…
KATRINA MADEWELL: And he owed $192,000?
DARRIN T. MISH: 191 grand…
KATRINA MADEWELL: Ok.
DARRIN T. MISH: And I offered 50 bucks and I did this in part cause I was slightly irritated with him and I was way major irritated with the IRS so I offered 50 bucks. So they worked the file and they come back hey we’ve got a problem here, we’ve got one of these liabilities is for you know the other spouse so we got to do, technically we’ve got to do another offer so you need to offer some more money. I’m like ok fine 20 bucks more, so for a total of 70 bucks…
KATRINA MADEWELL: 70 bucks?
DARRIN T. MISH: I offered them 70 bucks and I know there’s people who aren’t going to believe this but the IRS took 70 bucks on $191,362.00.
KATRINA MADEWELL: Now, how in the world did you get them to take $70 on a $191,000 tax liability?
PAT GOERGE: Seeing that I offered someone on Craigslist $35.00 for an $85.00 clock radio and they wanted 50.
DARRIN T. MISH: I’m usually pretty aggressive. I’m not usually quite that aggressive but in this particular case I was just sort of annoyed with the whole thing. I thought I would offer low and they would come back and say well no come on 70 bucks I thought they would take 500 bucks or a thousand bucks and you’ve got a deal but I got the acceptance paperwork at 70 bucks.
PAT GOERGE: I did the same thing and it didn’t work for me.
DARRIN T. MISH: So, that’s the IRS train wreck of the week that is actually my lowest offer ever offered and ever accepted. 70 dollars on a hundred and ninety one thousand..
KATRINA MADEWELL: That’s a pretty big spread like I would just calculate the percentage on that just because it’s so cool.
PAT GOERGE: Look I need you to call this lady to for me.
KATRINA MADEWELL: Well, you are listening to the IRS Solution Attorney show we had a great time today with Kay Bell in case you missed her you can catch up with her @taxtweet you can get Darrin @darrin_mish.
DARRIN T. MISH: Don’t forget the podcast, don’t forget the app this show will be there as well.
KATRINA MADEWELL: We are all around with the IRS Solution Attorney show I will be back tomorrow with Tampa home talk thank you so much for joining us.
DARRIN T. MISH: We’re out.