DARRIN T. MISH: Hello, hello, hello good morning. This is the IRS Solution Attorney Darrin T. Mish.
DARRIN T. MISH: Welcome to the IRS Solution Attorney show, I am THE IRS Solution Attorney Darrin T. Mish.
KATRINA MADEWELL: I can verify he is and I’m your co-host Katrina Madewell welcome to the show, welcome back this week.
DARRIN T. MISH: It’s yet another beautiful day in the neighborhood.
KATRINA MADEWELL: He says that every week. He watched too much Mr. Rogers when he was a kid.
DARRIN T. MISH: You know, but Mr. Rogers was always rocking the killer cardigan sweaters. Now that brings up a very important issue.
KATRINA MADEWELL: Yes. We loved Mr. Rogers when we were a kid, my mom hated it.
DARRIN T. MISH: Now why are cardigan sweaters not in style? I don’t think I have any anymore they haven’t been in style in a while.
KATRINA MADEWELL: Nope.
DARRIN T. MISH: Right.
KATRINA MADEWELL: Was that 80’s or 90’s I’m trying to remember.
DARRIN T. MISH: Probably more like the 70’s with a little bleed over into the 80’s. I was a Catholic High School boy so you had to dress up…
KATRINA MADEWELL: You had your share of cardigans.
DARRIN T. MISH: Had to dress up to go to school so I had my share of cardigans because you know it was kind of cold at times where I lived and sometimes you needed a little you know something to keep you a little bit warmer.
KATRINA MADEWELL: Indeed.
DARRIN T. MISH: Well, I kind of liked that preppy look. But anyway, today we are going to have a show and we are going to talk about why right now is the right time to end your IRS problems. Right now.
KATRINA MADEWELL: Right now, right this second.
DARRIN T. MISH: Today is the best day in history, tomorrow may be slightly better but today is the best day in history to solve your IRS problems and it’s actually true and there’s actually some reasons, we are going to get into those reasons a little bit later on with the show.
KATRINA MADEWELL: A lot of our questions and our content from the show actually come from things that you see in the field so real life stories, real life questions and all of that kind of stuff so if you have a question you can call 888-404-1010,888-404-1010 you can also call Darrin’s office at…
DARRIN T. MISH: 888-438-6474 that’s 888-get-mish, 888-438-6474.
KATRINA MADEWELL: Which I think for most people, unless they listen to this station all the time 888-get-mish is probably easier to remember.
DARRIN T. MISH: Yeah that’s g-e-t m-i-s-h there is no C in the name it’s g-e-t m-i-s-h. So you know I’ve been representing clients with tax problems for a long time.
KATRINA MADEWELL: A couple of years anyway.
DARRIN T. MISH: In fact, it was Bill Clinton was President when I started and don’t get me rolling on the Clinton’s but you know….
KATRINA MADEWELL: I was going to say in this day and age you can’t just say Clinton because you never know what that….
DARRIN T. MISH: Yeah, Bill Clinton was the President and so what I’ve seen is I’ve seen ups and downs, I’ve seen trends, I’ve seen different things occur and I have that philosophy that I will share with you and this philosophy has proven to be pretty true and without injecting my political opinion here’s what I see happening….
KATRINA MADEWELL: Yes, please do not do that, I try to keep you so far removed from that yes.
DARRIN T. MISH: Here’s what I see happening and that is Democrats raise taxes and do less to collect them and Republicans tend to lower taxes and do more to collect taxes that are due.
KATRINA MADEWELL: Right.
DARRIN T. MISH: So regardless of who wins the next election, it’s not even, it’s not even material because…
KATRINA MADEWELL: I personally think they should get away, do away with, political parties and just the people that run but you know it’s not the way our Government is set up.
DARRIN T. MISH: Now who’s talking about politics now?
KATRINA MADEWELL: I’m just saying, I’m saying in general; I think they should wipe political parties.
DARRIN T. MISH: Ok so for right now since Barak Obama is still the President we are in a situation where the Federal Government’s in the mood to help taxpayers and I will give you a concrete example and this is why today is the best time in history to settle your tax problems. We talk about offers in compromise quite a bit here on the show and an offer is where you make a deal to settle for less and the way an offer is calculated is by a relatively simple math equation that goes like this and then I will give you an example. Monthly disposable income times 12 plus your assets equal the amount of your offer so let me give you an example; if you had a hundred dollars in monthly disposable income, a hundred times 12 is $1200. Let’s assume that there were no assets so you could theoretically settle this hypothetical case for $1200. Now back before I think it was 2012 that equation was different that equation was actually worse for the taxpayer and it went like this, monthly disposable income times 48 plus assets was the amount of your offer so in that same $100 monthly disposable income figure our offer would be $100×48 equals 48…you know assuming no assets…equals $4800 so in other words the IRS took 75% off when they changed the rules in 2012 and I can remember when those rule, that rule change came down I was really, really cynical, I didn’t really think it was going to happen because it just seemed like it was almost too good to be true and I’m here to tell now, you know 4 or 5, 4 years removed it’s not too good to be true and really our success rate with offers in compromise in particular, went sky high because they made it easier to get deals through.
KATRINA MADEWELL: So staying away from the politics side do you think regardless of who gets into office that it’s going to stay that way or it’s going to change?
DARRIN T. MISH: I think there’s a reasonably good chance, well I’m going to get into the politics I’m not going to inject opinion ok?
KATRINA MADEWELL: Oh dang it.
DARRIN T. MISH: I’m not.
KATRINA MADEWELL: Ok.
DARRIN T. MISH: So if Hillary Clinton were to win it’s probably going to stay the same, if Trump were to win it’s probably going to change. I can’t tell you how it’s going to change but it probably will change.
KATRINA MADEWELL: And the why is the tax…
DARRIN T. MISH: Yeah usually when you have a change in the political party lots of things change. Now it took Barak Obama 4, or his administration, 4 years to make that rule change but they eventually did so I think that if the parties change there probably will be change eventually in the offer in compromise program. Now, think about why they made that change, they made that change because they are trying to encourage people to come in from the cold and to get back into the tax system, we’ve talked about this many, many times, the average person who does an offer in compromise is a non-filer and has been out of the system for quite some time. One of the prerequisites to getting an offer accepted or after acceptance is they have to file and pay and remain on course for 5 years after the offer is accepted and paid. So that virtually guarantees that that person’s going to get back into the system. They are going to be paying their social security taxes, they are going to be paying their income taxes and they are going to be back in the system. And I would venture to say most people who get an offer in compromise through is going to count that as there one lucky break and not be a recidivist. I’m sure there’s, I have actually represented some recidivist’s but…
KATRINA MADEWELL: There’s always exceptions.
DARRIN T. MISH: There’s always exceptions but I think most people are going to be like wow man I caught a lucky…
KATRINA MADEWELL: Take it and run.
DARRIN T. MISH: Yeah I caught, I owed a hundred grand, I got away for 2 grand you know that was my lucky break that was my one, my one freebie for life and so they are going to stay on the straight and narrow.
KATRINA MADEWELL: You know it’s funny, I was looking at our outline to and it’s, you know one of the facts and one of the things that we have on here is nearly 50 million people, 50 million people every year find themselves in some type of an IRS tax predicament where they owe money and they don’t have the money to pay it and with that being said a lot of your clients show up later and I wonder if they think ok, yeah, the IRS has just forgotten about me and they are not going to catch up with me but that’s, that’s really the case isn’t that true?
DARRIN T. MISH: We tend to have two types of clients we have the type that this whole thing is just really bugging them and so they are going to go out and proactively seek help and they want a solution, they want, they are taking an active role in finding a solution to the problem. The second kind of person is the person that is going to be reactive so they are going to wait until the stuff actually hits the fan, they are going to wait until there is a lien, a levy, wage garnishment, a bank you know seizure, all these things, they are going to wait until all that stuff happens and then they are going to go looking for help. Now here is why it doesn’t make sense to be the guy in number 2. Well if you just had your wages garnished and you’ve just had the IRS vacuum out all the money in your bank account what resources do you have to go and hire help?
KATRINA MADEWELL: What do you do for that client Darrin when they come in and they want to hire you but they have no money cause the IRS just took it all?
DARRIN T. MISH: I only know one way to be and that’s honest and in those people, in those people’s cases I’m not going to take care of their wage levy, I’m not going to take care of their bank levy without getting paid first, I’m just not going to do it.
KATRINA MADEWELL: I mean nobody works for free so they would have to sell something right theoretically is that what happens or somebody loans them the money?
DARRIN T. MISH: Sometimes yeah they get a loan from someone and they get it taken care of but a lot of people in those situations just have nobody left, they’ve sort of tapped all of their resources and I just can’t help them because you know there’s just, these people haven’t been paying their taxes to the most feared collection agency in the world, they are not going to pay me after I get there levy released and it’s happen, I’ve gone and stuck my neck out, it get’s chopped off everytime.
KATRINA MADEWELL: Right. Now, interesting thing we were talking about how it’s a good time to actually strike a deal with the IRS or let you help somebody strike a deal with the IRS but everybody knows our government deficit is ridiculous so I don’t, I don’t see this staying the same I know you think it depends on who goes into office but I think we just owe to much money.
DARRIN T. MISH: Well ok assuming that that is a true statement I’m not sure that that makes sense because would you rather have….
KATRINA MADEWELL: Would you rather have…
DARRIN T. MISH: Would you rather have zero and have the person stay out of the system for some indeterminate length of time into the future or would you rather have 2 cents on the dollar and get them back into the system right now?
KATRINA MADEWELL: Correct but you said they changed the formula, right?
DARRIN T. MISH: They did.
KATRINA MADEWELL: So that’s…
DARRIN T. MISH: I don’t know, I don’t know if the formula is going to get changed back or not. I hope it doesn’t cause quite frankly it’s really good for business right now because there are really good programs available for people and I hope it stays the same or get’s even better. Can’t get, I don’t want it to get too much better then people wouldn’t need me but, but right now is a pretty good time to take care of it and I think part of it is is it’s really that issue they just want to get people back into the system.
KATRINA MADEWELL: And when we come back in just a minute we are going to give you some tips also on when is a good time to actually prepare to make that appointment and come in and chat with you so if you stick around we will be back in just a few. This is the IRS Solution Attorney show and we will discuss that in just a moment.
DARRIN T. MISH: Welcome back to the IRS Solution Attorney show, I am THE IRS Solution Attorney Darrin T. Mish.
KATRINA MADEWELL: And I am your co-host Katrina Madewell and for once I think in almost the whole time we are doing the show we are actually on the same spot in the outline, that’s lovely.
DARRIN T. MISH: Today we are talking about why right now is the right time to end your IRS problems for good. And it really is the right time right now in history the IRS just has a lot of lenient programs in place and that’s what we are talking about.
KATRINA MADEWELL: And timing is everything.
DARRIN T. MISH: Yeah, you know, a lot of people will tell me stories when they come in they say, I say we actually have on our intake form that you fill out in the lobby we have some questions and one of the questions is why haven’t you already dealt with this? And a lot of people tell me because well because I was trying to get my money together so I could settle it. Well that’s exactly wrong thinking and here’s why. It’s far easier to settle your tax debt for pennies on the dollar if you are in a bad financial situation and that’s because if you think about what an offer in compromise does it measures your ability to pay, do you want to have a higher ability to pay or a lower ability to pay?
KATRINA MADEWELL: Right, but I cannot understand why someone would think that’s the opposite.
DARRIN T. MISH: I’m not criticizing I’m just saying…
KATRINA MADEWELL: No, it’s interesting to hear.
DARRIN T. MISH: Yeah.
KATRINA MADEWELL: Information.
DARRIN T. MISH: Because if you have a war chest of you know $20,000 and you owe the IRS $100,000 well then guess what your offer is going to start $20,000 versus if you don’t have that $20,000 we might get it settled for you know a thousand dollars or two thousand dollars or some smaller number.
KATRINA MADEWELL: What other things did people put on that just out of curiosity when you asked them why they have not settled their IRS issue yet?
DARRIN T. MISH: It’s really a valuable question because it gives you an insight into the market and to that particular person but we hear things like shame, embarrassment, procrastination…
KATRINA MADEWELL: Quickbooks crash.
DARRIN T. MISH: Fire, flood, hurricane.
KATRINA MADEWELL: What’s the most wild one you have ever got?
DARRIN T. MISH: Oh, I don’t know, I will have to think about it.
KATRINA MADEWELL: The dog ate my tax form.
DARRIN T. MISH: See I’ve been a lawyer for over 20 years, so just part of my natural makeup now, my mental makeup is I discount all excuses, for myself and from everyone else like if I hear you start to give me an excuse about something my brain literally goes to white noise and I just stop….
KATRINA MADEWELL: Shuts off.
DARRIN T. MISH: Yeah like, I mean, it’s great that everybody has a reason why things happen, but excuses are so rarely useful in my opinion, now I could be wrong but in my opinion excuses are not usually that useful so I kind of turn off I just, I just zone out I don’t want to hear it so much and it’s not that I am unsympathetic it’s that it’s not going to help us get to where we want to go so I don’t want to waste a lot of time on it. There are a lot of people who want to come in and sit down and they want to spend their 30 minute consultation, they literally want to spend the time telling me why they are not a bad person for owing so much taxes and I try to stop them quick and say look, I don’t think you are a bad person period, I don’t care why you owe all the tax, literally in my mind there is no correlation.
KATRINA MADEWELL: Doesn’t matter.
DARRIN T. MISH: There’s no correlation to good person or bad person equals big tax debt, low tax debt no tax debt, there is no correlation it doesn’t matter.
KATRINA MADEWELL: Do you think they are afraid that maybe as your attorney you might judge them as a person and represent them differently? Do you think that is why they start with the explaining?
DARRIN T. MISH: Maybe and I think that’s logical, I don’t think it’s right, but I think it’s understandable why people might think that but you know…
KATRINA MADEWELL: Half the battle is understanding their position.
DARRIN T. MISH: Yeah and yeah that’s true and some of it is my own experience so I was a criminal defense lawyer for like 7 years, I heard every excuse in the book for every crime you can imagine and I couldn’t spend any of my own emotional bandwith judging those people cause it’s not you know….
KATRINA MADEWELL: It’s not your job as a defense attorney.
DARRIN T. MISH: Yeah, it’s not my job my job is to figure out how to put the puzzle back together so I can get you off period. Like whether a good person or a bad person is of no, in that particular in that job it’s of no relevance, it doesn’t matter.
KATRINA MADEWELL: So what about for the person who is sitting there like I really want to settle this but I am just afraid of all these horror stories that I have heard that they are going to seize my bank account they are going to come get my car, they are going to do whatever they want to do just for fun.
DARRIN T. MISH: Well prior to 1998 the IRS actually did do what are called punitive seizures so they would seize your car for fun, they used to call them seizure Friday’s I think and…
KATRINA MADEWELL: Oh snap.
DARRIN T. MISH: Yeah, so literally, there’s a great book out there and I can’t remember the name, I’ll try to remember it but I think it’s called confessions of a revenue officer and in that book and I’ve met, I’ve spoken with the author before he tells stories about how literally all the revenue officers in Lakeland Florida would get together, and this is happening all over the country, they would get together on Fridays and they would ride around and they would just go pick up peoples, they would literally ride around with the tow truck drivers and they would hook up taxpayers cars and they would seize them. And they weren’t seizing the cars to sell at auction like to make the money because car seizures are relatively rare because cars are not of, you know you are not going to make a lot of money seizing a car cause usually there is a lien and stuff on it but they would do it just to get there point across, hey you don’t want to mess with the revenuer you know and eventually in 1998 that stuff all came to a head and Congress you know radically overhauled the tax code in terms of taxpayer rights and you know they can’t do that anymore, so they cannot due whats called a punitive seizure, a punitive seizure is when the IRS is doing something where it’s unprofitable they are seizing something and it’s unprofitable? By definition if it’s unprofitable it was done for punitive reasons, punitive means punishing.
KATRINA MADEWELL: Yeah, just because.
DARRIN T. MISH: Yeah they were doing it to like punish you, well that’s not a revenue officer’s job is not to punish you a revenue officers job is to get the money so if you think about that their job is to get the money and there’s all these procedural safeguards that were put into place 1998 then there’s not a lot to fear in most cases because if we put together you know a logical plan then we are going to make, by definition, we are going to make sure that you don’t get levied and seized and all that kind of stuff. But in some cases people come too late and there already right on the cusp or it’s already happening and those cases are obviously harder.
KATRINA MADEWELL: And they’ve already seized your bank account or taken their stuff?
DARRIN T. MISH: Yeah they’ve already done, they’re going through levies and now it’s a lot harder on ring the bell and so those cases are more difficult. Most of the time you can still take care of it you could still get it resolved but you know it’s harder, once you already have a revenue officer and he’s already seizing things you know you jump in at the 11th hour and you are like hey wait a minute hold on stop don’t do that, sometimes it’s harder to get them to slow the train down.
KATRINA MADEWELL: So off topic but they still locally have to IRS auctions where they resell things? Cause you remember they used to advertise like oh we are reselling the drug dealers corvette or reselling their house.
DARRIN T. MISH: The IRS actually has a mailing list it’s actually the US Treasury has an internet email list of all the auctions that occur of all property seized so it’s not just vehicles but real property and office equipment and stuff like that.
KATRINA MADEWELL: So they just send it to auctioneers to be generally auctioned?
DARRIN T. MISH: Yeah they send it to auctioneers and it’s kind of like your typical government, have you ever looked at a Federal Government auction it’s you know it’s, there’s paperwork and stuff….
KATRINA MADEWELL: Of course any of the Government is going to have some paperwork.
DARRIN T. MISH: And I can tell you that for real property for real estate there’s a right of redemption period I believe it’s 180 days and so what that means is the taxpayers has 180 days after the auction to come up with the money and get the property back, well what does that do to the price? Drives the price down because who in their right mind wants to buy real property and they have to sit on it for another 180 days.
KATRINA MADEWELL: That’s with anything though foreclosures, IRS.
DARRIN T. MISH: Yeah I mean the problem is that during that 180 days you are not going to make any improvements you are not even going to claim it because the odds are, depends on how the person owes I suppose.
KATRINA MADEWELL: Not to mention (inaudible) issues people can actually stake claim to that.
DARRIN T. MISH: Yeah, there’s all kinds of reasons why that drives the price down and that’s you know generally not in the Governments best interest to seize things that aren’t going to make them a significant amount of money. Over the years I have seen some seizures of things. Knock on wood I’ve never seen a primary resident seizure of one of my clients, I’ve seen…
KATRINA MADEWELL: They will take that beach condo though.
DARRIN T. MISH: I’ve seen some, I’ve never even had like a second house seized but I’ve seen some commercial buildings seized over payroll taxes typically. So that building like a daycare or something owns the building free and clear and they get behind on their payroll taxes and they can’t figure out how to get them paid and then the building gets seized and sold at auction. I’ve seen that.
KATRINA MADEWELL: Makes sense to me. Should we hop into questions from our listeners? Are you ready it’s a little early for that but should we, is there any closing thoughts on this?
DARRIN T. MISH: Well, the one thing is is that the IRS revenue officers use to be rewarded based on how much money they collected, post 1998 they are rewarded basically, not financially but there, there rewarded internally based on how much cases they close.
KATRINA MADEWELL: So there pay structure changed?
DARRIN T. MISH: I don’t think their pay, their management definitely has changed.
KATRINA MADEWELL: Incentives.
DARRIN T. MISH: Ok, so that they are measured based on how many cases they close not on how much money they collect and so that’s a really interesting thing to know to that even if you are broke this is not a bad time to try to resolve your tax problems but you know it’s probably the best time, if I, because in an offer in compromise scenario what I’m doing is I’m trying to paint a picture that you are so broke that you can never, you are never going to be able to afford to pay. So let’s make that, let’s paint that story or paint that picture or tell that story and get it done while you are in this down trough.
KATRINA MADEWELL: Right. Exactly and do it now because you know everybody has something that they can sell and honestly if you are in that mess you are probably going to have to sell something anyway, that’s just my thought.
DARRIN T. MISH: A lot of our clients actually have to borrow money from friends or family to get there offers you know fully funded but we are not talking about a lot of money here and there are some, I’ve never used them but there are some companies that will actually loan you money to settle the offer in compromise (OIC).
KATRINA MADEWELL: Oh my gosh that is scary alright. Well you are listening to the IRS Solution Attorney show we are not recommending that you borrow money to settle that IRS problem but we will help you get it resolved. You can reach Darrin at 888-get-mish.
DARRIN T. MISH: That’s 888-438-6474.
KATRINA MADEWELL: We will be back in just a minute stick around.
KATRINA MADEWELL: Welcome back, you are listening to the IRS Solution Attorney show here with Mr. host with the most.
DARRIN T. MISH: The IRS Solution Attorney, Darrin T. Mish.
KATRINA MADEWELL: Just trying to throw him off a little bit I’m your co-host Katrina Madewell and our topic for today’s show is why is right now the perfect time to end your IRS problem and we chatted a lot about that and surprisingly I love one of your questions when people come into the office you ask them you know why now why have you been waiting.
DARRIN T. MISH: Yeah and we get a lot of different answers there we get procrastination, embarrassment, shame, anxiety, don’t know what to do, get a lot of different answers there but it really kind of helps us frame where that person is emotionally and mentally and want to deal with their problem. Quite frankly I don’t like to work with people who are not motivated to get their problem solved cause if they are not all in, if they are not completely committed then they are harder to represent.
KATRINA MADEWELL: And you can’t always help somebody that’s not willing to do it I know for me that’s like you saying hey I want to buy a house well how motivated are you like if you don’t want to save the money so I can help you and you are not ready to like you know look at properties and get your inspection and do everything that it’s going to take and if you are getting a loan the lender is going to ask for a lot of stuff, by the way, I can’t do that by myself you have to do it and it’s no different than the tax problem.
DARRIN T. MISH: Or even in your business if they are trying to sell, if they want you to sell their house and they won’t even clean the place.
KATRINA MADEWELL: Yeah it’s, well you know what I have an answer for that, we have to price it for what it is.
DARRIN T. MISH: Yeah and yeah I actually like looking at, when I was in the market for buying a house I liked looking at houses that were kind of not perfectly staged because that meant that I was probably going to get a good deal.
KATRINA MADEWELL: No, it’s not even a matter of being staged sometimes Darrin sometimes it’s the matter of like the yuck factor.
DARRIN T. MISH: I was being, I was being diplomatic and…
KATRINA MADEWELL: No, I’ll just say it like don’t like you know what my pet peeve is? I don’t think I have told you this I don’t think I have ever said if I have you can call me out but like when I go into a house and the baseboards are so nasty they’ve never been wiped down that’s like one of my biggest pet peeves as an agent. I’ve never said that have I?
DARRIN T. MISH: Well, no I’ve never heard that but you know human beings have different standards and different you know acceptable limits you know if, most men this is stereotype but most men would probably never look at the baseboards. Come to think of it the baseboards here in the studio are not real clean and I had never noticed but…
KATRINA MADEWELL: And the dirty toilets.
DARRIN T. MISH: But I hear you, I hear you. Looked at some places over the years you know looking to buy that were not real great and but, I don’t think it’s intentionally done and it’s kind of the same situation here is that people just have to decide if this is the right time for them to resolve their tax problem or not. You know right now the IRS is more likely to try and help you if you are struggling financially then if you are just the kind of guy who just you know wants to get away with paying less tax. I have a lot, because I have such a big Social Media presence I have a lot of people that come from that you know that venue and I’m friends and personally acquainted with lots of pretty successful people and I get a lot of questions about well you know I have a $50,000 tax debt. Ok, fine, how much money you make, $500 well ok I’m probably not…
KATRINA MADEWELL: How often?
DARRIN T. MISH: I’m probably not going to be able to do anything for you because you have the ability to pay but versus if you owe $50,000 and we can show the IRS that you earned $50,000 a year which is not a crazy scenario, the IRS is just in a situation right now but who knows how long this will last but they are more than willing to deal with you right now.
KATRINA MADEWELL: So that’s why if you are listening to the show or you know somebody that has this issue where they haven’t filed returns in many years or they owe a huge chunk to the IRS this is really a good time to take the first step, call Darrin let him walk you through the process and explain what some of the options are.
DARRIN T. MISH: I’ve said this on the air before I’m not a puzzle guy like if you said tonight after dinner family we’re going to put together a puzzle here on the dining room table. I’d probably bow out of that one and the reason is that’s what I do for a living is I take you know I basically solve puzzles all day long every day all day, I like that part I like taking real life scenarios and this is one of the things that is actually hardest to do after you get out of law school is you take real life scenarios, you identify what the issues are, you apply the law to those issues and you come up with a conclusion with that resolution.
KATRINA MADEWELL: And I can see, with all due respect that’s why one IRS lawyer and another one not so great, because it is like the difference between the common sense and the book sense, like they could be perfect straight A student in law school, get the highest grade in the class but if they can’t mesh up like a common sense approach to a real life scenario it’s going to be hard for them to apply, to figure out how the law applies to that situation.
DARRIN T. MISH: Yeah and I think communication is just epically important you know communication, if you can’t communicate with your client, if you can’t understand what the client’s definition of a win, what the client’s definition of success is then you are going to have a lot of unhappy clients.
KATRINA MADEWELL: Agreed.
DARRIN T. MISH: So you’ve got to understand what that is and then try to over deliver to really truly be successful in this profession in my opinion. I’m going to tell you I’m not the best, smartest, book smart lawyer out there but I get really good results.
KATRINA MADEWELL: But that’s the thing I think sometimes the people with the most common sense are the most productive and can be the most successful, including financially.
DARRIN T. MISH: Yeah, I consider myself to be a people person that actually just knows this one little sliver of law really well and I love applying that sliver of the law to real people in there real problems because you see them so often, you see the marital problems. I literally have some prospects right now that told me that they are separated and probably going to be divorced in large part due to the tax problem. Well, that breaks my heart. I mean seriously it’s like let me get in there and like let’s get working on it.
KATRINA MADEWELL: Fix some stuff.
DARRIN T. MISH: Yeah lets fix that stuff and then maybe if everything goes well then you can rekindle that spark that caused you to be attracted to each other in the first place and you can rebuild that.
KATRINA MADEWELL: Right.
DARRIN T. MISH: But, yeah, it really makes me sad to think that people get divorced, and I understand cause I’m married to but…
KATRINA MADEWELL: Well then the number one reason for divorce is financial stress.
DARRIN T. MISH: I understand completely and that’s one of the reasons why I’m so passionate about helping people with these kinds of problems is to help alleviate that stress because I believe that life was, we are here to live, we are here to enjoy. We are not here to stress and freak out and, to be totally forthright I have my share of stress and freak outs.
KATRINA MADEWELL: Everybody does but…
DARRIN T. MISH: But that’s not what we are here for that’s not why…
KATRINA MADEWELL: It’s how you handle it it’s how you live.
DARRIN T. MISH: Exactly, exactly.
KATRINA MADEWELL: All of those things. Alright, so let’s dive into some questions from listeners, shall we?
DARRIN T. MISH: We shall.
KATRINA MADEWELL: So, the first one is from Suzy. Thanks for listening, Suzy. She wants to know if I claim my daughter who is a full-time college student as a dependent, can she claim her own personal exemption when she files her return?
DARRIN T. MISH: No, she can’t, you can’t double dip. You don’t get both. So what you really should do is you should talk to your daughter and you all should compare notes to find out who, how it makes the most sense who you know…
KATRINA MADEWELL: For who to claim?
DARRIN T. MISH: Who to claim the exemption. I think you need to be careful though because for various student loan reasons or even some employment benefit reasons you might want to continue to claim the child on the tax return, maybe health insurance perhaps…
KATRINA MADEWELL: Yes.
DARRIN T. MISH: You might want to claim that child as…
KATRINA MADEWELL: A dependent.
DARRIN T. MISH: As a dependent.
KATRINA MADEWELL: Well they are getting very sticky with a lot that stuff including health insurance, they ask more and more questions than ever before. Have you noticed that?
DARRIN T. MISH: I think when I was college student and or law student I think my parents claimed to me in part cause they were actually were providing more than 51% of my, my room and board but also because there were certain privileges, I got flight privileges because of my stepfather was a captain with an airline so if I was independent then I’m not sure I could have flown for free and that would have been horrible.
KATRINA MADEWELL: See that’s why you don’t know how to work the chainsaw because your dad figure was a pilot now it makes sense. I’m just saying you might be able to fly the plane but you can’t operate the chainsaw, just kidding different topic.
DARRIN T. MISH: I can take off and I can fly the thing, I’m not that great at landing and I think landing is kind of crucial, landing is actually hard, landing is not super simple. Now here’s kind of a short story about, about flying, now he’s actually, he works in the flight simulator program in Atlanta helping to train Delta Pilots in the simulator and so I’ve been there and I flew in the simulator and stuff and so on one occasion, it’s a 737 sim and we had set it up so that I could take off out of LAX and as a captain and so I did it and it was really realistic you know the plane banks it makes noise, it’s like completely legit and then we try to land and I need help cause like I’m going to crash and to crash in the sim is even bad so we land it and like a week or 2 later I’m sitting in a 737 taking off out of LAX, up towards the front of the plane and I was thinking to myself man this ain’t so hard, I’ve done this before I’ve taken off out of LAX before I just can’t land it. Good thing we are going somewhere else.
KATRINA MADEWELL: Oh my gosh.
DARRIN T. MISH: So what’s the next question?
KATRINA MADEWELL: Alright, so our next question is from Greg and he wants to know how much does an unmarried dependent student have to make before he or she has to file an income tax return? Good question Greg.
DARRIN T. MISH: Alright so I’m, I’m gonna pull a rip cord here and say it depends, ok…
KATRINA MADEWELL: Here we go.
DARRIN T. MISH: The answer is in IRS…
KATRINA MADEWELL: Where’s that attorney disclaimer you can go ahead and play it now.
DARRIN T. MISH: Can you see my parachute? I just pulled the rip cord. Actually, the answer is in IRS publication 501. I don’t have enough information to answer the question here but in IRS publication 501 which you could get at irs.gov it’s irs.g-o-v you can find IRS publication 501 and the answer shall be revealed to you.
KATRINA MADEWELL: That should be a rap, the irs.g-o-v.
DARRIN T. MISH: The irs.g-o-v.
KATRINA MADEWELL: I think there is a song for that.
DARRIN T. MISH: Oh, probably.
KATRINA MADEWELL: Anyhow so we have a news story lets hop into that. I don’t know who this is but NeNe, I don’t know who that is leaks that they owe the IRS nearly $830,000 who is that?
DARRIN T. MISH: So she is one of the former real housewives of Atlanta…
KATRINA MADEWELL: Oh I don’t watch TV so that answers that.
DARRIN T. MISH: Now here’s my big question about NeNe there’s that pop song right now that’s something like show me NeNe, I can’t, I’m drawing a blank here…
KATRINA MADEWELL: We will have to try to find that song.
DARRIN T. MISH: Yeah. I wonder if that’s who it is but anyway, she owes a lot of money to the IRS and really, I can’t say she should call me but I have represented celebrities and athletes and what not before so this might be kind of a fun case.
KATRINA MADEWELL: And Rock stars.
DARRIN T. MISH: Oh yeah.
KATRINA MADEWELL: We’ve talked about that.
DARRIN T. MISH: I’ve handled some rock stars for sure.
KATRINA MADEWELL: Real Housewives and rock stars are all in the same.
DARRIN T. MISH: I had an R&B singer call me that’s a household name, I didn’t represent her and I can’t even remember her name so there’s no fear of divulging who it is but she’s like an R&B singer that’s a household name that like if you said her name you would go oh she’s been around forever, in fact, I have actually had that conversation.
KATRINA MADEWELL: So real quick story what’s this IRS extends deadline for 401K rollovers what is that?
DARRIN T. MISH: Real savers who miss a 60 day deadline when moving their individual retirement accounts or workplace retirement plans such as 401K’s can now have a second chance. The IRS on Wednesday said that IRA owners and retirement plan participants who inadvertently exceed a 60 day limit when moving their accounts during a rollover, can receive a waiver of the deadline, without these waivers the amount in the IRA or retirement plan would often be taxable and many account holders younger than 59 1/2 years old would owe the additional 10% early withdrawal penalty.
KATRINA MADEWELL: And on that note, we are going to have to take a break and you can finish explaining when we come back. You are listening to the IRS Solution Attorney show, when we come back we will talk about why the IRS extended the deadline for the 401K rollovers and we will recap that back in 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 thank you for sticking with us through the break and the whole topic pretty much for today’s show is all about why right now, even though you think you don’t have the money, is the right time to actually figure out how to settle this IRS problem that you have. Right? In a nutshell?
DARRIN T. MISH: That is what the show is about but right before the break we were talking about the IRS is actually extended the 60-day rollover deadline for certain circumstances for people to get waivers like if they blow the 60-day deadline for rollovers for IRA’s and other and 401K’s. And I think you wanted to know why would the IRS do that and I can tell you that I have seen, I’ve seen some pretty bad things happen when people either are a day or 2 late because they just didn’t calculate the deadline correctly or even more commonly they do the roll over and they just can’t prove that it went through on time.
KATRINA MADEWELL: And don’t put it in your name.
DARRIN T. MISH: And I think the IRS is just trying to show some humanity here which is kind of surprising but on occasion if they see too many unintended results they will actually change the regulation, change the law. They can’t change the law but they could definitely change the regulation and the way things are handled in the Internal Revenue Manual.
KATRINA MADEWELL: So if you’ve missed any part of the show if you want to catch it in it’s entirety or you want to catch up with Darrin Mish you can get him at 888-get-mish?
DARRIN T. MISH: That’s 888-438-6474 or you can visit our website at getirshelp.com, we have the podcast, we have the app, there are all kinds of ways to hear more of myself and Katrina at anytime that you would desire.
KATRINA MADEWELL: Facebooking, you can Twitter, you can Tweet @darrin_mish
DARRIN T. MISH: We are on Pinterest, we are on Instagram we are everywhere.
KATRINA MADEWELL: What the heck are you Instagraming with an IRS issue?
DARRIN T. MISH: All pictures of my kids.
KATRINA MADEWELL: I was going to say, alright, so you can go get friendly with Darrin at Instagram but he won’t be posting, I guess you could post pictures of some of these boring IRS notice numbers but you know.
DARRIN T. MISH: You know what I could do, is I could take pictures of happy clients after their problems are solved. You know before their problem was solved they had wrinkles on their faces and they looked beaten down and weather downtrodden but after they look perfect they look like they have had a facelift.
KATRINA MADEWELL: Well, you could put like zoom in a letter just real quick on that number and then the happy face of the client and the final number that would be cool.
DARRIN T. MISH: Ok so by way of waiver that was, I was engaging in hyperbole, just now that’s not true you are not going to have a facelift after your IRS tax problem is solved but you are going to feel a lot better most likely.
KATRINA MADEWELL: They will feel like that, they will feel like that. So about that time.
DARRIN T. MISH: This is the segment of the show that we call it the IRS train wreck of the week and the reason we call it that is people come in and they are typically, their tax situation is just a train wreck and typically after they come in and seen us and hired the firm and we resolved the problem they come out much better off. So in today’s segment, we are going to talk about a client who actually, the strategy was we basically just ran out the clock. So in basketball when I was a kid, this is before the, I think it was before the NBA even had a shot clock but one of the things they taught us as young kids is that, since there was no shot clock in basketball, like if, one of the strategies was if you could keep the ball on offense away from the other team they couldn’t outscore you…
KATRINA MADEWELL: Right.
DARRIN T. MISH: Right so you would just play what we called four corners, you basically just passed the ball around on your half of the court forever until they got the ball or you took a shot and it was just, you were basically just running out the clock and you would do that if you had a good lead and you just were trying to make the game be over. You see it in football quite a bit you know usually in the 4th quarter.
KATRINA MADEWELL: They are running down the clock.
DARRIN T. MISH: They are running the ball to keep the clock running. Well that’s what we did in this particular case as you recall there is a statute of limitations for collections and what that is is there’s a time clock and it’s, the time clock is generally, there are exceptions, generally 10 years from the date the tax is assessed so you can think of the tax being assessed on the date either that you filed a tax return with a balance due or the IRS did an audit and they added money to your, you know to your account. So the, basically it’s 10 years, well this particular woman came into the office and she’s a great lady, really like her a lot and we were able to identify that hey you have a very short period of time on the statute of limitations and she owed, well on the liens, she owed $89,712. Now, the liens don’t actually have an accurate amount, that was the tax penalty and interest when the lien was filed but this lien had been filed for many, many years so it was probably 130-150…
KATRINA MADEWELL: So you are saying that number was much higher.
DARRIN T. MISH: Yeah that number was way, way higher than what was on the lien and what we decided to do is we identified that you know the best thing for her to do, this is rare, but the best thing for her to do was nothing. The IRS wasn’t bugging her, she had moved down from up north to Florida and that was the best thing to do so was just do nothing. And we knew, because we’d done the power of attorney and we got the transcripts, I was able to ascertain exactly when the statute of limitations expired.
KATRINA MADEWELL: I’m listening to that Rascal Flatts song in my head, days go by.
DARRIN T. MISH: Yeah, so every day that went by was just another day closer to ultimate freedom right? So, long story short, we outlasted the statute of limitations and then we very politely asked that the IRS release the tax liens both in this jurisdiction down here in Florida as well as up in New Jersey where she actually owned a second home. She owned a second home with equity in it in New Jersey, the IRS was not able to identify that in any meaningful way. I just talked to her yesterday and she had actually, we got the lien released and the balance was completely zeroed out. She sold the home recently up in New Jersey and has a little bit of equity in her pocket. So, that’s a situation where I didn’t do anything illegal, unethical or immoral we just played the game.
KATRINA MADEWELL: So at what point or did they, the IRS realized the clock actually ran out and they dropped the ball?
DARRIN T. MISH: I think the computer actually, the computer actually zero’s out the transcript automatically but typically those liens are not going to be released until somebody makes a demand or actually we are going to call it a request till somebody request that the liens be issued…
KATRINA MADEWELL: Oh times up can you let it go? Let it go.
DARRIN T. MISH: You are even a red head. So…
KATRINA MADEWELL: Having some fun today.
DARRIN T. MISH: That’s what happened they issued releases to the tax liens and she came out smelling like a rose.
KATRINA MADEWELL: Oh, we had way too much fun on today’s show. You are listening to the IRS Solution Attorney show you can get Darrin at 888-get-mish.
DARRIN T. MISH: That’s 888-438-6474 or you can visit the website at getirshelp.com.
KATRINA MADEWELL: Catch up with him on Twitter and on Facebook he is kind of fun there we will be back same time same place next week for this week.
DARRIN T. MISH: We are out.