Brian: Peter, can you identify maybe a couple of folks out there who might be listening, what their situation might be, those who might be in need of your services?
Peter Stephan: I can, Brian, but let me remind you that although we like to work 24 hours a day, seven days a week, if you’re calling outside of business hours, sometimes we take a Sunday off during tax season.
Brian: Yeah, that’s right folks, as we get closer to April 15th maybe we’ll get somebody in there on a Sunday afternoon, or heck, I’ll go sit there through the night. I could use the money.
Peter Stephan: There’s a great idea.
Brian: You know my situation. I’ll do anything for $20.00 these days. Peter, typically what are you seeing in the office?
Peter Stephan: The point I was trying to make is you can go to tri.davidkarp.co, that’s TaxResolutionInstitute.com.
Brian: And there’s a wealth of information on the website, and even more fun interviews with us right there at TaxResolutionInstitute.com.
Peter Stephan: You can also email us, and we will get back to you, even on a weekend.
Brian: Or Monday morning, of course.
Peter Stephan: Exactly.
Brian: It’s 818-658-7590.
Peter Stephan: Let me give you an example. I had a mortgage broker come into the office who was referred by a bankruptcy attorney. He said, “she owes $1,000,000.00 in taxes.” This girl walks into my office. She’s 34 years old, and I’m looking and wondering how is it possible you can owe $1,000,000.00 in taxes.
She was what you call a warehouse mortgage broker, meaning she went to my little mortgage broker clients and said, “If you originate loans with us,” and this was back in the hey day here, a few year’s ago, “we’ll give you a little piece of each of the loans.” Bear Stearns or whomever she worked for at the time had that deal. She was making $1,000,000.00 to $1,500,000.00 a year on a 1099. No estimated tax payments, and no withholding taxes.
As you know what happened in the mortgage industry, she’s out of a job.
Brian: Right, sure.
Peter Stephan: She’ll never make $1,000,000.00 or $1,500,000.00 again. Of course she spent all the money and had no money to pay the taxes. What we did is we put her in CNC status. Currently not collectible status, because her hand called for it.
Brian: What does that mean? It sounds like it’s a shelter, and it protects you, basically, to be in CNC status.
Peter Stephan: Yes, it prevents the IRS. It’s an agreement with the IRS to leave the tax payer alone until the situation gets better. What people don’t seem to understand, and should, is that there’s no debtor’s prison for not paying your taxes. If you file your taxes and you legitimately can’t pay, then the IRS will still leave you enough money for a roof over your head, food and clothing, an automobile to drive up to $495.00 a month.
Brian: Am I supposed to like them now, Peter?
Peter Stephan: Well, you can like them a little better. In fact, what happened in this situation is that three years went by, the taxes aged, and the debt that was $1,000,000.00 and change went up about $300,000.00 or $400,000.00 with the interest and penalties, and we did a chapter 7, and she owes no taxes and is getting on with her life and her three kids, mother and so on and so forth that she’s supporting.
Brian: That is remarkable. Seriously, I don’t want to get schmaltzy, but that’s got to make you feel good.
Peter Stephan: On the one hand of course it does because that’s what we do. On the other hand, we all pay our taxes, and to watch somebody walk away from $1,000,000.00 tax liability sometimes upsets people, especially the revenue officers at the IRS.
Brian: You are listening to The Tax Show. I’m Brian Whitman from The Morning Answer. Right here The Answer, Peter Stephan right here from The Tax Resolution Institute, and Jim Felton from Greenberg and Bass. We’re here every Sunday at this time. Let me give you the number. Give them a call Monday morning, leave a message, 818-658-7590. That’s the number. The Tax Resolution Institute. You can also check out the website, tri.davidkarp.co. Call them, talk to them about the situation if, like me, you received a letter from California Franchise Tax Board or the feds sent you a letter. 818-658-7590.
Currently Not Collectable Status is a way to protect a client while a solution to their back tax issue is reached. Eventually a Chapter 7 Bankruptcy was filed on behalf of the mortgage broker.
If you need expert tax resolution or bankruptcy attorney help call 818-658-7590 and get the Tax Team on your side.