P5 – How to Protect Your Wages
0:00
So, what I want to discuss here is how to stop an IRS levy and what to do? There’s two, there’s two steps that I generally like to use.
0:10
First thing is, you want to stop the levee, I don’t care about Elaine.
0:14
Liens, we can deal with later.
0:15
I just care about cash flow and then things the IRS wants to take from you that you need.
0:25
So, alevi is when you get a notice of levy, usually, you’re gonna get it after, the bank freezes, your accounts for the IRS is going to hold your money for 30 days, and it’s gonna give it up to the IRS.
0:35
So the way you prevent that or the way you stop that is within 30 days of receiving the notice of levy, you ask for a due process hearing. It’s called a collections due process hearing.
0:47
You want to use form number 1 2 1, 5, 3.
0:53
So you can go on the internet and search for IRS form 1, 2, 1, 5, 3, PDF.
1:01
Very easy to find this.
1:03
This is you fill this out takes like NaN.
1:06
You follow the instructions on that form on how to mail it and fax it uses include a copy of the notice the levy so they can the agents can see are within the 30 days.
1:16
The agents can then stop the levy. Most of the time they got to stop the levy. I think it’s even required they stopped the levy. If you do this within 30 days if it’s after 30 days you can still do it.
1:25
It’s just permissive with the IRS agent. If he’s going to stop the levy, he can decide yes or no, and there’s no penalty there.
1:32
If you have a problem with this, if there’s something beyond, and I’m just speaking.
1:36
Generally, if, there’s something crazy where you get this crazy IRS agent that just is out to get you right.
1:43
You can bring in a second layer of bureaucracy. It’s called the Problems and Resolutions Office.
1:49
The way you do it is, with form 1, 2, 1, 5, 3, you fill out form 911 of all things. I didn’t come up with that name because he said the IRS came up with form 911.
2:00
It’s urgent that you have a meeting with supervisory agent to look over what’s going on in the collections process, and the automated collections or the levy process, OK. So that’s what you’re doing.
2:15
With a form 911, you’re bringing in a super supervisory agent to overlook and oversee what you’re doing, and sort of intervene and make sure things are done fairly.
2:24
If you’re not filing tax returns, they’ll do whatever they want, OK?
2:28
Without penalty, If you’re filing returns, then you get a little look a little bit more latitude with the IRS.
2:35
They’re gonna, They’re gonna work with you, OK. It’s much easier.
2:40
So just think of that, In most cases, I mean, I really think it’s about the money when it comes to that.
2:46
It’s not about the principle of, I know you believe that you don’t have to file, and all this sort of thing.
2:50
It’s not really about the money, it’s about sometimes that people really need the money, so it’s best to try to get your money, OK, so that’s how you stop it now, when you do this virus who’s going to want to have a meeting?
3:01
And this is really a good idea, don’t be afraid of the IRS.
3:04
You’re going to have a meeting, lots of times, is by phone, but you can go there in person, and they’re going to expect you to make an offer to pay.
3:12
You can make an offer not to pay because you think there’s no liability, but you’re more than likely not going to get that through unless there’s clearly a mistake.
3:21
So, what you want to do is make an offer in compromise is what is called an offering compromise based on doubt as to collectability.
3:30
In other words, you don’t have the ability to pay so you want you want to get some sort of deal with them where they can check your finances and maybe look, look at again in six months and see if you can pay at that point. So, that’s why I tell people the Iris is actually the friendliest creditor, if you know what forms to fill out, how to communicate with the IRS.
3:46
Because the IRS bases this collection on your ability to pay where everybody else in the world basses it on, how much you owe and how much the claim is worth, as to how much they can take. They’ll take everything at once Now, virus will do the same as well.
3:59
But if you ask it and if you’re in the right situation financially, you can get a much more favorable outcome if you ask them the right way.
4:09
When you do the 12153, you get a collections due process hearing, based on data Zika to collectability, the agent is going to expect you to file a form 656.
4:21
It’s a packet of lots of pages, basically.
4:23
It’s a balance sheet, it’s like doing a tax return, so it’s almost the same information.
4:27
Maybe it’s a little bit more than doing a tax return and it’s it’s disclosing all your financial abilities, all your bank accounts and ability to pay and you have to list all the property you can.
4:38
So, like if you have a boat sitting on your backyard, the IRS might want you to sell it before it makes a deal with you. It’s just how they do things.
4:45
So they want to know what you have, before they make a deal with you.
4:51
That within the form 650 sets, you can get a booklet. You can get this on the Internet, again, search on Form 656, PDF.
4:59
It’s just as well. You get it on the Internet. You can print it out. You’re going to need a paper version of this.
5:04
Inside that Form 656, you’re going to have several other forms. The two basic ones are this.
5:10
It’s called a form 433 A for individuals and a form for 33 B for businesses, Sometimes they’ll want both, It depends on know what your individual mastro file looks like to the IRS agent.
5:25
So you’ll have to make these disclosures on forms 433, A and or form 33 B.
5:32
You should have that ready so I will start preparing that now When I get my levy And I got my 30 days. You know, you might not know about the levy until two weeks ago or something like that. Hopefully, it’s early. Hopefully they give you the 30 days they’re supposed to anyways.
5:45
So just file your, you’re 1212, 1 5, 3 as soon as you can start preparing your form 656 with your 433 A and have that ready. And when you get to your meeting, you want to present this to the Agent.
6:00
And then the Aging, we’ll just go on that now.
6:02
It is helpful to have nothing.
6:04
It’s helpful not to have a job that’s helpful, in that sense, not to have the ability to pay, because the IRS will tell you, OK, well, you don’t have the ability to pay, we’ll check back every six months. This will work in your favor.
6:16
Then, from that point, this is, This is the second stage of it.
6:20
Once you get to that point, you want to start doing things that make more money, whether it’s getting a job or whatever.
6:28
Maybe you want to buy an asset or invest in something, you want to do it, but you want to do it in a way that it’s not in your name, you want to set up a company and I’m not saying, Hide everything.
6:36
I’m just saying structured in a way so that the relationship, you have to this asset you want to build up or this cashflow the same and is the same as if you were signing on your churches bank account. That’s probably the best example I can give. I always use that one.
6:52
The churches money is not yours, but if you’re the secretary and you’re just volunteering your time to help your church, then, yeah, you’re you’re empowered to pay its bills, but that’s not your money to pay personal debts, right. And everybody knows that, everybody respects that. So, if I set up that situation with your own company, well, then we’re in good shape.
7:10
Because now, we can build up that company’s net worth and we can disburse funds to you in a way that is favorable to you continuing to work out something with the IRS. So, if I were to tell you what could deal with the IRS and showing how poor you are, and then I show you how to make $50,000 a month.
7:28
That’s not going to help your situation because, well, I mean, maybe it well, but the IRS is going to want that money, right?
7:33
So everyone’s a little bit different.
7:36
So just keep that in mind. So let me just go through the kinds of things that you’re gonna look at here.
7:43
The last third of the IRS process. The first third is where you get a letter saying hey you didn’t pay enough money, or we’re gonna select your account for audit. And then there’s the second middle is where you can argue about it in tax court.
7:58
And then the last third is any unresolved matters become a collection issues right in if they’re unresolved it results in the IRS doing levy’s typically.
8:09
So, what you’re gonna get as a series of computer paragraph letters, if you ever wonder, what the seat, the CP, letters mean on the numbers. The form numbers, You’re getting a look at the top right corner of your IRS letters.
8:21
There, CP 5, 1, 5, 5, 1, 8, et cetera.
8:26
Look those up on the internet.
8:28
Just look up CP, IRS, letter, CP, Whatever the number is and you will start getting a picture now, a lot of times.
8:34
These these instructions, when you see on the internet, they’re written by attorneys are written by IRS employees, and they’re just telling you don’t do it.
8:42
Don’t do it the structure and tell you, OK, just, it’s information, so just look at it for information, so you understand what the IRS is doing.
8:49
I’m not saying go search out those form numbers and then follow the instructions on the Internet.
8:54
Definitely.
8:55
Um.
8:58
What you’re concerned with is a timeline you want to see, because this gives you a better idea of what’s going on in the timelines and how to prepare, and so forth. It gives you more information.
9:06
That way, you’re not worried, because if you don’t know what’s going on, it’s, it’s more scary, and you’re more willing to pay somebody for useless help, like, pay an attorney to do all this stuff. And you can do it yourself, OK?
9:16
Sometimes attorneys have their place, but not filling out forms. And not for $6000. That’s absurd to do things like that.
9:24
Alright, so, what will happen is you’re gonna list all the property, which you have You’re gonna anyways. When you do these forms, you’re going to list all the property you have. You’re going to list your cash in the bank. And this thing you’ve heard you, you’ll have already done this when you do the 656.
9:38
But for your own benefit, you want to list property that you have the right to sell, OK, a boat, a car, a house.
9:47
And identify things, money, cash that you have the right to spend that can be seen.
9:55
Like if you have a tube of silver rounds in your sock drawer, no one gets to see that, right? So we don’t have to talk about that. I’m not talking about that.
10:05
I’m talking about the cash in the bank trading accounts out of stock brokerage and I’m not talking about cryptographic currency.
10:13
I’ll get to that later.
10:15
Any receivables? Alright, if you’re running a sole proprietorship and you have regular receivables, The IRS will want to know about that.
10:21
And you’re going to want to know that you have that, you want to make a list of all the things that you have the right to spend or sell. And the reason being is I’m going to show you how to divest yourself away from that. And that will help you in making a deal with the IRS.
10:34
I’m not saying hide your property, I’m just showing you how to re-organize it restructure it so that the IRS can agree that you don’t have the ability to pay OK, that you’re not going to do it. If you had $10 million in the bank and then transferred it to your Brother Bills account, right? That’s not going to fly. They’re going to see that.
10:53
The best way to do this is Receivables.
10:57
Here’s a quick example receivable from which you’re getting 1099 is you direct the payor, whoever is sending the 1099 to then issue the payments from now on into the name of your new limited liability company.
11:10
You can call it whatever you want, Whatever works in your situation, You need yourself to be a member of it, and you need another friend or family member or somebody that’s not a spouse to be another member of record.
11:20
So when you organize it, you and the other individual should be listed as members, so it’s a multiple member, LLC.
11:28
The reason for that is a multiple member LLC creates a situation that looks just like you signing for your church. It’s not your money, It’s a company and then you have to wait for a disbursement or a paycheck before you have the ability to pay it out.
11:39
It can’t be taken from the third party because it’s not your money yet.
11:44
And I set these up specifically for those situations so that there’s no disbursing the schedule and the operating agreement. Right?
11:51
So we can eat, This is we can use that as a shield to protect assets, property rights, and cash flow and cash that you need to use in the bank, because sometimes, you need to use the bank because you’re running a business or something like that.
12:06
So we use limited liability companies for that. Lots of times we can just do one LLC sometimes, too.
12:12
Then that’s what we do.
12:13
So we start re-organizing the the things You have re titling them.
12:19
Like, for example, I’m not going to take a boat or a car, and I’m going give it to a company and then tell the IRS, I don’t have anything, but that’s just not how it works.
12:29
But, what I may have to do is I may have to sell the boat. I could probably keep the car the IRS to say, OK, we don’t care about that, but that boat, you need to sell that boat and pay us, that’s what they’ll do.
12:38
And you can then use that to negotiate because you can always get another boat, It’s just difficult when you have to, you’re not going to have to get rid of your car, but it’s difficult to get rid of your car because you need to go to work right there. They understand that so the agents aren’t gonna mess with you on that.
12:54
And there’s no real concern about fraudulent conveyance.
12:56
I know people they’re concerned about fraudulent conveyances.
13:00
If you transfer property when a third party is a creditor is making a claim on you, but when it comes to the IRS, if you and even the judgement creditor, when you transfer property, allein already, it’s still attaches to the property so, you’re not really defrauding a creditor. He still has the right to collect.
13:16
The conveyance only protects against future creditors that establish a claim against you. So, don’t be concerned about that.
13:25
So what we’re doing is we’re reducing the risk of collections by re-organizing the rights we have to sell property or spend money, Right, personal bank account, replace that with a limited liability company and not only disbursed out enough to pay my personal expenses. If I don’t disbursed enough to pay my personal expenses, but they’re getting paid, that looks funny.
13:47
And the IRS says, Well, how are you paying your life, Bill?
13:50
Well, if aqua Bob is paying your light bill. That’s your income.
13:52
So you can’t really escape income if you’re paying a bill over here. So as long as you have a bill over here, you gotta have some income here. Otherwise, it looks really weird. And I say that because I’ve been to so many audits have been over 100 audits over the years. I stopped doing that a long time ago, but, in the very beginning, the first few years, when I did this, I went to over 100 audits all over the country. And I just see how people tried to do silly things, and, you know, the IRS doesn’t make a lot of sense. They’ve been doing that for a long time, And so the questions they asked, gave me the information I needed to make sure if I do certain things for members, that it’s done correctly.
14:27
And even if the IRS can see it, it doesn’t matter, OK? It’s a regular transaction. It’s not some silly, like I’m not gonna give.
14:34
I’m not gonna give my boat to my neighbor, you know? So, it’s gotta be irregular transaction.
14:41
Alright, so, I’m gonna stop now.
14:42
There’s a second part, and I’m gonna get into more detail about About what we can, what we can do. So anyways. I’m gonna stop right here then.