When you call the IRS, the call is not recorded. The IRS is too concerned
about taxpayer’s privacy. But you can still get in trouble if you
lied to them on the phone because even though they don’t tape record
your conversation, they do keep a record of the call and log it in their computer.
The worst thing you can do is intentionally lie and then repeat. Then you’re
starting to walk that criminal path. This comes up most often with fairly
sophisticated businessmen. They’re sophisticated; they run a successful
business and should know the basics: i.e., they know their filing requirements,
etc. When someone has failed to comply with the requirements for a number
of years, then I become concerned about potential criminal penalties.
Do You Have Any Interesting Case Studies To Share?
One guy came to me with a very successful business. He was in the manufacturing
business, and he had a big manufacturing plant. Not big by GM standards,
but still a substantial local business here in Oakland, California. This
client had about a dozen employees and well over a million dollars’
worth of manufacturing equipment. He was running a successful business
and had clients who were paying him. Unfortunately, he ran into cash flow
problems and started cutting corners on his payroll tax. Before he knew
it, he ended up owing the IRS half a million dollars. They were ready
to padlock his building.
The IRS was ready to auction off his equipment and sell his inventory.
All of his employees would be out of jobs and so would he. He’d
blown off the IRS for a couple of years, and they were ready to go after
him. They were tired of messing around.
Finally, he came to me. At this point with the IRS, the collection was
assigned to a person they call the revenue officer. This is the IRS’s
bill collector. I contacted the revenue officer. She appreciated that
there was an attorney involved because this was a serious case. She knew
that she had somebody she could talk to. I told her right away, “We’re
going to start making monthly payments on this, and we’re going
to make them regularly.”
Over time, we were able to work something out. It’s been almost five
years later now. The guy is still on his monthly payment plan, and he’s
running his business. He’s doing well, and eventually, he’s
going to have that half million dollars paid off. This is one of my success stories.
In another case, a guy came in, and after I heard his story, I was really
concerned about his potential criminal liability. In some ways, it was
the same thing as the other case. He’s okay now. He’s on a
monthly payment plan, and I received assurances from the IRS that they
would not go after him criminally. We did that early in the game. Again,
if an attorney is there to say, “He’s going to cooperate,”
and the client starts cooperating, then there’s often some assurance
that the IRS will not go after him criminally.
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