We'd like to say that when people hire us that we can immediately…or at least within months…get them that final tax resolution that they so desperately want. That's not always the case, though. Sometimes it can take years to resolve a case, and probably not for the reason you think.
"Mr. Ferrari" first came to our firm in January of 2011 — before I even started work at IRSMedic. He owned a stone mason contracting business with a few employees, and he relied on a handful of select subcontractors.
He had unfiled tax returns and IRS debts looming. It wasn't that he didn't have work — he did, and everyone knew him to do quality work as well. He was just overwhelmed with the paperwork part of running a business and keeping the books. In 2008, he hired a CPA to get him straightened out, but the CPA wasn't completing tax returns or helping Mr. Ferrari make estimated payments even though he had been paid up front.
In June of 2011, when I began working in the IRSMedic tax resolution department, I was assigned to his case. Instead of following our advice, Mr. Ferrari kept on ignoring that part of his business that he didn't like doing, and he wouldn't give us the complete information we needed to help him. He was in a sort of paralysis, and I was frustrated because he was not giving me the tools I need to settle his tax debt.
We must have updated his financial analysis at least three time times because he could never quite bring all aspects of his case together simultaneously in order move forward with a resolution. We held off the IRS for as long as we could, but then the day finally came: He was levied by the IRS. Our hands were tied as he was not in compliance.
It was that levy that finally sparked him to devote more effort to resolving his case. We got the levy released, and eventually submitted an Offer in Compromise at the end of 2011. Unfortunately, Mr. Ferrari defaulted the Offer in Compromise while it was under consideration — because he had not been making estimated tax payments. So we had to start over.
Turning self-fulfilling prophecies around
Mr. Ferrari was one of the guys who was always pessimistic that he would ever get out from under his tax problem. He viewed himself as someone who couldn't do anything right and had bad luck. He was the nicest guy you will ever meet, and I was determined to make him see that it was possible to resolve his liability if he listened to our advice and understood that the path he was previously on was not working for him.
The part of his story that struck me the most was that he and his wife had divided their finances — their house, their vehicles, their bank accounts… everything was kept separate because of his tax problem. She was afraid and she was angry. Their marriage had broken down and they were on the brink of a divorce because his wife resented that their joint relationship, their life together, had become so divided because of his tax problem. This made me extremely sad. It was clear that he needed this Offer not just because he couldn't afford to repay his liability; he needed it to save his marriage.
When someone hires us, we get an intimate look into their lives, warts and all. I am amazed at how some people can feel so awful about themselves when all they have are typical human imperfections. Somehow, though, they are unable to recognize all of the amazing qualities in themselves. They have bought into this lie that they are horrible people and don't deserve a great life; thus they continue the very habits that led them to their misery — even when they know better.
Thank God for stubborn fools
Mr. Ferrari was also very stubborn. He never quit trying to get his life back on track. His old habits caused him to fail with us two times — and we're pretty good, if I may say so myself. So why try for a third time? We refused to give up on him.
Eventually, we were able to submit a new Offer in Compromise. It wasn't an easily accepted Offer, and I could tell each time the IRS had a document request for him that he thought they would find some fault with his Offer and reject it. It felt like I was walking on a tightrope, just hoping the other side would come sooner than it was.
The IRS asked Mr. Ferrari's wife to provide some of her information as well, which she initially refused to do. This may have been the end of it, had we not been able to show her that the Offer acceptance would have a positive impact on both their lives, not just his. So she bought in. He stuck with it; we stuck with him. And we were about to get a great result.
Money is not the bottom line
I wanted to share Mr. Ferrari's story because it is a prime example of how resolving a tax liability has less to do with money and more to do with getting things that money can't buy. Things like mental health and quality relationships with your loved ones and with yourself.
For our most difficult cases, fixing a tax problem includes our clients fixing something about their lives. And yes, sometimes, you have to pick yourself up and try, try again.
It feels like a miracle
Do you know how absolutely great it feels, when someone who you really like, someone who has been frustrated, someone who can't seem to catch a break, someone who is a really great person — finally wins?
Well, that's what happened. We won! I can tell you that when we received the letter from the Offer in Compromise examiner telling us that Mr. Ferrari's decade-long back tax problem was settled for $3,216, I danced around the office, and then was joined by several other team members. And maybe the acceptance dance is so much fun because I know it is not just one person's life we helped make better, but everyone in their life as well.
If you have a tax issue you need assistance with, contact us. We can help.
