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JULY 2025 VOLUME 9, ISSUE 7
TOPH’S TAX RESOLUTION TIMES
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SMALLER STAFF, MORE PRESSURE HOW THE IRS IS TIGHTENING THE SCREWS ON TAXPAYERS
Change is in the wind for taxpayers.
themselves or have a tax-resolution specialist intervene on their behalf, they are vulnerable to the IRS’s most damaging enforcement weapons.
As the IRS cuts about 20%–40% of its workforce in response to the Department of Government Efficiency (DOGE) cost-reduction campaign, fewer taxpayers are facing audits. However, the IRS is nothing if not resourceful! Although thousands of employees have hit the exits, the agency is stepping up pressure on taxpayers in other ways. The IRS is clearly grappling with staffing gaps. I might be working with one IRS employee on behalf of a client, only to learn days later that the case has been reassigned. But the agency is also stepping up issuance of threatening collection letters. We are hearing from a growing number of clients and prospective clients who have received mailings from what appears to be an automated system. This suggests that the agency is using computer- generated communications to fill the staffing gap.
I’m also seeing evidence that the IRS may be using bots as stand-ins to interact with taxpayers and enrolled agents by phone. This is speculation on my part, but I have had bizarre telephone encounters recently. One telephone exchange was especially cryptic. I received a voicemail from a robotic-sounding IRS agent who identified herself by name — let’s call her Emily Smith. I called back and submitted to an identity- verification process conducted by the same robotic-sounding voice. After my identity was verified, the voice said I would be transferred to someone else with the same name — Emily Smith. And when the new Ms. Smith picked up, she sounded authentically human. If I didn’t know better, I would have thought it was a scam. But this was a bona fide communication from the IRS! The only conclusion I could draw was that the IRS is testing an AI-driven call screener. In thousands of calls with the IRS over the years, I have never had an encounter like that one. It has made me more intent than ever on holding meetings with IRS agents in person. What does all this mean for taxpayers? Our clients’ cases are taking on more urgency at the front end, for one thing. While we could assume in the past that a case pending with Campus Collections wouldn’t trigger levies by the IRS, that is no longer a sure thing. If you are carrying tax debt, it is more important than ever to act quickly in your own defense. Also, resolving our clients’ cases on the back end will probably take 25%–50% longer, because the IRS’s shrunken staff will be handling a larger number of collection actions. If you are concerned about a tax debt, we are here to help. And we promise — no bots work here! We will greet you with an authentic human handshake and a smile. Call us today for help with all your tax resolution concerns.
THREATENING LEVIES For the first time since the 2020–2021 pandemic, the IRS is imposing levies against a wide range of tax debtors, large and small. Levies give the IRS full rein to seize your house, garnish your paycheck, freeze your bank accounts, or impound your cars or other assets. The agency has brought these enforcement actions consistently against people with large tax debts, whose cases are handled by a local IRS field officer. But since the pandemic, taxpayers with smaller debts — those handled by centralized service centers through a process called Campus Collections — have been protected from levies. This may have lulled some into a false sense of security. Now, the pandemic-era protections are over. Taxpayers with smaller debts are being hit by IRS levies too. Unless they take steps to protect
–Toph Sheldon
DON’T LIVE IN FEAR - TOPH IS HERE!
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Sometimes, the best escape is right under your nose. Planning a staycation in your local area can save you the hassle of long travel days and large expenses but also reveals hidden gems in your own backyard. Here are six ways you can turn your town into a fun staycation! SET YOUR INTENTIONS. Start by deciding what kind of staycation vibes you’re aiming for. Is it relaxation with spa-like peace and quiet, or are you looking for adventure and exploration? Setting your intentions will help guide your activities and tailor your staycation to your desires. TREAT YOURSELF. Part of the joy of vacationing comes from stepping out of your routine and indulging a bit. Why should a staycation be any different? Book a massage at a local spa, order takeout from that high-end restaurant you’ve always wanted to try or splurge on a fancy “hotel-style” breakfast in bed. Remember, it’s all about treating yourself! VISIT A NEW PLACE EACH DAY. Challenge yourself to visit new spots in your area. It could be a park you’ve never strolled through, a museum you’ve skipped, or an interesting shop you’ve passed but never entered. It’s fun to see how much you discover in places you can visit every day. DON’T JUDGE YOURSELF FOR NOT DOING ANYTHING. If your most adventurous activity for a day is moving from your bed to your couch or hammock, that’s perfectly fine. Not Your Staycation, Your Rules Easily Enjoy a Perfect Home Holiday
When a divorced couple who were still living together came to us recently for help, I offered some unusual advice: Set up separate households right away! Don’t get me wrong — I am not hanging out a shingle as a couples counselor! But for these ex-spouses, supporting two households rather than one conferred some tax advantages. And by moving apart and working with us, the ex-husband was able to settle a $154,000 tax debt for a mere $800 — less than 1% of the amount owed! Love and Taxes: How One Couple’s Split Lowered Their IRS Bill Toph’s Tax Triumph
Let’s start the story from the beginning.
You have probably heard about “the marriage penalty,” the quirk in tax law that forces some married couples to pay higher taxes jointly than they would if they were single and filing separately. While 2017 legislation reduced the number of couples affected, the marriage penalty still hits spouses at higher income levels. That was the case for this couple. One of the primary reasons they had divorced in the first place was taxes. They had both joint and separate tax debts that needed to be resolved. We wouldn’t normally represent both ex-spouses, but these two were cooperative and seemed to get along. So, we secured a conflict-of- interest waiver from both of them allowing us to represent them both before the IRS. Even though the IRS should have treated this couple’s concerns as two separate cases, I knew the agency would demand more of each of them if they were living together. In the agency’s view, sharing a household would mean sharing the bills, leaving more surplus cash to pay the IRS. When I suggested to the ex- husband that he move out for a while to show the additional expense of supporting a separate household, he agreed. We then offered $800 to settle the ex-husband’s $154,000 in unpaid taxes back through 2013. Even I was surprised when the IRS accepted! His ex-wife owed less than half as much as her ex- spouse, and her case is still pending. So what about their relationship? I don’t know the details. If you’re asking my opinion, this pair still seemed to enjoy each other’s company, suggesting there was hope for a lasting reconciliation. But of course, it’s not my place to say!
every staycation day needs to be filled with activities. After all, the best memories can come from hanging out and enjoying the peace of your own space. BE A TOURIST FOR THE DAY. Grab a camera and see your city through the eyes of a tourist. You might discover typical tourist activities you’ve never done because you live there. It’s a fun way to engage with your surroundings differently.
REMEMBER, IT’S YOUR STAYCATION. The best part of a staycation is that there are no rules. Sleep in, stay up late, eat dessert for breakfast, or wear pajamas all day. Do what makes you happy because, after all, isn’t that what any great vacation is about?
–Toph Sheldon
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ASHLEY’S CORNER BOUNDARIES VS. FREEDOM: FINDING THE SWEET SPOT
Our family is always going through transitions. Didn’t some philosopher say the only constant in life is change? Well, he was right. Our newest transition is that Mac is turning 10. We are leaving the land of diapers and “I need to do everything for you” for the land of “What can you do for yourself?” It’s a whole different ballgame. Mac is clearly ready for more independence. But what does that look like? What rules are we going to set? Can he walk to the playground? Could he go to the community pool on his own? Mac is an excellent swimmer. But he’s only 10. Does he need to be able to call me if he is out in the neighborhood? Recently, I found myself wondering if I should get him one of these GPS tracking watches with texting and calling. Where did this mentality come from? When I was growing up, nobody was tracking me. My mom didn’t always know where I was. She trusted me. I rode my bike all over the neighborhood. I knew the rules and came home by 6 p.m. So, why do I think I need to give Mac an AirTag so I know where he is? I went to a community book talk recently about “The Anxious Generation” by Jonathan Haidt. The premise is that today’s parents are putting far more restrictions on their kids’ playing outside. But we give them freer access to the internet, where predators and social-media harassment jeopardize their mental health. Wouldn’t it be better if they were all at the park?
After that book talk, I decided Mac could take the swim test and go to the pool on his own. If he needs to reach me, he can borrow a phone or use the pool phone. Why do I feel like I need to give him a phone?
Mac wants one — he says all of his friends have phones. “But I don’t want you to have a phone,” I tell him. “You don’t need a phone. You are 10. I want you to be outside
playing and learning to make smart choices.” And during those moments when I think I need a GPS tracker, I’m going to rein in my own anxiety.
You want your kids to be good humans. So, you have to shove them out into the world and say, “I’m going to trust you until you screw up, and then you’re going to experience the consequences.” I’m not sure I’m ready for that. But it’s going to be interesting!
Take a Break
4TH OF JULY COCKTAIL
Ingredients
Inspired by PeelWithZeal.com
•
2 oz grenadine, divided
• 3 oz vodka • 2 oz blue curaçao
• 6 oz lemonade
Directions
1. In each of 2 cocktail glasses, pour 1 oz grenadine and fill with ice. 2. In a cocktail shaker or glass measuring cup, mix lemonade and vodka. 3. Slowly pour the mixture evenly into the glasses with grenadine. 4. Place a soup spoon upside down over each glass. Very slowly, pour half of the blue curaçao over the spoon, cascading the curaçao to create the blue layer. 5. Serve immediately, and let freedom ring!
Solution on Page 4
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Cincinnati Tax Resolution Powered by Toph Sheldon 9200 Montgomery Rd., Ste. 7B Cincinnati, OH 45242
PRST STD US POSTAGE PAID BOISE, ID PERMIT 411
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INSIDE
1
A Shrunken IRS Wields More Weapons Against Taxpayers
2
Creating a Vacation Vibe at Home How Toph’s Advice Helped a Divorced Couple Slash Their IRS Debt Ashley’s Corner: Raising Kids to Make Smart Choices 4th of July Cocktail
3
4
Queen Bey Beats the IRS
How Beyoncé Triumphed in a Multimillion-Dollar Tax Battle TOPH’S TAX NIGHTMARES
Cowboy Carter’s battle with the IRS appears to be nearing a close.
addition, the IRS ruled out legal and professional service expenses she had claimed on 2018 returns, alleging that Beyoncé had failed to support them.
The score: Beyoncé 1. IRS 0.
The IRS had also disputed an $869,000 deduction for a charitable contribution. Beyonce is known for supporting various charitable initiatives through her foundation, BeyGOOD, including scholarships, internships, small-business funding, and donations to UNICEF and hunger relief, hurricane relief, and wildfire relief organizations. For the 2019 tax year, the IRS had accused the singer of failing to support expenses claimed in connection with royalty income, including utilities, insurance, management fees, taxes, and depreciation.
The IRS went after the superstar singer in 2023 for nearly $2.7 million in taxes, penalties, and interest the agency claimed she owed from tax years 2018 and 2019. Beyond her enormous popularity and record Grammy award wins, it appears that Beyoncé has some pretty smart tax lawyers too. In a stipulated decision approved late last year by a tax court judge, Beyoncé agreed that she owes $709 in back taxes and penalties for the tax year 2018, and nothing for tax year 2019, according to Tax Notes, an online tax news and analysis publication. The amount now due from the pop superstar is less than 0.03% of the IRS’s original claim.
After the IRS entered settlement talks with the pop star, the agency was clearly satisfied by her counterarguments and documentation.
“I guess you could say that Beyoncé’s team made lemonade out of lemons,” a tax specialist not involved in the case told Tax Notes, referring to the title of the singer’s hit 2016 album. The irony, the observer added, is that Beyoncé likely had to spend tens of thousands of dollars on professional fees in a fracas over a tax bill that ended up being less than $1,000.
Clearly, the ruling was a taxpayer-friendly outcome.
The dispute surfaced in 2023 when Beyoncé filed a tax court petition disputing the IRS claims. In calculating her alleged tax debt for 2018, the agency had asserted that she had unreported royalty income. In
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DON’T LIVE IN FEAR - TOPH IS HERE!
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