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MAY 2025 VOLUME 9, ISSUE 5
TOPH’S TAX RESOLUTION TIMES
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All the changes in Washington are leaving many of our clients wondering how this new administration will affect taxpayers’ dealings with the IRS. IRS UPHEAVAL Now May Be the Best Time to Resolve Back Taxes Staffing at the IRS has been in flux as I write this, amid the layoffs of 7,000 workers, more staff cuts reportedly on the way, and lawsuits pending to challenge the layoffs. The outcome is uncertain. But these moves are creating a lot of uncertainty, both among taxpayers and our colleagues in the tax resolution industry. The cutbacks mark a reversal since Congress approved $80 billion in new funding for the IRS in 2022 and gave the agency leeway to hire thousands of new employees. That process was going on through late 2024.
Now the new administration is going in a different direction.
A TIME TO COME CLEAN If the IRS does offer new options for tax forgiveness or penalty reduction, that could be a good opportunity for people troubled by tax debt to come clean and take advantage of the new programs, and perhaps to resolve their issues with less aggression. We also expect all of the uncertainty to drive out some of our newer competitors in the tax resolution field. The IRS is only going to get harder to deal with, which will impact us for the better, as we will continue to be the premier tax resolution company in our area. Our biggest competitive advantage is that we are local. That gives people a level of trust and confidence that they can come into the office and meet with us in person rather than deal with some faceless nationwide vendor online. Whatever happens with the IRS, and regardless of how difficult dealing with the IRS may become, we will be here to greet our clients in person with a handshake and a smile. We look forward to helping you with all your tax resolution concerns!
For people burdened by overdue tax debts, the news out of the IRS may not make much difference. Their personal battles are often more internal than external. Their tax problem may have been weighing on them for so long that it eclipses any news on the national scene. Even if the IRS operations are curtailed, they still go to bed at night thinking about it and dealing with their own internal demons. They know they need to get their tax problems resolved. The trickle-down effects are hard to anticipate, but my hunch is that dealing with the IRS is going to become even more difficult than it already was. It may take 25%–50% longer to resolve issues for our clients, compared with the past. In the wake of all the staffing changes, getting in touch with the right person who can actually help may be next to impossible. THE UPSIDE Other signs suggest the IRS in some ways may become easier to deal with. We will likely see a pullback in the frequency of audits. The IRS hiring spree under the previous administration was sparking a huge surge in auditing activity, triggering countless new audits in the last 1 1/2 years. So, any retrenchment on this front would be good news for small-business owners. The agency recently released a new program offering friendlier, more flexible options for extended payment plans. For taxpayers who owe less than $50,000, the maximum payment term is being extended to 10 years from six years. This may be an effort to motivate more people to get their tax issues resolved. There is also speculation in the industry that the agency will announce amnesty or penalty reduction offers for taxpayers in arrears.
–Toph Sheldon
DON’T LIVE IN FEAR - TOPH IS HERE!
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CHORDS OF NEW WONDER THE WORLD’S FIRST COLOR- CHANGING GUITAR
“We’re crazy. That’s the first thing you need to know.”
Toph’s Tax Triumph
When Cream Guitars mastermind Luis Ortiz said those words in an interview with Premier Guitar on the floor of the 2024 National Association of Music Merchants (NAMM) Show in California, he summed up his company’s awe-inspiring vision for the future of music performance.
Waiting Out the IRS: When Patience Pays Off
Through a partnership with the Boston-based electronic ink and ePaper technology company E Ink, Ortiz has developed Cream Guitars’ revolutionary Voltage DaVinci, a guitar that can change color on demand . As Ortiz explained to Premier Guitar, a player who delights churchgoers with their white guitar in the morning no longer has to switch to a black guitar when they hit the stage with their heavy metal band in the evening. “We had the idea to break all the rules of the traditional guitar,” he states in an E Ink press release. “We’ve redesigned every part of an electric guitar to broaden and enhance the playing experience. Through our innovative collaboration with E Ink, we are providing artists a level
We score wins for many of our clients by negotiating settlements with the IRS. Sometimes, however, playing a waiting game is a better bet.
We recently helped a client who was on the hook with the IRS for $45,000 in payroll taxes he had withheld from his employees’ paychecks at a former business but failed to submit to the agency. He worked on a solution with Mandi Lowen, our colleague who earned her licensed enrolled agent status last year. This client’s predicament was one we have seen before: He had been using the cash he withheld from employees’ checks to keep his company afloat. Even though he eventually shut the business down, the IRS went after him in a procedure called a Trust Fund Recovery Assessment, which allows the agency to hold him personally responsible for the back taxes. Our client had no cash to spare. He was working part time for a landscaping contractor to pay the bills while also trying to get a new business started, making and selling a jerky product. The new business wasn’t making any money, but our client had some assets, including a house and two vehicles. His asset-to-debt ratio was a little too high to safely assume the IRS would consider settling his debt. However, the statute of limitations for the IRS to pursue him for the back taxes expires in early 2027. Submitting an offer in compromise would pause the statute of limitations. If the IRS accepted our offer, the issue would be moot. But if the agency took, say, 18 months to consider it and then rejected it, our client could land in a worse situation, remaining in the IRS’ crosshairs for an additional 1 1/2 years. Rather than taking that risk, we kicked the can down the road. We asked the IRS to agree that forcing our client to make payments would impose an undue hardship. The agency agreed, placed him in a “currently not collectible” status, and put a lien on his assets. Our goal will be to keep our client in “not collectible” status for the next two years. At that point, the statute of limitations will expire without his having had to pay anything — a good solution by any measure. Shoutout to Mandi for her capable handling of this client’s case!
of creativity that extends well beyond anything available in today’s market.”
The Voltage DaVinci’s E Ink displays allow players to switch between seven styles and shades. Depending on a player’s specific needs, the guitar can be programmed to retain a static color or display various animated looks as desired. This option will appeal to performers who welcome the opportunity to alter the color of their guitar based on the mood or presentation of a particular song.
Developed in the mid-1990s by scientists and engineers at the
Massachusetts Institute of Technology (MIT), electronic ink has become a staple of mobile phones, electronic notebooks, and
e-readers. With its colorful arrival in the music world, the possibilities for sonic and visual expression on stages worldwide have never been greater. The color-changing guitars are expected to be on the market by the end of 2025 and have an estimated price tag of $3,200.
–Toph Sheldon
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ASHLEY’S CORNER Teacher Assignments: Letting the Chips Fall Where They May
Kids’ assignments to new teachers for the next school year are always a hot topic. Some parents try to have a say in which teacher their child gets. But I’ve learned from experience that it’s better to let the chips fall where they may. In honor of National Teacher Day on May 6, it’s a good time to recognize that all the teachers at my kids’ school this year have been great — so much so that our kids are actually sad to leave them behind! The teacher Mac had in second grade is a school favorite. When he was assigned to her classroom, he felt like he had won the lottery. I thought she would be great for Rex, too. But Rex had other plans. He said he wanted to chart his own course and be different from his older brother. Now, as Rex finishes second grade, I’m really glad I didn’t interfere. The teacher Rex was assigned is awesome. Mac and Rex are two different kids, and Rex’s teacher has been a perfect fit. Parents talk about teacher assignments all the time. The school sends out a survey at the end of every year, asking for feedback or requests. The form specifically directs us not to ask for a specific teacher, but parents do it anyway. As a parent, you think you know what’s best for your kid. Keeping quiet about your preferences can be really hard. It’s so tempting to think, “Ah, let me put a little blurb in there: ‘Hey, we really liked our experience with this second grade teacher and (hint, hint) we have another second grader now!”
I have learned from experience not to do this. It’s better to let the school figure it out, for two reasons. One, you don’t see your kids at school. The teachers see them interact with
others all year. They also know how to mix personalities to balance each class. They talk about the students, then do whatever magic they do behind the scenes to divvy them up.
And two, kids need to learn to adapt. I don’t want to go through life making their pathway easier. They learn more from being challenged. They are either going to get a teacher they love or not. Either way, they’re going to learn something. So, when it comes to picking teachers, the luck of the draw is the way to go. As my kids sometimes remind me, “You get what you get, and don’t make a fit!”
As we wrap up a great year at school, we wish you all a great summer and, come fall, your best teacher assignments yet!
Take a Break
Silky Chocolate Mousse
Ingredients
Inspired by TheKitchn.com
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1 1/2 cup heavy cream, divided 1 cup milk chocolate or dark chocolate chips (6 oz)
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Optional garnish: grated chocolate, crushed nuts, toffee, or brittle
Directions
1. In a microwave-safe bowl, put 1/2 cup of cream in the microwave for 1 minute. 2. Stir in chocolate and let sit for 5 minutes, then whisk until smooth. 3. In a separate bowl, beat the remaining 1 cup of cream with a hand mixer or whisk until soft peaks form. 4. Set aside 1/2 cup of whipped cream for topping, and continue whipping the remaining cream until stiff peaks form. 5. Gently fold whipped cream into the cooled chocolate mixture in batches, mixing until combined but still light and fluffy. 6. Spoon into four ramekins or glasses, and refrigerate for at least 1 hour before serving. 7. Top with reserved whipped cream and garnish if desired.
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
513-513-8674 513TAX.COM
INSIDE
1
In IRS Layoffs, a Silver Lining for Taxpayers
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Meet the Voltage DaVinci Playing a Waiting Game With the IRS Ashley’s Corner: Why Teacher Assignments Get Parents Talking Silky Chocolate Mousse
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Existential Crisis? Hemingway’s Views of the IRS
FOR WHOM THE TAXMAN COMETH: HEMINGWAY’S LIFELONG ANGST OVER TAXES Toph’s Tax Nightmares
The famed author Ernest Hemingway was well-known for taking risks and suffering
agents “would twist … and what they would insist was evasion,” Hemingway wrote.
Hemingway did have some legitimate tax issues in that era of 90% marginal tax rates. He typically worked on his books for years, then received the bulk of his income from each project in a single year, in the form of royalties and movie rights. The options in the 1930s were limited for distributing income backward over the multiple tax years required to produce a work of art. So, the government dipped deeply into Hemingway’s accounts. Congress partly fixed the problem in 1942. In one of his most creative preoccupations, Hemingway reasoned that if businesses were allowed to take depreciation deductions on capital equipment, he should be able to claim deductions on his body — which, he argued, he had worn out in efforts to advance his writing, in airplane crashes, car accidents, and other mishaps. Although Hemingway was preoccupied with money throughout his life, he wrote that he was proud of paying his taxes. “I need money, badly,” he wrote, “but not badly enough to do one dishonorable, shady, borderline, or ‘fast’ thing to get it.”
setbacks, including serious injuries in wartime battles
and plane crashes. Few people realized that one of his chronic worries was the IRS.
Filing and paying his taxes was a constant source of stress for the Nobel Prize-winning
author, according to an analysis by TaxNotes.com, based on research published by the Hemingway Foundation and Society. Hemingway was no tax evader. He regarded paying taxes as a moral obligation. But although he had tax help from his lawyers, he fretted about whether he had calculated his taxes correctly and whether he might be audited. He sometimes imbued his characters with similar fears. In his 1937 novel “To Have and Have Not,” a wealthy grain broker lies awake at night on his yacht, worrying about an IRS audit. The broker seethed with resentment over the agency’s power and fretted about what
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