The Roz Report
Authorized member 2020
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I’m a big believer in not owning a depreciating asset. That’s why, when it comes to cars, unless it’s a classic, vintage automobile, Roslyn and I both lease our everyday drivers. For the last few years, Roslyn’s been driving a 2017 BMW X5. When her lease came up recently, we went out to the dealership to get her the 2020 model. We’ve been doing business at the same dealership for years and have never had a problem. That is, until this last visit. Our actual trip to the dealership was unremarkable. The man who conducted the end-of-lease inspection had nothing but high praise. “Wow, this car is in great shape for a three-year-old vehicle with 22,000 miles,”he said tome.“There’s really nothing out of order that I would need tomark down about the car.” Roslyn takes very good care of her cars, so this news wasn’t surprising. The inspector did note that we were missing the cargo cover, something we would be charged for if it wasn’t returned by the end of the day. Fortunately, Roslyn knew exactly where the cargo cover was in our garage. She ran home to grab it and dropped it back off at the dealership. We got Roslyn in her new car, and it was all business as usual —until we got a bill with the turn-in charges. We were blindsided with a bill for $2,100! The inspection claimed that the tires were bald, there were large dents all over the car, and the cargo cover hadn’t been returned. What happened to the car being in“great shape”? Luckily, Roslyn and I always buy the protection plan when we lease a car, and all of these charges were covered under the plan. However, even though we didn’t have to pay anything out of pocket, I was furious. This wasn’t about the money; it was the principle of the thing. That inspector had said one thing tomy face, then lied on the paperwork. I called the dealership’s corporate office tomake a complaint and reached out to the general manager to discuss the incident. This isn’t how you treat people, let alone your clients, and especially your repeat clients. Your Word Is Your Bond Broken Promises and Lost Respect
“One of the biggest lessons we teach our members is to be true to your word.”
One of the biggest lessons we teach our members is to be true to your word. Your word is your bond. If you promise to call a client on a certain day
or at a certain time, you better make that call. If you promise a revenue officer that you’ll get them the 433-A and supporting documents by Friday, well, they should be there Thursday afternoon. Not keeping your word is the fastest way to damage your reputation. No one respects a person who doesn’t do what they said they were going to do. You should keep your word in all areas of your life, and it’s especially important for people in our industry to be careful of the promises we make. Never make promises to a client that you can’t keep. I used to have people coming intomy office asking for guarantees.
“Can you guarantee that if I hire you, you’ll reduce my tax bill to zero?”
“Can you promise to reduce my taxes from $100,000 to $5,000?”
No, I couldn’t make those promises. We should never guarantee anything out of our control. Like a lawyer can’t promise what a judge or jury will decide, we can’t promise what the IRS will do. We can only make promises about our own actions. We’ll be diligent, we’ll return calls, and we’ll communicate with our clients. These are the promises we canmake, and they’re the promises we must keep.
Dedicated to your success,
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ARE YOU AN INTROVERT OR AN EXTROVERT? BY ROSLYN ROZBRUCH (FOOD FOR THOUGHT)
I’ve never been the popular girl (or woman), and the older I get, the more uncomfortable I amwith attention directed toward me, so not only do I not want to be the popular gal, but I also make an effort not to be. But I never used to be that way. When I was younger, I consideredmyself to be an extrovert, which leads me to thinking—can you be an extrovert one day and then become an introvert, or vice versa? Recently, Michael and I attended a business seminar led by Roland Frasier. Roland is a very successful entrepreneur who I admire and have learned a lot from. We were excited to have the opportunity to attend a two-day seminar taught by Roland in a small setting of 20 entrepreneurs because, while he has his ownmastermind group, he has other people help him lead them. Before the seminar started, Michael wondered if we’d know anyone attending, and I wondered howmany other women would be in the room. I’ve noticed that the more successful the people are in the room, the less women I see in it. I consider myself to be a woman’s woman. We all connect to people differently, and I happen to connect with women easier thanmen. Or maybe it’s that I’mmore comfortable in nonbusiness settings, so I feel like an introvert when I’m in one. Many men I know are extroverts in a business setting but introverts at a social function. When I attendmasterminds or workshops, as long as there’s one other woman in the room (besides me) and Michael doesn’t leave my side for very long, I’mokay. I was happy to learn that there were three other women in the room, and I easily connected with everyone. Roland is a brilliant man and taught a week’s worth of information in two days. But a funny thing happened a few hours into the meeting. Michael went to the men’s room, and Roland asked for my thoughts on something. Here’s a little backstory: There were no breaks other than a lunch break, so if you needed to use the restroom, you just left the room. When Michael left the room, Roland calledmy name. I looked up frommy notetaking and turned to both sides of me, thinking he must be talking to someone else. I knew no one in the roomhadmy name, but I’mnot used to being called on. When no one answered, he again saidmy name and asked for my opinion. Luckily, I’ve been going to seminars for a while; I’ve been in business for over five years, and I had an answer. After, I thought,“Okay, I survived.”But then, over the next two days, every time Michael went to the men’s room, Roland called onme for my opinion. There were other people in the roomwho hadmore successful businesses thanmine, so why was he calling onme? I knew he waited for Michael to leave the room so I couldn’t say,“Michael will answer that question for us.”By the second day, I wanted to
... whether you’re an introvert or an extrovert or just feel more comfortable in one kind of setting over another, it’s always good to go out of your comfort zone and do the thing you don’t want to do.
say to Michael,“Do you really need to use the men’s room?”But I didn’t. I let Michael leave the room. Over those two days, I sharedmy opinions when called on. My heart raced a little and I was schvitzing (sweating) a little, but I did it, and I left the seminar feeling a little more confident in myself than before I came. What does this have to do with you?Well, whether you’re an introvert or an extrovert or just feel more comfortable in one kind of setting over another, it’s always good to go out of your comfort zone and do the thing you don’t want to do. Because nomatter what, when you walk through that uncomfortable
thing you really want to walk away from, you grow as a person and gainmore confidence in yourself.
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PRACTICE CORNER FROM THE
Charging for Additional Services for Tax Resolution
Question: What do you do after you’ve been retained on a flat fee and discover there’s additional work to be performed that wasn’t included in your original engagement letter? Answer: Cases can be sold in one or two phases. If you sell in phases, phase one includes transcript investigation, and phase two includes compliance and the permanent resolution, such as an offer in compromise (OIC), installment agreement, penalty abatement, or currently not collectible status. When you have a client who has two years of unfiled returns and you’ve taken them through a mini 433-A in your consultation and determined they’re a great offer in compromise candidate, you should get retained for the entire case right then and there on a flat fee basis. However, what do you do when you discover while you’re working the case and analyzing the transcripts, “Hey wait a minute here, there’s another three years of unfiled returns?” That’s an additional three years of unfiled returns that you haven’t been contracted for that must be done prior to the submission of the OIC. Well that’s an “additional service fee” that you need to be paid. When you use my recommended engagement letter, you’re covered for this. You need to go back to the taxpayer and inform them that these three years of unfiled returns need to be prepared and filed before you can prepare, submit, and negotiate the OIC you’ve been retained for. The way to do this correctly is to include in your engagement letters a paragraph that states your flat fee is predicated upon the representations at the time and what the taxpayer told you. And if additional services are required to permanently resolve your taxpayer’s problem, additional fees are appropriate and will be added to a revised engagement letter. I did this for 16 years, and this additional service piece represented millions of dollars in extra income. Said another way, about 30% of our total revenue was comprised of additional service request fees. So, don’t be bashful. Don’t be shy to go back to your client to request payment for additional services you haven’t been
contracted for initially. If you don’t know how to approach the client when it comes to requesting additional services, use this transcript: “We were contracted to do two years of tax prep for 2014 and 2015 and do your offer in compromise. After we got your tax transcripts and records of account from the IRS, it’s apparent that there are another three years that haven’t been filed, so we need to get those returns filed because we can’t do the offer in compromise until you’re in full legal filing compliance, and those three years are going to result in X amount of additional tax liability, penalties, and interest. And what we’ll do is we’ll include the fees for this in your remaining future recurring payments. We’ll spread that over the six payments that you’re paying us or the four payments or the eight payments, etc.” If you say it this way, it’s not a big deal for your client, and you’ll be getting paid for the extra work you’re going to do. Make sure your engagement letter agreement has a paragraph permitting you to go back for additional services. Use my engagement letter that’s found in the “Easy Template Library” on the membership site. You don’t want to be caught with scope creep because you’ve boxed yourself in on a flat fee. Flat fees are great. That’s what you need to do, but you need to cover yourself with a paragraph in your engagement letter agreement that lets you go back and get paid for additional services.
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Allan R. Pearlman, Esq. Member Spotlight
Allan Pearlman’s earliest writings were not legal briefs. Before he had his thriving practice in tax resolution, he wrote poetry, short stories, and even plays. His skillful way with words is one of the reasons for his success in negotiating with the IRS. Allan could be called “the IRS whisperer.” “Something that inspired me to consider law school was having a really bad landlord when I was living on the Lower East Side of Manhattan in the 1980s, when an empty building was more valuable to a landlord than a full building,” Allan begins. “Our landlord was pretty terrible, and so a couple of neighbors and I went on rent strike.”The landlord sued Allan and his fellow tenants for nonpayment of rent, and
heard the whole thing about putting an ad on ‘The Howard Stern Show’ and getting like 100 calls in a day, and he was off to the races.” So, when Michael launched his Tax Resolution Success System and program in 2014, Allan was one of the first people to sign up. Over the years, Allan has used multiple strategies to build his clientele. Right now, he is updating his website and sending out his newsletter more often, saying, “Historically, the newsletter has been a pretty good thing. When I do it monthly, it works to stimulate referrals.”Word-of- mouth referrals, of course, are frequently the best, as they begin with a foundation of trust and good will.
the case went to court. “We succeeded in compelling this guy to do the work necessary for the building not to have leaks, to provide heat and hot water, and all those great things that are considered basic services,” Allan says. At the time, Allan was working the graveyard shift as a proofreader to pay the bills, first at Sports Illustrated and later at law firms, where he quickly saw that the better money was in word processing. He had been doing this for three years when he realized he wanted to do something more meaningful and went to law school. Upon receiving his Juris Doctor, Allan began a one-year judicial clerkship at the United States Court of Appeals for the 2nd Circuit in New York. After that year, he worked for the New York Supreme Court, researching and writing proposed decisions on motions for trial court judges. As interesting as working for the courts was, Allan wanted to get experience in the private sphere. And so, when offered an associate’s position at a boutique law firm, he accepted. But Allan found that he wanted to strike out on his own. He wanted a practice that would involve a large and heterogeneous population of potential clients. After some research, he began putting his energy into tax resolution. He signed up his first resolution clients in 2005, and like most newcomers to tax resolution, he faced a steep learning curve. He read, researched, and went to seminars on the topic and met Michael at one in 2008, when he still owned his tax resolution firm. “Michael is legendary,” Allan said. “I
Of the many clients Allan has helped, one stands out. The client was a life insurance salesman in his 40s, and over many years, he had accumulated a tax debt that ran to seven figures. According to Allan, “We submitted an offer in compromise and got an IRS reviewer who was crazy, dishonest, or just completely misinformed. Based on no facts whatsoever, he decided that my client had not been forthcoming about his business or his income, and so he was about to return the offer without appeal rights. I reached out to the Taxpayer Advocate Service, and ultimately, we were expecting the reviewer still to reject the offer but at least allow us an opportunity to appeal. “My client’s offer suggested that the minimum settlement amount was going to be $2,000, even though he owed more than $1 million,” Allan explains, “but then the reviewer contacted me and said, ‘If the taxpayer increases his offer to $6,094, we’ll take it.’ So, I settled — or ‘compromised’— a $1,070,050 federal tax liability for $6,094. I still have the number pinned on my wall.” “What I’ve been telling people is that I write poems that all start with the same line: ‘May it please the Court’—which is to say that most of my writing energy, talent, and even creativity are dedicated to persuading a judge, or in the case of the IRS, a revenue, appeals, or settlement officer, that the government should do what I’m asking them to do —within the bounds of the law, of course,” Allan adds with a smile.
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NEW ORLEANS ‘20
Date: Thursday, Aug. 27 Friday, Aug. 28 Saturday, Aug. 29 Where: Hyatt Regency New Orleans Register now for early-bird pricing. For more details: www.rozstrategies.com/nola You’re just one strategy away from retaining more clients! But do you know which strategy will get you there? I will have new speakers who will also give you specific tips that will supercharge your tax resolution practice. This is like no other tax resolution event! This August, over 200 tax resolution practitioners will gather for the industry’s most sought-after event. This year’s 5th Annual Success Summit promises to be even better than last year! For more details, go to www.rozstrategies.com/nola
I’LL BE TAKING YOU ON A JOURNEY — Would you like to join us?
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S H O U T
Congratulations to Tracie Lowe ! You went above and beyond in sending out your referral letters and brochures to the PTIN list with a one-sheet flyer on “Why Partner With Me?” We love that you included a rack card in your mailings as well — very nice! Good luck and remember to send out follow-up letters.
Congratulations to Stuart Fletcher for not only sending out your referral letters but for also taking advantage of our Fee Schedule Pricing and getting a $15,000 client you would have charged $1,500–$6,500 for and a $3,000 case you would have charged hourly for! Nice job, and you deserve it!
Way to go, Robert Boeshaar , for publishing your new book, “Restaurant Tax Solutions,” that’s specifically aimed at helping individuals and owners in the restaurant industry. Most excellent! Do you have a story or picture to share with us on something you’ve implemented, a client you’ve helped with a tax problem, or anything else you’d like to share? If you do, email it to us at info@ RozStrategies.com, or mail us, and we will give a Shout Out to you!
Double congrats to Philip Hebner for rolling out your Audit Protection Plan along with your engagement letter and tax organizers. Now that’s what we’re talking about! And also for sending out follow- up referral letters for tax resolution. A high-five to Bob Jablonsky for sending out your referral letters and brochures. Keep up the good work!
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O U T S !
Roslyn and Michael accepting a Two-Comma Award from Russell Brunson and Todd Dickerson at the Funnel Hacking Conference
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PRSRT FIRST-CLASS MAIL US POSTAGE PAID BOISE, ID PERMIT 411
11271 Ventura Blvd. #612 Studio City, CA 91604 Inside This Issue pg 1 ∙ Your Word Is Your Bond
pg 2 ∙ Food for Thought pg 3 ∙ pg 4 ∙ Member Spotlight pg 5 ∙
From the Practice Corner
Tax Resolution Success Summit 2020
pg 7 ∙ pg 8 ∙
IRS Terror Tale of the Month
The titles of city mayor and children’s book author paint the picture of a highly respectable citizen. However, as the story of disgraced former Baltimore mayor Catherine Pugh shows, titles aren’t everything. In November 2019, Pugh, who resigned as mayor of Baltimore, Maryland, last May, plead guilty to the federal charges of conspiracy to commit wire fraud, conspiracy to defraud the United States, and two counts of tax evasion. The charges came after a long scandal, during which Pugh was accused of defrauding the citizens of Baltimore through a scheme involving her self-published“Healthy Holly”children’s book series. The scheme began in 2011 when Pugh served in the Maryland State Senate and was a member of the Senate health committee. Pugh persuaded the University of Maryland Medical System (UMMS), where she was a member of the board, to purchase 20,000 copies of each of her first three“Healthy Holly”books. UMMS paid Pugh $300,000 for the books, intending for the books to be donated to the Baltimore City Public School system (BCPS). However, due to“various grammatical and spelling errors,”the school systemdecided not to use the books for the curriculum, and the“Healthy Holly”books were stored in a warehouse. IRS Terror Tale of the Month Former Baltimore Mayor Charged With Evading Taxes in Children’s Book Scheme
Thousands of copies were later removed by Pugh and her aide, Gary Brown Jr., and used for Pugh’s personal benefit. For years after this, Pugh would double-sell copies of“Healthy Holly”books to various nonprofit organizations and foundations. Many of these organizations did business or attempted to do business with the Maryland
and Baltimore City governments. Pugh used the profits from these sales to secretly fund her mayoral election campaign with straw donations in 2016, violating Maryland’s campaign finance law. All the while, Pugh was evading taxes. In 2016, when Pugh was running for mayor, she told the IRS that she’d earned just $31,000. In reality, Pughmade over $322,000 that year. According to the U.S. attorney’s office, in 2016 alone, Pugh shorted the federal government of around $100,000 in taxes. Pugh and Brown also defrauded the IRS by representing “Healthy Holly”checks to Brown as payments for services, treating these checks as deductible business expenses. These fake expenses included“labor costs”for nonexistent employees. Pugh faces a maximum sentence of 20 years in federal prison for the wire fraud conspiracy, five years in federal prison for conspiracy to defraud the United States, and 10 years in federal prison for the two counts of tax evasion. Despite writing books about being healthy, Pugh didn’t seem to realize that lying to the IRS is never part of a healthy lifestyle.
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