The Pattie Gentile Show as heard on WADK Radio Ep 29

Pattie Gentile's "Fighting the Good Fight Podcast" is now a weekly radio program! Heard Saturday evening's at 6 and again Sunday morning at 10 at www.wadk.com or 1540AM Newport RI.

Host Patricia Gentile continues "Defending Taxpayers & Solving Their Tax Problems". With this new format, The Pattie Gentile Show will be your weekly appointment with Host Pattie Gentile & her guest experts as they discuss the latest tax news, issues and cutting-edge strategies to resolve and prevent tax problems.

Here on episode 29, we welcome back Gary Mastrodonato President & CEO
of Masters Wealth Management Group. Gary has dedicated his career to helping families in Eastern North Carolina retire with confidence. With nearly five decades of experience, he built this firm on the principles of integrity, independence, and a genuine commitment to the community he calls home. This is the 2nd half of our VIP conversation w/Gary again as heard on WADK. 

Enjoy and tune in on WADK.

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Transcript

SPEAKER_05 0:00

This is Patricia Gentile, founder of New England Tax Relief and host of the Patty Gentile Show. A client once wrote me, quote, My husband and I found ourselves in debt to the IRS for $167,000. I had contacted a company that said they would help. After I paid them $6,000, I found out that they took my money and ran. I was desperate and searched for a local tax attorney and found Patricia. She was able to get our tax debt reduced to $36,000. End quote. The moral of that story is that you really need to be able to trust the person you choose to represent you with the IRS. With over 43 years of combined experience as a taxpayer, defense attorney and CPA, I have successfully resolved hundreds of difficult IRS situations. One-on-one, personal attention is the hallmark of my representation, and my strategies are customized to your specific needs to completely resolve your IRS issues. So go to my website, New EnglandTaxrelief.com, and schedule a free telephone consultation or call me at 1-800-880-8388, where a live person will always answer and take your message 24-7. Welcome everyone to the Patty Gentiles Show. And in studio with me, as always, is my producer, John Ayanuzzi. John, I just want to start off by saying happy birthday.

SPEAKER_00 1:38

Oh, thank you.

SPEAKER_05 1:39

You're welcome. John's birthday is actually a very big day, April 15th. So, of course, all the shows since the beginning of this year leading up to the April 15th tax deadline. So that was a big day, but it's also John's birthday. And I want to say that April 15th is also a big day for me. You know, I believe in tax freedom, and the fight for tax freedom is in my DNA. We've talked about that on my dad's side, my bloodline is from Italian immigrants, but on my mom's side, my bloodline makes me a member of the National Society of the Daughters of the American Revolution. And also ten generations ago, my relatives from my mother's side in the UK arrived at Plymouth, New England, December 1620. So they arrived. I have descendants from the Mayflower arriving at Plymouth Rock. So this is definitely in my DNA. And so April 15th is very big, but tell me about your birthday.

SPEAKER_00 2:55

Well, I have to tell you, I posted on social media. Part of the post was this is an opportune time to binge the Fighting the Good Fight podcast with Patty Gentile.

SPEAKER_06 3:06

Oh, thank you.

SPEAKER_00 3:07

In that 11th hour, as I was sitting waiting to meet with my tax preparer. On your birthday. Well, I wait, I waited till the last minute.

SPEAKER_05 3:17

Okay. And you and a few other of my clients have made me really tired.

SPEAKER_00 3:22

Well, and we apologize for that. But let me say this I'm receiving questions now through social media. And the first one I want to hit you with, someone suggested that they did seasonal work as a dock. They worked at a dock at a boating company. Oh and they got a W-2 that they forgot about. It was mailed to an old address, they just got it handy. How complicated this person would like to know? Kenny would like to know how complicated is the amendment process? Because I think he's literally gonna tuck that W-2 in a folder and put it in a junk drawer. So tell us what to do, Patty.

SPEAKER_05 4:05

Okay. Really, as soon as you're aware of a correction needed on your return, a mistake, an error, a forgotten W-2 is in your case, something forgotten there. Once your return, the original, is processed by the IRS, and boy, this this question comes up perfectly because in the last segment today, I'm in the coaching corner, I'm actually going to talk about IRS transcripts. And one of those types of transcripts you're going to want to retrieve for yourself so you can actually see when the IRS officially processed your return. Now, I don't know if you're expecting a refund. It doesn't necessarily mean, I want to say this, that if you get that refund direct deposited in your account within the next couple of weeks, say you just electronically filed your return April 15th, just for discussion's sake, and then in a couple of weeks from now you get that refund direct deposited, that doesn't necessarily mean the IRS in the back room, as I call it, has effectively processed an electronically filed return. So this account transcript that I'm going to talk about is very important for you. What does that mean for the amended return? It just simply means that now that your original tax return, you've become aware of the date it's been effectively processed and you know you're deemed filed, that's when you want to simply prepare a form 1040x, which is the federal amended tax return form. And if you have a state tax return that you also are going to have to amend, they have their form numbers are going to be similar. So you want to look at what that state amended uh tax return form is.

SPEAKER_00 6:06

So do you just include that W-2 with that form?

SPEAKER_05 6:09

No, you don't have to attach the W 2. You simply you'll see that it'll say what you originally reported, what's your change, and why. And then you put in an explanation and say, I inadvertently forgot to include this W-2, and here it is. Here's the result. And if you end up owing with that amended return, you can pay with it, or you can wait and get billed. And you can electronically file a federal and a state amended individual income tax return too. So if you're doing your own turbo tax uh at home, this these are this is how you'd follow through. If you have a tax return preparer professional, you just bring them the W-2 and they'll do this through their professional tax software. But it can be electronically filed and done. Lastly, if you throw it in a drawer or throw it in the garbage, the IRS, you'll probably get a notice from the IRS, maybe within the next, oh, I don't know, you know, within easily within the next six months for sure uh or less. And it's a notice C as in CAT, P as in Paul, notice CP 2000. And the IRS says, We propose to change your return and assess you this much tax based on information that we received and here that you didn't include on your return. And so they give you a response on that.

SPEAKER_00 7:40

Can I ask you a cynical question? Sure. If they owe money, do they reach out to you? Let's say let's say you you pay you paid into this, you know, over and they owe you. Are they as quick to reach out to you as the reverse?

SPEAKER_05 7:59

About the change or about the difference in the return?

SPEAKER_00 8:02

Correct.

SPEAKER_05 8:03

Well, yes, I'll tell you why. Okay, okay. You're so bad. You are very cynical. And this is perfect about your attitude about my in the next segment when I'm going to talk about. This is great. It's all technology. The IRS has a matching system. They have a program that matches your social security number with, oh, here's another transcript that I'm going to talk about. Um, the wage and income transcript that they create, where everybody who has had to report to you some tax reporting uh form, W-2, 1099, anything like that, your social security numbers on it, they match it with your automatically, automatedly, let's say, with your form 1040, and it'll spit out that notice will actually get computer generated because there is a difference between what was reported to them and what you reported on your return, and it creates that notice uh CP2000. So great, great question because it really had some legs there. Um, I I do yeah, I do want to ask you. I I'm gonna put out two poll questions. So here's our text phone number for to answer to the poll questions 603-204-0104. Two poll questions, especially to tax professionals here. How did the season go for you? The tax season, let me know. And to everybody, what do you have summer plans? Have you started to make or are you making your summer plans? Let's hear them because I am that's where I am after tax season right now.

SPEAKER_00 9:47

So, John I'm with you a hundred percent, by the way. I I if the yard is ready, the spring has sprung, I I am with you. Uh, I did want to shout out two things. First of all, I got a very funny uh response to a much earlier poll question. Oh, okay, and this is the crazy thing with AI somebody has started to insert Chuck Norris into classic movie roles where he did not belong or was not initially for incidents far as go far as gone, sitting on that park park bench, right? Life is like a box of chocolate, and here comes Chuck Norris with a roundhouse kick.

SPEAKER_05 10:39

Where does he hit Forrest?

SPEAKER_00 10:42

Hits Forrest. Oh Chuck Norris in an officer and a gentleman, Chuck Norris in Star Wars, Chuck Norris being dropped into all these roles. And I'm gonna send this to you and I think you'll get a kick out of it. Yeah, but it just shows that people sometimes binge and catch up, you know, weeks later.

SPEAKER_06 11:00

Right, right.

SPEAKER_00 11:01

And on that note, there were, and I'm sure that we've we I I we've had to have had Boston subscribers before, but in this last episode, part one of Gary's Master Donato's last episode, right? Boston, Massachusetts, Norwood, Massachusetts, yeah, and then Lahore Punjab, India. You've gone international.

SPEAKER_05 11:26

Wow. Well, we had Finland early this year, too. Oh, right.

SPEAKER_00 11:30

Well, this is even farther. This is even farther.

SPEAKER_05 11:33

This is something uh, you know, God bless you for being able to pronounce that too. And and yes, it for uh new listeners or listeners who haven't caught up yet um on the downloads, we acknowledge the passing of Chuck Norris. So that's how the uh the Chuck Norris conversation has even come up in the first place. But you know, come on back in this next segment. I'm actually going to actually set you up for eliminating the fear of an IRS audit. So come on back. In this segment, I want to actually discuss with you, especially because we just finished the filing of the 2025 uh tax return season. Yes, there are uh a lot of people who filed for an extension of time, an automatic six months until October 15th to file that tax return. So this is very helpful for you as well. And now we're into 2026. Uh, and so as you're collecting documentation for the tax returns of 2025, and as you're collecting documentation in your everyday life and business right now in 2026, I thought it was a good time to talk about, you know, not waiting for an audit notice to talk about documentation. I thought it was a good time. And I don't want you to let fear of an audit dictate how you file. And what I mean by that is that if the return is accurate and documented, an audit is merely a temporary inconvenience, not a catastrophe. And so what do I want you to know about this? There's a few pointers here. You know, you you want to understand that you know the revenue agent or the revenue uh officer is assigned a case, and what's going on in the background at the IRS is that they're often evaluated on how efficiently they can process the case. So they want to get the case off their plate so they can move on to the next one. They have tons of cases stacked in front of them. So, what you want to make sure is that you want to help the auditor, I'm gonna call it the auditor, close that file. I've always made sure that I put any information that they're requesting, and they should request information in writing on an information document request form, an IDR. If an auditor is telling you verbally and you're taking notes, or they send you, they write it down, it needs to be official on an information document request form, IDR. Always make sure everything they want is on that. But I like to take the information and I'll actually put it in a three-ring binder. I'll put separations and tabs, and I'll make their job easy so so that they can flip through, walk through, make their notes, ask their questions, decide if they need more information. I also, in representing my clients, I prepare the return once I've seen all this supporting documentation from my clients. If I see the errors, as well as what is correct and accurate to be reported on the return, even if the IRS is disallowing it under this audit and placing the burden of proof on you, the taxpayer. I I actually prepare a draft of the return the way I think it should have been, should have been done. And I include that to for them. The next thing is what were we talking about here? Document, document, document. You know, you you have to have documentation because you do have the burden of proof. Initially, the taxpayer has the burden of proof for any claim you're making on your return, anyway. And there are some times that the burden of proof will shift to the IRS, but it depends. Uh and just remember that the IRS evaluates cases based on objective evidence rather than personal circumstances alone. For example, you know, you may have a heartbreaking story about why you missed a deadline or failed to report income, but the IRS operates on evidence, not emotion. And, you know, for example, you might have had a car accident that prevented you from filing on time. You want to include a photo of the wrecked car as and a copy of the police report and the insurance claim or the emergency room bill. Uh, unfortunately, I had a client several years ago that actually was an engineer on the Boston uh what they call the T, the commuter railway train, and he and a couple of other guys were working on the tracks on a certain section of the tracks, and he was actually hit by a train. And I actually went to the local newspaper and got the story. Got got a copy of the entire story that was in the in the newspaper and and brought that forth. So there's many alternative evidence that you can use if you don't have you've lost physical receipt. Uh I like to use affidavits where the client signs under penalties of perjury that you know this is the expense and why and why they put it. But you can look at emails from other parties of the transaction or bank deposits that show the flow of funds that can serve as sufficient evidence. There's so many different alternative types of evidence that it's based on your facts and circumstances that you can pick them. There uh know that you know a lot of tax pros make and tax professionals and taxpayers think that they're actually sending the response when they're sending something in the mail that is handled by the high-level tax expert. The the IRS has an initial intake process and often handled by an administrative staff and who's following a checklist to sort the mail. So you want to make sure that if you're routing something, like for example, we had in the first segment like an amended tax return, it is specifically going where it needs to go uh properly. And lastly, there is a myth about audit proofing a return. So you can only be audit ready, and that's why documentation is everything. So make sure you're being uh actually organized this year about putting away your 2025 documentation or pulling it all together for returns that are on extension or going forward in 2026. Make sure your your folders are all set up and ready to go. And uh we'll be back from the break, so don't miss any part of the show today. As was mentioned before the break, we have part two now of our interview with Gary Mastro Donato, the founder of Masters Wealth Management Group for over 46 years, the radio show host of Mastering Your Money for over 43 years, and now the creator of the Master Plan, where he helps retirees and pre retirees build and maximize their. Income. Gary spoke last week about the first segment, which is the foundation of this master plan, and that was maximizing Social Security. So now what we have is the culmination of the rest of our interview with Gary. That is what else outside of Social Security is involved in the master plan. So enjoy the rest of the segment.

SPEAKER_07 22:27

So we want to maximize Social Security the best we can. People's choices for Social Security, they all start at age 62. They all go to age 70. Those are the times that one can choose Social Security. There's a couple of exceptions. If you're a widow early on and you have young children, uh that starts earlier. Or if you're disabled prior to 62, you can actually start collecting at 60 and sometimes at age 55, depending on the disability and depending on your participation in the Social Security Act alone. But we're just talking about a basic retiree. And uh so we help them maximize out their social security. I've got 12 of the best coaches in the world in the United States, including yourself, Miss Patty Genteel, because you are one of my you're my creative CPA and tax attorney coach that I reference a lot on my radio program. But uh, we got to have specialists along the way. And we have uh Social Security specialists. I use Dr. Larry Kotlakoff uh out of Boston University. He's a Harvard PhD, uh, comes with good credentials. He's the head of the economics department at Boston University. He teaches economics, he teaches Social Security, and he's written the majority of books that are kind of like the compendium on Social Security uh rules and regulations. He knows them better than just about anybody. He also designed software that he gave to me that uh works pretty well. And uh the software that we use, we run everybody's case through the Social Security software to give them their maximum social security, if you will, based on their situation. So that's how we start the whole program off is we maximize your social security. We're building an income that hopefully they can outlive. And Social Security is one of them. You know, Social Security is like one of the best annuities that you can have because it not only pays you over your lifetime, but it pays the higher of the two spouses once the first spouse dies. Uh, if you have if you have a living spouse or even a deceased spouse, you can go back and work off if you've been married 10 years or longer, you can you can get your your former husband's Social Security payout from that perspective. So we maximize Social Security for building the foundation of a good income plan for when you're retired.

SPEAKER_05 24:58

So what is also involved in that master plan beyond Social Security?

SPEAKER_07 25:05

That's an excellent question. From so from that, Patty, we go on to looking at ones. Remember, I mentioned pensions a little bit ago. We take a look to see if they have a pension plan. And if they do have a pension plan, is there a survivorship benefit attached to the pension plan? Because we need to know that and planning out a husband wife's lifetime income plan over their lifetime. And the survivorship program is is extremely crucial. If a husband dies first, is there any money going over to the to the surviving spouse or does it cut off at their death? Many people in second and third marriages have elected their their pension at the time that they weren't married yet. So, and those are irrevocable. They can't go back and change them. So if they take lifetime income, if if it if if a guy gets gets married, if a guy elects his pension as a as a sole receiver, if you will, uh he's gonna take the maximum, which is life only. When he dies, it stops. But now that he's married, his wife is gonna lose that part of the income that they're used to living on because there's no survivorship benefit in that program. And that becomes a problem from that perspective. So we have to look at what their income is gonna look like in the event that there's an early death. Pensions is one of them, and that's part of the second leg that we look at is maximizing out your pension income. If you if you have a husband and a wife together going in, making choices and giving them the options. And is there a better way to take the full life-only income and use different income from that perspective? Those are those are things we explore. So we want to maximize. Our goal is to always maximize the present income available that's on the table as part of the master plan. And then thirdly, we go to the next step, and that's taking their savings that they've made, whether it's in a 401k, if it's in an IRA, if it's in a Roth IRA, we break down the different segments of what they may have saved. Some people have saved a lot more than others. And the more you save at that time, we can convert that to income. And we try to provide lifetime income. That's a check that you can't outlive. And people like to know that they have a paycheck coming in. You can spend money as much as you wish during your budgetary time, which is the month to month. But you know, I used to ask my mom, I said, You're spending money, mom, like uh there's no tomorrow. She goes, Well, it's the end of the month. I got another paycheck tomorrow for my for my company pension plan.

SPEAKER_02 27:40

Oh, yeah.

SPEAKER_07 27:41

Ah, you said, okay. Now, a lot of people don't have that lifetime income plan. We try to build the the lifetime income plan for the for the client that at least covers their monthly expenses, whether they have a mortgage, car payments, health insurance, whatever the case is, there's a monthly, there's always a there's always an expense that has to be paid. Even if all your debts are paid, there's still expenses that pop up along the way. Doctor's bills, uh, drug bills, whatever they might be. So you have to have ongoing income that's coming in. And then uh, you know, once we match that out, we try to have make sure that everybody has a plan for long-term care. Long-term care, Patty, is the biggest reason that people run out of money before they die. A health change. The two biggest reasons that people run out of money before the day they die, and by the way, that's the biggest scare and worry for any retiree when they walk out that door from the paycheck for the last time is well, I have enough money to live for the rest of my lifetime, because they don't know how long they're going to live. That's part of the unknown. So, part of the questioning that I will give to a person in in planning for distribution, which is totally different from accumulation. Accumulation question might be, how much longer, Mr. Jones, do you still plan on working? Well, I want to plan, I want to work eight more years.

unknown 29:04

Right.

SPEAKER_07 29:04

Well, when Mr. Jones retires, my question is no longer how much longer are you going to work? My question now to Mr. Jones is how long do you plan on living?

SPEAKER_06 29:12

Right.

SPEAKER_07 29:12

Well, most people have an answer, believe it or not. And the answer is, well, my mother lived to 81 and my father lived to 79, so hopefully I'll make it to 83 or 84.

unknown 29:22

Right.

SPEAKER_07 29:23

Better health care. And that's kind of like their focus. Unfortunately, most retirement plans in accumulation are built for 10 years of retirement. When people get beyond the 10-year stage, they're pretty much out of money, or they could be out of money, but they start holding back and they're not spending what they could because they want to make sure they have enough for that rainy day. They want to make sure if something happens, if their health changes. Many people have parents now that are in long-term care facilities where they see the cost of the parents' uh cost every month. My sister passed recently. She was paying $13,000 or $14,000 a month so that she can stay at home. Uh, you know, many people want to keep their, I know in my own case, I have a long-term care plan that'll allow me to stay in my own home all through the rest of my lifetime, unless I'm a vegetable and I need to go into a facility, but hopefully I'll, you know, can bring enough people into the home to make my my life comfortable. And uh people, people want that for themselves today. So they want to plan for long-term care. But that's a real reason that people run out of money, is higher taxes. And that's where you come in because your job is to kind of skill away at reducing that tax as much as you can within the realm of the tax law.

SPEAKER_06 30:35

Right.

SPEAKER_07 30:35

So, you know, a lot of people pay more taxes than others because they're not taking advantage of what the tax law allows. But there's a lot of there's a lot of allowances when they know the tax law, uh, as you do, and there's a lot of ways to reduce one's taxes. So, legally, that is. We don't recommend anything illegal in the game here. There's enough reasons to go legally that you never really have to go illegal, and that's the part that many people don't realize either.

SPEAKER_06 31:01

That's very true.

SPEAKER_07 31:02

So it goes along that line. So the biggest cost of retirement is longevity risk, living too long, living longer than your life expectancy might show. And you know, interestingly, a husband and wife age 65, there's greater than a 50% chance that one of the two of them will live to age 90. 50% or greater that one of the two will live to age 90. What does that mean? Well, you have to have income now to age 90.

SPEAKER_06 31:30

Right.

SPEAKER_07 31:30

Okay. One of the one of the two has needs income. And sadly, when the first spouse dies, if there's no, if there's no continuation of their pension plan to the surviving spouse, they lose one social security, and there's they lose their their filing joint situation now where they're filing as a single filer, where your tax rate has increased, and you may have additional health care costs as you get older. Uh, chances are that poor widow is going to run out of money along the way and end up moving in with a child or moving or downsizing their home or whatever the case is. We try to make it comfortable enough where you never have to change your lifestyle, one iota in the master plan. So I built this plan a long time ago. It works beautifully. Our clients never have to go back to work, our clients never have to change their lifestyle, our clients never have to move in with a child if they follow the master plan. So that's basically what we do day in and day out. 24-7. I've been doing it for 47 years, and I feel like it's my first day. Every time I walk in the office, I'm that excited.

SPEAKER_05 32:39

So I love your commitment, Gary. That's why I love having you on so our listeners can hear what I think is common sense.

SPEAKER_02 32:48

Oh, yeah.

SPEAKER_05 32:49

Uh absolute common sense planning. Gary, how can uh people get in touch with you and be able to even schedule some kind of consultation with you?

SPEAKER_07 33:01

Sure. Uh great question. Thank you. They can call my phone number, my direct line number is area code 252-249-0100. And phone lines are there 24-7. We have a live answering person on duty 24 hours a day, 252-249-0100. They can go to our website at masterswealth.com. Masters like the golf tournament coming up in April. And uh Wealth, like everybody wants to be, Masterswealth.com. And uh they can always reach us there. My direct email, if you want to email me directly, is Gary at Masterswealth, easy to remember. And uh or call Patty, she'll she'll pass the word on as well.

SPEAKER_05 33:47

That's absolutely true.

SPEAKER_07 33:48

I want to put the own we'll put the onus on you a little bit too.

SPEAKER_05 33:51

That's right.

SPEAKER_07 33:52

But primarily, uh, you can always reach us. We're very reachable.

SPEAKER_05 33:56

Thank you so much, Gary.

SPEAKER_07 33:58

My pleasure. It's been a pleasure to everybody. Have a great weekend.

SPEAKER_05 34:37

And in this segment, I like to call it my coaching corner because I like to provide guidance and tips and strategies to both taxpayers and tax professionals alike. If you go to my website, New England Taxrelief.com, immediately on my homepage you see get relief, give relief. And I'm talking to both taxpayers and getting relief and tax professionals and giving relief. The hallmark of my representation with my clients is one-on-one personal attention. And I also do one-on-one coaching for professionals who want to strengthen their tax resolution practice. On my website, there is a page for taxpayers to get the relief and contact me. And there is a tab for tax professionals to also touch base with me both for a free initial consultation about whatever the tax issues are. Part of this segment is about my tax situation analysis. That's one of the first things I have to do when I have had an initial uh complementary consultation with a taxpayer. Uh if they retain me and I go to work for them, uh, the first thing I do is a tax situation analysis. And what's what's a part of that analysis is that you're going to appoint me as power of attorney, tax representative on the IRS form 2848 and whatever state that I might have to uh be at your tax representative about as well. And I retrieve with that power of attorney, I retrieve IRS transcripts. And also, when I file that power of attorney, I will get a power of attorney copy, they call it POA, copy of every correspondence the IRS sends you, I get a copy of that as well. So I'm in the loop now. And what I do with those IRS transcripts is I review them. And if for penalty cancellation, if it's possible for you, I review to see your history with the IRS, I I analyze them, I evaluate them and see what options you have to resolve your tax matters. I'll look at all the IRS notices and correspondences. I will discuss with you and interview with you facts and circumstances that have caused your tax problems and also your financial information. IRS has a form 433-A. You can find it on their website, irs.gov, and see what would be required of you. But I do all this analysis before we even talk to the IRS or any state tax authority about your problem. And you get to decide how you want to resolve your tax problem and what the best course of action is for your situation. We'll discuss that together and you will choose. So I want to talk about the very initial uh fundamental thing I do in the tax situation analysis, and this is a fundamental thing to do for both taxpayers if you're representing yourself, or tax professionals if you're representing taxpayers, is get IRS account transcripts. And the account transcripts, they're the most detailed of all the transcripts. They show all the transactions that are related to a tax return, including the assessments, the penalties, and the actions that the IRS has taken, as well as your representative. So you get to see that that history. So please go to my website, New England Taxrelief.com, schedule a complimentary telephone consultation or call me at 1-800 880 8388. And until we talk to you again, have a great week.