The Pattie Gentile Show as heard on WADK Radio Ep 37

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 37, we welcome back our guest John Taylor Kelshaw, EA, an IRS registered tax preparer for the second half of our conversation. 

Enjoy and tune in on WADK.

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Transcript

SPEAKER_01 0:01

Welcome everyone to the Patty Gentile Show. And in studio with me as always is my producer, John Ianuzi. We have a packed show today, John, but what we like to do before we get into the meat of our show is we like to start off with some notable dates, people who have texted the show at 603-204-0104 with either uh comments or answered our poll questions or have some questions. We also like to acknowledge new uh subscribers to the podcast, which we upload this show every Monday. It is heard on WADK on Saturday evenings at 6 p.m. Eastern Standard Time, replayed Sunday mornings at 10 a.m. And then John uploads to my podcast called Fighting the Good Fight with Patricia Gentile. So you can download, and we like to acknowledge our downloaders. We'd like to acknowledge those who are listening to us on social media. And I'm trying to tie up loose ends so that I can go camping up in uh the upper northern regions of New Hampshire and enjoy the national Laconia Motorcycle Week, which is the 103rd motorcycle week and the oldest national bike week in the nation. It's funny because you and I were just talking the other day about what it takes, especially for business owners, to be able to feel like they've tied up enough loose ends, both business-wise and personally, to actually be able to leave and walk away. And I do want to say that I just made an appointment to speak with a client at nine o'clock on Monday morning from the camper, which is fine. But I really did want to speak with this client uh before I got back. I thought it was very important. And I might bring something else to do, some paperwork. But how long does it take you to relax when you're on vacation? Some people say it takes them a couple of days to feel relaxed and get out of dive.

SPEAKER_02 2:30

I'm going to admit that I classically go hard, as they say, the first night of a vacation. I just I get off the plane or I get to where I'm going and immediately I have a drink and I'm embracing the food and I'm relaxed and stay up too late because I feel unencumbered.

SPEAKER_01 2:54

Oh, okay.

SPEAKER_02 2:55

And by the second night, I'm, you know, I'm starting to do the math in my head. All right, how much time do we really have? I hate to admit this, I don't know that I ever fully relax. And something always slips through the cracks. And don't let me get in your head. I want you to have a great time while you're away. But nine out of ten times, something slips through the cracks, and two or three days into vacation, I get a text, and it's usually something that I have to deal with. And then I have to excuse myself from my family, find a quiet corner, find Wi-Fi, log on. I don't know what the answer is, but I I I think normally when I get on the plane, I feel like, all right, I've done what I need to do, but most of the time I haven't really done what I need to do. At least not all of it.

SPEAKER_01 3:40

Well, unfortunately, I am gonna reach out to you next week because there is a business that I'd like to interview the owner and the chef of a business who's actually preparing for National Bike Week at least 200 to 300,000 bikers coming in from Canada as well.

SPEAKER_02 4:07

That's the population of some cities.

SPEAKER_01 4:09

Yes, yeah, and and so I want to interview him on what's it take to be a restaurant owner, and especially during a whole week where there he is in a prime location where bikers pass through to go up to the uh White Mountains of New Hampshire. So I'm gonna be calling you because if I get an interview with him that we could put him on next weekend's show, I'm calling you. We're zooming on my cell phone. Yeah, thank you. But I'm gonna put this out as a poll question. You know, how long does it really take you to feel now you're in uh vacation mode? Does it take a couple of days? You know, John's talking about how he parties hard the first night. I know, you know, we set up camp or wherever you go after you've traveled all day long, if you've been flying or whatever, and it's taken hours of travel time, and then you get yourself set up, and you know, and the next day is kind of like getting yourself acclimated. I I will say when it comes to doing some work that I'm I'm planning on doing, like I mentioned, this has happened to me. There are times where I sit back and I say, Really? You can't be on vacation, you can't be away for just seven days of your life.

SPEAKER_02 5:36

So I will say this though, and I said this to you all fair, it goes back to what you said, that expression that you used way back when we had the great Len Green on from Babson College.

SPEAKER_01 5:46

Oh, yeah.

SPEAKER_02 5:47

When you hang your shingle and it's your business, yeah, you know, you kind of you're kind of on the you're on the clock all the time.

SPEAKER_01 5:56

Well, the doors are always open, seven days a week. It's you don't look at the door. But they're your doors, right?

SPEAKER_02 6:02

They're your doors.

SPEAKER_01 6:03

Right. So your time is your own. There are a couple of notable days. Of course, we have on Sunday, June 14th, Flag Day. And I love this article I read about Flag Day. They called it the Fabric of Freedom. I love that. The fabric of freedom, big time. Actually, Thursday, June 11th was corn on the cob day. And I love that June 10th was two things, and I'm gonna have a poll question to these two. Iced tea day was June 10th, and National Frosted Cookies Day, where somebody mentioned the frosted animal cookies. John, does your daughter eat those frosted animal cookies?

SPEAKER_02 6:55

Not in front of my not in front of the mama. When she's with me, you know. Uh would if you dug through the backseat of our car, would you find one squishing in between the uh seats? Most likely.

SPEAKER_01 7:10

Oh my god, that's too funny. Yeah, I hadn't thought about those animal cookies forever, and you could get them frosted or non-frosted. But here's a poll question: 603-204-0104. Are you an iced tea drinker or are you an iced coffee drinker? And I don't like iced coffee, love hot coffee, can drink it year-round. But um, are you uh oh habitual?

SPEAKER_02 7:43

Oh, okay and giant, like uh a comically large one that I carry around most of the day. I I'll add ice to it as I continue to to chug it down, yeah.

SPEAKER_01 7:54

Oh, you will during the day. So before we get into our next segment where we're gonna pick up with the taxpayer bill of rights number five this week. John, how how was your week uh with your daughter? She she's out of school now for the week. And what'd you guys what were you up to?

SPEAKER_02 8:14

So her school gets out earlier than some of the surrounding schools, which kind of left us in a weird place because camp doesn't begin until next week. So she opted to hang with my wife and I, you know, during the week. We mixed in some grandparent time, and it's worked out quite well. But I wanted to tell you a very funny story. The difference between daughters and sons, and I don't have a son, but I've seen my nephews. And sometimes when things get a little uncomfortable, my nephews will kind of hide behind my brother-in-law, you know? Okay. They're around seven, you know, the same age as my daughter. Well, we take very seriously the wildlife in our lake pond area. And the other day we saw two gents kind of trespassing and they had a machete and they were cutting down some of the brush to make their way through the wooded area. You know, I don't know what they were doing back there, but they were hiking and they were disrupting some of the wildlife. Right. And I kind of half-jokingly said to my daughter, grab the bat, we're gonna jump in the boat and head across the pond and see what these guys are up to. Now I was teasing. Patty, I turned around, I turned around and the bat was resting on her shoulder.

SPEAKER_01 9:37

She came out of the shed with the battery.

SPEAKER_02 9:39

She was ready, she was ready to go throw hands if need be to protect the beaver, the egret, and the hawks and all the wildlife that we have out back. So I'm not saying my nephews wouldn't have done it, but I'm telling you emphatically, my daughter was ready to go mix it up with these interlopers.

SPEAKER_01 9:56

So hey, do you have um trespass, no trespass signs posted?

SPEAKER_02 10:02

It's just you know what, if the woods are so thick that it's you know, to it's uh they would just be overgrown with weeds in two weeks.

SPEAKER_01 10:09

Got it.

SPEAKER_02 10:10

Oh, that's can I give you, isn't that a great story? Can I give you real quick stats? I'm very excited to share this with you. So there was there was a spike in downloads the 21st, 22nd, 23rd, 24th of this month. And you had 456 downloads in the last 30 days.

SPEAKER_01 10:29

Wow.

SPEAKER_02 10:30

Which I think is just wonderful. Organic growth. So welcome to the 456. And next week we'll shout out some of the new locations.

SPEAKER_01 10:39

Thank you, everyone, because we have so much fun here, and we want you to have fun just like we are, but we want you to get value as well. This is very important to us. It's our passion and our mission here with what we provide. So after the break, we're gonna go to the taxpayer bill of rights number five, which is the right to appeal an IRS decision in an independent forum. So come on back.

SPEAKER_03 11:13

I'm not gonna try it.

SPEAKER_00 11:33

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SPEAKER_01 12:33

And in this segment, we're gonna pick up with the taxpayer bill of rights number five. And if uh you're not aware of these, these are the cornerstone document that highlights the 10 fundamental rights that taxpayers have when dealing with the Internal Revenue Service. These uh taxpayer bill of rights were adopted by the IRS in 2014 as proposed by the former national taxpayer advocate Nina Olson. It applies to all taxpayers in their dealings with the IRS. And these rights are in the tax code. So these are our 10 fundamental rights, and they are made clear, hopefully, and understandable and accessible. And that's why approaching July 4th, our Independence Day, our declaration of independence has our 10 Bill of Rights, and we have the 10 taxpayer bill of rights, and I wanted to get through those between now and July 4th. So today, the right to appeal an IRS decision in an independent forum really means here that the taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions, including many penalties, and you have the right to receive a written response regarding the Office of Appeals decision. And taxpayers generally have the right to take their cases to court as well. And so, what what does this mean for you is that you know the IRS commissioner must ensure an independent IRS Office of Appeals that is separate from the IRS office that initially reviewed your case. So it's separate from any other uh faction of the IRS, it's separate from collections, it's separate from examination, it's it's just separate from the IRS office that initially reviewed your case. That grant in the end, that decision gave you the right to appeal in the Office of Appeals. And so generally, appeals cannot discuss a case with the IRS unless you or your representative is given the opportunity to be present. And these are in the code, the Internal Revenue Code. The IRS must ensure that an appeals officer is regularly available within each state. There's a problem though, where the IRS lacks a permanent appeals presence in 12 states and Puerto Rico. And so it can make it difficult for some taxpayers to obtain timely and equitable face-to-face hearings with an appeals officer or appeals settlement officer in each state. And there is a legislative recommendation uh to have access to appeals requiring that appeals have at least one appeals officer or appeals settlement officer located and permanently available within every state, the District of Columbia, and Puerto Rico. Now that's in person. It doesn't mean that you can't video conference or telephone conference. It's just when you want to do an in-person appeal, you don't have these certain areas do not have an on-site appeals office. If you do not agree with the proposed adjustment as a result of an examination, i.e., an audit, you have the right to an administrative appeal. In certain situations, a taxpayer has the opportunity to request a conference with the offices of appeal, and this is what we were just referring to. You have the right to request an independent review conducted by the Office of Appeal prior to the termination of an installment agreement. Very important to know that. If the IRS is proposing to adjust the amount of tax you owe, you will typically be sent a statutory notice of deficiency, which informs you of the proposed change, and the notice provides you with a right to challenge the proposed adjustment in tax court without first paying that proposed adjustment. And this statutory notice of deficiency is considered your ticket to tax court. Tax exercise is your right to challenge the proposed adjustment in tax court without first paying the proposed adjustment. You must uh file a petition in tax court within 90 days of the date of the notice being sent, and there's information and instructions about how to timely file a petition in U.S. tax court. In certain circumstances, the Office of Appeals has exclusive authority to settle your case. In our next segment, our guest, John Kelshaw, held eight positions, different positions, over a 40-year period as an employee of the IRS. And one of the positions, we pull back the curtain and he gives us an insight into being an appeals officer. Generally, you're entitled to request a collection due process hearing to dispute a proposed levy action regarding uh relating, excuse me, to a particular tax liability. If the IRS rejects your request for an offer and compromise, asking the IRS to settle your tax debt for less than the amount owed or a payment plan called an installment agreement, you may seek an independent review of the rejections with the IRS Office of Appeals, which is good to know. And you can generally request that an issue you have not been able to resolve with the IRS examination or collection division be transferred to the Office of Appeals. So at the end of the show, I like to call my coaching corner, where you know I provide guidance and tips and strategies for tax professionals and taxpayers. I'm going to talk also about alternative dispute resolutions, meaning alternatives to the Office of Appeals as well. So you want to stay tuned to that. And I just mentioned that John Kelshaw is a former uh IRS employee. Uh, last week he discussed on the show, last weekend's show, the paid tax preparers' due diligence penalties that the IRS will assess them if they have not done their proper due diligence. But this week he's going to pull back the curtain for us and reveal inner workings and uh the day-to-day culture. Being an IRS employee, especially in the different positions he's had. So you don't want to miss this very interesting behind the scenes look. So come on back after the break. 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 England Taxrelief.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 back everyone to the Patty Gentile Show. And in this segment is our guest John Kelshaw, a 40-year veteran of the Internal Revenue Service, holding eight different positions over his tenure with the IRS. So welcome John. In looking at these different positions with the IRS, let's just simply start with the difference between a revenue agent and a revenue officer.

SPEAKER_05 23:00

Yeah, that's the one job I didn't have was revenue officer. A revenue agent, when I first came out, they had two they had large case and general program. And general program was your average 1040 tax return. So you'd go out and you'd audit a 1040 tax return, you'd have an inventory of 20 or 30 cases, work them, close them, get more and do it that way. Revenue officers are the ones who get involved after you do the audit and they owe money. Or if it's an old case and there's still cases, you know, still taxpayers who owe money, they go out and do it. So that's the the difference. One is they examine the books and records, the other one goes out and tries to collect what the taxpayer owes. I never really had any inkling or desire to go into collection. So that's pretty much the one thing that I didn't do during my whole career.

SPEAKER_01 23:52

I love this term we were talking about yesterday that you said you called it a meet and deal skills. Elaborate on that again and when that kind of applies in your positions.

SPEAKER_05 24:09

I think in my opinion is it applies in life every day. But as as a revenue agent or anybody works with the IRS, you always have to meet a taxpayer and then you have to deal with that taxpayer. So hopefully you have some good meet and deal skills. So that's where that term comes from if you do have good meet and deal skills you'll probably have a very good career that's not too confrontational or replete with too many problems just because you sort of respect people and get along some people don't have great meet and deal skills and it's not their fault. A lot of people are shy. A lot of people can't deal with sometimes these get confrontational you know there's been situations where you're with a taxpayer and things just don't go according to the way they should. So you got if you have good meet and deal skills you can usually get out of those with you know not too much fanfare but um it's a big part and you do get rated on in your position how you deal with the taxpaying public. You know that's that's part of what's really yeah yeah I'm not sure exactly what all the critical elements are but your communications with the taxpayers and your meet and deal skills are always built into your position.

SPEAKER_01 25:30

How how does someone get rated?

SPEAKER_05 25:33

They they look at your case and then compare your case files to the critical elements and then they look at the internal revenue manual and make sure that you did certain things according to how they were supposed to be done. Okay. And um then they come out and do a couple on-site case reviews so it's a whole package that they put together and hopefully hopefully you do well you know it's that's the luck of the draw too because some managers rate high and some managers don't the only answer to that is that I used to tell everybody your manager's not going to be there forever or you may move to a different manager. So don't let it get you down everybody who's worked there has been I don't want to say the word screwed but that's what people when they didn't get promotions they felt like they got screwed I said everybody here's been screwed at least once right there are many jobs that I thought I should have got that I didn't get for whatever reason. Right. You know but you'll get there just don't give up the ship now just keep plugging along you'll get what you want now's just not the time I I really like this discussion because it humanizes the employees of the Internal Revenue Service and they're all decent people. They're not there because they want to give it to the taxpayer or you know shove it down the taxpayer's throat. They're there because they like the job. Most people hate the IRS and they don't even know why.

SPEAKER_01 27:02

Right. Where does the pressure come from for an auditor to close a case and why is there pressure for them to close a case?

SPEAKER_05 27:12

Well what happens you get a case you look at the case if you don't survey it and get rid of it you then decide that you're going to examine it and then you give what's known as an ECD date an estimated completion date okay so you put that on your time report that it's going to take me I'm going to close this case in nine months. So as you start working your inventory something may come up where you can't get to that case in nine months. But that's it may be a priority maybe like a tax shelter maybe part of a certain program we're looking at schedule C's that may put pressure on you and squeeze you to get rid of that because they have certain deadlines that have to be done. But if you can explain during my career my experience if you could explain why you know that something came up that there may be fraud involved or something else then your manager would sign off on that. But and then there's some people who can never meet a closing date no matter what it was. They just some people can never make a decision. Or they can never make a decision. Make a sound decision. If it's not the right decision we'll deal with it later but just make the decision and move on.

SPEAKER_01 28:40

And that was one of the best pieces of advice that I got because it gave me I don't know if courage is the word but it gave me the impetus to say all right here's everything the facts this is what I think we'll move on and I really didn't have any problems with that because then you can close the cases you get new inventory and sometimes you know somebody can't close a case they'll give it to you what drew you to becoming an appeals officer and what did you what was your experience what'd you like about being in that position?

SPEAKER_05 29:13

Well to be totally honest the reason I went into that was because they were offering permanent grade 14s when large case international was not they read you could apply for one in large case international but you would only get it for up to three years. And then you may not get it appeals came out and then said okay well we're making permanent grade so a lot of the international people went to appeals for that for the grain but I liked it because it was a different way to look at the cases I mean the the common story with appeals is that oh appeals is the candy store. Everybody goes to appeals because they give everything away you know it's like the Christmas shop. I'll go to appeals and they'll give everything away and I never thought that but then you get to appeals and you find out that you know sometimes we have to settle cases you know it's the old you're an attorney hazards of litigation you know what am I going to do with this case? Do I have a chance to win it? What are my chances of winning it? So you know we used to have one guy who every case would say I'll give you 50% you know and um you know one day in the old days we didn't have computers he came in it was an economist I'll never forget he was looking for work papers and he asked the team coordinator do you have any work papers she goes you don't need work papers you need a crystal ball because his line was I'll give you 50% on everything. And I liked appeals because the taxpayer would then come in you'd be able to read the case as to what they told the agent and then you can see if they told you the same thing. And if they did or you know why didn't they have receipts for certain things or why where did this bad loss come from you know and um it was good because you got to interact on a different level and um I enjoyed it I mean it it just you got to meet different people with different issues and you know it's just that was one of the things I liked about the job. So appeals was good. The other thing that people on both sides sort of have to realize that you never know what people are bringing with them to work. You know you don't know if their kid is sick. You don't know if their dog just died you don't know what the story is so then it could have gotten an accident on the way to see so you never really know what anybody's carrying when they come in so you you sort of have to try I used to have some times where people would seem like they're really mad and you just hold the conversation down a little don't keep pressing it you know they'll talk to you when they're ready to talk to you. Some people are just not nice but you know for the most part everybody sort of at least from my experience just wants to get through the audit with the least amount of trouble as possible you know and conflict.

SPEAKER_01 32:03

You're speaking for both sides both the IRS employee and the taxpayer. Yeah that was my experience yeah so John how can people reach out to you for any of the presentations of the variety of topics uh that you've been speaking at tech seminars and conferences about how can they reach out to you if they're interested in having you speak yeah they they're interested they can send me an email it's um john kelsho1 at gmail that's j-o-h n k the number one at gmail.com no spaces that's perfect i can't thank you enough for all your time and your expertise i'm really glad we could put this out here for our listeners both taxpayers and tax professionals alike is really important i i appreciate the offering the kind words thanks very much you're welcome back everyone from the break this is the patty gentle show and in our last segment of the show I like to call my coaching corner where I provide guidance and tips and strategies for taxpayers and tax professionals alike. This week I wanted to talk about the alternative dispute resolution programs that the IRS has as well. In our second segment today I discussed the Office of Appeals when we were doing the right to appeal an IRS decision in an independent forum and then you just heard our guest John Kelshaw discuss briefly when he was in the uh the position uh as an appeals officer during his tenure with the IRS but the IRS also has what they call ADR options which stands for alternate dispute resolution options that allow taxpayers and the IRS to resolve disputes more quickly than through the traditional appeals processes. And many practitioners you know appreciate these advantages because it's these programs are called for example the fast track settlement there's also a fast track mediation for collections and there is a post appeals mediation meaning we discussed the Office of Appeals but before you file a United States tax court petition uh to dispute an appeals determination an office of appeals determination you you may be able to use the post appeals mediation as an alternative dispute resolution. So the fast track settlement is uh and the fast track mediation for collection they allow taxpayers under audit or in collection to work with an IRS appeals mediator to facilitate a resolution often within 60 days these programs uh encourage collaboration between taxpayers and the IRS while and this is important while preserving your appeals rights if no agreement is reached so for taxpayers seeking a quicker and less adversarial process during examination or collection these options can be especially uh valuable and then the post-apeals mediation is available to taxpayers when a dispute reaches an impasse during the appeals process a neutral IRS mediator assists the parties in exploring settlement options or this mediator will assist in facilitating communication if there's like a breakdown of communication as well as identifying compromise areas this mediator will help to identify areas that can the both parties can compromise on and come to a resolution so importantly the mediator does not impose a decision so you need to know that and the outcome does rest solely with the parties so these programs really are meant to encourage collaboration between taxpayers and the IRS while preserving appeals rights if the taxpayer and the IRS do not reach an agreement but by you know expediting resolution ADR can reduce the cost or minimize the burden that's on both the taxpayer and the IRS and protects the taxpayers' rights. So you're looking for that win-win scenario and I like I like that opportunity those are the benefits but the I want to mention that the right fast track program for you or your client if you're a tax professional assisting your clients with tax problems it depends on your case are you a small business self-employed or individual a large business or businesses with international interests individuals with international interests tax exempt organizations and government entities or taxpayers with collection issues so the right fast track program for you depends on your case you want to be prepared for a successful mediation if you go to your where you download your podcast episode five back in October of 2025 we had attorney Steve Glitzner he's an attorney out of Miami Florida who actually does a lot of these mediations and he discussed a lot of the practical aspects of these but what I'm going to give you here is the IRS list of preparing for a successful mediation. So you want to look up this list on IRS.gov but I invite you to go back and listen to episode five with attorney Steve Klitzner because he like I said had a lot of practical experience that he'll be able to discuss and you can understand you can get a whole picture here you know mediation works only if the disputing parties can agree to an outcome since both parties have come to the mediation you know with an effective veto over its outcome each party has an incentive to find a solution that meets the needs not necessarily the desires of the other party so mediation doesn't work for anybody unless it works for everybody. And I think that's very important to understand. So you want to maximize these benefits of mediation that all participants should follow you know the principles that decision makers must be present at these mediations participants should have a sincere desire to resolve the dispute not just want it to go their way and it is important for each party to know and understand but not necessarily agree with the other party's concerns but just to know and understand them be open-minded you know to new ideas for resolution and the party should weigh the prospects of continued appeal and litigation costs realistically so there is a good opportunity there with mediation but if you would like to contact me for a complimentary uh telephone consultation please go to newenglandtaxrelief.com and schedule that complimentary call with me you could call me directly at 1-800-880-8388 where I have 24-7 live answering service and you can also text at 603 2040104 and we can discuss an opportunity perhaps for yourself as a taxpayer or a tax professional regarding your client for uh ADR mediation alternative and until our next show have a great week