Tax Trouble: What To Do When Things Go Sideways

David Wiener: A lot of people think tax trouble only happens to reckless people, shady people, or people who are trying to beat the system. But that's just not true. Sometimes it starts with a bad TikTok tax hack that you decided to try. Sometimes it starts with a real estate deal that just didn't go as planned. Sometimes it starts with a business owner who had a cash crunch, got behind, and told themselves they'd fix it next quarter. Then the IRS letter shows up, and instead of opening it, They put it in a drawer and hope it goes away. Today's the episode for that moment. This is the what do I do now episode. Because tax trouble can happen to anyone, and when it does, it should never be met with shame or guesswork. It should be met with a plan. And let me suggest that you stay with us through this full conversation because my guest today is going to walk us through what to do in the first days, the first weeks, and the real options that people have when things have already gone sideways. Welcome back to the Tax Strategy Playbook, the show where real estate investors, business owners, and tax professionals come to turn complicated tax rules into practical strategies that can protect cash flow and build wealth. I'm David Wiener, your host, also known as Mr. Cashflow. And on this show, the goal is simple: help you make smarter tax decisions before problems happen, and help you respond the right way when they do. And today I'm excited to be joined by Jason Wiggum. founding partner of Wiggham Tax Law Resolution Attorneys in Atlanta. Jason focuses on tax controversy, tax debt resolution, IRS and state collection matters, audits, appeals, and helping individuals and businesses navigate some of the most stressful moments of their financial lives. Jason, welcome to the show.

Jason Wiggam: Thanks for having me, David.

David Wiener: My pleasure, absolutely. When when people ask you what you do and and you say tax resolution, what do they usually think that means?

Jason Wiggam: ⁓ I mean varies, you know. Sometimes it's you know, help them pay less than taxes, which is not what I do, but I it as tax resolution because I want people to think that they have a tax problem. Typically they they owe taxes or the IRS alleges they owe taxes and they disagree and you we solve them. Those are the types of problems we solve. So I tell people that I resolve tax issues with the IRS and state agencies.

David Wiener: you're kinda like a dentist, you know, nobody wants to have to talk to you, everybody's gonna have to talk to you at some point. What brought you specifically into helping people at the point where things have already gone wrong?

Jason Wiggam: So I went to law school, I not intend to be a tax attorney. ⁓ I I went to Georgia State in Atlanta. did my undergraduate work at Clemson, so came to Atlanta afterwards, and I thought I was going to be a transactional attorney, you know, like contracts, wills, things like that. And in my second of law school, I took as a class, this low income taxpayer clinic at at Georgia State. And really loved the work. Like it it was fun, kind of fighting the man. ⁓ we we would have these cases where the person, our client would owe de minimus amounts maybe like a thousand dollars. And you know, we would spend hours fighting to get the thousand dollars removed or settled. And you know, I I just felt like I was getting justice. for you know people and then I was you know helping them and you know kind of doing the right thing. It would you know it was fun and get confused a lot. I I graduated with this like highest pro bono distinction. So like frequently on when people are interviewing my firm or talk to me and see my profile they they think I do a lot of like volunteer work. I actually do none. I When I was in law school, I just worked a lot of extra hours in this clinic because I just loved the work. I loved helping the clients. And after going through that, I realized, you know, hey, if I love doing this, maybe I should do it for a living. And that's that's how I got started.

David Wiener: Definitely need people who who do that and and love to do it. What do people what do most people misunderstand about the kind of clients who end up needing your help?

Jason Wiggam: Yeah, a lot of misconceptions there. Your your intro did a really good job going over the types of situations. first thing I would say is everybody has tax issues. I represented clients from all walks of life, high income, low income, high net worth, low net worth, middle class. most of the time it's not intentional. There's some kind of life event, you know, divorce, health issue, you know, your your business has financial problems for whatever reason, maybe lost a large customer that was unanticipated, maybe an employee embezzled funds, you know, l sort of life events. there's usually a lot of shame ⁓ tied in it. You know, I think when someone has a tax issue, they tend to avoid it and stick their head in the sand 'cause they don't want to confront it. you know, I I think couple other things. Taxes are complicated.

David Wiener: Yeah.

Jason Wiggam: So I think many times when someone has an issue, I said, it wasn't intentional. They just like didn't understand how these things worked, or maybe they outsourced it to a professional that maybe didn't do the best job. And so it's it it's like I said, generally not intentional. Just things have happened ⁓ and they have to deal with it.

David Wiener: That's that's really where I want to start because one of the biggest myths in this space I think is that tax trouble only happens to to irresponsible people. From from your perspective, you who actually ends up in tax trouble? like you say, it it could be anybody in any walk of life. But are are are there smart, capable people who get hit by a life and wind up in tax tax trouble?

Jason Wiggam: I mean there's different types of cases, you know. I think like I've been audited twice, right? And you it's not fun. it happens. it happens I think a lot less than people realize. like if you look at the statistics. But you know, if you you know, like I like to say, you're winning the game of life, if you're out there accumulating assets, making investments, you know. Growing your business, earning more money. you're likely to have a complex tax situation, which at some point is likely to bring some level of IRS scrutiny. and then yeah, like like we talked about earlier, you know, people run into situations where they don't file, they don't pay, through no fault their own. You know, just things happen. I always try to get the story from the perspective client. Like I I lead with, you know, like why are we here today? And, you I want to understand their background and how they got to me and sort of what their fears and motivations are.

David Wiener: Are there are there some common pathways into tax trouble? I mean, is it like side hustles or is it self employment income or real estate losses? ⁓ you know, what are the most common ones or are there trends?

Jason Wiggam: Sure. yeah. ⁓ I can I can speak to that. I mean, I think it's a variety of things. Like there are campaigns by the government where they target specific things and it's also kind of human behavior, but typically what I see is someone chooses not to file their tax returns. and maybe that's because they couldn't afford to pay it, ⁓ which which is a bad idea. they don't pay what's owed. like I said, maybe That's because of a life event or some kind of a situation that prevents them from being able to. in terms of like auditing of returns, you know, so if it's a scenario where you've filed and paid and, you know, the government audits you, that could be any number of things. So they they typically target like large and unusual items. So if you had a really large loss that's outside of the norm of your income bracket, you could be targeted. specific items. So like right now we're very busy with conservation easements and the employee retention tax credit. I I know you had a guest on your show about conservation easements before, so I won't I won't go into it too far, but ⁓ a lot of those you know ⁓ estate professional status, just gener employee independent contractor. you know, there's a lot cash transactions, thing things like that.

David Wiener: Sure. We did we did an episode a few weeks back on TikTok hacks and how quickly bad advice spreads. Do you do you see issues where social media tax advice shows up in real cases and and the damage that that can cause?

Jason Wiggam: ⁓ yeah. So if you have a tax issue and you relied on someone else's advice, that's a defense to like get you out of the penalties. But if the government disagrees with the position you've taken and and claws back, you know, tax and interest, you like you have to pay that. That person that whose video you watched will not be paying it. I mean ⁓ maybe maybe maybe you could sue you know, I don't know, but ⁓ the ⁓

David Wiener: That's true. If you can find them.

Jason Wiggam: Yeah, yeah. I mean, typically it's someone pitching something you know, I ⁓ the old adage, if it sounds too good to be true, it you know, it may be, right? Like you should be skeptical and investigate. I mean, there are plenty of things in the tax code that are beneficial. but if someone's making it seem like there's some magic tax code have access to that the rest of us don't, I would be highly skeptical. ⁓

David Wiener: Well, the the headline the secret tax hack that nobody knows about t to make most people kinda curious, but ⁓ know, I found that in the tax hacks that I did expose on on that episode, they all have a kernel of truth in them. They just don't give you all the information and they just don't tell you the the documentation that's necessary or or all those kinds of things and that can come back to really bite you.

Jason Wiggam: Yeah, I agree. I mean, like if you're audited, it's going to turn on substantiation, like your d documentation, right? Like how organized are you? Can you support everything that you've claimed? someone that's leaving out information on their video probably isn't doing that, right? Like or they're not gonna be able to help you with that. Yeah, exactly.

David Wiener: They're they're looking for likes and clicks. Yeah. I think, you know, can trust your tax strategist. Don't social media because ⁓ there's so stuff out there on social media. One thing I think is important here is that the same curiosity that gets people interested in advanced tax strategy, which we cover on this podcast, can also make them vulnerable to bad shortcuts.

Jason Wiggam: I I agree.

David Wiener: We we've talked on previous episodes about how strategy without substance becomes risk. That feels like the real life convers me say that again. This like real life consequence side of that conversation. So once somebody they have a problem, whether it started with bad advice or a cash flow crunch or just avoidance, the next question I guess is, what do they first? If somebody if somebody's listening right now and they have an IRS letter sitting opened in a drawer, what's the first thing you want them to do today?

Jason Wiggam: Open it. it it it's funny, the amount of consultations I've had where I've opened letters for clients is kind of wild. Like they frequently come in with a bag, and I pull out the letters and start opening them. But but I would say open this is why. Typically there are deadlines.

David Wiener: Ha ha ha.

Jason Wiggam: The IRS sends a lot of notices. In my opinion, they waste a lot of paper because a lot of the notices maybe you know aren't real. and what mean by that is you're not in any immediate danger. But the problem is you you're not gonna know, right? Like is this one of the notices we need to be worried about or not? Typically there is a deadline, so we wanna see what the deadline is and do within that time frame. I mean, the best thing to do would be to contact a professional. like myself or someone else, your CPA, and they help you determine is this a notice that needs to be dealt with or not. Like if you're being audited, typically there's a certain time frame to provide the information to the auditor. you know, you can get it extended usually, but best to go ahead and make contact and develop a good report. I don't want you to make contact. Like your representative should. You should never speak to that IRS auditor, in my humble opinion. If this is like a collection notice from the IRS, typically there's like 30 days and they may take action against you at the end of that 30 day period. They are a very powerful creditor. Like most in in a lot of situations, an IRS agent can just go to a computer, generate a notice of levy, and send it to your financial institution. They garnish your bank account, right? Or or they send it to your employer and garnish your wages. Like if someone owed me money, I would have to sue them. I would have to get a judgment. I then would have to go to the court and ask the court to approve a garnishment. So there's a lot of steps. The IRS just has to issue a notice and wait thirty days and then they can start taking things without court approval.

David Wiener: I would say it's probably really important to know when you get that notice in the mail. I mean, I know that feeling in the pit of your stomach when you open the the mailbox and you see a a letter from the IRS. But open it, know, here I am a tax strategist. I still get that feeling when I open the the mailbox. Turns out it was ⁓ something about whether or not I had had a change of address and I just answered it and I was done. But you also want to know whether the IRS is just asking questions or if they're already taking action.

Jason Wiggam: It exactly.

David Wiener: So what documents or information should they gather in that first week so you can understand the full scope of the problem?

Jason Wiggam: Yeah, definitely. when someone contacts me, I want the most recent notices. I to understand what they know about the situation. So, like how do they think they got here today? And typically most recent tax return, kind of general background on their their finances. I want the person to to be able to come to the call and talk about, you know, what assets they have, what liabilities, about how much money they're making. the the IRS doesn't do very much well. but you know, I have to give them kudos when they do. They actually have an online account now that you can create. So if you just Google like IRS online account, there is transcripts, ⁓ notices, a bunch of information on that account. So like frequently when I'm on a Zoom consult, I have the client go into the account and we start pulling information and looking at it. So if you're able to access that and get it, that's very helpful. ⁓ the transcripts are like an accounting of each year that shows you, you know, what happened. there's also wage and income documentation and and ⁓ information there, so it's very helpful.

David Wiener: Be helpful and know where that is. Do you how do you help a client separate what feels urgent in the moment and what is actually urgent?

Jason Wiggam: Well th I would say to them it always is urgent, you know, but but yeah, I look at I interview them and I try to understand where are they in the process. So I understand the tax procedure and how the collection works or if they're going through an audit, how the how works. It's really funny. The IRS created the I forget what it's called, but it's like tax map. And it it's basically a subway station of the entire tax process, like a subway map. if you would like to give yourself a headache, Google it and look at it. It is the most complicated ⁓ map I've ever seen. Like I go to Europe and I look at like, you know, or New York City, you know, these like big metro areas that have a great subway system that can take you everywhere. It it it's like that, but on steroids and where you are in that process is very important. And if I can kind of interview you and figure it out and look at the notices you've received, that you know brings a lot of confidence to me. Now if I don't know, like if if if I don't know if the prospective client is in danger or not, I'm gonna take a better safe than sorry approach. I'm just gonna they're they engage me, I'm gonna go ahead and contact the IRS or know, a state agency. ⁓ whoever we're dealing with, and negotiate what's called a collection hold. you know, it's hey, I've just been retained. I getting more information. Can have like thirty, sixty, ninety days to try to figure out the scenario and, you know, come up with a plan.

David Wiener: That sounds great. let me pause right here and just say if this conversation is helping you think more clearly about the tax side of risk, take a second to like the episode, rate the show at taxstrategyplaybook.com, or leave a comment with the biggest tax myth you want us to break down next. We'd be happy to do that. Now, once the facts are on the table. The next step is matching the right resolution path to the right situation. And I I would much prefer letting you look at that subway map than have me. so that's good. ⁓ that's where I think a lot of people get sold slogans instead of strategy. When when somebody genuinely really owe money, how do you think about that first layer of solutions like installment agreements or the new simpler payment plan options?

Jason Wiggam: Sure, yeah. So yeah, assuming there's no way to dispute the debt. They just owe it and they can't pay it. I'm looking at like as a threshold matter, is this person ⁓ full pay or partial pay? And so what I mean by that is in a ⁓ of the resolutions that we do, we submit the client's financial information to the government. We have to disclose their assets, their liabilities, their monthly income, their monthly expenses. And the resolution is negotiated based on that. the more assets you have, the money you're making, the worse the resolution's going to be, right? It's a collectability analysis. and you just just think about it, right? If someone owed you money and, you know, say you owed Someone owed you $200,000 and you discovered they have a million dollars in the bank, you're going to expect them to pay you in full, right? Similar idea. So is this person a full pay or a partial pay? How you look at that is the government has a certain period of time to collect. So for the IRS, it's 10 years and 30 days for each tax year. From like the point they first bill you, it's 10 years and 30 days. So if you get to the end of that time frame, they write it off.

David Wiener: Interesting.

Jason Wiggam: They write off the balance, right? So the idea is they took available assets and they looked at what you could afford to pay in a monthly installment agreement, would you pay in full over those 10 years? If the answer to that is no, you're a partial pay. If the answer to that is yes, you're a full pay. So that's the first thing. Full pays, we're usually doing an installment agreement. frequently the person may have short-term financial issues or maybe they need time. So know ⁓ the subway map we talked about earlier. I figure out where they are and is there any way we can delay, right? Like maybe they need a year to get back on their feet. Or or maybe they need like a lower monthly payment plan. we also look at can we get penalties waived, right? The IRS charges significant penalties, late filing, late payment. Late payment penalty is a half a percentage point per month up until a certain point, then they issue a notice and it becomes one percent per month. It accrues on the unpaid tax debt until you get the 25% of the balance. So it's a big number. So if you're a full pay, can we get rid of that? ⁓ typically that's gonna boil down to what's your compliance history. You know, like is this your first tax problem? you know, why? Was it You know, a death in the family, medical issues, you know, some kind of situation that qualifies as reasonable cause. That's the legal standard. so yeah, that that's kind of full pays. I mean there there's more to it, but you know, in a nutshell, the partial pay scenario is I what most people are interested in. I mean, generally you owe a debt, you don't want pay it. ⁓ Let's be honest, one likes paying taxes. I I definitely don't. I know you

David Wiener: Sure.

Jason Wiggam: I know you don't. So i is there a way to get a discount? Or is there a way to get a discount effectively? And there's a couple different ways to do that, right? Waiting out that ten year period I was talking about. You can literally negotiate an installment agreement or this thing called hardship or currently not collectible status.

David Wiener: When does it make sense to pursue that hardship status or currently not collectible? W and and what should people understand about what it does and doesn't solve?

Jason Wiggam: Yeah, so specifically the government looks at your financial information and they determine that you can't afford to pay them anything. really like a hundred dollars a month or less. If you're at that level, they they will put you in this status. you still owe it. Penalties and interest continue to accrue, the government's just not going to seize anything, basically. They're going to leave you alone. You stay in the status until your financial situation improves. I find with my like self-employed entrepreneur clients, sometimes we can get them to qualify. if you're smart about it, right? Like maybe, ⁓ know, their business is cyclical. Like maybe we know they will make less money in Q1. So like we should go negotiate in Q1. or You know, I I'll have clients where they make no money, make no money, make no money. In year three, they make a ton, right? You know, they're in you know, they have like long sales cycles, you know, just everyone's situation's different. But flip side though is when your financial situation improves, they take you out of the status. So for a lot of people, we don't wanna do it because their income varies year to year and you you probably don't wanna pay me to renegotiate like every other year, right? So, know, we look at like the partial pay installment agreement too. So that's you know, it the government thinks you can pay more than a hundred a month, but not an amount that'll, you know, pay off the liability over the remaining ten years. So

David Wiener: the other thing is everybody's heard the radio ads and the T V ads about, you know, settle for pennies on the dollar. I plain English, ⁓ when an offer in compromise actually realistic and when is it just wishful thinking or bad marketing?

Jason Wiggam: Yeah, I I think primarily do the ads. Almost every person who calls me that has a type of case where they just owe money and can't pay it or they want a discount, ask about the offer in compromise. ⁓ we we do a lot of them, but to to answer your question, it's a formula. You know, it it isn't like you're negotiating with a normal creditor, right? Like if You know, let's pretend I get in a lawsuit with someone that owes me money, I'm paying an attorney, the litigation is kind of an annoyance. It's you know, there's a variety of reasons I may settle for less than the full amount, that could apply. None that applies here. Th the government has set up the system where they want to treat everybody the same, so it's a formula. And so you literally just See what the formula produces. Now there are ways to get like variances on it, but in a nutshell, it is the equity in your assets, and and they may apply some discounts, but you know, it's whatever equity you have in your assets plus they would get paid in an installment agreement over the remaining statute of limitation that 10-year period, but discounted. You know, if your equity exceeds your tax liability, they're not doing an offer. you you know, you your equity is less than the tax liability, but they think you can pay a large amount and pay them in full over the 10 year period, they're not doing an offer. The year that statistics are available, fifteen percent of offers in compromise were accepted. The consequence of a failed offer is substantial. The statute of limitation, that 10-year period I talked about earlier, gets extended every day you're in an offer. you you have to yeah, you gotta pay a 20% ⁓ payment that you lose if it fails. So big fan of offers, but step one, do you even qualify? Right? If you don't qualify, let's look at other alternatives. And then even if you do qualify, maybe it's not right for you, you know.

David Wiener: ⁓

Jason Wiggam: ⁓ you have to have a clean compliance history for five years. So I'll have clients who qualify for an offer, but you know, they frequently late file, late pay, you know, estimated tax payments are difficult for them. And that's fine, no judgment. It's just, hey person, unless you are going to change your behavior, we're gonna do all this work, get this great outcome, and then it's just gonna get canceled and we're gonna be back to point zero. ⁓

David Wiener: So it sounds like it boils down to if you can afford to pay, you're gonna pay.

Jason Wiggam: Yeah, I mean it the other scenarios to get a discount, and I'll hide I'll highlight those quickly because that's what I'll pivot to, right? Like, hey person, you want a discount? Let's look at these alternatives. Can we wait out that 10 year statute of limitation? You know, the bureaucracy of the IRS is not efficient. they're very slow. So, you know, the subway map I talked about earlier, where are you? Can we delay and buy more time? Can we negotiate a installment agreement that won't pay them in full? You know, that's kind of number one. Number two, can we get any penalties waived? penalties can sometimes be anywhere from like ten to thirty percent of the total balance. the IRS charges interest on the penalty. So if you get the penalty removed, you get the related interest removed too. And then finally, one is never popular, but I believe should always be considered bankruptcy. You can get rid of income taxes. It's called a discharge. ⁓ you can get a discharge of income taxes. By filing for bankruptcy. not like a regular debt, you know, like credit cards or you know, medical debt or whatever. You know, you have to wait certain time frames. So you you have to be really intentional about it. But you know, the frequent scenario I see is a higher income person who doesn't qualify for an offer but has low assets, maybe you can do bankruptcy. Or it depending on the assets they have, they may be exempt. So let's say the only asset I had was a 401k. And you know, I don't have some astronomical balance in it. You know, like I have like 200 grand in my 401k. That's a lot of money, but you know, not enough to retire on. that gets exempt in bankruptcy. And then I just have to negotiate after the bankruptcy with the IRS. They're not going to require the full 200, you know, maybe a small percentage of it. So it can be a scenario where you get a discount. Without fail, I am told, Jason, I'm not a loser, I don't file for bankruptcy, and I tell them. For me, it's a tool to get get a discount, right? To clean up your balance sheet. I don't personally file bankruptcies. I work with other attorneys that do, but you know, being an expert, I think it's important to give everybody all of the options. I think it's important when an option is to give the person what they want and they don't understand it to educate them on it.

David Wiener: Makes sense. let's pivot a little bit on this one. The issue isn't just collection, but the issue is disagreement, an audit issue, a a legal interpretation issue, or some kind of contested liability. How do appeals or more formal represented rep how appeals or more formal representation come into play?

Jason Wiggam: Yeah, so if if you're going through an audit, or you know, you've received letters from the IRS, and and and I guess the first thing I'd like to say is audits come in many shapes and forms. correspondence audits, that's where you're audited through the mail, ⁓ are more frequent now than they were like fifteen years ago. Like ⁓ as IRS budget has been cut, the amount of audits conducted through the mail has gone up. So ⁓ IRS gets a lot of third-party data takes that third-party data and checks it against your tax return. And their computer system believes that that third-party data is missing, you get a nice little nasty gram from them. So it may not feel like an audit, but it is. It's just very targeted. so I the first is are we at? You know, it If you're still going through the audit process, you likely have some really important due process rights. You file an administrative protest and go through the IRS appeals process. You can go to the United States Tax Court. If audit is already complete, you can do what's called an audit reconsideration or an offer in compromise doubt as to liability. So we're talking about offers earlier, OACs. We're talking about doubt is the collectibility. Basically, settle with me, government, because I can't afford to pay you. Well, there's another type. Settle with me because you're wrong. So hope is not lost, even if you ignored all the notices, basically. But but yeah, there's this appeals process. It is not the type of thing that you would want to do on own, in my opinion. ⁓

David Wiener: Absolutely. I was just thinking that you don't want to do this by yourself. You want somebody who's really trained in it to work with you. And for people who just use a tax preparation service or a tax preparer, they're gonna really be able to help you in any way in this audit, I would assume.

Jason Wiggam: Yeah, I agree. Yeah, it it depends. I mean, sometimes the person who prepared your tax return can handle the audit, especially if it's pretty straightforward. you know, w where I see issues arise is if you're if the person representing you, you may you may have a dispute with them, right? Like let's say a position was taken on the return and there's a problem with it later. The person who prepared your return is probably not gonna blame themselves, right? So just something to keep in mind. you know, I I I think it's just human nature. I don't think anyone's doing anything wrong, but it may be better to have an independent person handle that audit. you know, the other thing I see is like, is it a red flag to hire an attorney? definitely not, in my opinion. I I'm biased, I'm an attorney, but

David Wiener: Yeah.

Jason Wiggam: You know, it I I think from the IRS's perspective, a CPA, an enrolled agent or attorney can represent someone before the IRS. Like all three designations can can be on an IRS power of attorney form. So I I think what they're really looking at is does this person know what they're doing? I would say most IRS agents want to work with an experienced professional because it saves time, you know, it's not emotional. The the only area that an attorney can handle that the others generally can't would be going to the United States tax court. there's like limited situations where CPAs and enrolled agents can, but for the most part, attorneys do that. we handle the entire process for our clients, but you know, the many times they have someone already and it's a team effort, right? Like we work together on it.

David Wiener: Excellent. My dad was a CPA his ⁓ were practices, large medical practices, and they were audited fairly regularly but I remember an IRS agent coming to ⁓ his office and was there and the guy knocked on the door and when my dad answered he looked at him and he went, no, it's you. ⁓

Jason Wiggam: mean I

David Wiener: Because he never missed a trick when it came to, you know, backup and documentation and all that kind of stuff and rarely ever lost an audit.

Jason Wiggam: Sure. I e even if you have your ducks in a row, it's not gonna be fun, right? Like, you know. so I I totally get your dad's response. ⁓ I think that's most clients. Like they r r rarely do I get someone that's happy that they went through an IRS audit. ⁓

David Wiener: Well no, it was the auditor that actually said, ⁓ no, it's you when they saw ⁓ when when they saw my dad on the other side of the table.

Jason Wiggam: ⁓ I misunderstood. Well, I I'm yeah, no, it's exactly your dad had his ducks in a row and protected the client and that's what you want. So you know, mistakes I see made with audits quickly. Frequently I'll get someone that's like an entrepreneur and you know, good at sales, right? Like they they grew the business through sales and you know they're charismatic. And they're like, ⁓ like let me just talk with them, it'll be fine. That generally never goes well. I like very rarely let my clients interact with the government. I mean, sometimes I'm forced to because they're subpoenaed. But beyond that, I am generally not letting my clients speak to government agents unless it's like negotiated and very well prepared. myself or my team handled the interaction. to you just they tend to Say things they shouldn't is what it boils down to. And they admit to things they shouldn't.

David Wiener: And it that must be a relief to a lot of people too, that they don't have to talk with the auditor. You're gonna talk with them.

Jason Wiggam: A hundred percent. Yeah, we're we're like a shield. We get the power of attorney form and the rules say can't go around us unless we're, you misbehaving. They have to go through us and so we take advantage of that. you know, i yeah. yeah.

David Wiener: So let's take this from theory into human terms a little bit. Once somebody gets out of the immediate mess that they're in, how do you how do they keep from ending back in it?

Jason Wiggam: Yeah, that's a good question. know, and and this is gonna sound crazy because I represent people who like don't file, don't pay, do all the things, but file and pay your taxes on time, you know? ⁓ I you know, I I see situations where someone like the return is prepared and they can't pay it. still file, right? Like don't don't compound and make it worse. I see

David Wiener: Seems simple.

Jason Wiggam: situations where people act out of fear, you know, like they they kind of the the polar opposite, you know, they can't pay it, but they b take money from their four one K, they take predatory loans. So don't do those things. I think it's should an issue arrive arise, don't act based out of fear, right? Like if you've gone through this process and it you know it happens, God forbid it happens again, you just know it's something that we should approach. You know, rationally without emotion.

David Wiener: That's good. And once a once a case is resolved or at least stabilized, are there particular habits you want your clients to build so they don't end up right back in trouble a year or two later?

Jason Wiggam: Yeah, I well, w we do a few things. So we offer a transcript monitoring service. So the client can either do that th themselves or, you know, we do it for them. But the idea is when someone is a client of our firm, we get copies of all the notices and we basically manage them for them, right? Like we vr review the notices and let the client know if there's anything they need to do, is the notice pertinent or not. Once the engagement is over, we're going to revoke that power of attorney form and we're not going to get those notices anymore unless the client stays on this transcript monitoring service. They are it's just like when they were representing us. We monitor their IRS account, we check all the notices and let them know: is this an issue? like we talked about earlier with the offer in compromise, there's typically a period of time where you have to stay in compliance. So if you have any ⁓ you know, issue any letters or issues arise you want to address them. yeah, I guess, you know, if at the beginning you weren't opening the notice, let's start opening them, right? Like let's be more proactive. It may not be an issue. the transcript monitoring, I I talked about the IRS account earlier. You can get your IRS transcripts through that account. It's not super intuitive. You have to like go into View Tax Records and you gotta click transcripts, but they're there. So you could kind of theoretically monitor them yourself too. But I think it's just be more proactive. you if you weren't paying estimated tax payments, start them. I I personally hate estimated tax payments. I don't pay them. I just I have S Corp, S Corporation. I pay myself a salary from the S Corp and I just withhold on the salary. So it's I think really more about like client, what do you prefer? Like what what changes are likely to stick if we make them. You know, I get clients who have very uneven income, right? Like maybe you know, one month they make a large amount and then they don't make that same amount for a few months. Like I represent a lot of attorneys, personal injury attorneys. and, you know, it's hey person, when you take money ⁓ from this firm, just remember Uncle Sam's entitled to some portion of that, right? Is it You know, is it fifteen? Is it twenty? Is it twenty five? You know, we gotta figure that part out, but we should, you know, go ahead and pay that in. Just like when you were an employee and taxes were withheld on your pay, like try to create that habit. I tell clients, my goal is to hang out with you one time. Like i I'm gonna give you the advice so we hang out once. I I I guess with audits the government could audit you again. I can't control that. But like if it's a you know, a a payment situation where you haven't paid them, you know, I wanna try to avoid that again. And, you know, that's what most people want when they contact me. They're they're not know, they're typically very afraid. They're worried about what the government's gonna do to them. They don't want to be in the situation anymore. So it's just

David Wiener: Well that goes back to some of those T V ads too because you, you know, they they point at they can take your house, they can drain your income, they can know. so for the listener who yeah, it's all fear. For the listener who feels right now embarrassed or overwhelmed or afraid to admit they have a problem, what do you want them to hear from you right now?

Jason Wiggam: Fear. Yeah, so there's no shame in having a tax problem. And the only way you're gonna resolve it is to confront it. So, you know, go into your IRS account and look into it yourself. Hire a professional. Do something. Come up with a plan. Don't ignore it any further. no, it's you know, and the amount of people that hire me after the bad thing happens is quite high. You know, it's

David Wiener: Because it's not going away.

Jason Wiggam: Hey Jason, they seized my bank account. I'm like, okay, well, I have twenty-one days to get the fund b funds back now, right? Like and and we're gonna try, but it would have been great if you had called me like two months ago, right? ⁓ Yeah, and and you know, and that's why the fear selling works, right? Because people think the government's gonna put them in prison, thinks they're gonna take all of their assets.

David Wiener: Ha ha. When you got that first letter. Absolutely.

Jason Wiggam: And and I guess jail prison, I should confront that. There's no debtors' prison. If you owe them money, you know, you're not a bad person. They're not gonna put you in jail. it it really only gets to that level if you take like intentional actions and and do additional things, right? Like if it's just I couldn't afford to pay them because of life events, y you're good. ⁓ like the

David Wiener: You're you're not going to jail.

Jason Wiggam: Yeah, I mean you're you got this problem that we have to confront. So, you know, whether you're good or not, I guess it's debatable, but like you're not going to jail. like the calls I get on those cases are typically like, Hey Jason, are government agents gonna be at my door? Are they gonna put me in jail? Are they gonna take my house? Are they gonna take my car? Are they gonna take my 401K? So those are, you know, kind of the questions we confront. And there's always a solution, you know, there's always a resolution that, you know, gets you out of the situation.

David Wiener: Sure. Fantastic. Before we close, I want to turn this into something even more practical and memorable. We call this the Tax Strategy Playbook, so let's let's give ⁓ a a little bit of playbook that listeners can walk away with. if you had to break this into a f simple four step or five step playbook, f what are the steps from first notice to real resolution?

Jason Wiggam: Yeah, so step one, ⁓ let's open those notices. Let's do, know, let's figure out where you are in the process, okay? so we can fear and move forward. two, analyze everything. Let's get the IRS information, like all of your records from the IRS. Let's get all of your information, let's do an analysis to see, you know, what you qualify for. I like to say we're navigators and you're the captain of the ship. I saw the Odyssey this past weekend, so this is like very real for me right now, you know. So yeah, we're we're giving the routes you can take. And you know, we're strongly recommend which route is the best, but at the end of the day, you're gonna decide, right? So it's the next step of the process. Do the analysis, give you the options, and then you decide. And then we execute or or you execute. And then I guess the final step in the process would be tax resolved and hopefully you don't have to deal with it anymore. But ⁓ you know, hop hopefully hopefully that's a a good playbook.

David Wiener: Sounds good. Sound sounds a lot better than Sounds better than just throwing that notice in the drawer And I assume the step that most people often skip is is opening the notice in the first place. so at at what point in in this should they stop trying to handle it themselves and get qualified help?

Jason Wiggam: Yeah. You know, i if it's a material liability, you know, like if you got a notice and it's a few hundred dollars, maybe a few thousand dollars, it may just be better to handle it yourself or pay it, right? but you know, anything that's material, or it's you know, I guess like scary, if there's deadlines, things of that nature, you should contact a professional. Like I would start with whoever prepared your tax return if they're helping you. handle all types of cases. We're always happy to, you know, chat to see if we can assist. But, you know, don't don't do it yourself, right? We talked about dentist earlier. Like you wouldn't drill your own teeth, right? You know, like hire a professional, hire an expert.

David Wiener: Yeah. Absolutely. Absolutely, yes. the whole dentist thing is a whole nother long story, but I won't get into that. so sometimes I think get a notice that says, Hey, we got this ten ninety nine, you didn't include it, you owe us this much. You know, you've you missed a ten ninety nine or something when you filed, and that's pretty straightforward. You could just pay it and be done with it. ⁓ if it's correct, yeah, yeah.

Jason Wiggam: Yeah. Right. I if it's correct. Yeah. Yeah. S sometimes it's not.

David Wiener: So so basically the the the playbook is open the notice, identify the issue, gather the facts, and then choose the right resolution path, whether that's with their CPA, calling you, somebody you, and stay engaged until it's fully handled. No shame, no hiding, no guessing, no throwing notices into the into the drawer. Pretty pretty close?

Jason Wiggam: Yeah, open ⁓ up. Now that's very well said, much much better than me.

David Wiener: ⁓ okay. if you want more episodes like this that break complicated tax situations into practical playbooks, let me ask you to subscribe to the show, leave a comment with the topic you want covered next. I read every one of those and and share this episode with somebody who needs to hear it. Jason, that's exactly the kind of framework that people can remember. Hopefully they don't get that that feeling in the pit of their stomach when they open the mailbox and see a letter from the IRS anymore. Let's close this with one final takeaway. If somebody listening remembers only one thing from this conversation, what do you want it to be?

Jason Wiggam: Open those IRS notices. Yeah. That's I think that yeah, I mean that that solves a lot of issues or at least starts the process to solving ⁓

David Wiener: That's the beginning of everything, right? ⁓ And Jason's contact information will be in the show notes at Taxstrategeplaybook.com. But real quickly, where can people learn more about your work or reach your team if they need help?

Jason Wiggam: Yeah, our our website is a great place to start. So it's ⁓ Wigamlaw dot com. So my last name Wigam L A W dot com. and we have lots of content and free information there and there's a way to contact us on schedule a consultation to the website too.

David Wiener: Excellent. Jason, this was incredibly valuable. I think what stands out most is that tax trouble's not a character flaw. And it's not something people should try to solve with panic or pride or internet shortcuts. It's a problem that needs facts, sequence, the right strategy, and also the right team to work together. Thanks so much for joining me. it this has been great, and I'm sure we're gonna be talking again. For everybody listening, this is exactly why this show exists. We spend a lot of time talking about smart planning, strategy, cost segregation, cash flow, how to use the tax code well. But real part of the tax the real tech part of tax leadership is also knowing what to do when a plan breaks down, when advice was wrong, or when life simply got messy. Thanks for joining us on the Tax Strategy Playbook. We'll see you next Tuesday.

Jason Wiggam: Thanks for having me.

David Wiener: That was outstanding. Thank you so much. ⁓ we you and I will have to get together sometime for lunch because I want to talk further. My dad I he was my hero. and I I started out in college to be a CPA like him. I got to cost accounting and said, if I have to do this the rest of my life, I'm gonna kill myself. So

Jason Wiggam: No problem. Sure, yeah, I'll ⁓ I'll reach out.

David Wiener: But I used to watch him. He he got a he was talking to an IRS auditor. He got an audit notice for one of his clients and he got an aud he he called and he said, we're not doing this audit. And they said, Yes, you are. We we've already decided. We're auditing your client. He says, No, we're not doing it. And they said, You have to do it. He said, No, because the IRS code says if the last two audits had no change, I can refuse the third one. And

Jason Wiggam: Right.

David Wiener: The guy he he stopped for a second, he thought about it, and he went, I you're right. ⁓

Jason Wiggam: No, yeah, it's the like the taxpayer bill of rights is pretty much useless, but that is one of the few teeth in it, right? Like like there's a lot of like statements about things, but then there's no way to hold them accountable, but that is one of the few and ⁓

David Wiener: Yeah. Fantastic. Well, it's good to have a new friend in Atlanta. I I love dealing with local people, but most of the people I wind up dealing with are far flung across the country, so it's good to know somebody local. And if I do ever do get that notice ⁓ be on the phone with you real fast. ⁓ Jason.

Jason Wiggam: I ha I hope not. ⁓ Sounds good. Thanks, David.