In episode 35 of The Real Talk, Raquel Ramirez interviews Attorney Magda Abdo-Gomez, a tax attorney, as she shares her journey into tax law and her experiences working with the IRS from the importance of opening IRS letters promptly to the implications of missing tax deadlines.
Tune in to discover the relationship between bankruptcy and tax law, and learn about the significance of acting within timeframes in legal matters.
TIMESTAMPS
[00:01:47] Finding Passion in Tax Law.
[00:04:41] Law School Challenges and Realizations.
[00:08:43] The Complexity of Tax Codes.
[00:12:51] Specializing in Tax Litigation.
[00:17:19] Penalties for Late Tax Filing.
[00:19:26] Tax Penalties and Interest Accumulation.
[00:26:40] IRS Staffing Challenges.
[00:29:32] Background Checks for Employment.
[00:33:44] Generational Gaps and Learning.
[00:38:16] Representing the IRS in Bankruptcy.
[00:39:18] The Reward of Helping Others.
[00:46:22] Handling IRS Letters Promptly.
[00:46:44] Tax Filing Deadlines and Penalties.
In this episode, Raquel Ramirez and Attorney Magda Abdo-Gomez emphasize the critical importance of promptly opening any correspondence from the IRS. Attorney Magda highlights that many individuals tend to delay or ignore IRS letters out of fear or avoidance. However, she stresses that neglecting these letters can lead to severe consequences and penalties in the future.
Overall, this episode gives importance to being proactive in meeting tax obligations, understanding the deadlines, and taking timely actions to avoid penalties and interest charges. By staying informed and acting promptly, individuals can navigate the tax system more effectively and prevent unnecessary financial strain.
QUOTES
SOCIAL MEDIA LINKS
Raquel Ramirez
Instagram: https://www.instagram.com/featured_properties_intl/
Facebook: https://www.facebook.com/featuredre
LinkedIn: https://www.linkedin.com/in/raquel-ramirez/
Attorney Magda Abdo-Gomez
Facebook: https://www.facebook.com/taxbankruptcylawyer/
LinkedIn: https://www.linkedin.com/in/maggie-abdo-gomez-attorney-bbbb9614/
WEBSITES:
The Real Talk: https://www.therealtalkpodcast.net/
Featured Properties International: https://msha.ke/featuredre
Magda Abdo-Gomez: https://magdaabdogomezlaw.com/
Welcome to The Real Talk. I'm Raquel Ramirez, your host and real estate professional here to bring you insightful conversations, expert advice, and powerful stories about what really goes on in life, love, divorce, and real estate. Are you ready? Let's get real. Welcome to The Real Talk podcast. Today, I have the very distinguished privilege of talking to my friend Maggie, Maggie Abdo Gomez Magda, actually. But I call you Maggie for short because you're my friend and it's a privilege to have you. You're a tax attorney, and I know that you are the first actually to be on the show to talk to talk about something as riveting as taxes. But I welcome you on the show. Thank you so much for joining me today.
Raquel Ramirez
Thank you, Raquel, for having me. And yes, everybody can call me Maggie. So that's not a problem. I appreciate you having me on your show. I'm looking forward to this riveting conversation that we're going to have about taxes.
Attorney Magda Abdo-Gomez
Exactly, exactly. So before we get into anything like that, just for the listeners, tell us what it is that you do exactly and how you got to be a tax attorney.
Raquel Ramirez
Okay, so that's interesting. So I went to law school at the University of Florida in Gainesville. and discovered that after one semester, I wanted to quit. Nobody knows this pretty much because I couldn't because it was such an ordeal to get my parents to let me go there. Right. That that to then say, my God, I hate every minute of being of of not being there, but of law school. Right. And then I just kind of like got the hang of it. And but I really didn't care for law school or anything that I was learning until I took my tax course. And then it was like, oh, my God, there is there is beauty. There's wonder. And that's because I was a math major. Right. And in math, everything has an answer, always has an answer. Two plus two is four. You know, it's very set. But when you go to law school, everything is gray and everything is it all depends. And there was no answers. So for me, intellectually, that was my difficulty with law school. Oh, my God. I couldn't see that. I couldn't see the gray to me. Everything was black and white needs to be black and white. It was a many, many years of studying mathematics. Right. So tax was numbers. And the way tax was taught at the University of Florida, which was patterned after NYU, which was the best tax program in the nation, always. was problem oriented right so you learn the law, but then you apply that law in the context of. a problem with numbers and you came to an answer. And that was like heaven. Of course. So I found what I liked. And so then I got a master's in in tax. So I stayed in law school an extra year devoted just to tax. So that's how that was tax classes. And you got and you got a master's of law in taxation. So that's kind of like where my tax came from. And then I went to work for the IRS. Soon after and representing the IRS in tax court and in any other issues that the IRS had that revenue agents or revenue officers had questions about what they were doing if they wanted to obtain a special lien if they wanted to summons a taxpayer. All of that came through my office, through our office at district council. Some of the matters went, had to be delegated to the Department of Justice and some we retained. So anything that had to do with answering questions or going to tax court was district council. Anything else that involved the district court, refunds, refund lawsuits, criminal, criminal cases. We reviewed them, but then we did refer that to the Department of Justice for representing the United States in those tax matters.
Attorney Magda Abdo-Gomez
That sounds serious.
Raquel Ramirez
It was. And, you know, and it was fun.
I can imagine. But, you know, now that you say that whole thing about law school, I mean, I know a lot of attorneys and most attorneys, I think, kind of felt the same way. They went to law school. They really weren't sure what to expect. They really weren't in love with law in general. And then they found that one field or they came across that one field that really changed the game for them. But now knowing you the way that I do, I can absolutely understand how this makes sense for you, the whole black and white thing. I'm a very black and white person too. And I really never considered how law really is a gray area. And I mean, it's just, I know that sounds stupid maybe because I'm around a lot of attorneys and we talk about law and we actually jokingly say that the lawyerly answer always is, it depends. But it never dawned on me that that whole industry is really based on a whole gray scale of, possibilities and interpretations.
I think that because when I because I'm also a professor, so when I talk to the students, I say I don't see gray. To me, everything is black and white. And still to this day, everything is black and white. And we call it like the black letter law. So so the law per se is kind of like black letter. Hey, if you look at a statute, the statute says this, but we are not taught on a statutory basis per se, we are taught on case law, which is the interpretations. And so when you read that statute, which seems to be black letter law, there's always like, well, what did the legislature really mean? Did they mean this? How do we interpret that? And that's where case law comes from. And so the case law is really trying to interpret that black letter law because there was some vagueness And it's that part that I just don't get. Because sometimes, to me, it's very black and white. And sometimes I tell the students, really, did we need to go to the Supreme Court to get this answer? Isn't this logical to everybody? And that's my hindrance because I only see the black letter. My view of how I interpret that statute, a case law comes from the vagueness of the way these statutes are worded. to to and how and it's subject to interpretation. How do we interpret that? So when people talk about, oh, the Supreme Court or the court is legislating, they're not legislating. Had you written the law super clear, we And you wouldn't have to legislate because we wouldn't know what you mean. Exactly. And that's kind of like where it comes. You have to try to interpret what was said and what was meant. Right. Sometimes they don't do a good job of interpreting, but that's really where it all comes in. So when you're sitting there in law school and you're studying these cases, I'm like, oh, my God, you know. Just just, you know, and it was that greatness that that we're that's what law school is, is reading all of that greatness to try to come to an eye, an idea of what it should be as as black and white kind of thing. Does that make sense?
I don't know. Yeah, no, absolutely. Actually, no one has ever really explained that to me that way. Everybody always talks about how difficult law school is and how much reading you have to do and how much case law studying you have to do. But nobody has ever broken it down that way for at least for me to understand, really, from your perspective, what it is you're going through, what it is you're doing in law school. Right. So I could see then, yes, how going into tax. I mean, it's like you said, numbers don't lie. It's two plus two is four, whether you like it or not.
Except, of course, there's always the interpretation. The code is also written subject to interpretation. And maybe the IRS will interpret it one way and the tax, the accountant interpreted a different way. And so that's where the fights might might arise on the higher end stuff for everyday people. For everyday people, those issues don't really arise because you're either entitled to a deduction, not entitled to it. It's clearer. You either have the receipts or you don't have the receipts kind of thing. But the more sophisticated, when we're talking about attorneys that undertake planning, they're planning based on what the code says and how is the IRS kind of interpret it. And there you get sometimes into a little bit of gray. where a taxpayer may take a more aggressive position than the IRS wants you to take. And that's where kind of like the fights break out in a way. Wow. So it's all interesting. It's all fun. Yeah, I bet.
I bet. Now, I know we were talking offline that the tax code is like millions of pages, you know, with super fine. It's like an enormous Bible, right? Yes. So there are, I'm assuming, tax codes for everything and anything under the sun. And tax specialists obviously, I guess they specialize in a certain code or certain area of that law?
Pretty much. I would say to somebody that if you Talk to an attorney, a tax attorney, and they tell you, well, they're just a tax attorney. They do everything like run, run fast the other way. But it's almost the same thing as any other kind of lawyer. And even think about it in terms you understand as a doctor. A doctor, do you want to go to the general practitioner who claims to know every area of medicine, your heart, your brain, your nervous system, your this, your everything? Or do you want to go to the cardiologist for your heart problem? You know, do you want to go to, I don't know, to the podiatrist for your feet, to the ophthalmologist for your eyes? Do you want that? And it's the same thing with lawyers, right? So the law is Ever changing constantly changing and it's very broad. So just like we have. the attorneys that say they practice everything to the attorneys that say, I do PI, I do estate planning, I do this. It's the same thing in tax. Now within tax, the code is very large. The code is very, well, now we have the internet, so I don't even know what it would be like printed now, but it was written with very small print, very thick. And so you end up gravitating to different areas of the tax code. So we have people that do estate planning, We have people that do mergers and acquisition. A person that does mergers and acquisition might have no idea how to do trust to protect an inheritance, right? We have the people that do a lot of international work. They might never have gone into tax court, right? Me, because I worked for the IRS, I ended up more in the procedure and litigation. So they might not know the simplest thing that I consider the simplest thing, but at the same time, I may not know what they're doing. Now, not to say that we couldn't pick up the code and try and understand and learn it, but we wouldn't have the experience that someone that's been spending years just doing mergers and acquisition would have as somebody like me. Yeah, I have a master's in law, but I'm always very careful to say, but I practice in this area. I practice in this area because there is so much. I mean, and then you've got the people like out in Texas and Louisiana that they do natural resources because gas and oil and all of that is something that's its own thing. Right. Right. We used to have in law school. Well, I don't know if they still have it, but like in California, they used to grow a lot of almonds. So there was whole code sections for those almond growers, right? And farmers and stuff like that. I remember in tax court, once I had a client who had a nursery, a plant nursery. There was a whole set of codes I had to learn about plants and how big the plants are and all this stuff. Then there's excise taxes, right? There's employment taxes. There's just so much. So many times you have people in those basic areas, estate planning, purchase and acquisition, international, you know, and they kind of like stay in their lane because they're very good. They're very good at that. that particular area of the code.
Yeah. And I mean, there's something to be said about specializing. It's actually exactly how you said, you know, about a doctor, you wouldn't go to a podiatrist to see something about your, I don't know, your heart condition, or you wouldn't go to a gastroenterologist for your athlete's foot. You know what I mean? You want to find the right specialist to deal with the right problem. Right.
So that's what I do. I just basically do tax litigation, tax defense litigation, So the IRS is coming after you for anything, then that would be me. Now the IRS is coming after you because of a crime of tax evasion. Then I would bring in a criminal attorney to do that part and assist them because they might not know the civil because that criminal tax case is always going to go civil. Always, right? Most times they start civil, grow criminal, but then they always come back to civil. civil meaning you owe us money, criminal meaning you need to go to jail or you go to prison and or pay a fine in addition to the taxes that you owe. It's two different things. So I wouldn't represent the on the criminal criminal in criminal court. But I could assist with regards to the tax aspects of the case. And then I would do the civil part of the case.
I don't know what it is about taxes in the IRS. I don't know if it's because since you're very little, you always hear that you can't avoid the IRS, that there are two things that are given in life and that's death and taxes. I mean, It's kind of like that running joke, right, that you hear from the time that you're very small. And I'm assuming that a lot of people sharing that sentiment. But I find the IRS to be a little scary. So any and every time that I get a letter in the mail, even if it's just to wish me a Merry Christmas, which they don't, but Even if it was that simple, I start to freak out and I always say, Oh my God, what did I do wrong? What do they expect me to pay? And, you know, and I have a good CPA. It's not like I don't file my file, my taxes every year, like right on time. If I have to, you know, request an extension, I make sure it's done on time, you know, and I'm, and I'm by the book because I don't want to get in trouble. I don't think I've ever been in trouble. I've always been on the right side of the law, but There's something about the IRS, maybe because, you know, Al Capone couldn't even avoid, you know, get away with tax evasion. So I know that there are a number of things that I'm just not even aware of, you know, from like a typical perspective, like, you know, filing your taxes, maybe as a as a W2 employee, I know that I file my taxes, you know, I own my own corporation. So I know that there are ways to file my taxes and then my CPA does it to where I get a salary and all these other things. But for the normal person, I guess, what are the implications, if any, at all for like filing on time, not filing on time, paying your, you know, your dues or your penalties, you know, within the timeframe given?
Okay, so you're not the only one. Everybody's afraid of the IRS for reasons I can't quite figure out. If you ask me, the Department of Revenue is much worse. Thankfully, everyday people don't have to deal with the Department of Revenue because we have no income tax in Florida. But if you have a business, sales tax, employment tax, they're just very difficult to deal with. Not like the IRS. I've never had problems dealing with the IRS. So, I guess the first thing I would say to you and to your listening public, if you get a letter from the IRS, the tendency for people is to be afraid, put it aside, hide it. Thinking somehow it's going to go away. The IRS is not going to go away. Whatever problem or whatever they're addressing in that letter will only get worse if you ignore it. So the first piece of advice is open it. Open it as soon as possible and see what is it that they want. Many of those letters contain rights. And all the rights are based on times. You have a certain amount of time to exercise that right. Most of it is 30 days, right? And if that time expires and you didn't do, and you didn't exercise that right, you lost it. You lost it and you can't get it back, right? So open whatever you've got, whatever it is, it's not the end of the world, right? And sometimes it's just something simple. And what you don't want is to have it snowball. So that's the first thing. So now let's talk about penalties. They're pretty intense, okay? They're pretty intense. So if you don't file your income tax return, and we're talking individuals here, if you don't file your tax return, the penalty is 5%. Per month. Oh my gosh. So if you owe $200, you're saying 5%. Oh, it's not a problem. 5% is 10 bucks. What do I care? Right. Except once you are late 60 days, there's a minimum penalty of like 480 something dollars. Oh my gosh. All right. So your penalty could end up being more than your tax. Right. And the penalty reaches 25%. Right. So it's the highest of the two. If you owe something like a couple thousand dollars and you ignore them, well, 25% of $2,000 is $500. Just for not filing your income tax return, you're going to incur a penalty of 5% per month until it reaches 25%. And April 15th is coming up and this is important to remember. People say, oh, I'm just going to get an extension of time. I'm just going to get an extension of time. Fine. You can get an extension of time, but understand that all you're getting is an extension of time to file the return, not an extension of time to pay. There is no such thing as an extension of time to pay. So when you seek that extension, you need to more or less have an idea if you're going to owe taxes and you have to pay that tax. along with the extension, okay? Because if you don't pay the tax, you're going to accrue a 5% penalty on the amount unpaid with that minimum penalty until you pay the tax. And that penalty starts to accrue in April, April 15th. That is our deadline to pay our taxes, okay? If you file your return late, because you don't get an extension or you get an extension and still file it late, then we have a different penalty, a penalty for failure to file. And that penalty is half a percent per month. with a maximum of 25%. So you actually have 50% of penalties if you fail to pay and file on time. Because that's an addition too. And that's in addition to the tax that you owe. Now you take all of that and you add interest to it. So you're going to accrue interest on the penalties on the tax that you owe from April 15th for the late payment penalty from the due date of the return for the late filing penalty. And that interest rate changes every quarter. So it depends on prime, right? I think it's prime rate or something like that. Right now, the interest is 8%. So it's been 8% for the first quarter. It was 8% for the first quarter, January 1st through March 1st, and it's 8% for the next quarter, so April, May, and June. So sometimes at the beginning of June, we'll know what the rate is for July. It could stay the same, it could go higher, it could go lower, right? So 8% now, all of that, the tax, the penalties, and the compounding interest daily at 8% on all of this stuff, starts to snowball. And that's why you want to open that letter as soon as possible. Because if you thought you didn't owe, and maybe you owe, you want to stop the running of those penalties as soon as possible. And penalties and interest run on whatever tax is owed. Until you pay that tax in full, you're going to keep on accruing penalties. The balance on which they're accruing is going to be lower, but it's still going to be compounding. And it gets pretty high.
Oh my gosh. So, okay. So that is in the case where somebody is looking to file an extension and they probably owe taxes, they should probably get with their CPA, their accountant, whomever, to make sure that they have an idea of what they might owe, even if they do have to file an extension for April 15th, to give them time to get, you know, sort out their numbers and actually file a property return. Now let's say, And I'm assuming in that case, obviously, the person should be going to their accountant, whomever that might be, and dealing with that then. Let's say after April 15th, we filed our taxes, we paid what we had to pay, whatever. In this particular case, I presume, well, I guess that could happen to anyone, right? Because I think I had a client, one who said that the IRS sent her some letters because there was some, I don't know, if I remember correctly, there were some errors or some some missing information in her tax return. She reached out to her account. Her accountant either wasn't practicing anymore or wouldn't give face. And she had to deal with that problem on her own. This was many years ago. And now I'm trying to remember that. So I guess it can happen to anyone where there may be some issues with your tax returns. Right. The IRS sends you a letter and says this was wrong. You forgot to include this. You forgot to include that. Should someone go back to their CPA or is that the point in time in which they should hire an attorney such as you?
Well, it depends what the letter is asking you to do and it depends whether you agree that what the IRS is saying is correct or incorrect, right? If you agree with what the IRS is saying, then you're basically just going to sign and agree and they're going to assess that tax and that tax that additional tax that you owe, you owe, plus you'll owe interest and penalty back from April 15. Oh my gosh. Of the due date of the return. Remember, our taxes are always due on April 15. And the IRS doesn't catch up with you a month after you file the return. It's going to take the IRS a year, possibly, or longer to catch up with the fact that there was an error on your prior return. So for example, right now we're filing our 2023 return, right? So it's possible that the IRS is not gonna notify you of an error on your 2023 return until sometime probably in 2025. But the penalties and the interest began to run on April 15th of 2024. Okay? So, you know, and I have clients that were audited, they were in tax court and I always say to them, If you, you know, we're not going to win this in full. So try to make payments, make an advanced payment. And they don't. Many of them don't. And then when when the case is finally resolved, they owe a ton of money. much more, but they didn't make that advance payment. As opposed to, I had another client who owed, and it wasn't small, he owed over a million dollars, but he prepaid the tax, right? He prepaid, and it took a while to resolve everything. And then when it was resolved, the IRS, he ended up, had paid a little bit more than he owed, and the IRS paid him back what he owed, plus interest. It's just like you have to pay interest if the IRS owes you money, not on a regular refund, because they have a certain number of days to refund your money. But in the example where you prepay, then you're entitled to interest from the time of payment. And I have a client right now who's owed like a million dollars of refund. Yeah, he's owed a million dollars. And so the IRS has been just I mean, they just delayed and delayed and delayed and delayed. And I say, well, you know, they're going to be paying you interest on a million dollars. All right. If we eventually win, then they have to give him his interest plus his refund plus interest because they kept his money. So, I mean, it's kind of like fair. You know, okay, interest, they owe you interest to in, in certain circumstances.
Well, that's news to me. See, I thought that they would just say, okay, you know what, we owe you this and have, you know, here's your money, whatever it was.
And no, if you if you file your, if you file your return now, April 15, and let's say that you're owed a refund of $1,000. I don't remember exactly, but I think they have at least 45 days I forget the exact number. They have a certain amount of time to refund you the money. But if they go past that date, then they owe you interest for anything past the date that the law requires them to refund you the money.
Interesting. Now, how many people and I don't know if you know the answer to this question. This is just, you know, something I just thought of. How many people do you need working at the IRS to handle however many millions of returns are sent in by the deadline?
How many people? Yeah, probably four times more than what they've got now. I mean, I don't know how many, but a lot, a lot, a lot, a lot, a lot. The IRS is severely understaffed and no one wants to wrap their head around this. The IRS has been understaffed and underfunded for more than a decade.
Oh, my God. And that's compounding, I'm sure.
Right. And and you have a situation where the people with the institutional knowledge are retiring or have retired. Like, for example, everyone that I worked with the attorneys, the managers on the IRS side, the revenue agent, the audit managers, they're all retiring. They've all retired or are in the process of retiring, right? And so now what you have, like, for example, I brought in a good friend of mine as an attorney. He just retired in December. Right. So that institutional knowledge goes with him. Everybody that's left at that office is no one I worked with. All of that institutional knowledge has been retiring. It is gone. Oh, my God. So you have a lot of young people. and young people is just not the same. It's not the same. And they don't have the knowledge because they don't have the years of experience. So that's just on the attorney side. But the same is true of your revenue agents, your collection officers and their managers. Wow. You know, so and it takes a long time. The IRS doesn't just hire you. The IRS trains you. So so you spend when you're hired, you spend a certain amount of time training, training, and then they put you on there to do like baby cases, let's say, and then they take you out and train you some more to move you up. It isn't just like, oh, we're just gonna throw this out there. That's not how it works. No one can understand because when I was an attorney, I'd have to go to training every year for different areas of things that I, they needed me to know about, right? And as an office wide, as a district wide, we would have continuing education. So like two days, two or three days when we went somewhere and spent all days in lectures and getting us up to date and things that we want is done this way. This is how it's, you know, that that kind of thing. So it isn't just like these are not these people are trained. They're trained and all of that takes time.
Yeah.
And they have to be vetted. And I we all go through an FBI investigation. You know, our background is checked before we're allowed to to get to be an employee. You know that that, you know, goes before you even step into the office. By the time you step in there, you've already been you've already had a background check done by the FBI. Yeah. And your taxes have to be up to date too.
Yeah, that's similar to like when you work for a banking institution or someplace like that, they do a thorough background check to make sure you're not a criminal or that you wouldn't have any inkling to embezzle money or any past history with maybe bad credit. Even people who have bad credit are vetted against that policy of theirs that you have to have a minimum threshold in order to work, say, as a banker. It's interesting. Now you mentioned education, so that brings me back to something I was thinking about. You said that you are a professor, I believe it's at FIU, right? You teach at FIU? Oh, in St. Thomas, in St. Thomas. And so what exactly do you teach? Are you there as a professor as part of their law program or do you teach something in specific?
I'm in the law school, so I'm an adjunct professor. So I started back in January of 2005. It's been over 19 years. I know, right? I can't believe it myself. because it just came out of the blue. It's not nothing I was pursuing, nothing I'd really ever done. So it's kind of scary now. Now I think that, you know, I feel much more comfortable. It's not, it's not, it's not as easy as people think. Everybody thinks, oh yeah, I could just, I'm a lawyer. I could go teach and it doesn't work that way. Um, and I brought in, I brought in attorneys as speakers and the students will tell me that part of it was terrible because they don't teach them. They, they, they're used to being attorneys. And so they just start talking like these kids know this stuff. They got to, It's like an infant, you got to teach, you got to teach.
Yeah, and you make a really good point with that because you could be brilliant, you can know everything there is to know about a specific topic. But if you don't know how to relay that information in a way that somebody could learn from you, then What's the point? That knowledge is really only for you. But after everything you've said and after everything you've basically taught me in this interview so far, I could see how you're an excellent teacher because you just broke down something that I've never really understood. And I'm sure there's so much more to learn about the tax code and tax law and all of that. But I've learned a handful of things already in a matter of like 20, 30 minutes. And so it shows that you know how to teach and that you're a great teacher. Well, thank you.
So yeah, so I started out, I was hired to teach debtor creditor rights. It was only supposed to be that one semester because the professor that taught it had had a stroke. He also taught bankruptcy and he decided that he was not coming back. It had been his second stroke. And so then the professor, the person that they had hired to teach bankruptcy in the fall, because I came in in January, the person that was going to teach in August, in the fall, backed out during the summer. So then I was brought in. So I taught debtor-creditor rights until 2015. Then the course was not offered anymore. And I've been teaching bankruptcy since 2005. there. And I handle the bankruptcy clinic. That's in it. So I've been doing that. I don't even know how long. It didn't start in 2005. It started a few years after that, that they got the clinic up and running again. And I teach law office management, which I've been doing since 2007, which is a course I developed for the school. Wow. So it's my baby. And I teach that every semester. That's fantastic. Yeah. That's fantastic. Yeah. Look at you. Wow. It's a lot. It's a lot of work. I know. But, you know, so far, I really I love what I do. I was going to say you sound like you enjoy it. I love my practice of law and I do enjoy teaching the students, I try to think that I want to give back to the new generation and hopefully set them on the right path. Some of them understand and some of them don't. Yeah. Don't get that. Don't understand the value of it. But maybe they will when they grow up.
Right. Well, yeah, the generations, I think the younger generations are growing up a lot later than the older generations. That's an entirely different episode. Yeah.
We don't want to send anybody on your on your podcast here that might be young. I mean, I, you know, I do. I do enjoy them, but it is hard because you got to stay on your toes and they sometimes they teach me things like I learned what catfishing was like, who knew what that was? But. They talk or sometimes they'll say to me, don't use that word because it's like from another generation. Right. Right. You know, you're not supposed to say, geez, OK, you know, and that's just part of my vocabulary. Right. Don't use that word. It's kind of cute and it's kind of nice. And if you if you're young, if you're in touch with the with the with the new generation to try to they have things to offer to. Sure. Oh, absolutely. You know, and to to try to learn, try to learn something from them to of what's going on and
You know, the whole what's coming up next, right?
But but they have things that's for their generation. And, you know, we should try to learn it instead of. being stuck in our own.
We've all had it. We are all a product of the prior generation. We're all a product of our upbringing. And I think we go adjusting, right? Based on our needs or our traumas or our circumstances. So yeah, there's always something to learn. And I do think that they have brought some new things that are worth embracing and the next generation is going to do the same and so on and so forth. I mean, they're the future. So we have to at least pay attention and figure out how and when we're going to adapt if we want to stay young and alive for much longer. But before we end, I actually wanted to ask you about bankruptcy, because you mentioned bankruptcy a couple of times, and I know that bankruptcy is its own branch of law, but I presume that bankruptcy is closely related to tax law, or at least it has something to do with it at some point, because we are talking money here. What kind of relationship does it have?
Well, I mean, there are two completely separate codes and they don't really have anything to do with each other unless your bankrupt debtor owes taxes. Why are they filing bankruptcy to get rid of taxes? It's complicated in the sense that if you have an entity in bankruptcy, then there may be the tax filing requirements for the entity become the So depending on the chapter, which is basically not usually a chapter seven, but more like in a chapter 11, if the chapter 11 drags on, you end up having really the debtor, which was what existed prior to the date of the filing of the case. And then we have the debtor in possession, which is the entity that arises upon the filing of the bankruptcy case, right? So it's possible that your debtor in possession is going to have tax filing obligations as a separate entity from its debtor. It can get complicated that I leave that to the CPAs and they are CPAs that specialize in and have a lot of knowledge and work a lot with bankruptcy. So there's a couple of CPAs that I know that are very well-versed because that's kind of like one of their niches, those firms is doing all of that accounting work that needs to be done on behalf of these bankrupt entities and debtors and things like that. For an individual, because I do largely consumer debtor, I stay away from, from all of that chapter 11 and stuff like that. So I do basically consumer debtor. And that issue does not really arise. The only time it arises is if they're entitled to a refund. Does it do they lose it to the bankruptcy? Do they not lose it to the bankruptcy? Do they owe taxes to the IRS? Can we get those wiped out in bankruptcy? Can we not get those wiped out in bankruptcy? And bankruptcy can be a tool if you owe the IRS money. Maybe it might not apply to you, but it's a tool that sometimes if it applies can help and help somebody get a true fresh start, not only with all of their other debt, but also with the IRS. So interesting. So that's why when I was in the government, I was representing the IRS in bankruptcy. So I was district counsel, but I was also a special assistant U.S. attorney. representing the IRS in bankruptcy. It's kind of like that delegation thing as a district council attorney. If it was a bankruptcy matter, that's a district court matter, federal district court. So I would refer that to the Department of Justice to handle and represent the IRS in bankruptcy. But because I was wearing two hats and they would refer it back to me. And so I put on my U.S. attorney hat because I was a special assistant U.S. attorney. And then I had the authority and the delegation to go and represent the IRS in bankruptcy court. Right. And so sometimes we'd be owed money. We'd have to object to plans and that kind of thing.
That's quite the resume, Maggie. That's quite the resume. You should be very proud. You've had quite the career.
I've enjoyed every minute of what I do.
And I love that because I got to tell you, tax is not the thing that I'm super excited about ever. But to know that there are other people who find that exciting or find that rewarding to some or at least enjoyable.
But you know what, it isn't the tax in a way, it's the helping people, right? Helping people, people that are afraid of the IRS, people that try to ignore and then they have this huge problem and they hand it off to you and you find a way to resolve that and get that weight off their back and the relief that they feel and the fact that you've gotten their life back on track, it's to me what is great about being an attorney and in these two areas, because in both the areas that I practice, the bankruptcy and the tax, if you were able to solve their problem, you've made a huge difference in their life, right? Because it's all financial. It's all financial. And if you have financial problems, it affects everything. It affects you emotionally, psychologically, you know, sometimes even physically, it affects your family, it affects everything. It's true. It affects everything. And it's this weight, this weight of the world and, and to solve it. It's a new life for them. And it's very, for me, it's very- I can see how that's rewarding, yeah.
Yeah, and it's rewarding and very fulfilling. I can see that. I can see that. Last question, just because it came up for me a little while ago when you were talking. Do you ever use, say, a forensic accountant to help you sort some things out? Is there ever a need for that? I know that we do it in divorce when we have auditing, and I know that other attorneys have use for them, but I don't know in your tax-
I've myself never had to use it because most of the time the IRS does it for us in a sense, right? And maybe I shouldn't say this, but for example, Or as I have a case right now that I'm gonna, you do that, right? Because if the client has a mess with their bank statements, the IRS is going to sit there and do a bank analysis, which is what forensic accounting is, right? They're going to do the bank analysis of all of these banks and they're gonna figure out what is income and what isn't. So in that sense, they kind of did it for us. And all we have to do is review and see if we agree. As opposed to me having to analyze. And I had a case a few years ago that must have taken that agent like two years. Because remember, My case is not the only case she has, of course. Right. So they have to. So and I have a case right now that is this mess that we're talking about. And the agent already told me the other day, she says, I don't know if I'll be able to finish this before next year. And in that particular case, she's only dealing with maybe two or three accounts. In that other case, I'm talking about this guy had, I don't even know how many accounts, six, seven accounts, and she had to go through all of them. And then they transfer her money from here to here, and then all of that has to be subtracted out because you can't count it twice and it can get messy. And it's not like they're sitting there Like if I had a forensic accountant, they might sit there and work three days straight on my matter, and it would be done on paying top dollar. But they have tons of cases, and they've got to dedicate, and they've got to keep them all moving, all moving as much as possible, right? So I'm going to set aside this day to work on this case, and that might be one day next week, and they might not pick that case up again for another month. That's right. Because that's how it is. Yeah. Because there's not enough people to do all the work. Yeah. You know. So, yeah. So I've never had the need for it. That's good. That's on my top stuff. Right. Because most of the time they kind of like do it for me.
That's smart. That's smart. Yeah, I love this. This is a great, I mean, this is very, very insightful, super insightful. Now I know that if and when I am to receive another letter from the IRS that I should open it immediately. It's the very first thing that I took home from this conversation, which is I should open it immediately as opposed to set it aside because I felt like you were talking directly to me at this moment because I am that person that I open it, but I don't necessarily read right through it because I'm afraid of what it's going to say. So I kind of put it at the bottom of the pile and I say, I'll get to it tomorrow. And then tomorrow turns into next week. And before I know it, you know, granted, I've never had any issues. The issues have been very minor, but it's true. If something were to come my way, I'd probably be that person who's running up against the clock.
And my clients do it all the time. And then and then and then they come to me and say, When do they come to me? When the IRS sends that letter, that nasty letter saying, we're going to seize your property. And then they come to me and say, I don't know why the IRS look. And then and my God, are they going to take my bank account? Are they going to take my house? And I said, well, you got other letters. No, I didn't get any letters. And I look at I say, you got a letter that said this and this and this and this and you did nothing about it. No. And then I say, bring me all the letters that you got. Put them in chronological order. And I remember specifically this one person one time I said, here, you see this letter? This is the letter I told you that you said you didn't get. You see right here what it said? But you didn't do anything about it. You didn't contest it. And so if you don't contest, you lose. And that's what you can do. A lot of these problems could be avoided if the person dealt with that initial letter.
and took action. Right. Which is I think the second point that you had made, which was that you have rights, but if you don't act within the time frame that you are given, you basically forfeit those rights.
And it's true under anything. Yeah, it's true. You're right. You're right. Right. If you have a car accident, maybe you are, you know, you have injuries, but you have a certain amount of time to go. make a claim to report that right. And if you don't, well, you could have lost two arms.
Yeah.
You know, statute of limitations due to the negligence of some huge trucking company. If you didn't do anything about it, you lose those rights. The law has statutes of limitations. The law on almost under everything has time deadlines by within which to act. We don't want the evidence to get stale. We don't want the evidence to be lost. We want witness testimony to be fresh in our mind. We don't delay. And that's why almost everything has timeframes for you to act. And that's the same thing with the IRS.
That's a very good point. Yeah, it's true. It's true. So now we know everybody listening, please, if if and when you get a letter from the IRS, open it immediately and act upon it right away. And if you have any questions, reach out to your CPA. And if not, then you reach out to somebody like Maggie and find out what can be done. And there was something else that I wanted to remind everybody. Oh, that's right. Tax deadline, April 15th. Don't think that by filing your extension that you're going to have until August to start paying or do whatever you need to do. If you do have to pay, you do need to pay by April 15th and you need to have some idea of what that's going to be so that you can start paying by April 15th. Otherwise, your penalties, your taxes, whatever it is that you're going to accrue is going to be as of April 15th. That's something that I think a lot of people don't know.
So that was a very good point.
Which is what you said, it could be a minimal amount, but that minimal amount could easily double or triple.
Yep.
And there's no turning back after that, right? Wow. Excellent information. Thank you so much. I so appreciate this. This was so great. I would love to sit in for one of your classes, even though I'm not in law school, but I would love to see you teach. That's great. Thank you.
I'll let you know and I'll bring you in. Let me know when you have nothing better to do on an evening. Exactly. Okay, Raquel. Well, thank you so much. I appreciate it.
I enjoyed it. Good. I'm glad. Maybe we'll have you again sometime soon. Bye. Thank you for tuning in to this episode of The Real Talk. We sure do appreciate it. If you haven't already done so, be sure to subscribe to the show wherever you consume podcasts. This way you'll get updates as new episodes become available. And if you found value in today's show, we'd appreciate it if you would help others discover this podcast. Until next time.