Episode Transcript
Alara Sage (00:01.784)
Hello, hello, and welcome to another episode of Wealth Embodied, where we activate and inspire you in wealth consciousness, creative genius, and your visionary impact. I'm your host, Sage, and I'm sure all of you have felt the pressure from the IRS. Perhaps in your own mind, you have a figure, a character, representation of how
Morgan Q. Anderson, EA (00:04.23)
and episodes of Wealth and Body, where we activate and inspire you in wealth consciousness, genius, and your visionary impact. I'm your host, Lara Sage, and I'm sure all of you have heard the...
Morgan Q. Anderson, EA (00:23.174)
in your own mind you have a figure, a character, a representation of how the IRS will come knocking on your door if you have to pay or you have have debt with taxes. This is a real fear we all have in the community and it's an important conversation. I'm going to dive into that with a very special guest, Morgan Q. Anderson. What is this?
Alara Sage (00:29.122)
The IRS will come knocking on your door if you fail to pay or if you have debt with taxes. And this is a real fear we all have in humanity. And it's an important conversation that we're going to dive in today with a very special guest, Morgan Q. Anderson, EA, who is spunky enrolled agent and NTPI fellow with over 25 years of
tax debt resolution experience, making her an expert in all matters surrounding tax debt issues with the IRS and the states. Morgan, welcome. Thank you so much for being here with us today.
Morgan Q. Anderson, EA (01:09.617)
Thank you, Elora. I really appreciate the opportunity to come here, connect with you, connect with everybody listening, and hopefully demystify and take down some of that anxiety that everybody feels when they think about taxes.
So it's a pleasure to be here. Thank you.
Alara Sage (01:29.578)
Yes, the anxiety. And I want to read to the audience something that Morgan created when she represented herself as a speaker. And it's just perfect. So I want to read this out loud, and then we'll start the conversation from here. She wrote that when clients come to her, they often have this fear, right? We all do. Let's be real, right? And she said they have images of a 1950s IRS agent with a fedora, an overcoat.
and a gun knocking on their door to claim their firstborn child and the vehicle sitting in the driveway. The IRS and states have done a great job creating this fear as it inspires the masses to comply. I love that so much, Morgan. Can you go into a little bit about that and how your clients come to you as I really truly believe most of humanity would with this anxiety and this fear?
Morgan Q. Anderson, EA (01:58.246)
their firstborn child.
Morgan Q. Anderson, EA (02:11.494)
Absolutely. There is something akin to when we're children being sent to the principal's office, right? When the IRS or the state tax agencies are turning their focus to you. It causes your heart to start racing, know, jumps in your throat.
You start sweating and this real fear comes into play and they do that on purpose. They've created this mental image on purpose because the easiest way to get people to comply with something is to create a fear around what will happen if they don't. So our tax system is built that way because
When you think about following the bouncing ball, so to speak, of what our tax dollars are actually supposed to be used for, it is for everything you see around you in our communities, our roads, our public education system, social security, our national security. You know, all of those factors are funded by the taxes that we pay, government programs in your local communities.
whether that be the park system, some of them, some cities cover the trash that they collect. All of those things are paid for by tax dollars. There's not an imaginary fund that keeps all these things going. It's what we contribute as part of the community. So when people think about that, right, it automatically takes down a little bit of the level of
anger or frustration in having to pay tax because we really do benefit from it at some point. Now I'm not saying that the governments are always the best stewards of our tax money, right? Hopefully we can get them all to start paying attention to that more, but it does help everyone understand a little bit that it is something necessary for the way our societies and our communities are structured right now.
Morgan Q. Anderson, EA (04:39.526)
When people come to me, they are in a past tense situation with a tax. They had a tax owed at some point and it didn't get paid. They couldn't pay it for whatever reason. And they're receiving notices from the IRS or the state. And now they're starting to feel panicked about it. They're threatening to take my bank accounts. They're threatening tax liens. They're threatening to garnish my pay.
I don't know what to do and everybody who comes to me is like a cat on a ceiling. Like, what do I do? How do I get past this? I'm feeling so scared. They can't sleep. It impacts their health. It impacts their families. It impacts their business relationships. The first thing to remember is not to give it power beyond what it really is. It's a bill.
It is, if they're reaching out to you about an audit situation, there's just something that doesn't make sense to the IRS or to the state when they're processing your return. The worst thing you can do is ignore it, thinking it will go away because it won't. that's usually like the opening when somebody calls me and says, well, I've got this situation, you know, whether it's
by using us or just following some guidance we give them, it's really important not to let it sit there and fester for fear of what could happen because the fear is always, always gonna be way more than what you actually realize when you just sit down and face the situation.
Alara Sage (06:28.578)
this so much and I really love how you speak to the benefit of taxes because I think a lot of times we feel well we're you know the the IRS is taking our money and a big chunk of our money and like you said it doesn't mean that you know the government is being perfect in the shepherding but there is benefit there and when we allow ourselves to be the benefit see the benefit we can soften that a little bit and say okay yes this is benefiting me right like we need these roads we need these stoplights we need all these things that
the money goes towards. so important to one of the things I really love about your profile and everything that you stand for is that there is a solution. And what you just said about the fear being worse than actually the action we tend to as humans put off things. And then the irony of it is when we actually sit down to do it, we're like, wow.
Morgan Q. Anderson, EA (06:59.044)
Right
Alara Sage (07:21.464)
That really wasn't such a big deal that I had just made up in my head, right? Because that's what we do. We feed the fear. We make it a very big deal. But when we actually sit down to solve the problem, it is meniscal compared to that big issue. And what I love about what you stand for is that there's always a solution. And I think even just hearing that for some people,
Morgan Q. Anderson, EA (07:28.102)
Right.
Alara Sage (07:48.344)
can be very empowering that, you are not alone. There is support and there is a solution to your problem. Morgan has been around the block. She says that she's seen all the different circumstances. So she's saying that there's a solution for it. You best believe that there's a solution. Can you talk a little bit about these solutions, Morgan?
Morgan Q. Anderson, EA (08:09.022)
Yeah, you bet, you bet. So first things first, you touched on something that I want to expand. In the last filing cycle that closed out, it was the 2022 tax year cycle of filing.
Over 11 million people's individual tax returns were filed with a balanced due that wasn't paid. 11 million, and that's just one year. The IRS also estimates that 23 % of small businesses have a tax issue just at the federal level. So when you think about it, we have 50 states as well that piggyback off of that data, same percentages.
Probably are impacting the state tax collection. So no if you have a tax situation, but you are not alone You're not alone at all. So just know that and and as you were saying a Lara there are solutions out there There are so many different resolution options that you can employ that are sanctioned by the IRS in the state Now you have to deal with it
That's their expectation of you, right? If you have a tax issue, call us and let's address it. But there are ways that as long as you stay compliant with your current obligations moving forward and you show that you cannot afford to pay the debt, a lot of the tax agencies will put you in a formal recognized, uncollectible status, meaning they put a pause on asking you to repay it for a while.
You can always set up monthly payments to address the debt. The IRS and most states have a settlement program that you can go through where you end up paying a fraction back of what you owed. But in 25 years, I have never had a tax case come to me that didn't have a solution. So know that there's always a solution. You just have to sit down and work on it and get it to that point where
Morgan Q. Anderson, EA (10:21.496)
Everybody says yes, okay, this is the best outcome that both sides can expect.
Alara Sage (10:27.672)
I mean, what a relief, right? 25 years that you've been doing this and every single one you found a solution. If anybody is experiencing that, I feel like that statement is such a relief. There is a way out of this. And like you said, you just have to simply address it. What are some of the recommendations that you have? We speak a lot here about business entrepreneurship.
Morgan Q. Anderson, EA (10:32.144)
Yeah.
Morgan Q. Anderson, EA (10:43.654)
So you just have to simply.
Morgan Q. Anderson, EA (10:50.214)
recommendations that you have. We speak a lot here about business entrepreneurship, visionary entrepreneurship. What recommendations do you have for entrepreneurs, small business owners around...
Alara Sage (10:56.504)
visionary entrepreneurship. What some recommendations that you have for entrepreneurs, small business owners around taxes?
Morgan Q. Anderson, EA (11:08.442)
That's a great question and it's one that I love talking about because my biggest recommendation is to work with a very good bookkeeper. Make sure you are fully transparent with everything that you do because they will be able to record things. They'll be able to guide you with expenses that maybe you're not thinking about writing off. The other thing is work with your tax professional throughout the year.
Don't come to them in February knowing that your S-Corp return is due mid-March and say, here are my records, what can we do? That's a historical question at that point that you're dealing with, right? Like it's past tense, it's done. So get a good practice in place where you're working with your trusted tax professional throughout the year. They're gonna be able to look at your records with you.
Alara Sage (11:38.148)
you
Morgan Q. Anderson, EA (12:07.726)
and help you make educated pivots to leverage the best tax position possible. They'll be able to talk to you about maybe investing more money, maybe purchasing new equipment, maybe paying yourself more, paying yourself a little less, doing more W-2 or less W-2 and taking more in draws. There are all these pivots we can make within our businesses to help ourselves.
when you're looking at the annual financial picture. And use them as almost a member of your board because they have the experience and the knowledge to navigate you through this in the best way possible for you and your business.
Alara Sage (12:53.784)
That is a huge recommendation. And I'm like listening, I'm like, I'm like bringing this in. I'm like, okay, I need to be working with my CPA more regularly. Cause that's basically what I do as well. Like, okay, tax season, like, you know, and again, it comes down to, I'll be transparent, not wanting to deal with the taxes until I really have to, right? And there's so much, there's so much power when we just say, you know what, I'm going to be ahead of it, right? I'm going to be.
Morgan Q. Anderson, EA (12:58.662)
Yeah.
Morgan Q. Anderson, EA (13:11.65)
I know I Yeah
Alara Sage (13:20.484)
And like you said, it's not really ahead of it. It's actually with the time, because you're moving through the year with your CPA instead of at the end. it's horse store historical by that point. But being in that motion with it rather than waiting to the last minute, because it does build up that stress no matter what, whether you're even if you're doing your taxes on time, if you're waiting to the last minute to start having the conversations, guess what? There's already been some subtle
Morgan Q. Anderson, EA (13:39.462)
Absolutely. And make sure if you use a bookkeeper that is separate from your tax professional,
Alara Sage (13:50.666)
stress placed on taxes are coming, taxes are coming, right? Whereas if you're having those conversations regularly, it's like a no brainer.
Morgan Q. Anderson, EA (14:07.366)
Create that bridge of communication between the two of them. That's really important. A lot of CPAs will have a recommended bookkeeper in their office or as an associated professional with their office. If you're not using them, you're using your own, just make sure you open that communication bridge between your tax professional, whether it's an EA or a CPA, and your bookkeeper because
Them working together is just going to benefit you as well.
Alara Sage (14:39.534)
So beautiful. Yeah, these are amazing recommendations. What have been some of the challenges that you've seen? Let's just go for some fun. What was the hardest case that you ever had to crack?
Morgan Q. Anderson, EA (14:51.846)
boy, okay. So I was working with a conglomeration of family-owned LLCs. They had over 80 LLCs that they had registered with their state. And it was because every time they had a new project, they would create this new entity so that it would insulate the others from...
exposure if the project went bankrupt or things like that. So we started with 80 of them. Most of them were created and then nothing happened with them. Okay, so we got rid of all those, closed those out. Then we were left with around 30 LLCs and between all of them they owed over 32 million in unpaid payroll taxes to the federal government. Yeah. And I was dealing with a revenue officer in the IRS and
I was able to work through all of those to get them whittled down, personal assessments, because payroll tax is a trust tax. When you cut a check to your employees, you give them a check for the net pay, right? They are supposed to think about, basically receive the gross pay, but you take out for their taxes, for their...
medical insurance and things like that. So you are perceived to withhold those monies and hold them in trust to turn over to the tax agencies, right? And when businesses are facing financial challenges, one of the places where they delay making a payment is they'll not pay the payroll taxes over, okay? With the intention of next quarter I'll get caught up.
next quarter I'll get caught up. And pretty quickly you end up with a payroll tax bill that could be six figures. And so because of this, the IRS and the states know that a business can't take this action on its own, right? ABC incorporated can't physically take that action. Somebody is a steward of the business and the representative of the business and oversees this process happening.
Morgan Q. Anderson, EA (17:11.652)
Because of this, the IRS and the state can pierce the corporate veil and hold individuals personally responsible for those unpaid taxes. So this is something that all business owners need to know. You have this responsibility put on your shoulders and there are ramifications that happen. But again, there's always a solution.
Alara Sage (17:35.027)
Hahaha!
Morgan Q. Anderson, EA (17:35.118)
And in this case, with this big group of all these LLCs that were related and they had all this unpaid payroll tax, we went through that process. All the owners and directors of these entities were personally assessed. We came up with solutions on all of those cases. We came up with solutions on all the LLCs. And we were able to keep it from going to the Department of Justice.
justice for any tax evasion or fraud charges, which was huge. It took years to get through, but if you can solve that, knowing that that case was solved without anybody going to jail or any federal charges, know that there's always a solution. You don't want to let it ever get that big, but it's a great example of what you can do if you have a tax situation.
Alara Sage (18:33.688)
That is incredible. And I had never thought about that before where it's a trust and the company is in trust to then pass that on to the government. I wonder, have you ever heard anything about that changing and employees being responsible for their own taxes?
Morgan Q. Anderson, EA (18:52.706)
No, no, because if you are a W-2 employee, by turning in your W-4, you're giving the business the right to withhold the tax out of your paycheck, and then they are taking responsibility for that process.
Alara Sage (19:09.666)
Yes, I understand that, but I just wonder why.
Morgan Q. Anderson, EA (19:14.552)
You know, it has to do with the commitment that you're making as an employer. I mean, when you submit the quarterly withholding reports to the IRS and the state, you want as a business itself are saying to the IRS and to the state, here's how much I paid the employees, here is how much was withheld in income tax, social security, Medicare, any state level taxes.
and here's what their net pay was. So here is how much ABC Inc. owes you for income tax or social security, Medicare, every state level tax. Every business owner that has employees is required to file this every quarter.
Alara Sage (20:01.73)
Yeah, it's very interesting. So we spoke a little bit about the entrepreneurship, small business, and then we had this other example. How do people who are employed, how do they generally end up with tax debt?
Morgan Q. Anderson, EA (20:04.234)
Great question.
Morgan Q. Anderson, EA (20:18.124)
Usually it's by not having enough withholdings declared on their W-4. When you're working with an employer, you say, okay, I am married, I have two dependents, so this is what should be withheld from my pay to pay enough income taxes over so I don't have a tax consequence at the end of the year. A lot of individuals who come to me with a
W-2 issue with an income tax issue is because you look at their W-4 and they claimed, I have 10 dependents. There's these people who encourage you to keep more money in your pocket and claim a higher amount on your W-4 than you should. And then at the end of the year, you end up with this tax bill and you don't have the money to pay it. Some people have taxes because of capital gains from selling
let's say somebody who's day trading on E-Trade and they make a lot of money off of it in one year and they're buying and selling stock, all of that goes into a gains tax and you could have a significant tax from that if you have a really good year.
Alara Sage (21:32.598)
If you haven't liquidated, you still owe the tax.
Morgan Q. Anderson, EA (21:36.23)
yes. Yes.
Alara Sage (21:38.85)
Yeah, that's interesting. And I want to touch on the comment about the 10 dependents, right? And I think that's an interesting comment right there where you're saying some people recommend claiming higher dependence, keep the money in your pocket. then essentially what the point of that is, is that you would then pay your taxes at the end of the year when it's owed. But that's, you know,
Morgan Q. Anderson, EA (21:59.014)
then essentially what the point of that is, is that you would then pay your taxes at the end of the year when it's owed, but that's implying the person has the discipline to hold that money to the side or do something where they have that money available because they're paying higher dependence at the end of the year when they actually owe money and that money is available. But it sounds like it's a problem in the case of what you really mean. Correct.
Alara Sage (22:08.246)
implying the person has the discipline to hold that money to the side or do something where they have that money available because they've claimed higher dependence at the end of the year when they actually owe money that that money is available. But it sounds like that's not often the case of what truly might happen.
Morgan Q. Anderson, EA (22:27.622)
Correct, a lot of people, know, right now there's this big trend of tax tips that you can learn from TikTok and Instagram and Facebook. Do not follow those. telling you. I've seen things on there where there are these part truths shared, but the aftermath like this, claim 10 dependents and then you keep more money in your pocket.
you know, but they don't tell you the other side. So then when you file your tax return, you're like, my gosh, I owe the IRS $15,000 and I spent that money. But you know, first and foremost, do not take tax tips that you hear from social media. Talk to your trusted CPA or enrolled agent and say, okay, I heard this idea where I can create an LLC and my kids names and I can pay them their allowance through that.
Don't fall for that. yeah, there are some interesting ones I've seen.
Alara Sage (23:28.579)
Wow.
Alara Sage (23:32.674)
Morgan, you should do a TikTok of all like debunking the, you know, because we need people like you saying, no, don't do that.
Morgan Q. Anderson, EA (23:40.166)
You know that's a good idea. I'm gonna write that one down. That's a great suggestion, Alara.
Alara Sage (23:45.852)
Yeah, it's very important because I can see how people would take that on. And, know, because it is a lot of times people are like, they want to keep the money in their pocket. We talked about that at the beginning of the conversation. We sometimes have some ideas of like the IRS is taking from me. I'm going to hold it on. I'm going to hold onto. I'm going to keep more in my pocket. We're trying to get that upper hand so I could see where people would.
Morgan Q. Anderson, EA (23:53.339)
Yeah.
Morgan Q. Anderson, EA (23:59.654)
the conversation, please give us some ideas about what the IRS is taking.
Morgan Q. Anderson, EA (24:07.302)
Right, right. And it's so sad. really is. Every time I see one, I go on and I comment like, do not listen to this. But one voice amongst it being shared a hundred thousand times, it's pretty scary.
Alara Sage (24:11.586)
you know, listen to those recommendations. And if the recommendations aren't the full story, they find themselves in a hole later on. Yes. Not good.
Alara Sage (24:37.164)
Yeah, and if the other people who might or might not read your comment, they may or may not, you know, who is Morgan and, you know, go into like your history and your actual knowingness rather than just write you off as like just some naysayer, right? I mean, it's, it takes work to like, who is this person that's making this comment? Let me go check them out. And rather than just swipe left.
Morgan Q. Anderson, EA (24:43.225)
Right.
Morgan Q. Anderson, EA (24:54.571)
Right? Well, and what's so scary, it's so true, and what's so scary is as a taxpayer, there is an expectation that if you are claiming a position on your tax return, that you are doing so willingly and you've done the research and you know
what the background is on the position that you're taking. That's why, if I could say another message to all of you business owners out there, I know we're always counting our expenses every month and trying to minimize them as much as possible, but you get what you pay for when it comes to things like tax guidance, advice, doing your returns.
Every time I see a self-prepared return for a client, it makes me just kind of get a little worried even more so because we simply don't know what we don't know. Using programs like TurboTax or online file your own tax returns, those are great for people who are W-2, they're employed by somebody else, they have minimal information to
put on the return, but if you're a business owner, you could get in real trouble by claiming expenses that you legally aren't allowed to. The programs don't know what you're not feeding it. So if you omit something, could cause the program to not ask you leading questions, and then you could miss something that will come back and bite you on the backside later on. So...
Alara Sage (26:34.756)
Right.
Morgan Q. Anderson, EA (26:48.006)
It is worth the investment and the peace of mind working with a trusted tax professional.
Alara Sage (26:56.296)
And the savings, right? Because my experience between TurboTex and professionals is generally, and this is just my personal experience, so everybody can take this as a grain of salt, but I've actually experienced that they get me a larger return or a larger or a smaller amount owed, right? That actually pays for their services. They save money for me and that pays for their services.
Morgan Q. Anderson, EA (27:10.758)
I agree.
Alara Sage (27:26.02)
And then like you said, it's more of a professional that's got their eyes on your tax return rather than an AI or a system. So for me, it always pays off because the couple of times that I've gone back and forth, it's like, yeah, it actually paid for itself.
Morgan Q. Anderson, EA (27:43.585)
And they're able to give you great advice moving forward. Hey, based on what your tax return looks like this year, I would recommend you make these few changes in the next year because it's going to benefit your tax position and how much you get charged income tax at the end of the day.
Alara Sage (27:47.052)
Yeah.
Alara Sage (28:00.92)
Right.
Morgan Q. Anderson, EA (28:02.01)
You you cannot replace that direct intimate advisement that a tax professional can give you for moving forward.
Alara Sage (28:12.706)
Right. Yes. Yes, yes, yes. And that's invaluable.
Morgan Q. Anderson, EA (28:17.52)
Yes, I agree. agree.
Alara Sage (28:20.42)
So Morgan, you have a mastermind coming up and I would love for you to talk about it.
Morgan Q. Anderson, EA (28:29.616)
Yes, thank you for bringing that up. I have found that there is this great portion of the 11 million people who filed their tax return in 2022 filing season with balances owed, where the balance that they owe doesn't warrant hiring a professional to become involved. Like let's say,
You filed your 2023 tax return under extension and you have an $18,000 balance and you don't know what to do with that. I have created a master class and we're putting the finishing touches on it right now that will give you step-by-step tutorial of how to handle it. What department to call, what to say, how to figure out what you want to offer them to pay on a monthly basis towards the debt.
how to ask for the penalties to be removed. So it's gonna be a great class and unfortunately it's just not ready. We're putting the finishing touches on it. It should be ready by mid December. But for anybody who has a situation where you owe money, you can't afford to pay it off right away.
But it's not a lot of debt where it warrants getting a professional involved. This is gonna be a great class for you to walk you through every step you need to know to handle it and empower you to handle it for yourself.
Alara Sage (29:57.96)
So wonderful. What a beautiful program offer for people that need the support and yeah, don't or not necessarily need to hire a professional. So how can people reach you if they're interested in that mastermind or they're just interested more in what you do?
Morgan Q. Anderson, EA (30:13.062)
Yeah, go online. My company is Golden Lion Tax Solutions. Just think of a big fierce lion. I am on LinkedIn, Facebook. You can look me up, Morgan Q Anderson, EA. My direct email and phone number are on our website.
Alara Sage (30:36.258)
Wonderful. That's really beautiful. This has been extraordinary, Morgan. I really love what you do, the energy that you bring forth, the awareness and the solutions that you provide. So thank you for your work, for your service and for everything that you are.
Morgan Q. Anderson, EA (30:37.51)
Yeah.
Morgan Q. Anderson, EA (30:52.752)
Thank you for having me on your show. really appreciate it. I just want to make sure that anybody who has a tax debt knows there's always a solution. Take a deep breath. You can get this worked out.
Alara Sage (31:06.114)
Yes, yes, yes, yes. Wonderful. And to the audience, if you have tax debt or you know of somebody who has tax debt, I'm sure we probably all know quite a few people have tax debt. If you have a small business or any of the things that we spoke about here today, then you can definitely reach out to Morgan and learn more and heed the advice that she brought. I know I'm going to heed the advice that she brought through here today. And as always, I love you all so much. I will see you on Tuesday. Much love.
Morgan Q. Anderson, EA (31:28.774)
Yeah.
