IRS in CHAOS: Tax Attorneys Expose What's REALLY Happening Inside the IRS (ERC Disaster & More)

20/10/2025 46 min

Listen "IRS in CHAOS: Tax Attorneys Expose What's REALLY Happening Inside the IRS (ERC Disaster & More)"

Episode Synopsis

Ed Lyon sits down with Mary Lundstedt and Ashlee Hall, co-creators of the Tax Planers community, for an eye-opening conversation about the current IRS crisis. These veteran tax attorneys reveal a system in chaos following budget cuts, failed AI implementations, and the ERC disaster that has trapped thousands of legitimate businesses in audit limbo.No Law Requires Your Refund: There's no statute compelling the IRS to pay taxpayer refunds—you're at their mercyTechnology from the 1960s: The IRS master file was commissioned under President Lyndon Johnson and runs on magnetic tapeUnauthorized Moratorium: The IRS implemented an ERC moratorium without Congressional authority or judicial oversightAI Epic Fail: Faulty algorithms deny valid claims, saying 20-year businesses "didn't operate" during COVID"Ignore and Deny" Default: Legitimate cases rejected without human review, forcing unnecessary appealsEducation Burden: Tax pros now spend more time teaching IRS employees than resolving cases14:00–18:00 — The post-DOGE crisis: eliminated positions and exponential confusion26:00–29:00 — How "ignore and deny" became the IRS default response34:00–36:00 — The Lyndon Johnson-era database revelation36:00–40:00 — Two bombshells: no refund law + unauthorized moratorium42:00–46:00 — Congressional intent vs. IRS propaganda warfareMary: "There is no law on the books that requires the IRS to pay any taxpayer their refund. Every taxpayer in America should be livid."Ashlee: "Their default now is just to ignore and deny. I finally got ahold of someone who said, 'Oh yeah, looks like nobody reviewed it. So resend it.'"Mary on AI: "The AI model was just flat out wrong, denying ERC claims saying the taxpayer did not operate a business during COVID. And they had been in business sometimes for 20 years."Ed: "Who was president when the IRS commissioned this system? Lyndon Johnson. Your master tax file is kept on magnetic tape."Mary: "The IRS is operating unreined. They have shown the ability to just wield power with no check or balance."Doomsday Mary: "I'm pretty afraid it's gonna be worse. I just see a trajectory of the IRS doing what it does best, which is screw things up."Mary Lundstedt is a 20-year tax attorney who traded archaeology dreams for tax controversy. She's worked at BNA/Bloomberg, as a controversy attorney, and now at Thomson Reuters. Known for making tax engaging on LinkedIn, she co-created Tax Planers with Ashlee Hall.Ashlee Hall is a tax attorney with a classics degree who found her calling in tax resolution after the 2007 recession. Former Deloitte credits specialist, now ERC audit expert running her own advisory practice. Co-creator of Tax Planers.Ed Lyon is CNN's "funniest tax guy in America"—tax strategist, author, podcaster, and amateur paleontologist who digs for dinosaur bones in Montana.SUBSCRIBE: Apple Podcasts | Spotify | YouTubeDISCLAIMER: Educational purposes only. Not tax, legal, or financial advice. Consult qualified professionals.KEY REVELATIONSKEY MOMENTSPOWERFUL QUOTESABOUT THE GUESTS

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