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Can Ch. 13 debtor bring a 547 action to recover tax levy?
Dear Mark and Eric,
I was unaware of the Cohen case. However, I still think that the tax lien problem may present an insurmountable hurdle.
All the best,
Nick
Nicholas Gebelt
Nicholas Gebelt, Ph.D., J.D.
Attorney at Law
Certified Bankruptcy Law Specialist State Bar of California Board of Legal Specialization
Law Offices of Nicholas Gebelt
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Whittier, CA 90604
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Dear Mark,
Per Begier v. IRS, 496 U.S. 53 (1990), if the tax was a trust fund tax, then the levy was not a preference.
Normally, I would suggest that you use 522(g) to exempt the funds, and 522(h) to recover them. However, if the tax lien was perfected, your potential client has a big problem because of 522(c)(2)(B). See, e.g., In re Walkup, 183 B.R. 884, 888 (Bankr. E.D. Cal. 1995) (inst exempt property.). Given that the FTB seized the funds, Iient will not succeed in the avoidance action.
As for using 547, the case law affirms that a (non-Chapter 11) debtor can only avoid a preference under 522(h), and thus lacks standing to mount a 547(b) action. For example, in Jardine v. Bennett's Eastside Paint and Glass (In re Jardine), 120 B.R. 559, 562 (Bankr. D. Idaho 1990) the Court held (with emphasis added):
In sum, this Court will not extend the Chapter 13 debtors powers beyond those provided in Section 522(h). In other words, a Chapter 13 debtor does not have full unilateral avoidance powers except as to involuntary transfers of otherwise exempt property, and then only if the trustee has not acted. In all other cases, other than the limited circumstances described in Section 522(f), the avoidance powers must be exercised by the trustee.
The Ninth Circuit B.A.P. adopted the Jardine holding, to wit:
This panel is persuaded instead by the holding in Jardine and will not extend a debtors avoidance powers beyond the plain language of 522(h). The plain language of 522(h) is clear that a debtor has avoidance powers only to the extent that the debtor could have exempted the property.
In re Nielsen, 197 B.R. 665 (B.A.P. 9th Cir. 1996).
All the best,
Nick
Nicholas Gebelt
Nicholas Gebelt, Ph.D., J.D.
Attorney at Law
Certified Bankruptcy Law Specialist State Bar of California Board of Legal Specialization
Law Offices of Nicholas Gebelt
15150 Hornell Street
Whittier, CA 90604
Phone: 562.777.9159
FAX: 562.946.1365
Email: ngebelt@goodbye2debt.com
Web: www.goodbye2debt.com
Blog: www.southerncaliforniabankruptcylawblog.com/
Important notice required by 11 U.S.C. 528: We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
Confidentiality Note: This e-mail is intended only for the person or entity to which it is addressed and may contain information that is privileged, confidential, or otherwise protected from disclosure. Dissemination, distribution, or copying of this e-mail or the information herein by anyone other than the intended recipient, or an employee or agent responsible for delivering the message to the intended recipient, is prohibited. If you have received this e-mail in error, please notify us immediately at 562.777.9159 or e-mail info@gebeltlaw.com and destroy the original message and all copies.
Representation Note: If you have not signed a contract of representation, the Law Offices of Nicholas Gebelt do not represent you, and this email does not contain any legal advice for you.
Privacy Warning: The use of e-mail involves risk that the message may be intercepted by third parties (such as the government). Contacting me by email is your acknowledgment that you waive the risk of emails sent to me, and that you waive the risk of emails sent from me to you. Further, accessing websites carries the risk of detection of your access not only in real time, but also by discovery. If you have ANYTHING that is sensitive to convey to me, it should be given in a face-to-face meeting.
IRS Circular 230 Disclosure: In order to comply with the requirements imposed by the Internal Revenue Service, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue code, or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.
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Ch 13 debtor has standing. Cohen, 305 BR 886 9th Cir. BAP 2004
Law Office of Eric Alan Mitnick
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> On May 23, 2019, at 9:11 AM, 'Mark J. Markus' bklawr@yahoo.com [cdcbaa] wrote:
>
> Hello group,
>
> Potential client just had the FTB seize about $20,000 from his bank account for taxes owed.
>
> Assume these are priority taxes and that the funds in the bank account would be covered by the wildcard exemption.?? Assume the Chapter 13 case is filed within 90 days of the seizure and all other prima facie elements of a preferential transfer are met.
>
> Debtor is contemplating filing a Chapter 13 case, recover the funds seized via a preference adversary, and then do a repayment plan over 60 months.
>
> My questions are:?? Is this feasible??? Can the debtor step into the shoes of the Trustee in a Chapter 13??? I cannot find the code section that allows it, but I recall there was one.
>
> Also, does this fall under the statutory lien exception in 547 since it is a tax debt?
>
>
>
> *************************
> Mark J. Markus
> Law Office of Mark J. Markus
> Mailing Address Only:
> 11684 Ventura Blvd. PMB #403
> Studio City, CA 91604-2699
> (818)509-1173 (818)332-1180 (fax)
> web: http://www.bklaw.com/
> Certified Bankruptcy Law Specialist--The State Bar of California Board of Legal Specialization
> This Firm is a Qualified Federal Debt Relief Agency
> ________________________________________________
> NOTICE: This Electronic Message contains information from the law office of Mark J. Markus that may be privileged. The information is intended for the use of the addressee only. If you are not the addressee, note that any disclosure, copy, distribution or use of the contents of this message is prohibited.
> IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication.??????
>
The post was migrated from Yahoo.
Hello group,
Potential client just had the FTB seize about $20,000 from his bank
account for taxes owed.
Assume these are priority taxes and that the funds in the bank
account would be covered by the wildcard exemption.?? Assume the
Chapter 13 case is filed within 90 days of the seizure and all other
prima facie elements of a preferential transfer are met.
Debtor is contemplating filing a Chapter 13 case, recover the funds
seized via a preference adversary, and then do a repayment plan over
60 months.
My questions are:?? Is this feasible??? Can the debtor step into the
shoes of the Trustee in a Chapter 13??? I cannot find the code
section that allows it, but I recall there was one.
Also, does this fall under the statutory lien exception in 547 since
it is a tax debt?
*************************
Mark J. Markus
Law Office of Mark J. Markus
_*Mailing Address Only:*_
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2699
(818)509-1173 (818)332-1180 (fax)
web: http://www.bklaw.com/
Certified Bankruptcy Law Specialist--The State Bar of California
Board of Legal Specialization
This Firm is a Qualified Federal Debt Relief Agency
________________________________________________
NOTICE: This Electronic Message contains information from the law
office of Mark J. Markus that may be privileged. The information is
intended for the use of the addressee only. If you are not the
addressee, note that any disclosure, copy, distribution or use of
the contents of this message is prohibited.
IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements
imposed by the IRS, we inform you that any U.S. tax advice contained
in this communication (or in any attachment) is not intended or
written to be used, and cannot be used, for the purpose of (i)
avoiding penalties under the Internal Revenue Code or (ii)
promoting, marketing or recommending to another party any
transaction or matter addressed in this communication.
The post was migrated from Yahoo.