Question about Tax Refunds and Taxes owed.

Yahoo Bot · Fri May 13, 2011 7:52 am

Dang.... okay I have it drilled into my head enough. I get it. That really
sucks.

oh well I tried. Thank you fellas *David and John) for helping
me not to waste my time fighting windmills.
Renay
On Thu, May 12, 2011 at 4:37 PM, John D. Faucher
wrote:
>
>
> The IRS could do a postpetition offset of refund against dischargeable
> taxes.
>
> John D. Faucher
> Hurlbett & Faucher
> 5743 Corsa Ave., Suite 208
> Westlake Village, CA 91362
> (818) 889-8080
> Fax: (805) 367-4154
> http://www.hurlbettfaucher.com/
>
> 3324 State Street, Suite O
> Santa Barbara, CA 93105
> (805) 963-9111
>
> *This electronic mail message and any attached files are confidential,
> contain information intended for the exclusive use of the individual or
> entity to whom it is addressed, and may be legally privileged. If you are
> not the intended recipient, please immediately reply to John Faucher (at
> 818/889-8080 or john@hf-bklaw.com) indicating that you received this
> message and then delete the message without delay. Thank you for your
> cooperation.
>
> Disclosure Under U.S. IRS Circular 230: The recipient may not use any tax
> advice contained in this communication, including any attachments, for the
> purpose of avoiding federal tax related penalties or promoting, marketing or
> recommending to another party any particular transaction or matter.
> *
>
> On 5/12/11 3:13 PM, "David A. Tilem" wrote:
>
>
>
> Liens are not dischargeable.
>
>
> *David A. Tilem*
> Certified Bankruptcy Specialist** *
> Law Offices of David A. Tilem (a debt relief agency)
> 206 N. Jackson Street, #201, Glendale, CA 91206
> Tel: 818-507-6000 Fax: 818-507-6800
>
> * Bankruptcy specialist cert. by State Bar of CA Bd of Legal
> Specialization.
> Business bankruptcy specialist cert. by Amer. Bd. of Certification
>
>
> -----Original Message-----
> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com]
> *On Behalf Of *R Grace Rodriguez
> *Sent:* Thursday, May 12, 2011 2:15 PM
> *To:* cdcbaa@yahoogroups.com
> *Subject:* Re: [cdcbaa] Question about Tax Refunds and Taxes owed.
>
>
>
> Gentlemen: I'm trying really hard to get it. but.....
>
> 11 USC 547 (6)(c) that is the fixing of a statutory lien that is not
> avoidable under section 545 of this title;
>
> HOWEVER I think you guys are missing my point. I get the fact that the IRS
> has the right to confiscate the 2010 Tax Refund and I think that's what
> 547.6.c. refers to? yes?
>
> BUT, in a chapter 7, the 2006, taxes ARE DISCHARGEABLE. So how can they
> apply the refund to the debt that is dischargeable? Why isn't it the case
> that they are to apply the REFUND to the NON-DISCHARGEABLE debt because
> there is a statutory lien in the form of taxes owed from the past 3 years
> having been assessed and the return was not on file within the past two
> years.
>
> That's the part I don't get.
>
> HERE is why I ask the question. in my example 2500 could go to reduce the
> tax debt that is not dischargeable and hence debtor pays less in the chapter
> 13 plan. BUT if they apply that money to taxes which are UNSECURED, NO
> PRIORITY, NO SECURITY (because they have not entered a tax lien and IT IS
> NOT statutorily secured debt) then the refund is flushed down the toilet.
> That constitutes a preference under the code because clearly they got paid
> for a debt that in Chapter 7 they would not have otherwise been paid upon.
>
> What am I missing? Sorry I'm not getting what you guys are trying to
> explain.
>
> Is it the case then that otherwise dischargeable may always be paid with
> current refunds. So even though they get a discharge in bankruptcy and the
> IRS can't collect, they are still free to confiscate refunds and apply them
> to the old debts? Or once the discharge is entered they can no longer do
> that? Or is it that while in chapter 13, each year they get a refund they
> can pay down old debts even though the plan is paying on the otherwise
> non-dischargeable taxes?
>
> Help? I need an explanation a 4 year old can understand. Sorry. Thanks
>
> 2011/5/11 David A. Tilem
>
>>
>>
>> Automatic tax lien
>>
>>
>> *David A. Tilem*
>> Certified Bankruptcy Specialist** *
>> Law Offices of David A. Tilem (a debt relief agency)
>> 206 N. Jackson Street, #201, Glendale, CA 91206
>> Tel: 818-507-6000 Fax: 818-507-6800
>>
>> * Bankruptcy specialist cert. by State Bar of CA Bd of Legal
>> Specialization.
>> Business bankruptcy specialist cert. by Amer. Bd. of Certification
>>
>>
>> -----Original Message-----
>> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On Behalf
>> Of *R Grace Rodriguez
>> *Sent:* Tuesday, May 10, 2011 8:22 PM
>> *To:* cdcbaa@yahoogroups.com
>> *Subject:* Re: [cdcbaa] Question about Tax Refunds and Taxes owed.
>>
>>
>>
>> Hi John:
>>
>> On what basis is the 2006 tax debt is secured? Its not priority debt,
>> there is no lien. In a chapter 7 this debt would be discharged under the
>> circumstances. So how can they grab the money they have a security interest
>> in and apply it to debt that is unsecured? That's what I don't get from
>> your post John. Mind you I agree under the Code they have the right to
>> swipe those funds, but they have to apply them to debt that is prioritized
>> if the want to keep it.
>>
>>
>>
>> On Tue, May 10, 2011 at 4:23 PM, John D. Faucher > j.d.faucher@sbcglobal.net> wrote:
>>
>>>
>>>
>>> Grace:
>>> In a chapter 7, had the IRS not done the setoff prior to the bankruptcy
>>> petition, it would do so after the petition. Ideally, it would file a motion
>>> for relief from stay to allow the setoff of the refund (a prepetition
>>> security) against the prepetition debt. The 2006 tax debt is secured because
>>> the IRS has a security interest in the refund. This preference action is
>>> unavailing.
>>>
>>> John D. Faucher
>>> Hurlbett & Faucher
>>> 5743 Corsa Ave., Suite 208
>>> Westlake Village, CA 91362
>>> (818) 889-8080
>>> Fax: (805) 367-4154
>>> http://www.hurlbettfaucher.com/
>>>
>>> 3324 State Street, Suite O
>>> Santa Barbara, CA 93105
>>> (805) 963-9111
>>>
>>> *This electronic mail message and any attached files are confidential,
>>> contain information intended for the exclusive use of the individual or
>>> entity to whom it is addressed, and may be legally privileged. If you are
>>> not the intended recipient, please immediately reply to John Faucher (at
>>> 818/889-8080 or john@hf-bklaw.com) indicating that you received this
>>> message and then delete the message without delay. Thank you for your
>>> cooperation.
>>>
>>> Disclosure Under U.S. IRS Circular 230: The recipient may not use any tax
>>> advice contained in this communication, including any attachments, for the
>>> purpose of avoiding federal tax related penalties or promoting, marketing or
>>> recommending to another party any particular transaction or matter.
>>> *
>>>
>>> On 5/10/11 3:56 PM, "R Grace Rodriguez" wrote:
>>>
>>>
>>>
>>> Dear Friends:
>>>
>>> I have a client who owes as an example 5K for 2006 taxes which were
>>> assessed more than three years ago and return was filed and let's presume no
>>> intent to defraud and not tax lien
>>>
>>> He also owes 5K for 2007 taxes, and 5K 2008 taxes and 5K 2009 taxes.
>>>
>>> In 2010 Client is due a REFUND of 2500. He filed this Tax return on
>>> April 15, 2011. As of that date, IRS did not give a refund, but instead
>>> applied the 2500 in refund to the UNSECURED NON-PRIORITY TAXES for 2006.
>>>
>>> Since this was done 10 days before the filing of the bankruptcy it seems
>>> to me that this is a PREFERENCE as defined by Section 547
>>>
>>> (b) Except as provided in subsection (c) of this section, the *trustee
>>> may avoid any transfer of an interest of the debtor in property*--
>>>
>>> (1) to or for the benefit of a creditor;
>>>
>>> (2) for or on account of an antecedent debt owed by the debtor before
>>> such transfer was made;
>>>
>>> (3) made while the debtor was insolvent;
>>>
>>> (4) made--
>>>
>>> (A) *on or within 90 days before the date of the filing of the petition*;
>>> or
>>>
>>> (B) between ninety days and one year before the date of the filing of the
>>> petition, if such creditor at the time of such transfer was an insider; and
>>>
>>> (5) that enables such creditor to receive more than such creditor would
>>> receive if--
>>>
>>> (A) the case were a case under chapter 7 of this title;
>>>
>>> (B) the transfer had not been made; and
>>>
>>> (C) such creditor received payment of such debt to the extent provided by
>>> the provisions of this title.
>>>
>>> SO IN A CHAPTER 7 Case the 2006 taxes would have been discharged. So
>>> They should not have applied that refund to the UNSECURED NON-PRIORITY
>>> DEBT. But it says the TRUSTEE can avoid. Can debtor avoid in a 13? Do I
>>> do letter first asking them to apply the 2500 to the secured priority taxes
>>> then object to claim because they don't include the credit?
>>>
>>> Or is there some other obscure law lurking somewhere that I cannot see
>>> that says its perfectly fine for the IRS to do this?
>>>
>>>
>>>
>>> --
>>> R. Grace Rodriguez, Esq.
>>> OFF: (818) 734-7223
>>> CEL: (818) 554-9922
>>>
>>> NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail
>>> notice for ex parte Applications via voicemail or by email. You must comply
>>> with California Law and give notice to a person in my office during regular
>>> business hours.
>>>
>>> CONFIDENTIALITY STATEMENT: This message contains privileged and
>>> confidential information and is intended only for the individual named. If
>>> you are not the intended recipient you should not disseminate, distribute,
>>> store, print, copy or deliver this message. Please notify the sender
>>> immediately by e-mail if you have received this e-mail by mistake and delete
>>> this e-mail from your system.
>>>
>>>
>>
>>
>> --
>> R. Grace Rodriguez, Esq.
>> OFF: (818) 734-7223
>> CEL: (818) 554-9922
>>
>> NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice
>> for ex parte Applications via voicemail or by email. You must comply with
>> California Law and give notice to a person in my office during regular
>> business hours.
>>
>> CONFIDENTIALITY STATEMENT: This message contains privileged and
>> confidential information and is intended only for the individual named. If
>> you are not the intended recipient you should not disseminate, distribute,
>> store, print, copy or deliver this message. Please notify the sender
>> immediately by e-mail if you have received this e-mail by mistake and delete
>> this e-mail from your system.
>>
>>
>
>
> --
> R. Grace Rodriguez, Esq.
> OFF: (818) 734-7223
> CEL: (818) 554-9922
>
> NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice
> for ex parte Applications via voicemail or by email. You must comply with
> California Law and give notice to a person in my office during regular
> business hours.
>
> CONFIDENTIALITY STATEMENT: This message contains privileged and
> confidential information and is intended only for the individual named. If
> you are not the intended recipient you should not disseminate, distribute,
> store, print, copy or deliver this message. Please notify the sender
> immediately by e-mail if you have received this e-mail by mistake and delete
> this e-mail from your system.
>
>
>
R. Grace Rodriguez, Esq.
OFF: (818) 734-7223
CEL: (818) 554-9922
NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice
for ex parte Applications via voicemail or by email. You must comply with
California Law and give notice to a person in my office during regular
business hours.
CONFIDENTIALITY STATEMENT: This message contains privileged and
confidential information and is intended only for the individual named. If
you are not the intended recipient you should not disseminate, distribute,
store, print, copy or deliver this message. Please notify the sender
immediately by e-mail if you have received this e-mail by mistake and delete
this e-mail from your system.
Dang.... okay I have it drilled into my head enough. I get it. That really sucks.

oh well I tried. Thank you fellas *David and John) for helping me not to waste my time fighting windmills. On Thu, May 12, 2011 at 4:37 PM, John D. Faucher <j.d.faucher@sbcglobal.net> wrote:

The post was migrated from Yahoo.

Yahoo Bot · Thu May 12, 2011 4:37 pm

charset="UTF-8"
What David said.
You say the dischargeable taxes don't have security; but they do. The
prepetition refund held by the IRS is security for any tax debt the IRS
chooses to apply it to. Because a refund offset is an involuntary payment,
the IRS has the right to apply it in the manner that best serves its
interests. I don't have a cite for that proposition at hand, but it's pretty
well settled law.
So yes, the tax refund basically goes down the toilet, as far as your
chapter 13 client is concerned.
"clearly they got paid for a debt that in Chapter 7 they would not have
otherwise been paid upon."
Not quite. In a chapter 7, the IRS would have still gotten paid this
pseudopreference (Dennis, can I make up this word? I'm not using a hyphen).
The IRS could do a postpetition offset of refund against dischargeable
taxes.
John D. Faucher
Hurlbett & Faucher
5743 Corsa Ave., Suite 208
Westlake Village, CA 91362
(818) 889-8080
Fax: (805) 367-4154
http://www.hurlbettfaucher.com/
3324 State Street, Suite O
Santa Barbara, CA 93105
(805) 963-9111
This electronic mail message and any attached files are confidential,
contain information intended for the exclusive use of the individual or
entity to whom it is addressed, and may be legally privileged. If you are
not the intended recipient, please immediately reply to John Faucher (at
818/889-8080 or john@hf-bklaw.com )
indicating that you received this message and then delete the message
without delay. Thank you for your cooperation.
Disclosure Under U.S. IRS Circular 230: The recipient may not use any tax
advice contained in this communication, including any attachments, for the
purpose of avoiding federal tax related penalties or promoting, marketing or
recommending to another party any particular transaction or matter.
On 5/12/11 3:13 PM, "David A. Tilem" wrote:
>
>
>
>
>
> Liens are not dischargeable.
>
>
> David A. Tilem
> Certified Bankruptcy Specialist*
> Law Offices of David A. Tilem (a debt relief agency)
> 206 N. Jackson Street, #201, Glendale, CA 91206
> Tel: 818-507-6000 Fax: 818-507-6800
>
> * Bankruptcy specialist cert. by State Bar of CA Bd of Legal Specialization.
> Business bankruptcy specialist cert. by Amer. Bd. of Certification
>
>
> -----Original Message-----
R
> Grace Rodriguez
> Sent: Thursday, May 12, 2011 2:15 PM
> To: cdcbaa@yahoogroups.com
> Subject: Re: [cdcbaa] Question about Tax Refunds and Taxes owed.
>
>
> Gentlemen: I'm trying really hard to get it. but.....
>
> 11 USC 547 (6)(c) that is the fixing of a statutory lien that is not
> avoidable under section 545 of this title;
>
> HOWEVER I think you guys are missing my point. I get the fact that the IRS
> has the right to confiscate the 2010 Tax Refund and I think that's what
> 547.6.c. refers to? yes?
>
> BUT, in a chapter 7, the 2006, taxes ARE DISCHARGEABLE. So how can they apply
> the refund to the debt that is dischargeable? Why isn't it the case that they
> are to apply the REFUND to the NON-DISCHARGEABLE debt because there is a
> statutory lien in the form of taxes owed from the past 3 years having been
> assessed and the return was not on file within the past two years.
>
> That's the part I don't get.
>
> HERE is why I ask the question. in my example 2500 could go to reduce the tax
> debt that is not dischargeable and hence debtor pays less in the chapter 13
> plan. BUT if they apply that money to taxes which are UNSECURED, NO PRIORITY,
> NO SECURITY (because they have not entered a tax lien and IT IS NOT
> statutorily secured debt) then the refund is flushed down the toilet. That
> constitutes a preference under the code because clearly they got paid for a
> debt that in Chapter 7 they would not have otherwise been paid upon.
>
> What am I missing? Sorry I'm not getting what you guys are trying to explain.
>
> Is it the case then that otherwise dischargeable may always be paid with
> current refunds. So even though they get a discharge in bankruptcy and the
> IRS can't collect, they are still free to confiscate refunds and apply them to
> the old debts? Or once the discharge is entered they can no longer do that?
> Or is it that while in chapter 13, each year they get a refund they can pay
> down old debts even though the plan is paying on the otherwise
> non-dischargeable taxes?
>
> Help? I need an explanation a 4 year old can understand. Sorry. Thanks
>
> 2011/5/11 David A. Tilem
>>
>>
>>
>>
>>
>>
>>
>> Automatic tax lien
>>
>>
>>
>>
>>
>>
>>
>> David A. Tilem
>>
>> Certified Bankruptcy Specialist*
>>
>> Law Offices of David A. Tilem (a debt relief agency)
>>
>> 206 N. Jackson Street, #201, Glendale, CA 91206
>>
>> Tel: 818-507-6000 Fax: 818-507-6800
>>
>>
>>
>> * Bankruptcy specialist cert. by State Bar of CA Bd of Legal
>> Specialization.
>>
>> Business bankruptcy specialist cert. by Amer. Bd. of Certification
>>
>>
>>
>>
>>
>>
>>
>> -----Original Message-----
Of R
>> Grace Rodriguez
>> Sent: Tuesday, May 10, 2011 8:22 PM
>> To: cdcbaa@yahoogroups.com
>> Subject: Re: [cdcbaa] Question about Tax Refunds and Taxes owed.
>>
>>
>>
>>
>>
>>
>>
>>
>> Hi John:
>>
>> On what basis is the 2006 tax debt is secured? Its not priority debt, there
>> is no lien. In a chapter 7 this debt would be discharged under the
>> circumstances. So how can they grab the money they have a security interest
>> in and apply it to debt that is unsecured? That's what I don't get from
>> your post John. Mind you I agree under the Code they have the right to
>> swipe those funds, but they have to apply them to debt that is prioritized
>> if the want to keep it.
>>
>>
>>
>>
>> On Tue, May 10, 2011 at 4:23 PM, John D. Faucher
>> wrote:
>>
>>>
>>>
>>>
>>>
>>>
>>>
>>>
>>>
>>>
>>> Grace:
>>>
>>> In a chapter 7, had the IRS not done the setoff prior to the bankruptcy
>>> petition, it would do so after the petition. Ideally, it would file a motion
>>> for relief from stay to allow the setoff of the refund (a prepetition
>>> security) against the prepetition debt. The 2006 tax debt is secured because
>>> the IRS has a security interest in the refund. This preference action is
>>> unavailing.
>>>
>>>
>>>
>>>
>>>
>>>
>>>
>>>
>>> John D. Faucher
>>>
>>> Hurlbett & Faucher
>>>
>>>
>>> 5743 Corsa Ave., Suite 208
>>>
>>> Westlake Village, CA 91362
>>>
>>> (818) 889-8080
>>>
>>> Fax: (805) 367-4154
>>>
>>> http://www.hurlbettfaucher.com/
>>>
>>>
>>>
>>> 3324 State Street, Suite O
>>>
>>> Santa Barbara, CA 93105
>>>
>>> (805) 963-9111
>>>
>>>
>>> This electronic mail message and any attached files are confidential,
>>> contain information intended for the exclusive use of the individual or
>>> entity to whom it is addressed, and may be legally privileged. If you are
>>> not the intended recipient, please immediately reply to John Faucher (at
>>> 818/889-8080 or john@hf-bklaw.com) indicating that
>>> you received this message and then delete the message without delay. Thank
>>> you for your cooperation.
>>>
>>> Disclosure Under U.S. IRS Circular 230: The recipient may not use any tax
>>> advice contained in this communication, including any attachments, for the
>>> purpose of avoiding federal tax related penalties or promoting, marketing
>>> or recommending to another party any particular transaction or matter.
>>>
>>>
>>>
>>>
>>>
>>>
>>>
>>> On 5/10/11 3:56 PM, "R Grace Rodriguez" wrote:
>>>
>>>
>>>
>>>>
>>>>
>>>>
>>>>
>>>>
>>>> Dear Friends:
>>>>
>>>> I have a client who owes as an example 5K for 2006 taxes which were
>>>> assessed more than three years ago and return was filed and let's presume
>>>> no intent to defraud and not tax lien
>>>>
>>>> He also owes 5K for 2007 taxes, and 5K 2008 taxes and 5K 2009 taxes.
>>>>
>>>> In 2010 Client is due a REFUND of 2500. He filed this Tax return on
>>>> April 15, 2011. As of that date, IRS did not give a refund, but instead
>>>> applied the 2500 in refund to the UNSECURED NON-PRIORITY TAXES for 2006.
>>>>
>>>> Since this was done 10 days before the filing of the bankruptcy it seems
>>>> to me that this is a PREFERENCE as defined by Section 547
>>>>
>>>>
>>>> (b) Except as provided in subsection (c) of this section, the trustee may
>>>> avoid any transfer of an interest of the debtor in property--
>>>>
>>>>>
>>>>>
>>>>> (1) to or for the benefit of a creditor;
>>>>>
>>>>>
>>>>> (2) for or on account of an antecedent debt owed by the debtor before
>>>>> such transfer was made;
>>>>>
>>>>>
>>>>> (3) made while the debtor was insolvent;
>>>>>
>>>>>
>>>>> (4) made--
>>>>>
>>>>>>
>>>>>>
>>>>>> (A) on or within 90 days before the date of the filing of the petition;
>>>>>> or
>>>>>>
>>>>>>
>>>>>> (B) between ninety days and one year before the date of the filing of
>>>>>> the petition, if such creditor at the time of such transfer was an
>>>>>> insider; and
>>>>>
>>>>>
>>>>> (5) that enables such creditor to receive more than such creditor would
>>>>> receive if--
>>>>>
>>>>>>
>>>>>>
>>>>>> (A) the case were a case under chapter 7 of this title;
>>>>>>
>>>>>>
>>>>>> (B) the transfer had not been made; and
>>>>>>
>>>>>>
>>>>>> (C) such creditor received payment of such debt to the extent provided
>>>>>> by the provisions of this title.
>>>> SO IN A CHAPTER 7 Case the 2006 taxes would have been discharged. So
>>>> They should not have applied that refund to the UNSECURED NON-PRIORITY
>>>> DEBT. But it says the TRUSTEE can avoid. Can debtor avoid in a 13? Do I
>>>> do letter first asking them to apply the 2500 to the secured priority
>>>> taxes then object to claim because they don't include the credit?
>>>>
>>>> Or is there some other obscure law lurking somewhere that I cannot see
>>>> that says its perfectly fine for the IRS to do this?
>>>>
>>>>
>>>>
>>>> --
>>>> R. Grace Rodriguez, Esq.
>>>> OFF: (818) 734-7223
>>>> CEL: (818) 554-9922
>>>>
>>>> NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice
>>>> for ex parte Applications via voicemail or by email. You must comply with
>>>> California Law and give notice to a person in my office during regular
>>>> business hours.
>>>>
>>>> CONFIDENTIALITY STATEMENT: This message contains privileged and
>>>> confidential information and is intended only for the individual named. If
>>>> you are not the intended recipient you should not disseminate, distribute,
>>>> store, print, copy or deliver this message. Please notify the sender
>>>> immediately by e-mail if you have received this e-mail by mistake and
>>>> delete this e-mail from your system.
>>>>
>>>>
>>>
>>>
>>>
>>
>>
>>
>> --
>> R. Grace Rodriguez, Esq.
>> OFF: (818) 734-7223
>> CEL: (818) 554-9922
>>
>> NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice
>> for ex parte Applications via voicemail or by email. You must comply with
>> California Law and give notice to a person in my office during regular
>> business hours.
>>
>> CONFIDENTIALITY STATEMENT: This message contains privileged and
>> confidential information and is intended only for the individual named. If
>> you are not the intended recipient you should not disseminate, distribute,
>> store, print, copy or deliver this message. Please notify the sender
>> immediately by e-mail if you have received this e-mail by mistake and delete
>> this e-mail from your system.
>>
>>
>>
>>
>>
>>
>>
>
>
>
> --
> R. Grace Rodriguez, Esq.
> OFF: (818) 734-7223
> CEL: (818) 554-9922
>
> NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice for
> ex parte Applications via voicemail or by email. You must comply with
> California Law and give notice to a person in my office during regular
> business hours.
>
> CONFIDENTIALITY STATEMENT: This message contains privileged and confidential
> information and is intended only for the individual named. If you are not the
> intended recipient you should not disseminate, distribute, store, print, copy
> or deliver this message. Please notify the sender immediately by e-mail if you
> have received this e-mail by mistake and delete this e-mail from your system.
>
>
>
>
>
charset="UTF-8"
What David said. You say the dischargeable taxes don't have security; but they do. The prepetition refund held by the IRS is security for any tax debt the IRS chooses to apply it to. Because a refund offset is an involuntary payment, the IRS has the right to apply it in the manner that best serves its interests. I don't have a cite for that proposition at hand, but it's pretty well settled law. So yes, the tax refund basically goes down the toilet, as far as your chapter 13 client is concerned. "clearly they got paid for a debt that in Chapter 7 they would not have otherwise been paid upon." Not quite. In a chapter 7, the IRS would have still gotten paid this pseudopreference (Dennis, can I make up this word? I'm not using a hyphen). The IRS could do a postpetition offset of refund against dischargeable taxes. John D. FaucherHurlbett & FaucherDavid A.
TilemCertified Bankruptcy
Specialist
The post was migrated from Yahoo.

Yahoo Bot · Thu May 12, 2011 3:13 pm

Liens are not dischargeable.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
Grace Rodriguez
Sent: Thursday, May 12, 2011 2:15 PM
To: cdcbaa@yahoogroups.com
Subject: Re: [cdcbaa] Question about Tax Refunds and Taxes owed.
Gentlemen: I'm trying really hard to get it. but.....
11 USC 547 (6)(c) that is the fixing of a statutory lien that is not
avoidable under section 545 of this title;
HOWEVER I think you guys are missing my point. I get the fact that the IRS
has the right to confiscate the 2010 Tax Refund and I think that's what
547.6.c. refers to? yes?
BUT, in a chapter 7, the 2006, taxes ARE DISCHARGEABLE. So how can they
apply the refund to the debt that is dischargeable? Why isn't it the case
that they are to apply the REFUND to the NON-DISCHARGEABLE debt because
there is a statutory lien in the form of taxes owed from the past 3 years
having been assessed and the return was not on file within the past two
years.
That's the part I don't get.
HERE is why I ask the question. in my example 2500 could go to reduce the
tax debt that is not dischargeable and hence debtor pays less in the chapter
13 plan. BUT if they apply that money to taxes which are UNSECURED, NO
PRIORITY, NO SECURITY (because they have not entered a tax lien and IT IS
NOT statutorily secured debt) then the refund is flushed down the toilet.
That constitutes a preference under the code because clearly they got paid
for a debt that in Chapter 7 they would not have otherwise been paid upon.
What am I missing? Sorry I'm not getting what you guys are trying to
explain.
Is it the case then that otherwise dischargeable may always be paid with
current refunds. So even though they get a discharge in bankruptcy and the
IRS can't collect, they are still free to confiscate refunds and apply them
to the old debts? Or once the discharge is entered they can no longer do
that? Or is it that while in chapter 13, each year they get a refund they
can pay down old debts even though the plan is paying on the otherwise
non-dischargeable taxes?
Help? I need an explanation a 4 year old can understand. Sorry. Thanks
2011/5/11 David A. Tilem
Automatic tax lien
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
Grace Rodriguez
Sent: Tuesday, May 10, 2011 8:22 PM
To: cdcbaa@yahoogroups.com
Subject: Re: [cdcbaa] Question about Tax Refunds and Taxes owed.
Hi John:
On what basis is the 2006 tax debt is secured? Its not priority debt, there
is no lien. In a chapter 7 this debt would be discharged under the
circumstances. So how can they grab the money they have a security interest
in and apply it to debt that is unsecured? That's what I don't get from
your post John. Mind you I agree under the Code they have the right to
swipe those funds, but they have to apply them to debt that is prioritized
if the want to keep it.
On Tue, May 10, 2011 at 4:23 PM, John D. Faucher
wrote:
Grace:
In a chapter 7, had the IRS not done the setoff prior to the bankruptcy
petition, it would do so after the petition. Ideally, it would file a motion
for relief from stay to allow the setoff of the refund (a prepetition
security) against the prepetition debt. The 2006 tax debt is secured because
the IRS has a security interest in the refund. This preference action is
unavailing.
John D. Faucher
Hurlbett & Faucher
5743 Corsa Ave., Suite 208
Westlake Village, CA 91362
(818) 889-8080
Fax: (805) 367-4154
http://www.hurlbettfaucher.com/
3324 State Street, Suite O
Santa Barbara, CA 93105
(805) 963-9111
This electronic mail message and any attached files are confidential,
contain information intended for the exclusive use of the individual or
entity to whom it is addressed, and may be legally privileged. If you are
not the intended recipient, please immediately reply to John Faucher (at
818/889-8080 or john@hf-bklaw.com) indicating that you
received this message and then delete the message without delay. Thank you
for your cooperation.
Disclosure Under U.S. IRS Circular 230: The recipient may not use any tax
advice contained in this communication, including any attachments, for the
purpose of avoiding federal tax related penalties or promoting, marketing or
recommending to another party any particular transaction or matter.
On 5/10/11 3:56 PM, "R Grace Rodriguez" wrote:
Dear Friends:
I have a client who owes as an example 5K for 2006 taxes which were assessed
more than three years ago and return was filed and let's presume no intent
to defraud and not tax lien
He also owes 5K for 2007 taxes, and 5K 2008 taxes and 5K 2009 taxes.
In 2010 Client is due a REFUND of 2500. He filed this Tax return on April
15, 2011. As of that date, IRS did not give a refund, but instead applied
the 2500 in refund to the UNSECURED NON-PRIORITY TAXES for 2006.
Since this was done 10 days before the filing of the bankruptcy it seems to
me that this is a PREFERENCE as defined by Section 547
(b) Except as provided in subsection (c) of this section, the trustee may
avoid any transfer of an interest of the debtor in property--
(1) to or for the benefit of a creditor;
(2) for or on account of an antecedent debt owed by the debtor before such
transfer was made;
(3) made while the debtor was insolvent;
(4) made--
(A) on or within 90 days before the date of the filing of the petition; or
(B) between ninety days and one year before the date of the filing of the
petition, if such creditor at the time of such transfer was an insider; and
(5) that enables such creditor to receive more than such creditor would
receive if--
(A) the case were a case under chapter 7 of this title;
(B) the transfer had not been made; and
(C) such creditor received payment of such debt to the extent provided by
the provisions of this title.
SO IN A CHAPTER 7 Case the 2006 taxes would have been discharged. So They
should not have applied that refund to the UNSECURED NON-PRIORITY DEBT. But
it says the TRUSTEE can avoid. Can debtor avoid in a 13? Do I do letter
first asking them to apply the 2500 to the secured priority taxes then
object to claim because they don't include the credit?
Or is there some other obscure law lurking somewhere that I cannot see that
says its perfectly fine for the IRS to do this?
R. Grace Rodriguez, Esq.
OFF: (818) 734-7223
CEL: (818) 554-9922
NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice
for ex parte Applications via voicemail or by email. You must comply with
California Law and give notice to a person in my office during regular
business hours.
CONFIDENTIALITY STATEMENT: This message contains privileged and
confidential information and is intended only for the individual named. If
you are not the intended recipient you should not disseminate, distribute,
store, print, copy or deliver this message. Please notify the sender
immediately by e-mail if you have received this e-mail by mistake and delete
this e-mail from your system.
R. Grace Rodriguez, Esq.
OFF: (818) 734-7223
CEL: (818) 554-9922
NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice
for ex parte Applications via voicemail or by email. You must comply with
California Law and give notice to a person in my office during regular
business hours.
CONFIDENTIALITY STATEMENT: This message contains privileged and
confidential information and is intended only for the individual named. If
you are not the intended recipient you should not disseminate, distribute,
store, print, copy or deliver this message. Please notify the sender
immediately by e-mail if you have received this e-mail by mistake and delete
this e-mail from your system.
R. Grace Rodriguez, Esq.
OFF: (818) 734-7223
CEL: (818) 554-9922
NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice
for ex parte Applications via voicemail or by email. You must comply with
California Law and give notice to a person in my office during regular
business hours.
CONFIDENTIALITY STATEMENT: This message contains privileged and
confidential information and is intended only for the individual named. If
you are not the intended recipient you should not disseminate, distribute,
store, print, copy or deliver this message. Please notify the sender
immediately by e-mail if you have received this e-mail by mistake and delete
this e-mail from your system.
Message
Liens are not
dischargeable.

David A.
Tilem
Certified Bankruptcy
Specialist*
The post was migrated from Yahoo.

Yahoo Bot · Thu May 12, 2011 2:39 pm

With the 2005 Amendments, the IRS DOES NOT need to seek a relief from stay
to withhold a tax refund to apply to pre-petition taxes which are owed.....
*Sec. 362.(26)* under subsection (a), of the setoff under applicable
nonbankruptcy law of an income tax refund, by a governmental unit, with
respect to a taxable period that ended before the date of the order for
relief against an income tax liability for a taxable period that also ended
before the date of the order for relief, except that in any case in which
the setoff of an income tax refund is not permitted under applicable
nonbankruptcy law because of a pending action to determine the amount or
legality of a tax liability, the governmental unit may hold the refund
pending the resolution of the action, unless the court, on the motion of the
trustee and after notice and a hearing, grants the taxing authority adequate
protection (within the meaning of section 361) for the secured claim of such
authority in the setoff under section 506(a);
11 U.S.C.A. 362 (West)
*AND.....* In a chapter 13 case, even though you have a chapter 13 Plan that
provides for full payment, they still get to keep the tax refund and apply
it to the taxes. see 345 B.R. 229,United States Bankruptcy Court,E.D.
California,
Fresno Division.In re Nora J. RIVERA, Debtor.
United States of America on behalf of the Internal Revenue Service, Movant.
No. 0510567B13.
Sept. 29, 2005.
Synopsis
*Background:* Internal Revenue Service (IRS) moved for relief from automatic
stay to exercise right of setoff, and Chapter 13 debtor sought award of
sanctions against the IRS based on its past stay violations.
*Holdings:* The Bankruptcy Court, W. Richard

The post was migrated from Yahoo.

Yahoo Bot · Thu May 12, 2011 2:14 pm

Gentlemen: I'm trying really hard to get it. but.....
11 USC 547 (6)(c) that is the fixing of a statutory lien that is not
avoidable under section 545 of this title;
HOWEVER I think you guys are missing my point. I get the fact that the IRS
has the right to confiscate the 2010 Tax Refund and I think that's what
547.6.c. refers to? yes?
BUT, in a chapter 7, the 2006, taxes ARE DISCHARGEABLE. So how can they
apply the refund to the debt that is dischargeable? Why isn't it the case
that they are to apply the REFUND to the NON-DISCHARGEABLE debt because
there is a statutory lien in the form of taxes owed from the past 3 years
having been assessed and the return was not on file within the past two
years.
That's the part I don't get.
HERE is why I ask the question. in my example 2500 could go to reduce the
tax debt that is not dischargeable and hence debtor pays less in the chapter
13 plan. BUT if they apply that money to taxes which are UNSECURED, NO
PRIORITY, NO SECURITY (because they have not entered a tax lien and IT IS
NOT statutorily secured debt) then the refund is flushed down the toilet.
That constitutes a preference under the code because clearly they got paid
for a debt that in Chapter 7 they would not have otherwise been paid upon.
What am I missing? Sorry I'm not getting what you guys are trying to
explain.
Is it the case then that otherwise dischargeable may always be paid with
current refunds. So even though they get a discharge in bankruptcy and the
IRS can't collect, they are still free to confiscate refunds and apply them
to the old debts? Or once the discharge is entered they can no longer do
that? Or is it that while in chapter 13, each year they get a refund they
can pay down old debts even though the plan is paying on the otherwise
non-dischargeable taxes?
Help? I need an explanation a 4 year old can understand. Sorry. Thanks
2011/5/11 David A. Tilem
>
>
> Automatic tax lien
>
>
> *David A. Tilem*
> Certified Bankruptcy Specialist** *
> Law Offices of David A. Tilem (a debt relief agency)
> 206 N. Jackson Street, #201, Glendale, CA 91206
> Tel: 818-507-6000 Fax: 818-507-6800
>
> * Bankruptcy specialist cert. by State Bar of CA Bd of Legal
> Specialization.
> Business bankruptcy specialist cert. by Amer. Bd. of Certification
>
>
> -----Original Message-----
> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On Behalf
> Of *R Grace Rodriguez
> *Sent:* Tuesday, May 10, 2011 8:22 PM
> *To:* cdcbaa@yahoogroups.com
> *Subject:* Re: [cdcbaa] Question about Tax Refunds and Taxes owed.
>
>
>
> Hi John:
>
> On what basis is the 2006 tax debt is secured? Its not priority debt,
> there is no lien. In a chapter 7 this debt would be discharged under the
> circumstances. So how can they grab the money they have a security interest
> in and apply it to debt that is unsecured? That's what I don't get from
> your post John. Mind you I agree under the Code they have the right to
> swipe those funds, but they have to apply them to debt that is prioritized
> if the want to keep it.
>
>
>
> On Tue, May 10, 2011 at 4:23 PM, John D. Faucher j.d.faucher@sbcglobal.net> wrote:
>
>>
>>
>> Grace:
>> In a chapter 7, had the IRS not done the setoff prior to the bankruptcy
>> petition, it would do so after the petition. Ideally, it would file a motion
>> for relief from stay to allow the setoff of the refund (a prepetition
>> security) against the prepetition debt. The 2006 tax debt is secured because
>> the IRS has a security interest in the refund. This preference action is
>> unavailing.
>>
>> John D. Faucher
>> Hurlbett & Faucher
>> 5743 Corsa Ave., Suite 208
>> Westlake Village, CA 91362
>> (818) 889-8080
>> Fax: (805) 367-4154
>> http://www.hurlbettfaucher.com/
>>
>> 3324 State Street, Suite O
>> Santa Barbara, CA 93105
>> (805) 963-9111
>>
>> *This electronic mail message and any attached files are confidential,
>> contain information intended for the exclusive use of the individual or
>> entity to whom it is addressed, and may be legally privileged. If you are
>> not the intended recipient, please immediately reply to John Faucher (at
>> 818/889-8080 or john@hf-bklaw.com) indicating that you received this
>> message and then delete the message without delay. Thank you for your
>> cooperation.
>>
>> Disclosure Under U.S. IRS Circular 230: The recipient may not use any tax
>> advice contained in this communication, including any attachments, for the
>> purpose of avoiding federal tax related penalties or promoting, marketing or
>> recommending to another party any particular transaction or matter.
>> *
>>
>> On 5/10/11 3:56 PM, "R Grace Rodriguez" wrote:
>>
>>
>>
>> Dear Friends:
>>
>> I have a client who owes as an example 5K for 2006 taxes which were
>> assessed more than three years ago and return was filed and let's presume no
>> intent to defraud and not tax lien
>>
>> He also owes 5K for 2007 taxes, and 5K 2008 taxes and 5K 2009 taxes.
>>
>> In 2010 Client is due a REFUND of 2500. He filed this Tax return on April
>> 15, 2011. As of that date, IRS did not give a refund, but instead applied
>> the 2500 in refund to the UNSECURED NON-PRIORITY TAXES for 2006.
>>
>> Since this was done 10 days before the filing of the bankruptcy it seems
>> to me that this is a PREFERENCE as defined by Section 547
>>
>> (b) Except as provided in subsection (c) of this section, the *trustee
>> may avoid any transfer of an interest of the debtor in property*--
>>
>> (1) to or for the benefit of a creditor;
>>
>> (2) for or on account of an antecedent debt owed by the debtor before such
>> transfer was made;
>>
>> (3) made while the debtor was insolvent;
>>
>> (4) made--
>>
>> (A) *on or within 90 days before the date of the filing of the petition*;
>> or
>>
>> (B) between ninety days and one year before the date of the filing of the
>> petition, if such creditor at the time of such transfer was an insider; and
>>
>> (5) that enables such creditor to receive more than such creditor would
>> receive if--
>>
>> (A) the case were a case under chapter 7 of this title;
>>
>> (B) the transfer had not been made; and
>>
>> (C) such creditor received payment of such debt to the extent provided by
>> the provisions of this title.
>>
>> SO IN A CHAPTER 7 Case the 2006 taxes would have been discharged. So They
>> should not have applied that refund to the UNSECURED NON-PRIORITY DEBT. But
>> it says the TRUSTEE can avoid. Can debtor avoid in a 13? Do I do letter
>> first asking them to apply the 2500 to the secured priority taxes then
>> object to claim because they don't include the credit?
>>
>> Or is there some other obscure law lurking somewhere that I cannot see
>> that says its perfectly fine for the IRS to do this?
>>
>>
>>
>> --
>> R. Grace Rodriguez, Esq.
>> OFF: (818) 734-7223
>> CEL: (818) 554-9922
>>
>> NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice
>> for ex parte Applications via voicemail or by email. You must comply with
>> California Law and give notice to a person in my office during regular
>> business hours.
>>
>> CONFIDENTIALITY STATEMENT: This message contains privileged and
>> confidential information and is intended only for the individual named. If
>> you are not the intended recipient you should not disseminate, distribute,
>> store, print, copy or deliver this message. Please notify the sender
>> immediately by e-mail if you have received this e-mail by mistake and delete
>> this e-mail from your system.
>>
>>
>
>
> --
> R. Grace Rodriguez, Esq.
> OFF: (818) 734-7223
> CEL: (818) 554-9922
>
> NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice
> for ex parte Applications via voicemail or by email. You must comply with
> California Law and give notice to a person in my office during regular
> business hours.
>
> CONFIDENTIALITY STATEMENT: This message contains privileged and
> confidential information and is intended only for the individual named. If
> you are not the intended recipient you should not disseminate, distribute,
> store, print, copy or deliver this message. Please notify the sender
> immediately by e-mail if you have received this e-mail by mistake and delete
> this e-mail from your system.
>
>
>
R. Grace Rodriguez, Esq.
OFF: (818) 734-7223
CEL: (818) 554-9922
NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice
for ex parte Applications via voicemail or by email. You must comply with
California Law and give notice to a person in my office during regular
business hours.
CONFIDENTIALITY STATEMENT: This message contains privileged and
confidential information and is intended only for the individual named. If
you are not the intended recipient you should not disseminate, distribute,
store, print, copy or deliver this message. Please notify the sender
immediately by e-mail if you have received this e-mail by mistake and delete
this e-mail from your system.
Gentlemen: I'm trying really hard to get it. but.....11 USC 547 (6)(c) that is the fixing of a statutory lien that
is not avoidable under section
545 of this title;HOWEVER I think you guys are missing my point. I get the fact that the IRS has the right to confiscate the 2010 Tax Refund and I think that's what 547.6.c. refers to? yes?BUT, in a chapter 7, the 2006, taxes ARE DISCHARGEABLE. So how can they apply the refund to the debt that is dischargeable? Why isn't it the case that they are to apply the REFUND to the NON-DISCHARGEABLE debt because there is a statutory lien in the form of taxes owed from the past 3 years having been assessed and the return was not on file within the past two years.

The post was migrated from Yahoo.

Yahoo Bot · Wed May 11, 2011 4:50 pm

charset="windows-1251"
Automatic tax lien
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
Grace Rodriguez
Sent: Tuesday, May 10, 2011 8:22 PM
To: cdcbaa@yahoogroups.com
Subject: Re: [cdcbaa] Question about Tax Refunds and Taxes owed.
Hi John:
On what basis is the 2006 tax debt is secured? Its not priority debt, there
is no lien. In a chapter 7 this debt would be discharged under the
circumstances. So how can they grab the money they have a security interest
in and apply it to debt that is unsecured? That's what I don't get from
your post John. Mind you I agree under the Code they have the right to
swipe those funds, but they have to apply them to debt that is prioritized
if the want to keep it.
On Tue, May 10, 2011 at 4:23 PM, John D. Faucher
wrote:
Grace:
In a chapter 7, had the IRS not done the setoff prior to the bankruptcy
petition, it would do so after the petition. Ideally, it would file a motion
for relief from stay to allow the setoff of the refund (a prepetition
security) against the prepetition debt. The 2006 tax debt is secured because
the IRS has a security interest in the refund. This preference action is
unavailing.
John D. Faucher
Hurlbett & Faucher
5743 Corsa Ave., Suite 208
Westlake Village, CA 91362
(818) 889-8080
Fax: (805) 367-4154
http://www.hurlbettfaucher.com/
3324 State Street, Suite O
Santa Barbara, CA 93105
(805) 963-9111
This electronic mail message and any attached files are confidential,
contain information intended for the exclusive use of the individual or
entity to whom it is addressed, and may be legally privileged. If you are
not the intended recipient, please immediately reply to John Faucher (at
818/889-8080 or john@hf-bklaw.com) indicating that you
received this message and then delete the message without delay. Thank you
for your cooperation.
Disclosure Under U.S. IRS Circular 230: The recipient may not use any tax
advice contained in this communication, including any attachments, for the
purpose of avoiding federal tax related penalties or promoting, marketing or
recommending to another party any particular transaction or matter.
On 5/10/11 3:56 PM, "R Grace Rodriguez" wrote:
Dear Friends:
I have a client who owes as an example 5K for 2006 taxes which were assessed
more than three years ago and return was filed and let's presume no intent
to defraud and not tax lien
He also owes 5K for 2007 taxes, and 5K 2008 taxes and 5K 2009 taxes.
In 2010 Client is due a REFUND of 2500. He filed this Tax return on April
15, 2011. As of that date, IRS did not give a refund, but instead applied
the 2500 in refund to the UNSECURED NON-PRIORITY TAXES for 2006.
Since this was done 10 days before the filing of the bankruptcy it seems to
me that this is a PREFERENCE as defined by Section 547
(b) Except as provided in subsection (c) of this section, the trustee may
avoid any transfer of an interest of the debtor in property--
(1) to or for the benefit of a creditor;
(2) for or on account of an antecedent debt owed by the debtor before such
transfer was made;
(3) made while the debtor was insolvent;
(4) made--
(A) on or within 90 days before the date of the filing of the petition; or
(B) between ninety days and one year before the date of the filing of the
petition, if such creditor at the time of such transfer was an insider; and
(5) that enables such creditor to receive more than such creditor would
receive if--
(A) the case were a case under chapter 7 of this title;
(B) the transfer had not been made; and
(C) such creditor received payment of such debt to the extent provided by
the provisions of this title.
SO IN A CHAPTER 7 Case the 2006 taxes would have been discharged. So They
should not have applied that refund to the UNSECURED NON-PRIORITY DEBT. But
it says the TRUSTEE can avoid. Can debtor avoid in a 13? Do I do letter
first asking them to apply the 2500 to the secured priority taxes then
object to claim because they don't include the credit?
Or is there some other obscure law lurking somewhere that I cannot see that
says its perfectly fine for the IRS to do this?
R. Grace Rodriguez, Esq.
OFF: (818) 734-7223
CEL: (818) 554-9922
NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice
for ex parte Applications via voicemail or by email. You must comply with
California Law and give notice to a person in my office during regular
business hours.
CONFIDENTIALITY STATEMENT: This message contains privileged and
confidential information and is intended only for the individual named. If
you are not the intended recipient you should not disseminate, distribute,
store, print, copy or deliver this message. Please notify the sender
immediately by e-mail if you have received this e-mail by mistake and delete
this e-mail from your system.
R. Grace Rodriguez, Esq.
OFF: (818) 734-7223
CEL: (818) 554-9922
NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice
for ex parte Applications via voicemail or by email. You must comply with
California Law and give notice to a person in my office during regular
business hours.
CONFIDENTIALITY STATEMENT: This message contains privileged and
confidential information and is intended only for the individual named. If
you are not the intended recipient you should not disseminate, distribute,
store, print, copy or deliver this message. Please notify the sender
immediately by e-mail if you have received this e-mail by mistake and delete
this e-mail from your system.
charset="windows-1251"
Message
Automatic tax
lien

David A.
Tilem
Certified Bankruptcy
Specialist*
The post was migrated from Yahoo.

Yahoo Bot · Wed May 11, 2011 4:45 pm

charset="windows-1251"
Check out the exceptions in 547: particularly (c)(6).
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
John D. Faucher
Sent: Tuesday, May 10, 2011 4:24 PM
To: cdcbaa@yahoogroups.com
Subject: Re: [cdcbaa] Question about Tax Refunds and Taxes owed.
Grace:
In a chapter 7, had the IRS not done the setoff prior to the bankruptcy
petition, it would do so after the petition. Ideally, it would file a motion
for relief from stay to allow the setoff of the refund (a prepetition
security) against the prepetition debt. The 2006 tax debt is secured because
the IRS has a security interest in the refund. This preference action is
unavailing.
John D. Faucher
Hurlbett & Faucher
5743 Corsa Ave., Suite 208
Westlake Village, CA 91362
(818) 889-8080
Fax: (805) 367-4154
http://www.hurlbettfaucher.com/
3324 State Street, Suite O
Santa Barbara, CA 93105
(805) 963-9111
This electronic mail message and any attached files are confidential,
contain information intended for the exclusive use of the individual or
entity to whom it is addressed, and may be legally privileged. If you are
not the intended recipient, please immediately reply to John Faucher (at
818/889-8080 or john@hf-bklaw.com )
indicating that you received this message and then delete the message
without delay. Thank you for your cooperation.
Disclosure Under U.S. IRS Circular 230: The recipient may not use any tax
advice contained in this communication, including any attachments, for the
purpose of avoiding federal tax related penalties or promoting, marketing or
recommending to another party any particular transaction or matter.
On 5/10/11 3:56 PM, "R Grace Rodriguez" wrote:
Dear Friends:
I have a client who owes as an example 5K for 2006 taxes which were assessed
more than three years ago and return was filed and let's presume no intent
to defraud and not tax lien
He also owes 5K for 2007 taxes, and 5K 2008 taxes and 5K 2009 taxes.
In 2010 Client is due a REFUND of 2500. He filed this Tax return on April
15, 2011. As of that date, IRS did not give a refund, but instead applied
the 2500 in refund to the UNSECURED NON-PRIORITY TAXES for 2006.
Since this was done 10 days before the filing of the bankruptcy it seems to
me that this is a PREFERENCE as defined by Section 547
(b) Except as provided in subsection (c) of this section, the trustee may
avoid any transfer of an interest of the debtor in property--
(1) to or for the benefit of a creditor;
(2) for or on account of an antecedent debt owed by the debtor before such
transfer was made;
(3) made while the debtor was insolvent;
(4) made--
(A) on or within 90 days before the date of the filing of the petition; or
(B) between ninety days and one year before the date of the filing of the
petition, if such creditor at the time of such transfer was an insider; and
(5) that enables such creditor to receive more than such creditor would
receive if--
(A) the case were a case under chapter 7 of this title;
(B) the transfer had not been made; and
(C) such creditor received payment of such debt to the extent provided by
the provisions of this title.
SO IN A CHAPTER 7 Case the 2006 taxes would have been discharged. So They
should not have applied that refund to the UNSECURED NON-PRIORITY DEBT. But
it says the TRUSTEE can avoid. Can debtor avoid in a 13? Do I do letter
first asking them to apply the 2500 to the secured priority taxes then
object to claim because they don't include the credit?
Or is there some other obscure law lurking somewhere that I cannot see that
says its perfectly fine for the IRS to do this?
R. Grace Rodriguez, Esq.
OFF: (818) 734-7223
CEL: (818) 554-9922
NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice
for ex parte Applications via voicemail or by email. You must comply with
California Law and give notice to a person in my office during regular
business hours.
CONFIDENTIALITY STATEMENT: This message contains privileged and
confidential information and is intended only for the individual named. If
you are not the intended recipient you should not disseminate, distribute,
store, print, copy or deliver this message. Please notify the sender
immediately by e-mail if you have received this e-mail by mistake and delete
this e-mail from your system.
charset="windows-1251"
Message
Check out the exceptions in
547: particularly (c)(6).

David A.
Tilem
Certified Bankruptcy
Specialist*
The post was migrated from Yahoo.

Yahoo Bot · Tue May 10, 2011 9:33 pm

charset="US-ASCII"
Hello Grace:
It's secured because the IRS holds the money, not because there is a notice
of federal tax lien. Every tax debt more than 10 days old creates a lien,
the "silent lien" of IRC 6321. The bankruptcy trustee usually defeats the
silent lien, because it hasn't attached to specific property. But if the IRS
holds the debtor's refund, the silent lien attaches to the refund.
Possession perfects the lien. The courts routinely acknowledge the IRS's
right to setoff a prepetition debt with a prepetition refund. If the setoff
hadn't been completed prior to the bankruptcy filing, the IRS proof of claim
would list the 2006 debt as a secured claim, and it would be seeking relief
from stay to perform the setoff. Thus the setoff doesn't get it more than
it would in a chapter 7.
John D. Faucher
Hurlbett & Faucher
5743 Corsa Ave., Suite 208
Westlake Village, CA 91362
(818) 889-8080
Fax: (805) 367-4154
http://www.hurlbettfaucher.com/
3324 State Street, Suite O
Santa Barbara, CA 93105
(805) 963-9111
This electronic mail message and any attached files are confidential,
contain information intended for the exclusive use of the individual or
entity to whom it is addressed, and may be legally privileged. If you are
not the intended recipient, please immediately reply to John Faucher (at
818/889-8080 or john@hf-bklaw.com )
indicating that you received this message and then delete the message
without delay. Thank you for your cooperation.

Disclosure Under U.S. IRS Circular 230: The recipient may not use any tax
advice contained in this communication, including any attachments, for the
purpose of avoiding federal tax related penalties or promoting, marketing or
recommending to another party any particular transaction or matter.
On 5/10/11 8:21 PM, "R Grace Rodriguez" wrote:
charset="US-ASCII"
Hello Grace:It's secured because the IRS holds the money, not because there is a notice of federal tax lien. Every tax debt more than 10 days old creates a lien, the "silent lien" of IRC 6321. The bankruptcy trustee usually defeats the silent lien, because it hasn't attached to specific property. But if the IRS holds the debtor's refund, the silent lien attaches to the refund. Possession perfects the lien. The courts routinely acknowledge the IRS's right to setoff a prepetition debt with a prepetition refund. If the setoff hadn't been completed prior to the bankruptcy filing, the IRS proof of claim would list the 2006 debt as a secured claim, and it would be seeking relief from stay to perform the setoff. Thus the setoff doesn't get it more than it would in a chapter 7. John D. FaucherHurlbett & Faucher5743 Corsa Ave., Suite 208Westlake Village, CA 91362(818) 889-8080Fax: (805) 367-4154http://www.hurlbettfaucher.com/
The post was migrated from Yahoo.

Yahoo Bot · Tue May 10, 2011 8:21 pm

Hi John:
On what basis is the 2006 tax debt is secured? Its not priority debt, there
is no lien. In a chapter 7 this debt would be discharged under the
circumstances. So how can they grab the money they have a security interest
in and apply it to debt that is unsecured? That's what I don't get from
your post John. Mind you I agree under the Code they have the right to
swipe those funds, but they have to apply them to debt that is prioritized
if the want to keep it.
On Tue, May 10, 2011 at 4:23 PM, John D. Faucher
wrote:
>
>
> Grace:
> In a chapter 7, had the IRS not done the setoff prior to the bankruptcy
> petition, it would do so after the petition. Ideally, it would file a motion
> for relief from stay to allow the setoff of the refund (a prepetition
> security) against the prepetition debt. The 2006 tax debt is secured because
> the IRS has a security interest in the refund. This preference action is
> unavailing.
>
> John D. Faucher
> Hurlbett & Faucher
> 5743 Corsa Ave., Suite 208
> Westlake Village, CA 91362
> (818) 889-8080
> Fax: (805) 367-4154
> http://www.hurlbettfaucher.com/
>
> 3324 State Street, Suite O
> Santa Barbara, CA 93105
> (805) 963-9111
>
> *This electronic mail message and any attached files are confidential,
> contain information intended for the exclusive use of the individual or
> entity to whom it is addressed, and may be legally privileged. If you are
> not the intended recipient, please immediately reply to John Faucher (at
> 818/889-8080 or john@hf-bklaw.com) indicating that you received this
> message and then delete the message without delay. Thank you for your
> cooperation.
>
> Disclosure Under U.S. IRS Circular 230: The recipient may not use any tax
> advice contained in this communication, including any attachments, for the
> purpose of avoiding federal tax related penalties or promoting, marketing or
> recommending to another party any particular transaction or matter.
> *
>
> On 5/10/11 3:56 PM, "R Grace Rodriguez" wrote:
>
>
>
> Dear Friends:
>
> I have a client who owes as an example 5K for 2006 taxes which were
> assessed more than three years ago and return was filed and let's presume no
> intent to defraud and not tax lien
>
> He also owes 5K for 2007 taxes, and 5K 2008 taxes and 5K 2009 taxes.
>
> In 2010 Client is due a REFUND of 2500. He filed this Tax return on April
> 15, 2011. As of that date, IRS did not give a refund, but instead applied
> the 2500 in refund to the UNSECURED NON-PRIORITY TAXES for 2006.
>
> Since this was done 10 days before the filing of the bankruptcy it seems to
> me that this is a PREFERENCE as defined by Section 547
>
> (b) Except as provided in subsection (c) of this section, the *trustee may
> avoid any transfer of an interest of the debtor in property*--
>
> (1) to or for the benefit of a creditor;
>
> (2) for or on account of an antecedent debt owed by the debtor before such
> transfer was made;
>
> (3) made while the debtor was insolvent;
>
> (4) made--
>
> (A) *on or within 90 days before the date of the filing of the petition*;
> or
>
> (B) between ninety days and one year before the date of the filing of the
> petition, if such creditor at the time of such transfer was an insider; and
>
> (5) that enables such creditor to receive more than such creditor would
> receive if--
>
> (A) the case were a case under chapter 7 of this title;
>
> (B) the transfer had not been made; and
>
> (C) such creditor received payment of such debt to the extent provided by
> the provisions of this title.
>
> SO IN A CHAPTER 7 Case the 2006 taxes would have been discharged. So They
> should not have applied that refund to the UNSECURED NON-PRIORITY DEBT. But
> it says the TRUSTEE can avoid. Can debtor avoid in a 13? Do I do letter
> first asking them to apply the 2500 to the secured priority taxes then
> object to claim because they don't include the credit?
>
> Or is there some other obscure law lurking somewhere that I cannot see that
> says its perfectly fine for the IRS to do this?
>
>
>
> --
> R. Grace Rodriguez, Esq.
> OFF: (818) 734-7223
> CEL: (818) 554-9922
>
> NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice
> for ex parte Applications via voicemail or by email. You must comply with
> California Law and give notice to a person in my office during regular
> business hours.
>
> CONFIDENTIALITY STATEMENT: This message contains privileged and
> confidential information and is intended only for the individual named. If
> you are not the intended recipient you should not disseminate, distribute,
> store, print, copy or deliver this message. Please notify the sender
> immediately by e-mail if you have received this e-mail by mistake and delete
> this e-mail from your system.
>
>
>
R. Grace Rodriguez, Esq.
OFF: (818) 734-7223
CEL: (818) 554-9922
NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice
for ex parte Applications via voicemail or by email. You must comply with
California Law and give notice to a person in my office during regular
business hours.
CONFIDENTIALITY STATEMENT: This message contains privileged and
confidential information and is intended only for the individual named. If
you are not the intended recipient you should not disseminate, distribute,
store, print, copy or deliver this message. Please notify the sender
immediately by e-mail if you have received this e-mail by mistake and delete
this e-mail from your system.
Hi John:On what basis is the 2006 tax debt is secured? Its not priority debt, there is no lien. In a chapter 7 this debt would be discharged under the circumstances. So how can they grab the money they have a security interest in and apply it to debt that is unsecured? That's what I don't get from your post John. Mind you I agree under the Code they have the right to swipe those funds, but they have to apply them to debt that is prioritized if the want to keep it.
On Tue, May 10, 2011 at 4:23 PM, John D. Faucher <j.d.faucher@sbcglobal.net> wrote:
The post was migrated from Yahoo.

Yahoo Bot · Tue May 10, 2011 4:23 pm

charset="ISO-8859-1"
Grace:
In a chapter 7, had the IRS not done the setoff prior to the bankruptcy
petition, it would do so after the petition. Ideally, it would file a motion
for relief from stay to allow the setoff of the refund (a prepetition
security) against the prepetition debt. The 2006 tax debt is secured because
the IRS has a security interest in the refund. This preference action is
unavailing.
John D. Faucher
Hurlbett & Faucher
5743 Corsa Ave., Suite 208
Westlake Village, CA 91362
(818) 889-8080
Fax: (805) 367-4154
http://www.hurlbettfaucher.com/
3324 State Street, Suite O
Santa Barbara, CA 93105
(805) 963-9111
This electronic mail message and any attached files are confidential,
contain information intended for the exclusive use of the individual or
entity to whom it is addressed, and may be legally privileged. If you are
not the intended recipient, please immediately reply to John Faucher (at
818/889-8080 or john@hf-bklaw.com )
indicating that you received this message and then delete the message
without delay. Thank you for your cooperation.
Disclosure Under U.S. IRS Circular 230: The recipient may not use any tax
advice contained in this communication, including any attachments, for the
purpose of avoiding federal tax related penalties or promoting, marketing or
recommending to another party any particular transaction or matter.
On 5/10/11 3:56 PM, "R Grace Rodriguez" wrote:
>
>
>
>
>
> Dear Friends:
>
> I have a client who owes as an example 5K for 2006 taxes which were assessed
> more than three years ago and return was filed and let's presume no intent to
> defraud and not tax lien
>
> He also owes 5K for 2007 taxes, and 5K 2008 taxes and 5K 2009 taxes.
>
> In 2010 Client is due a REFUND of 2500. He filed this Tax return on April 15,
> 2011. As of that date, IRS did not give a refund, but instead applied the
> 2500 in refund to the UNSECURED NON-PRIORITY TAXES for 2006.
>
> Since this was done 10 days before the filing of the bankruptcy it seems to me
> that this is a PREFERENCE as defined by Section 547
>
> (b) Except as provided in subsection (c) of this section, the trustee may
> avoid any transfer of an interest of the debtor in property--
>>
>> (1) to or for the benefit of a creditor;
>>
>> (2) for or on account of an antecedent debt owed by the debtor before such
>> transfer was made;
>>
>> (3) made while the debtor was insolvent;
>>
>> (4) made--
>>>
>>> (A) on or within 90 days before the date of the filing of the petition; or
>>>
>>> (B) between ninety days and one year before the date of the filing of the
>>> petition, if such creditor at the time of such transfer was an insider; and
>>
>> (5) that enables such creditor to receive more than such creditor would
>> receive if--
>>>
>>> (A) the case were a case under chapter 7 of this title;
>>>
>>> (B) the transfer had not been made; and
>>>
>>> (C) such creditor received payment of such debt to the extent provided by
>>> the provisions of this title.
> SO IN A CHAPTER 7 Case the 2006 taxes would have been discharged. So They
> should not have applied that refund to the UNSECURED NON-PRIORITY DEBT. But
> it says the TRUSTEE can avoid. Can debtor avoid in a 13? Do I do letter
> first asking them to apply the 2500 to the secured priority taxes then object
> to claim because they don't include the credit?
>
> Or is there some other obscure law lurking somewhere that I cannot see that
> says its perfectly fine for the IRS to do this?
>
>
>
> --
> R. Grace Rodriguez, Esq.
> OFF: (818) 734-7223
> CEL: (818) 554-9922
>
> NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice for
> ex parte Applications via voicemail or by email. You must comply with
> California Law and give notice to a person in my office during regular
> business hours.
>
> CONFIDENTIALITY STATEMENT: This message contains privileged and confidential
> information and is intended only for the individual named. If you are not the
> intended recipient you should not disseminate, distribute, store, print, copy
> or deliver this message. Please notify the sender immediately by e-mail if you
> have received this e-mail by mistake and delete this e-mail from your system.
>
>
>
>
>
charset="ISO-8859-1"
Grace: In a chapter 7, had the IRS not done the setoff prior to the bankruptcy petition, it would do so after the petition. Ideally, it would file a motion for relief from stay to allow the setoff of the refund (a prepetition security) against the prepetition debt. The 2006 tax debt is secured because the IRS has a security interest in the refund. This preference action is unavailing. John D. FaucherHurlbett & Faucher5743 Corsa Ave., Suite 208Westlake Village, CA 91362(818) 889-8080Fax: (805) 367-4154http://www.hurlbettfaucher.com/3324 State Street, Suite OSanta Barbara, CA 93105(805) 963-9111This electronic mail message and any attached files are confidential, contain information intended for the exclusive use of the individual or entity to whom it is addressed, and may be legally privileged. If you are not the intended recipient, please immediately reply to John Faucher (at 818/889-8080 or john@hf-bklaw.com) indicating that you received this message and then delete the message without delay. Thank you for your cooperation. Disclosure Under U.S. IRS Circular 230: The recipient may not use any tax advice contained in this communication, including any attachments, for the purpose of avoiding federal tax related penalties or promoting, marketing or recommending to another party any particular transaction or matter.On 5/10/11 3:56 PM, "R Grace Rodriguez" <rgracelaw@gmail.com> wrote:
Dear Friends:I have a client who owes as an example 5K for 2006 taxes which were assessed more than three years ago and return was filed and let's presume no intent to defraud and not tax lienHe also owes 5K for 2007 taxes, and 5K 2008 taxes and 5K 2009 taxes.In 2010 Client is due a REFUND of 2500. He filed this Tax return on April 15, 2011. As of that date, IRS did not give a refund, but instead applied the 2500 in refund to the UNSECURED NON-PRIORITY TAXES for 2006.Since this was done 10 days before the filing of the bankruptcy it seems to me that this is a PREFERENCE as defined by Section 547
The post was migrated from Yahoo.