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X-eGroups-Edited-By: easky1
Thank you for the very detailed and helpful information!
Law Office of Jeffrey A. Cancilla & Associates
15355 Brookhurst St., Suite 202
Westminster, CA 92683
714-418-9735
714-418-9738 (fax)
.
Thank you for the very detailed and helpful information
The post was migrated from Yahoo.
tax discharge where debtor in payment plan
Dear Jeff,
I apologize for not giving you this information sooner, but I've let my emails fall behind a bit during the last few days.
I. Ordering Federal Income Tax Transcripts
The IRS practitioner hotline is 866.860.4259. The procedure for requesting a tax transcript for a given tax year is as follows:
1. Complete IRS forms 2848 (Power of Attorney, available at http://www.irs.gov/pub/irs-pdf/f2848.pdf) and 8821 (Tax Information Authorization, available at http://www.irs.gov/pub/irs-pdf/f8821.pdf). These forms can be filled out on the screen, i.e., the forms are fillable
PDF files. Much more information and additional forms, including the forms necessary to do offers-in-compromise, are available at
www.irs.gov,
2. Call the hotline number and tell the agent that you want to order a tax transcript. The agent will then give you a fax number which you
enter on your fax cover sheet - the fax number has been different each time we have ordered transcripts, which is why I can't give you
"the" fax number, and
3. Stay on the line until the agent has confirmed receipt of your fax and has attempted to fax the transcript back to you..
You should tell the agent that you want the MFTRA-X transcript. It's the one that has the complete activity history for the tax year in question; i.e., the date the return was filed, and the dates of each event associated with the given tax year.
Most of the time we receive the faxed transcript - one for each tax year, faxed one at a time (so make sure your fax machine will be free for a while) - within a few minutes. The IRS will make three attempts within the 48 hour period after the phone call. If all of these attempts fail, they will mail the transcript to you.
You will need to obtain a CAF number from the IRS before you can do all of this. The first time I placed a transcript order the agent asked for my CAF number. I told her I didn't have one, so she assigned one to me on the spot. This was a few years ago, so they may have a more formalized process now - especially in light of the recent changes in OIC requirements. Your CAF number is your practitioner identification number which you will use each time you order transcripts.
Important Caveat: Do NOT say that you are ordering the transcript for bankruptcy purposes. If you do, some of the IRS agents will not attempt to fax the transcript and instead will mail it to you - meaning that it could take quite a while to get the transcript. Their reason: the practitioner hotline is for TAX practitioners, not bankruptcy practitioners. Having said that, most of the IRS people I have dealt with are quite reasonable, and are willing to fax the transcript even if they learn that it is for bankruptcy purposes. But on occasion I have had problems if I have inadvertently said that the order is for bankruptcy.
As a general rule, if I even suspect that a client may have dischargeable tax debt I order the transcript to see if the 3-year, 2-year, 240-day rules are satisfied. This is especially important when determining when to file the bankruptcy papers. You don't want to file too soon if you're waiting for the 240-day rule to be satisfied, since that's the only rule that you won't know has been satisfied until you've actually looked at the transcript.
II. Ordering California State Income Tax Transcripts
The same sort of procedure can be used with the Franchise Tax Board (use the same CAF number that the IRS will issue to you). After all, state income taxes are subject to the same 3-year, 2-year, 240-day rules of dischargeability. The FTB practitioner hotline is 916.845.7057, and their web address is http://www.ftb.ca.gov. Their site has a "Tax Professionals" hyperlink as a tab at the top of the page, and the Tax Practioners page has a lot of good information you can use not only in bankruptcy cases, but also in negotiations and OICs.
The FTB Power of Attorney form is Form FTB 3520 available at http://www.ftb.ca.gov/forms/misc/3520.pdf (fax the completed POA form to 916.845.0523). A list of all FTB and IRS forms is available at http://www.ftb.ca.gov/forms/05_forms/05_1006.pdf, where you will learn that you can use the IRS Form 8821 for state tax information authorization. In the alternative, you can use FTB 3520 for both establishing POA and ordering California tax transcripts.
III. Dealing With The Board Of Equalization
If you represent a client with a business, who is having trouble with either the Board Of Equalization (say, for failure to pay payroll taxes) or the Employment Development Department (say, for receiving overpayments of unemployment compensation), the appropriate POA form is Form BOE 392, available at http://www.boe.ca.gov/pdf/boe392.pdf.
IV. Stopping Unwanted Mailings
One final note is in order. Once you have the POA on file for a given client, the taxing authority will send you all mailings it intends your client to receive. One way to avoid this nuisance is to specify in the relevant form that you are not to receive these mailing (e.g., for a California state income tax matter check box 7 of FTB 3520). If you don't put in this restriction, then unless you want to keep getting this mail, you will eventually have to send them something stating that you no longer represent the taxpayer.
I hope you find this useful.
All the best,
Nick
Nicholas Gebelt, Ph.D., J.D.
Law Offices of Nicholas Gebelt
15150 Hornell Street
Whittier, CA 90604
Phone: 562.777.9159
FAX: 562.946.1365
Web: www.goodbye2debt.com
Email: mn.gebelt@verizon.net
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@goodbye2debt.com and destroy the original message and all copies.
----- Original Message -----
To: cdcbaa@yahoogroups.com
Sent: Tuesday, April 08, 2008 1:23 PM
Subject: [cdcbaa] Re: tax discharge where debtor in payment plan
Thanks Nicholas,
The paperwork I have indicate clients entered an "Instalment
Agreement" for back 2002 and 2003 taxes, not an OIC. 2001 and 2002
taxes Clients think they entered agreement in 2004 or 2005. Does
anyone know how such an agreement affects 3 year discharge rule, if
at all? Also, what is the fax or phone # whereby I can order tax
transcripts? Thanks in advance.
--- In cdcbaa@yahoogroups.com, "Nicholas Gebelt"
wrote:
>
> Dear Jeff,
>
> Be careful about the 240-day rule. If the payment plan your
clients are in is an offer in compromise, the 240-day period might
never have passed because of 11 U.S.C. 507(a)(8)(A)(ii). For
example, if they entered the OIC after only 235 days had elapsed,
then they are stuck at the 235-day mark and may never reach the 240-
day trigger point.
>
> Good luck,
>
> Nick
>
> Nicholas Gebelt, Ph.D., J.D.
> Law Offices of Nicholas Gebelt
> 15150 Hornell Street
> Whittier, CA 90604
> Phone: 562.777.9159
> FAX: 562.946.1365
> Web: www.goodbye2debt.com
> Email: mn.gebelt@...
>
>
> 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@... and destroy the original message and all copies.
>
>
> ----- Original Message -----
> To: cdcbaa@yahoogroups.com
> Sent: Thursday, April 03, 2008 4:37 PM
> Subject: [cdcbaa] tax discharge where debtor in payment plan
>
>
> Prospective chap 7 client owes back federal income taxes, some of
which
> were incurred prior to 2005 and might be dischargeable. However,
client
> entered into a payment plan w/ the IRS, and has been making
monthly
> payments on the back taxes. I don't have full details yet on the
taxes,
> but assume that none are subject to the 10 year statute of
limitations
> and that none were "assessed" in the past 240 days. Thanks in
> advance.
>
The post was migrated from Yahoo.
Thanks Nicholas,
The paperwork I have indicate clients entered an "Instalment
Agreement" for back 2002 and 2003 taxes, not an OIC. 2001 and 2002
taxes Clients think they entered agreement in 2004 or 2005. Does
anyone know how such an agreement affects 3 year discharge rule, if
at all? Also, what is the fax or phone # whereby I can order tax
transcripts? Thanks in advance.
wrote:
>
> Dear Jeff,
>
> Be careful about the 240-day rule. If the payment plan your
clients are in is an offer in compromise, the 240-day period might
never have passed because of 11 U.S.C. 507(a)(8)(A)(ii). For
example, if they entered the OIC after only 235 days had elapsed,
then they are stuck at the 235-day mark and may never reach the 240-
day trigger point.
>
> Good luck,
>
> Nick
>
> Nicholas Gebelt, Ph.D., J.D.
> Law Offices of Nicholas Gebelt
> 15150 Hornell Street
> Whittier, CA 90604
> Phone: 562.777.9159
> FAX: 562.946.1365
> Web: www.goodbye2debt.com
> Email: mn.gebelt@...
>
>
> 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@... and destroy the original message and all copies.
>
>
> ----- Original Message -----
> To: cdcbaa@yahoogroups.com
> Sent: Thursday, April 03, 2008 4:37 PM
> Subject: [cdcbaa] tax discharge where debtor in payment plan
>
>
> Prospective chap 7 client owes back federal income taxes, some of
which
> were incurred prior to 2005 and might be dischargeable. However,
client
> entered into a payment plan w/ the IRS, and has been making
monthly
> payments on the back taxes. I don't have full details yet on the
taxes,
> but assume that none are subject to the 10 year statute of
limitations
> and that none were "assessed" in the past 240 days. Thanks in
> advance.
>
The post was migrated from Yahoo.
X-eGroups-Edited-By: easky1
Dennis,
2005 taxes were timely filed. There is a letter from IRS dated 9/07
saying that based on a recent audit, client's 2005 taxes increased,
plus interest, and she now owes $X. Not sure if 9/07 would be the
date of "assessment" for purposes of that 240 day rule.
2004 taxes were timely filed. Letter from IRS dated 8/07 saying they
intended to levy on certain assets if she didn't pay balance owing
for 2004 taxes.
2002 and 2003 taxes were both timely filed. I have a monthly
statement dated 9/07 reminding client to make her monthly $300
payment to IRS for back taxes from 2002 and 2003. Client remembers
entering into a payment plan starting 2004 or 2005. Based on the
monthly statement, that payment plan covers 2002 and 2003 taxes. I
don't know if she has entered into payment plans covering 2004 or
2005 taxes.
This is all I know so far. It may be that I need to order tax
transcripts from IRS, in which case I would ask someone for the
current contact info. for IRS for ordering transcripts. Meanwhile,
I'm wondering how the entering into of a payment plan might affect a
discharge of taxes, perhaps by tolling the 3 year period? Sorry for
the incomplete facts, but that's all I know for now. Thanks again
for your assistance.
>
> Jeff:
>
> need more facts.
> What tax years?
> When were the tax returns (year by year listing
> please) filed?
>
> Know of no statute which extends the ten years due to
> a payment plan. Does anyone else?
>
> dennis
> --- jeffreycancilla wrote:
The post was migrated from Yahoo.
Dennis,
2005 taxes were timely filed. There is a letter from IRS dated 9/07
saying that based on a recent audit, client's 2005 taxes increased,
plus interest, and she now owes $X. Not sure if 9/07 would be the
date of "assessment" for purposes of that 240 day rule.
2004 taxes were timely filed. Letter from IRS dated 8/07 saying they
intended to levy on certain assets if she didn't pay balance owing
for 2004 taxes.
2002 and 2003 taxes were both timely filed. I have a monthly
statement dated 9/07 reminding client to make her monthly $300
payment to IRS for back taxes from 2002 and 2003. Client remembers
entering into a payment plan starting 2004 or 2005. Based on the
monthly statement, that payment plan covers 2002 and 2003 taxes. I
don't know if she has entered into payment plans covering 2004 or
2005 taxes.
This is all I know so far. It may be that I need to order tax
transcripts from IRS, in which case I would ask someone for the
current contact info. for IRS for ordering transcripts. Meanwhile,
I'm wondering how the entering into of a payment plan might affect a
discharge of taxes, perhaps by tolling the 3 year period? Sorry for
the incomplete facts, but that's all I know for now. Thanks again
for your assistance.
>
> Jeff:
>
> need more facts.
> What tax years?
> When were the tax returns (year by year listing
> please) filed?
>
> Know of no statute which extends the ten years due to
> a payment plan. Does anyone else?
>
> dennis
> --- jeffreycancilla wrote:
The post was migrated from Yahoo.
Dear Jeff,
Be careful about the 240-day rule. If the payment plan your clients are in is an offer in compromise, the 240-day period might never have passed because of 11 U.S.C. 507(a)(8)(A)(ii). For example, if they entered the OIC after only 235 days had elapsed, then they are stuck at the 235-day mark and may never reach the 240-day trigger point.
Good luck,
Nick
Nicholas Gebelt, Ph.D., J.D.
Law Offices of Nicholas Gebelt
15150 Hornell Street
Whittier, CA 90604
Phone: 562.777.9159
FAX: 562.946.1365
Web: www.goodbye2debt.com
Email: mn.gebelt@verizon.net
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@goodbye2debt.com and destroy the original message and all copies.
----- Original Message -----
To: cdcbaa@yahoogroups.com
Sent: Thursday, April 03, 2008 4:37 PM
Subject: [cdcbaa] tax discharge where debtor in payment plan
Prospective chap 7 client owes back federal income taxes, some of which
were incurred prior to 2005 and might be dischargeable. However, client
entered into a payment plan w/ the IRS, and has been making monthly
payments on the back taxes. I don't have full details yet on the taxes,
but assume that none are subject to the 10 year statute of limitations
and that none were "assessed" in the past 240 days. Thanks in
advance.
The post was migrated from Yahoo.
Prospective chap 7 client owes back federal income taxes, some of which
were incurred prior to 2005 and might be dischargeable. However, client
entered into a payment plan w/ the IRS, and has been making monthly
payments on the back taxes. I don't have full details yet on the taxes,
but assume that none are subject to the 10 year statute of limitations
and that none were "assessed" in the past 240 days. Thanks in
advance.
The post was migrated from Yahoo.