.jpg)
Taxes: How to get Trustee disbursements applied
You have no choice on application unless Plan requires otherwise. These are
involuntary payments - IRS chooses application.
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.
Mark J. Markus
Sent: Saturday, June 26, 2010 6:45 PM
To: cdcbaa@yahoogroups.com
Subject: Re: [cdcbaa] Re: Taxes: How to get Trustee disbursements applied
first to pri...
But that's how it gets DISBURSED...not how the creditor has to apply it,
right? Or are you saying I can argue based on the bankruptcy code that the
payment the Trustee made was for secured or priority and, therefore, must be
applied as such?
Maybe I'm missing something here.
On 6/26/2010 6:23 PM, robert90701@ aol.com
wrote:
Payments received through the bankruptcy proceeding are applied as follows
First to liabilities listed as secured; Then to unsecured priority; and
Lastly, to the claim's unsecured general class unless 1) a court order
2)confirmed plan states to contrary or
3) in governments best interest to do otherwise.
Disclaimer
Although the above response is believed to be accurate, it should not be
relied upon as any type of legal advice. It is intended to educate the
reader and a more definite answer should be based on a consultation with a
lawyer. No attorney client relation is formed with me without a written
contract.
Good Luck starts with a strategy and a plan.
Robert J. Suhajda, MS,CPA
Attorney
17721 Norwalk Blvd. #43
Artesia, CA 90701
562-924-8922
Former financial auditor and controller. Admitted to US Tax Court, Income
Tax, Bankruptcy, IRS representation, Fiduciary income tax returns, Estate
and Gift tax returns
In a message dated 6/26/2010 5:10:23 P.M. Pacific Daylight Time,
bklawr@yahoo. com writes:
Thanks, Jeff. I don't see how that would help. I can get the Trustee to
"designate" if that would help. But I think Dennis said that even if I can
get the Trustee to specify what it is being paid for, then that won't result
in the IRS applying it the way we want. Sounds like this is purely up to
the IRS, unless anyone has different experience.
On 6/26/2010 3:17 PM, Jeffery B Smith wrote:
Mark:
Would it help, since you are filing the claims, to file separate claims for
each category? Identify the secured claims and file a POC that explains the
basis for the secured status. Then file a POC for the unsecured priority
claims, if there are some that exceed the collateral, and take the time to
explain the basis of that designation. If anything is left, file a third
POC designating the balance as unsecured, non-priority claims. When the
Trustee goes to pay claims he will list them as such on his final report,
which must be approved by the court and, if I recall, the COURT issues an
ORDER approving the distribution, by claim. After the case is closed, you
and I both know that the IRS will claim to have applied the payments some
other way, and claim the taxes that were paid were the unsecured
non-priority taxes. So, the IRS will move later (post-discharge) to levy or
garnish. THEN, you have to re-open the case, and ask for an injunction.
But you will get it if the final report and order are clear. I hope you
have a good trustee who appreciates you bringing him/her an asset case, and
cooperating with the administration of that case. If you work with, and not
against the trustee, and explain what you want to accomplish, my experience
is that they will help you by making the final report VERY clear about what
is being paid for what.
The key to this is that you said YOU will file the claims for the IRS. Its
gonna get tricky if the IRS files their own claims later. Then you might
have to object to their claims to make sure they have correctly categorized
each claim as secured/unsecured, and then priority/non priority. Very
tricky, but I think you can do it. Good luck! P.S. Had fun on the course
at the tourney with you a few weeks ago!
-Jeffrey B. Smith**
CURD, GALINDO & SMITH, L.L.P.
301 East Ocean Blvd. #1700
Long Beach, CA 90802
(562) 624-1177
(562) 624-1178 fax
(310) 993-6560 cellular
www.expertbk. com
**Certified By The State Bar
Of California As A Specialist
In Bankruptcy Law
Message
You have no choice on
application unless Plan requires otherwise. These are involuntary payments
- IRS chooses application.
David A.
Tilem
Certified Bankruptcy
Specialist*
The post was migrated from Yahoo.
excellent, thanks!
*************************
Mark J. Markus
Law Office of Mark J. Markus
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)509-1460 (fax)
web: http://www.bklaw.com/
This Firm is a Qualified Federal Debt Relief Agency (see what this means at http://bklaw.com/bankruptcy-blog/2008/0 ... efinition/)
________________________________________________
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.
On 6/27/2010 10:28 AM, John Faucher wrote:
>
>
> Here's what the IRS says about distributing estate property in a
> chapter 7: http://www.irs.gov/irm/part5/irm_05-009-006.html, see
> particularly 5.9.6.18.
> It points to 11 USC 726, and says that the distribution goes first to
> priority, then to general unsecured debts.
> While payments in bankruptcy are not voluntary, and the IRS generally
> keeps the right to apply involuntary payments as it sees fit, I don't
> see that it could receive payment under 11 USC 726 for a priority
> claim but apply that payment to a non-priority claim.
> This appears to be the magical way that Mark J. Markus was looking for.
>
> - John D. Faucher
>
>
> On 6/26/10 6:53 PM, "Dennis McGoldrick" wrote:
>
>
>
>
>
>
> In my experience, the IRS applies payments to the oldest
> (dischargeable) liability. Because their liens survive bk, it is
> in their best interest to apply payments to dischargeable debts.
>
> Robert, do you have some authority for your statement? If you do
> I'd like to read it.
>
> Dennis McGoldrick
> 350 S. Crenshaw Bl., #A207B
> Torrance, CA 90503
>
> On Jun 26, 2010, at 6:23 PM, robert90701@aol.com wrote:
>
>
>
>
> Payments received through the bankruptcy proceeding are
> applied as follows First to liabilities listed as secured;
> Then to unsecured priority; and Lastly, to the claim's
> unsecured general class unless 1) a court order 2)confirmed
> plan states to contrary or
>
> 3) in governments best interest to do otherwise.
>
>
> *Disclaimer *
>
> *Although the above response is believed to be accurate, it
> should not be relied upon as any type of legal advice. It is
> intended to educate the reader and a more definite answer
> should be based on a consultation with a lawyer. No attorney
> client relation is formed with me without a written contract.
> *
> *Good Luck starts with a strategy and a plan.
> *
> *Robert J. Suhajda, MS,CPA
> Attorney
> 17721 Norwalk Blvd. #43
> Artesia, CA 90701
> 562-924-8922
> *
> *Former financial auditor and controller. Admitted to US Tax
> Court, Income Tax, Bankruptcy, IRS representation, Fiduciary
> income tax returns, Estate and Gift tax returns
> *
>
>
> In a message dated 6/26/2010 5:10:23 P.M. Pacific Daylight
> Time, bklawr@yahoo.com writes:
>
>
>
>
> Thanks, Jeff. I don't see how that would help. I can get
> the Trustee to "designate" if that would help. But I
> think Dennis said that even if I can get the Trustee to
> specify what it is being paid for, then that won't result
> in the IRS applying it the way we want. Sounds like
> this is purely up to the IRS, unless anyone has different
> experience.
>
>
> On 6/26/2010 3:17 PM, Jeffery B Smith wrote:
>
>
>
>
> Mark:
>
>
> Would it help, since */you/* are filing the claims,
> to file separate claims for each category? Identify
> the secured claims and file a POC that explains the
> basis for the secured status. Then file a POC for
> the unsecured priority claims, if there are some that
> exceed the collateral, and take the time to explain
> the basis of that designation. If anything is left,
> file a third POC designating the balance as
> unsecured, non-priority claims. When the Trustee goes
> to pay claims he will list them as such on his final
> report, which must be approved by the court and, if I
> recall, the COURT issues an ORDER approving the
> distribution, by claim. After the case is closed, you
> and I both know that the IRS will claim to have
> applied the payments some other way, and claim the
> taxes that were paid were the unsecured non-priority
> taxes. So, the IRS will move later (post-discharge)
> to levy or garnish. THEN, you have to re-open the
> case, and ask for an injunction. But you will get it
> if the final report and order are clear. I hope you
> have a good trustee who appreciates you bringing
> him/her an asset case, and cooperating with the
> administration of that case. If you work with, and
> not against the trustee, and explain what you want to
> accomplish, my experience is that they will help you
> by making the final report VERY clear about what is
> being paid for what.
>
>
> The key to this is that you said YOU will file the
> claims for the IRS. Its gonna get tricky if the IRS
> files their own claims later. Then you might have to
> object to their claims to make sure they have
> correctly categorized each claim as
> secured/unsecured, and then priority/non priority.
> Very tricky, but I think you can do it. Good luck!
> P.S. Had fun on the course at the tourney with you a
> few weeks ago!
>
>
>
>
>
> -Jeffrey B. Smith/**
> /
> CURD, GALINDO & SMITH, L.L.P.
>
> 301 East Ocean Blvd. #1700
>
> Long Beach, CA 90802
>
> (562) 624-1177
>
> (562) 624-1178 fax
>
> (310) 993-6560 cellular
>
> www.expertbk.com
>
>
> /**Certified By The State Bar
> /
> /Of California As A Specialist
> /
> /In Bankruptcy Law
> /
>
>
>
>
>
>
>
>
>
> Reply to *sender* [cdcbaa] Re: Taxes: How to get Trustee disbursements applied
> first to pri...> | Reply to *group*
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>
The post was migrated from Yahoo.
charset="ISO-8859-1"
Heres what the IRS says about distributing estate property in a chapter 7:
http://www.irs.gov/irm/part5/irm_05-009-006.html, see particularly 5.9.6.18.
It points to 11 USC 726, and says that the distribution goes first to
priority, then to general unsecured debts.
While payments in bankruptcy are not voluntary, and the IRS generally keeps
the right to apply involuntary payments as it sees fit, I dont see that it
could receive payment under 11 USC 726 for a priority claim but apply that
payment to a non-priority claim.
This appears to be the magical way that Mark J. Markus was looking for.
- John D. Faucher
On 6/26/10 6:53 PM, "Dennis McGoldrick" wrote:
>
>
>
>
>
> In my experience, the IRS applies payments to the oldest (dischargeable)
> liability. Because their liens survive bk, it is in their best interest to
> apply payments to dischargeable debts.
>
> Robert, do you have some authority for your statement? If you do I'd like to
> read it.
>
> Dennis McGoldrick
> 350 S. Crenshaw Bl., #A207B
> Torrance, CA 90503
>
> On Jun 26, 2010, at 6:23 PM, robert90701@aol.com wrote:
>
>>
>>
>>
>> Payments received through the bankruptcy proceeding are applied as follows
>> First to liabilities listed as secured; Then to unsecured priority; and
>> Lastly, to the claim's unsecured general class unless 1) a court order
>> 2)confirmed plan states to contrary or
>>
>> 3) in governments best interest to do otherwise.
>>
>>
>>
>> Disclaimer
>> Although the above response is believed to be accurate, it should not be
>> relied upon as any type of legal advice. It is intended to educate the
>> reader and a more definite answer should be based on a consultation with a
>> lawyer. No attorney client relation is formed with me without a written
>> contract.
>>
>> Good Luck starts with a strategy and a plan.
>>
>> Robert J. Suhajda, MS,CPA
>> Attorney
>> 17721 Norwalk Blvd. #43
>> Artesia, CA 90701
>> 562-924-8922
>>
>> Former financial auditor and controller. Admitted to US Tax Court, Income
>> Tax, Bankruptcy, IRS representation, Fiduciary income tax returns, Estate
>> and Gift tax returns
>>
>>
>>
>> In a message dated 6/26/2010 5:10:23 P.M. Pacific Daylight Time,
>> bklawr@yahoo.com writes:
>>>
>>>
>>>
>>> Thanks, Jeff. I don't see how that would help. I can get the Trustee to
>>> "designate" if that would help. But I think Dennis said that even if I can
>>> get the Trustee to specify what it is being paid for, then that won't
>>> result in the IRS applying it the way we want. Sounds like this is purely
>>> up to the IRS, unless anyone has different experience.
>>>
>>>
>>> On 6/26/2010 3:17 PM, Jeffery B Smith wrote:
>>>>
>>>>
>>>>
>>>> Mark:
>>>>
>>>>
>>>> Would it help, since you are filing the claims, to file separate claims
>>>> for each category? Identify the secured claims and file a POC that
>>>> explains the basis for the secured status. Then file a POC for the
>>>> unsecured priority claims, if there are some that exceed the collateral,
>>>> and take the time to explain the basis of that designation. If anything
>>>> is left, file a third POC designating the balance as unsecured,
>>>> non-priority claims. When the Trustee goes to pay claims he will list
>>>> them as such on his final report, which must be approved by the court and,
>>>> if I recall, the COURT issues an ORDER approving the distribution, by
>>>> claim. After the case is closed, you and I both know that the IRS will
>>>> claim to have applied the payments some other way, and claim the taxes
>>>> that were paid were the unsecured non-priority taxes. So, the IRS will
>>>> move later (post-discharge) to levy or garnish. THEN, you have to re-open
>>>> the case, and ask for an injunction. But you will get it if the final
>>>> report and order are clear. I hope you have a good trustee who
>>>> appreciates you bringing him/her an asset case, and cooperating with the
>>>> administration of that case. If you work with, and not against the
>>>> trustee, and explain what you want to accomplish, my experience is that
>>>> they will help you by making the final report VERY clear about what is
>>>> being paid for what.
>>>>
>>>>
>>>> The key to this is that you said YOU will file the claims for the IRS.
>>>> Its gonna get tricky if the IRS files their own claims later. Then you
>>>> might have to object to their claims to make sure they have correctly
>>>> categorized each claim as secured/unsecured, and then priority/non
>>>> priority. Very tricky, but I think you can do it. Good luck! P.S. Had
>>>> fun on the course at the tourney with you a few weeks ago!
>>>>
>>>>
>>>>
>>>>
>>>>
>>>> -Jeffrey B. Smith**
>>>>
>>>> CURD, GALINDO & SMITH, L.L.P.
>>>>
>>>> 301 East Ocean Blvd. #1700
>>>>
>>>> Long Beach, CA 90802
>>>>
>>>> (562) 624-1177
>>>>
>>>> (562) 624-1178 fax
>>>>
>>>> (310) 993-6560 cellular
>>>>
>>>> www.expertbk.com
>>>>
>>>>
>>>> **Certified By The State Bar
>>>>
>>>> Of California As A Specialist
>>>>
>>>> In Bankruptcy Law
>>>>
>>>>
>>>
>>>
>>>
>>
>>
>>
>>
>>
>> Reply to sender > Taxes: How to get Trustee disbursements applied first to pri...> | Reply
>> to group > to get Trustee disbursements applied first to pri...> | Reply via web post
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>>
>> MARKETPLACE
>>
>>
>>
>>
>> Stay on top of your group activity without leaving the page you're on - Get
>> the Yahoo! Toolbar now.
>> > groups/S1705001180:MKP1/YYAHOO/EXP1277609073/Lbda359ee-818a-11df-ab11-d37
>> 9f0af21dd/Bk_g_DNGDJGU-/J1277601873188648/KcDQPmoiBO_HhW2Evn5NTiw/A606025
>> 5/R0/SIG1194m4keh/*http://us.toolbar.yahoo.com/?.cpdlgrpj>
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>> > groups/S1705001180:MKP1/YYAHOO/EXP1277609073/Lbda359ee-818a-11df-ab11-d37
>> 9f0af21dd/BlPg_DNGDJGU-/J1277601873188648/KcDQPmoiBO_HhW2Evn5NTiw/A607881
>> 2/R0/SIG114ae4ln1/*http://dogandcatanswers.yahoo.com/>
>>
>>
>>
>>
>>
>>
>> Get real-time World Cup coverage on the Yahoo! Toolbar. Download now to win
>> a signed team jersey!
>> > groups/S1705001180:MKP1/YYAHOO/EXP1277609073/Lbda359ee-818a-11df-ab11-d37
>> 9f0af21dd/Blfg_DNGDJGU-/J1277601873188648/KcDQPmoiBO_HhW2Evn5NTiw/A609398
>> 3/R0/*http://us.lrd.yahoo.com/_ylcX3oDMTFnaW5 ... leHQgTGlua
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>>
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>>
charset="ISO-8859-1"
Re: [cdcbaa] Re: Taxes: How to get Trustee disbursements applied first to pri...
Here’s what the IRS says about distributing estate property in a chapter 7: http://www.irs.gov/irm/part5/irm_05-009-006.html, see particularly 5.9.6.18.
It points to 11 USC 726, and says that the distribution goes first to priority, then to general unsecured debts.
While payments in bankruptcy are not voluntary, and the IRS generally keeps the right to apply involuntary payments as it sees fit, I don’t see that it could receive payment under 11 USC 726 for a priority claim but apply that payment to a non-priority claim.
This appears to be the magical way that Mark J. Markus was looking for.
- John D. Faucher
On 6/26/10 6:53 PM, "Dennis McGoldrick" <easky1@yahoo.com> wrote:
In my experience, the IRS applies payments to the oldest (dischargeable) liability. Because their liens survive bk, it is in their best interest to apply payments to dischargeable debts.
Robert, do you have some authority for your statement? If you do I'd like to read it.
Dennis McGoldrick
350 S. Crenshaw Bl., #A207B
Torrance, CA 90503
On Jun 26, 2010, at 6:23 PM, robert90701@aol.com wrote:
The post was migrated from Yahoo.
But that's how it gets DISBURSED...not how the creditor has to apply it,
right? Or are you saying I can argue based on the bankruptcy code that
the payment the Trustee made was for secured or priority and, therefore,
must be applied as such?
Maybe I'm missing something here.
On 6/26/2010 6:23 PM, robert90701@aol.com wrote:
>
>
> Payments received through the bankruptcy proceeding are applied as
> follows First to liabilities listed as secured; Then to unsecured
> priority; and Lastly, to the claim's unsecured general class unless 1)
> a court order 2)confirmed plan states to contrary or
>
> 3) in governments best interest to do otherwise.
>
> *Disclaimer*
>
> *Although the above response is believed to be accurate, it should not
> be relied upon as any type of legal advice. It is intended to educate
> the reader and a more definite answer should be based on a
> consultation with a lawyer. No attorney client relation is formed with
> me without a written contract.*
>
> *Good Luck starts with a strategy and a plan. *
>
> **
>
> *Robert J. Suhajda, MS,CPA*
>
> *Attorney*
>
> *17721 Norwalk Blvd. #43***
>
> *Artesia**, CA 90701***
>
> *562-924-8922*
>
> *Former financial auditor and controller. Admitted to US Tax Court,
> Income Tax, Bankruptcy, IRS representation, Fiduciary income tax
> returns, Estate and Gift tax returns*
>
> In a message dated 6/26/2010 5:10:23 P.M. Pacific Daylight Time,
> bklawr@yahoo.com writes:
>
> Thanks, Jeff. I don't see how that would help. I can get the
> Trustee to "designate" if that would help. But I think Dennis
> said that even if I can get the Trustee to specify what it is
> being paid for, then that won't result in the IRS applying it the
> way we want. Sounds like this is purely up to the IRS, unless
> anyone has different experience.
>
>
> On 6/26/2010 3:17 PM, Jeffery B Smith wrote:
>
>> Mark:
>>
>> Would it help, since */you/* are filing the claims, to file
>> separate claims for each category? Identify the secured claims
>> and file a POC that explains the basis for the secured status.
>> Then file a POC for the unsecured priority claims, if there are
>> some that exceed the collateral, and take the time to explain the
>> basis of that designation. If anything is left, file a third POC
>> designating the balance as unsecured, non-priority claims. When
>> the Trustee goes to pay claims he will list them as such on his
>> final report, which must be approved by the court and, if I
>> recall, the COURT issues an ORDER approving the distribution, by
>> claim. After the case is closed, you and I both know that the
>> IRS will claim to have applied the payments some other way, and
>> claim the taxes that were paid were the unsecured non-priority
>> taxes. So, the IRS will move later (post-discharge) to levy or
>> garnish. THEN, you have to re-open the case, and ask for an
>> injunction. But you will get it if the final report and order
>> are clear. I hope you have a good trustee who appreciates you
>> bringing him/her an asset case, and cooperating with the
>> administration of that case. If you work with, and not against
>> the trustee, and explain what you want to accomplish, my
>> experience is that they will help you by making the final report
>> VERY clear about what is being paid for what.
>>
>> The key to this is that you said YOU will file the claims for the
>> IRS. Its gonna get tricky if the IRS files their own claims
>> later. Then you might have to object to their claims to make
>> sure they have correctly categorized each claim as
>> secured/unsecured, and then priority/non priority. Very tricky,
>> but I think you can do it. Good luck! P.S. Had fun on the
>> course at the tourney with you a few weeks ago!
>>
>> -Jeffrey B. Smith/**/
>>
>> CURD, GALINDO & SMITH, L.L.P.
>>
>> 301 East Ocean Blvd. #1700
>>
>> Long Beach, CA 90802
>>
>> (562) 624-1177
>>
>> (562) 624-1178 fax
>>
>> (310) 993-6560 cellular
>>
>> www.expertbk.com
>>
>> /**Certified By The State Bar/
>>
>> /Of California As A Specialist /
>>
>> /In Bankruptcy Law/
>>
>
>
>
The post was migrated from Yahoo.
Thanks, Jeff. I don't see how that would help. I can get the Trustee
to "designate" if that would help. But I think Dennis said that even if
I can get the Trustee to specify what it is being paid for, then that
won't result in the IRS applying it the way we want. Sounds like this
is purely up to the IRS, unless anyone has different experience.
On 6/26/2010 3:17 PM, Jeffery B Smith wrote:
>
>
> Mark:
>
> Would it help, since */you/* are filing the claims, to file separate
> claims for each category? Identify the secured claims and file a POC
> that explains the basis for the secured status. Then file a POC for
> the unsecured priority claims, if there are some that exceed the
> collateral, and take the time to explain the basis of that
> designation. If anything is left, file a third POC designating the
> balance as unsecured, non-priority claims. When the Trustee goes to
> pay claims he will list them as such on his final report, which must
> be approved by the court and, if I recall, the COURT issues an ORDER
> approving the distribution, by claim. After the case is closed, you
> and I both know that the IRS will claim to have applied the payments
> some other way, and claim the taxes that were paid were the unsecured
> non-priority taxes. So, the IRS will move later (post-discharge) to
> levy or garnish. THEN, you have to re-open the case, and ask for an
> injunction. But you will get it if the final report and order are
> clear. I hope you have a good trustee who appreciates you bringing
> him/her an asset case, and cooperating with the administration of that
> case. If you work with, and not against the trustee, and explain what
> you want to accomplish, my experience is that they will help you by
> making the final report VERY clear about what is being paid for what.
>
> The key to this is that you said YOU will file the claims for the
> IRS. Its gonna get tricky if the IRS files their own claims later.
> Then you might have to object to their claims to make sure they have
> correctly categorized each claim as secured/unsecured, and then
> priority/non priority. Very tricky, but I think you can do it. Good
> luck! P.S. Had fun on the course at the tourney with you a few weeks ago!
>
> -Jeffrey B. Smith/**/
>
> CURD, GALINDO & SMITH, L.L.P.
>
> 301 East Ocean Blvd. #1700
>
> Long Beach, CA 90802
>
> (562) 624-1177
>
> (562) 624-1178 fax
>
> (310) 993-6560 cellular
>
> www.expertbk.com
>
> /**Certified By The State Bar/
>
> /Of California As A Specialist /
>
> /In Bankruptcy Law/
>
>
>
>
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