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"No, Mr. Trustee, it wasn't *bankruptcy* fraud . . . "
You didn't say if the in & out on the cash occurred wholly in 2012 or partially in 2011.
Potential client might want to file one of these for 2011 if applicable:
http://www.irs.gov/pub/irs-pdf/f3520.pdf
and maybe with one of these to explain his position:
http://www.irs.gov/pub/irs-pdf/f8275r.pdf
and do this also for 2012 at the appropriate time.
2011 Tax year is the first time that these things are being (supposedly) strictly enforced. He should file these whether or not he does bankruptcy. He doesn't need to have IRS concerned about money trafficing in addition to his other woes.
In addition, if he does go through and if the trustee can see that he has explained everything and gone on record with IRS, it might assuage
any tendency for the trustee to take action.
Curt Harrington
(562) 594-9784
curt@patentax.com
http://patentax.com/curt/index.html
>
> Esteemed practitioners:
> My potential client faces a foreclosure action on Wednesday morning. This
> occurs, of course, after all his efforts to modify his loan fell through.
> In the drama of the loan modification process, a friend and business
> associate gave him $75,000 to put into his account to show recent income.
> Now that he wants to file bankruptcy, the money has gone back to his friend
> every last cent. He used none of it for any other purpose than bulking up
> the appearance of his account.
> I'm inclined to claim that the money wasn't a loan and the friend wasn't a
> creditor, but that the debtor was holding the money as property of another.
> If this theory flies, then the repayment is not a preference.
> I think that's a big "if." And, of course, it leads to the notion that the
> debtor was committing bank fraud.
> The friend is in a South American country, so a preference action by the
> trustee may be unavailing, or at the least difficult.
> Any advice on a way to help this guy? Or do I just run away from the
> situation?
>
> John D. Faucher
> Faucher & Associates
> 5743 Corsa Ave., Suite 116
> Westlake Village, CA 91362
> (818) 889-8080
> Fax: (805) 367-4154
> http://www.hurlbettfaucher.com/
>
>
>
> 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@... )
> 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.
>
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John:
Explain it well to the client, in writing, and then let him make the
decision. You wouldn't represent the interest of the South American
benefactor, only the local client. It was in fact a loan. If the
potential client wants to risk his friend getting sued for preference
it's up to him. And I take it you're filing a 7, not a 13. Consider a
13.
Steve Lever
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charset="ISO-8859-1"
Esteemed practitioners:
My potential client faces a foreclosure action on Wednesday morning. This
occurs, of course, after all his efforts to modify his loan fell through.
In the drama of the loan modification process, a friend and business
associate gave him $75,000 to put into his account to show recent income.
Now that he wants to file bankruptcy, the money has gone back to his friend
up
the appearance of his account.
I'm inclined to claim that the money wasn't a loan and the friend wasn't a
creditor, but that the debtor was holding the money as property of another.
If this theory flies, then the repayment is not a preference.
I think that's a big "if." And, of course, it leads to the notion that the
debtor was committing bank fraud.
The friend is in a South American country, so a preference action by the
trustee may be unavailing, or at the least difficult.
Any advice on a way to help this guy? Or do I just run away from the
situation?
John D. Faucher
Faucher & Associates
5743 Corsa Ave., Suite 116
Westlake Village, CA 91362
(818) 889-8080
Fax: (805) 367-4154
http://www.hurlbettfaucher.com/
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.
charset="ISO-8859-1"
Esteemed practitioners: My potential client faces a foreclosure action on Wednesday morning. This occurs, of course, after all his efforts to modify his loan fell through. In the drama of the loan modification process, a friend and business associate gave him $75,000 to put into his account to show recent income. Now that he wants to file bankruptcy, the money has gone back to his friend – every last cent. He used none of it for any other purpose than bulking up the appearance of his account. I'm inclined to claim that the money wasn't a loan and the friend wasn't a creditor, but that the debtor was holding the money as property of another. If this theory flies, then the repayment is not a preference. I think that's a big "if." And, of course, it leads to the notion that the debtor was committing bank fraud. The friend is in a South American country, so a preference action by the trustee may be unavailing, or at the least difficult. Any advice on a way to help this guy? Or do I just run away from the situation? 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.
The post was migrated from Yahoo.