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Discharge taxes, Tax Liens, Offers and Compromise
The authority to file a motion to remove an irs lien is 506d. You have not discussed if the lien is oversecured or undersecured. Undersecured liens can be voided to the extent they are unsecured. But the IRS can abate the lien. Write a letter to the IRS and request an abatement and you may save your client the cost of the 506d motion. Of course, I tell the client what the cost of the motion will be, then tell them one can write to request and abatement, then explain that if the case closes and the abatement letter is denied, the debtor will have to pay for a motion to reopen the case, and pay filing fee for a motion to reopen.
I have had the IRS demand that all of the exempt property of the debtor is liened when the IRS files a lien. The abatement clerk will sometimes demand that the IRS be paid the full amount of the exemptions claimed to warrant an abatement.
Most, when faced with the costs, will just pay for the 506d motion.
d
Dennis McGoldrick, 350 S. Crenshaw Bl., #A207B, Torrance, Ca 90503 310-328-1001-voice
On Sep 17, 2013, at 3:09 PM, Stephen Mark wrote:
> Thanks Mark, but I am still not clear. Based on the facts stated below would there be a discharge if the taxes were timely filed more than 3 years ago? If so, and the tax debt is discharged, do I need to file the motion to remove the recorded lien? There is also the question about "assessment" to determine the exact amount of the tax debt verses the 240 day rule and some sort of tolling during an Offer and Compromise? Do you recommend I simply contact the IRS and get their take on this as well as it may require a stipulation?
>
> Thanks,
> Stephen
>
> To: cdcbaa@yahoogroups.com
> Sent: Tuesday, September 17, 2013 1:59 PM
> Subject: Re: [cdcbaa] Discharge taxes, Tax Liens, Offers and Compromise
>
>
> You are confusing in personum and in rem discharge. If the taxes are aged enough and otherwise qualified to be discharged under the code, they are dischargeable regardless of a tax lien's existence. A bankruptcy discharge does not avoid the tax lien, but limits the lien to only those assets on hand at the time the bankruptcy is filed. Later acquired assets are not subject to the lien of a discharged debt.
>
> Mark T. Jessee
> Law Offices of Mark T. Jessee
> "A Debt Relief Agency"
> 50 W. Hillcrest Drive, Suite 200
> Thousand Oaks, CA 91360
> (805) 497-5868 (805) 497-5864 (Facsimile)
>
> NOTICE TO RECIPIENT: THIS E-MAIL IS MEANT FOR ONLY THE INTENDED RECIPIENT OF THE TRANSMISSION, AND THIS COMMUNICATION IS INTENDED TO BE PRIVILEGED BY LAW. IF YOU RECEIVED THIS E-MAIL IN ERROR, ANY REVIEW, USE, DISSEMINATION, DISTRIBUTION, OR COPYING OF THIS E-MAIL IS STRICTLY PROHIBITED. PLEASE NOTIFY US IMMEDIATELY OF THE ERROR BY RETURN E-MAIL AND PLEASE DELETE THIS MESSAGE FROM YOUR SYSTEM. THANK YOU IN ADVANCE FOR YOUR COOPERATION.
>
> In a message dated 9/17/2013 1:26:30 P.M. Pacific Daylight Time, legalsos4u@yahoo.com writes:
>
> Dear List mates: If I understand correctly, a tax lien recorded previously to the Ch. 7 filing can't be discharged. Additionally, if there is an offer and compromise in place before the filing may effect the assessment of other taxes owed but not recorded as a tax lien. For example, is the IRS has as lien for the years 2006-2009, these taxes can't be discharged. If in 2010 client owes tax money but no recorded lien they may be able to discharge if filed after April 15 (if they filed on or before April 15 three years prior. If they owe for 2011, they may not be able to discharge because less than 3 years. Lastly, if assessment for 2010 done before offer and compromise, would the offer and compromise prior to Ch. 7 filing still negate ability to discharge taxes for this year?
>
> Thanks,
>
> Stephen Stern
> Law Office of Stephen M. Stern, PC
> (805) 543-5297
>
> To: "cdcbaa@yahoogroups.com"
> Sent: Monday, August 19, 2013 8:04 PM
> Subject: Re: [cdcbaa] Stipulation to discharge taxes
>
>
> John:
>
> I would try to agree, but require the IRS to reopen the adversary so client can contest the irs "reliance." Both sides get what they want.
>
> btw I would sue to determine "dischargeability", as opposed to nondischargeability.
>
> d
>
> Dennis McGoldrick, 350 S. Crenshaw Bl., #A207B, Torrance, Ca 90503 310-328-1001-voice
>
>
> On Aug 19, 2013, at 4:52 PM, "John D. Faucher" wrote:
>
>>
>> Hello all:
>> My client is trying to discharge $600,000+ in taxes. I filed a suit for declaration of nondischargeability, expecting to have IRS stipulate because all conditions are met for dischargeability - 3-year, 2-year, 240-day rules, no fraud on the return.
>> IRS agreed to stipulate, but wants this language:
>> "The United States reserves its right to rely upon 11 USC Sect. 523(a)(1)(C) if the IRS discovers evidence that the debtor has willfully attempted to evade or defeat his tax liability."
>> I objected; IRS attorney said "fine, I'll answer, and then we'll do discovery to make sure that he wasn't evading tax all along, even though we have no evidence of it now. It's kind of stupid for you to not agree to this language, because if you did, he'd probably never hear from us again, and now you're opening up a whole can of worms."
>> Has anyone else seen this language? How did you deal with it? To me, it seems to defeat the rationale for doing a declaratory judgment in the first place.
>>
>>
>>
>>
>> John D. Faucher
>> Faucher & Associates
>> 818/889-8080
>
>
>
>
>
The post was migrated from Yahoo.
Hello Stephen:
There are only six reasons that a tax won't be discharged (see 523(a)):
1. The return was due less than three years before the bankruptcy
petition.
2. The return was actually filed less than two years before the bankruptcy
petition.
3. The tax was assessed less than 240 days before the bankruptcy petition
(this gets very relevant after an audit goes wrong for the taxpayer).
4. The tax return was not filed before the IRS did its own "substitute for
return."
5. The tax return was fraudulent, and the IRS found out about it.
6. The taxpayer tried to "evade or defeat" the tax on the return.
None of these exceptions relates to a Notice of Federal Tax Lien. The
existence of the NFTL is irrelevant to discharging the taxes. As I
understand your original question, the taxpayer can discharge his 2006
through 2009 taxes, even though the IRS has an NFTL on those years.
Offer in compromise can toll the 240-day period.
I hope this helps.
John D. Faucher
Faucher & Associates
*818/889-8080*
On Tue, Sep 17, 2013 at 3:09 PM, Stephen Mark wrote:
> **
>
>
> Thanks Mark, but I am still not clear. Based on the facts stated below
> would there be a discharge if the taxes were timely filed more than 3 years
> ago? If so, and the tax debt is discharged, do I need to file the motion to
> remove the recorded lien? There is also the question about "assessment" to
> determine the exact amount of the tax debt verses the 240 day rule and some
> sort of tolling during an Offer and Compromise? Do you recommend I simply
> contact the IRS and get their take on this as well as it may require a
> stipulation?
>
> Thanks,
> Stephen
>
> ------------------------------
> *From:* "jesseelaw@aol.com"
> *To:* cdcbaa@yahoogroups.com
> *Sent:* Tuesday, September 17, 2013 1:59 PM
> *Subject:* Re: [cdcbaa] Discharge taxes, Tax Liens, Offers and Compromise
>
>
> You are confusing in personum and in rem discharge. If the taxes are
> aged enough and otherwise qualified to be discharged under the code, they
> are dischargeable regardless of a tax lien's existence. A bankruptcy
> discharge does not avoid the tax lien, but limits the lien to only those
> assets on hand at the time the bankruptcy is filed. Later acquired assets
> are not subject to the lien of a discharged debt.
>
> Mark T. Jessee
> Law Offices of Mark T. Jessee
> "A Debt Relief Agency"
> 50 W. Hillcrest Drive, Suite 200
> Thousand Oaks, CA 91360
> (805) 497-5868 (805) 497-5864 (Facsimile)
>
> NOTICE TO RECIPIENT: THIS E-MAIL IS MEANT FOR ONLY THE INTENDED RECIPIENT
> OF THE TRANSMISSION, AND THIS COMMUNICATION IS INTENDED TO BE PRIVILEGED BY
> LAW. IF YOU RECEIVED THIS E-MAIL IN ERROR, ANY REVIEW, USE, DISSEMINATION,
> DISTRIBUTION, OR COPYING OF THIS E-MAIL IS STRICTLY PROHIBITED. PLEASE
> NOTIFY US IMMEDIATELY OF THE ERROR BY RETURN E-MAIL AND PLEASE DELETE THIS
> MESSAGE FROM YOUR SYSTEM. THANK YOU IN ADVANCE FOR YOUR COOPERATION.
>
> In a message dated 9/17/2013 1:26:30 P.M. Pacific Daylight Time,
> legalsos4u@yahoo.com writes:
>
>
> Dear List mates: If I understand correctly, a tax lien recorded
> previously to the Ch. 7 filing can't be discharged. Additionally, if there
> is an offer and compromise in place before the filing may effect the
> assessment of other taxes owed but not recorded as a tax lien. For example,
> is the IRS has as lien for the years 2006-2009, these taxes can't be
> discharged. If in 2010 client owes tax money but no recorded lien they may
> be able to discharge if filed after April 15 (if they filed on or before
> April 15 three years prior. If they owe for 2011, they may not be able to
> discharge because less than 3 years. Lastly, if assessment for 2010 done
> before offer and compromise, would the offer and compromise prior to Ch. 7
> filing still negate ability to discharge taxes for this year?
>
> Thanks,
>
> Stephen Stern
> Law Office of Stephen M. Stern, PC
> (805) 543-5297
>
> ------------------------------
> *From:* cdcbaa
> *To:* "cdcbaa@yahoogroups.com"
> *Sent:* Monday, August 19, 2013 8:04 PM
> *Subject:* Re: [cdcbaa] Stipulation to discharge taxes
>
>
> John:
>
> I would try to agree, but require the IRS to reopen the adversary so
> client can contest the irs "reliance." Both sides get what they want.
>
> btw I would sue to determine "dischargeability", as opposed to
> nondischargeability.
>
> d
>
> Dennis McGoldrick, 350 S. Crenshaw Bl., #A207B, Torrance, Ca 90503
> 310-328-1001-voice
> [image: cid:part1.03050307.05030101@bklaw.com]
>
> On Aug 19, 2013, at 4:52 PM, "John D. Faucher"
> wrote:
>
>
> Hello all:
> My client is trying to discharge $600,000+ in taxes. I filed a suit for
> declaration of nondischargeability, expecting to have IRS stipulate because
> all conditions are met for dischargeability - 3-year, 2-year, 240-day
> rules, no fraud on the return.
> IRS agreed to stipulate, but wants this language:
> "The United States reserves its right to rely upon 11 USC Sect.
> 523(a)(1)(C) if the IRS discovers evidence that the debtor has willfully
> attempted to evade or defeat his tax liability."
> I objected; IRS attorney said "fine, I'll answer, and then we'll do
> discovery to make sure that he wasn't evading tax all along, even though we
> have no evidence of it now. It's kind of stupid for you to not agree to
> this language, because if you did, he'd probably never hear from us again,
> and now you're opening up a whole can of worms."
> Has anyone else seen this language? How did you deal with it? To me, it
> seems to defeat the rationale for doing a declaratory judgment in the first
> place.
>
>
>
>
> John D. Faucher
> Faucher & Associates
> *818/889-8080*
>
>
>
>
>
>
>
Hello Stephen:There are only six reasons that a tax won't be discharged (see 523(a)):
1. The return was due less than three years before the bankruptcy petition.2. petition.
3. The tax was assessed less than 240 days before the bankruptcy petition (this gets very relevant after an audit goes wrong for the taxpayer).4. The tax return was not filed before the IRS did its own "substitute for return."
5. The tax return was fraudulent, and the IRS found out about it.6. The taxpayer tried to "evade or defeat" the tax on the return.
None of these exceptions relates to a Notice of Federal Tax Lien. The existence of the NFTL is irrelevant to discharging the taxes. As I understand your original question, the taxpayer can discharge his 2006 through 2009 taxes, even though the IRS has an NFTL on those years.
Offer in compromise can toll the 240-day period. I hope this helps.
John D. Faucher
The post was migrated from Yahoo.
Thanks Mark, but I am still not clear. Based on the facts stated below would there be a discharge if the taxes were timely filed more than 3 years ago? If so, and the tax debt is discharged, do I need to file the motion to remove the recorded lien? There is also the question about "assessment" to determine the exact amount of the tax debt verses the 240 day rule and some sort of tolling during an Offer and Compromise? Do you recommend I simply contact the IRS and get their take on this as well as it may require a stipulation?
Thanks,
Stephen
________________________________
To: cdcbaa@yahoogroups.com
Sent: Tuesday, September 17, 2013 1:59 PM
Subject: Re: [cdcbaa] Discharge taxes, Tax Liens, Offers and Compromise
You are confusing in personum and in rem discharge. If the taxes areaged enough and otherwise qualified to be discharged under the code, they are
dischargeable regardless ofa taxlien's existence. A bankruptcy
discharge does not avoid the tax lien, but limits the lien toonly those
assets on hand at the time the bankruptcy is filed. Later acquired assets
are not subject to the lien of a discharged debt.
Mark T.
Jessee
Law Offices of Mark T. Jessee
"A Debt Relief Agency"
50 W.
Hillcrest Drive, Suite 200
Thousand Oaks, CA 91360
(805) 497-5868 (805)
497-5864 (Facsimile)
NOTICE TO RECIPIENT: THIS E-MAIL IS MEANT FOR ONLY
THE INTENDED RECIPIENT OF THE TRANSMISSION, AND THIS COMMUNICATION IS INTENDED
TO BE PRIVILEGED BY LAW. IF YOU RECEIVED THIS E-MAIL IN ERROR, ANY REVIEW, USE,
DISSEMINATION, DISTRIBUTION, OR COPYING OF THIS E-MAIL IS STRICTLY PROHIBITED.
PLEASE NOTIFY US IMMEDIATELY OF THE ERROR BY RETURN E-MAIL AND PLEASE DELETE
THIS MESSAGE FROM YOUR SYSTEM. THANK YOU IN ADVANCE FOR YOUR COOPERATION.
In a message dated 9/17/2013 1:26:30 P.M. Pacific Daylight Time,
legalsos4u@yahoo.com writes:
>Dear List mates: If I understand correctly, a tax lien recorded previously to the Ch. 7 filing can't be discharged. Additionally, if there is an offer and compromise in place before the filing may effect the assessment of other taxes owed but not recorded as a tax lien. For example, is the IRS has as lien for the years 2006-2009, these taxes can't be discharged. to discharge if filed after April 15 (if they filed on or before April 15 three years prior. If they owe for 2011, they may not be able to discharge because less than 3 years. Lastly, if assessment for 2010 done before offer and compromise, would the offer and compromise prior to Ch. 7 filing still negate ability to discharge taxes for this year?
>
>
>Thanks,
>
>
>Stephen Stern
>Law Office of Stephen M. Stern, PC
>(805) 543-5297
>
>
>
>________________________________
>To: "cdcbaa@yahoogroups.com"
>Sent: Monday, August 19, 2013 8:04 PM
>Subject: Re: [cdcbaa] Stipulation to discharge taxes
>
>
>
>
>John:
>
>
>I would try to agree, but require the IRS to reopen the adversary so client can contest the irs "reliance." Both sides get what they want.
>
>
>btw I would sue to determine "dischargeability", as opposed to nondischargeability.
>
>
>d
>
>Dennis McGoldrick, 350 S. Crenshaw Bl., #A207B, Torrance, Ca 90503
310-328-1001-voice
>
>On Aug 19, 2013, at 4:52 PM, "John D. Faucher" wrote:
>
>
>
>>Hello all:
>>My client is trying to discharge $600,000+ in taxes. I filed a suit for declaration of nondischargeability, expecting to have IRS stipulate because all conditions are met for dischargeability - 3-year, 2-year, 240-day rules, no fraud on the return.
>>IRS agreed to stipulate, but wants this language:
>>"The United States reserves its right to rely upon 11 USC Sect. 523(a)(1)(C) if the IRS discovers evidence that the debtor has willfully attempted to evade or defeat his tax liability."
>>I objected; IRS attorney said "fine, I'll answer, and then we'll do discovery to make sure that he wasn't evading tax all along, even though we have no evidence of it now. It's kind of stupid for you to not agree to this language, because if you did, he'd probably never hear from us again, and now you're opening up a whole can of worms."
>>Has anyone else seen this language? How did you deal with it? t in the first place.
>>
>>
>>
>>
>>
>>
>>John D. Faucher
>>Faucher & Associates
>>818/889-8080
>
>
The post was migrated from Yahoo.