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Stay
Hi Jay,
The attached might help, just change appeal to proceeding in state court.
Best regards,
Peter
Law Office of Peter M. Lively * Personal Financial Law Center I
11268 Washington Boulevard, Suite 203, Culver City, California 90230-4647
Telephone: (310) 391-2400* Toll Free: (800) 307-3328 * Fax: (310) 391-2462
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One of my debtor clients had the same fact pattern and I couldn't get FTB to budge. The client was ultimately required to pay the tax debt through his Ch13 Plan, so itwas not cost-effective to prosecute turnover motion, etc. However, I believe FTB is violating the automatic stay on these facts.
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The client's employer has a procedure where the payroll pay period ends and
the check is cut on Monday. Then the check is sent out on Friday. The
client had wage levies from two agencies - IRS and FTB (California Franchise
Tax Board -- California's income tax agency). So the payroll department had
cut on Monday three checks: one to the client with his wages, one to the
IRS, and one to FTB. The checks to IRS and FTB were aggregage checks and
included amounts deducted from the wages of other employees who had an IRS
or FTB wage levy.
We filed c7 on Tuesday after the pay period ended and after the checks were
cut but before the checks were mailed out and notified the employer.
1. The payroll manager said he could not stop the checks to IRS or FTB and
allowed them to be mailed. Is this a stay violation?
2. The IRS said that they will refund the post-petition payment. But the
FTB took the position that since the payperiod ended prepetition, it was
entitled to garnished wages. For both agencies, some of the tax debts are
old and will be discharged, some are recent and will remain owing. What
result?
Thank you.
Alik Segal
Alik.Segal@gmail.com
310-367-3626
Cal. CD, Los Angeles
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