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US Trustee's Office . . threatening to file motion to dismiss if...
The debtor is not simply saving him/herself from a lump sum payment the following April. The IRS requires quarterly estimated payments from those not withholding or underwithholding from a paycheck. If not made, this usually results in interest and penalties being added to the tax bill for the
late payments. There is a 90% of the prior years taxes owed threshold that
comes into the calculation of interest and penalties along with the
quarterly division.
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)
In a message dated 4/22/2015 2:41:54 P.M. Pacific Daylight Time,
cdcbaa@yahoogroups.com writes:
Basically 1304(c) states the business debtor 1304(a) must perform the
duties of the trustee specified in 704(a)(8)
704(a)(8) states the Trustee must file reports and summaries of the
operation, including statement of receipts & disbursements, & such otherinformation as the UST or court requires. I understood the question referenced
the UST required Debtor make a payment, not file a report. So the issue is
whether the UST can force the debtor to prepay the taxes.
Question: If the Debtor submitted statements of receipts & disbursementsand used the quarterly statement as the basis for the estimated quarterlytax due, then the debtor, by paying the tax by quarters is simply saving
itself from the larger payment in April, because it paid taxes in the correct
amount each quarter, this would allow the ongoing payment to be adjusted
each quarter. I.E. if there is a quarter with less income then quarterlyamount reduced to adjust what is estimated to be due by the end of the year.
If the Debtor is not able to pay quarterly taxes adjusted to the immediateincome then the next question is, how is the debtor going to be able to
pay the total annual tax due in April?
If the reason the Debtor cannot make the quarterly payments is because ofthe budget, and the Trustee filed a MTD based on failure to pay estimatedquarterly taxes, then an opposition to the MTD must be filed and if
necessary a MOMOD to adjust the budget. That way the court will have an
opportunity to weigh in on whether the debtor must pay estimated quarterly taxes or
face dismissal, especially since prepayment of quarterly taxes is not a BKCode requirement.
Law Office of Catherine Christiansen
Certified Specialist, Bankruptcy Law, The State Bar of California Board ofLegal Specialization.
On Wednesday, April 22, 2015 11:26 AM, "Michael Avanesian
michael@avanesianlaw.com [cdcbaa]" wrote:
Thanks to Matt Resnik who essentially said look at 1304 and 704(a)(8). Ifthe debtor is considered to be engaged in business within the meaning of
1304, then the US Trustee and standing Trustee can cause a lot of problemseven if there may not be a technical requirement to file taxes.
I think that in general, Chapter 13 is so loose with their rules that if it's not a tremendous benefit to your client, you should have him comply.
Last thing the bar would want is strict requirements which Riverside is
converging towards.
Sincerely,
Michael Avanesian, Esq.
Simon Resnik Hayes, LLP
15233 Ventura Blvd., Suite 250
Sherman Oaks, CA 91403
Tel: 818.783.6251 | Cel: 818.817.1725
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On Wed, Apr 22, 2015 at 11:12 AM, 'Mark J. Markus' _bklawr@yahoo.com_
(mailto:bklawr@yahoo.com) [cdcbaa] wrote:
I agree. However, to the best of my knowledge, estimated tax payments areessentially voluntary. The actual tax obligation does not arise until
April 15 of the following year. You can be penalized for not having paid a
sufficient amount of estimated taxes, depending on what your income for the
year ends up being, but the taxes are not owed/due until April 15 of the
following year. So while I can understand the argument the Trustee might be
making, I would argue that the M2D is premature. It assumes the debtor is
not going to be able to make the required post petition tax payment when
it is due, and if that's the criteria, most Chapter 13 cases would never be
confirmed (which would fit nicely in Riverside it seems).
*************************
Mark J. Markus
Law Office of Mark J. Markus
Mailing Address Only:
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)332-1180 (fax)
web: http://www.bklaw.com/
Certified Bankruptcy Law Specialist--The State Bar of California Board ofLegal Specialization
This Firm is a Qualified Federal Debt Relief Agency
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On 4/22/2015 9:55 AM, cdcbaa _cdcbaamailbox@gmail.com_
(mailto:cdcbaamailbox@gmail.com) [cdcbaa] wrote:
trying to be this strident with a chapter 13 trustee probably won't work. A debtor is required to make quarterly payments to the Irs, not by the bkcode but by the irc. I reread through chapter 13 to see if anything was
added in bacpa to require current taxes to be paid on a current basis, but,
like Mike, found nothing. But, "Know they judge," is the operative phrase
here. There are a few chapter 13 judges that would consider the operationof a chapter 13 estate, without paying current taxes, illegal. One of
those might dismiss the case.
Dennis
Dennis McGoldrick, 350 S. Crenshaw Bl., #A207B, Torrance, Ca 90503
310-328-1001-voice
On Apr 22, 2015, at 6:50 AM, Catherine Christiansen
_christiansenlaw@yahoo.com_ (mailto:christiansenlaw@yahoo.com) [cdcbaa] wrote:
File a motion to modify the plan to include the quarterly tax debt
payments.
Law Office of Catherine Christiansen
Certified Specialist, Bankruptcy Law, The State Bar of California Board ofLegal Specialization.
On Tuesday, April 21, 2015 10:01 PM, "Michael Avanesian
_michael@avanesianlaw.com_ (mailto:michael@avanesianlaw.com) [cdcbaa]"
wrote:
Keep in mind I have virtually no experience in Chapter 13 land and I onlyreally looked at the code, not many cases.
If you consider section 346, the tax isn't even owed by the Estate unlessa proof of claim is filed. So what standing does the Chapter 13 Trustee
have to raise this issue? None.
In fact, Congress designed Chapter 13s to allow debtors to not pay these
taxes. Otherwise, what purpose does 1305 serve?
Also, Congress understood what it was doing when it decided not to
bifurcate the debtor from the Estate with respect to taxes (as opposed to Chapter
11). This is evidenced by its enumeration of "cause" under the two
Chapters. Congress purposefully put nonpayment of taxes as cause for dismissal
under Chapter 11 and not under Chapter 13.
As further evidence, Congress made filing of prepetition taxes a
requirement of Chapter 13. 1307(e). They left postpetition taxes out of the equation
for Chapter 13.
Finally, the code specifically allows taxing authorities to request the
case to be converted/dismissed for failure to file postpetition taxes.
Notably, not even the U.S. Trustee let alone Chapter 13 Trustee can file such a
motion. See 521. More notably, it says file, nothing about paying the
taxes!
Sincerely,
Michael Avanesian, Esq.
Simon Resnik Hayes, LLP
15233 Ventura Blvd., Suite 250
Sherman Oaks, CA 91403
Tel: 818.783.6251 | Cel: 818.817.1725
Confidentiality: This electronic transmission and its contents are
legally privileged and confidential information and intended solely for the use
of the addressee. If the reader of this message is not the intended
recipient, you are hereby notified that any dissemination, distribution, copying or
other use of this message and its contents is strictly prohibited. If youhave received this transmission in error, please reply to us immediately
and delete this message from your directory.
IRS Circular 230 Disclosure: To ensure compliance with requirements
imposed by the IRS, please be advised that any U.S. federal tax advice contained
in this communication (including any attachments) is not intended or
written to be used or relied upon, and cannot be used or relied upon, 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 herein.
On Tue, Apr 21, 2015 at 2:31 PM, Craig J Beauchamp _legallycraig@gmail.com_(mailto:legallycraig@gmail.com) [cdcbaa] wrote:
Normally, the IRS requires self-employed individuals to file quarterly
taxes if they are going to owe the IRS money each year. However, the IRSrarely enforces that provision. Note, however, owing the IRS each year is the
equivalent of incurring new debt. If Debtor's Schedule J sets aside fundsto be applied to those taxes, then Debtor would have an obligation to
either escrow those funds for tax purposes. Paying quarterly would mean no
debt on April 15th.
I am not sure the TR can dismiss for failure to file, but this is what
I've been told by one TR in the past is the rationale for the request forcompliance.
Craig J. Beauchamp, Esq.
Of Counsel
Law Offices of Victor W. Luke, APLC
(714) 835-5091
(714) 835-5763
Craig J. Beauchamp, Esq.*
Attorney at Law
PO Box 25857
Santa Ana, CA 92799
(949) 689-9709
(949) 269-6421 fax
_Legallycraig@gmail.com_ (mailto:Legallycraig@gmail.com)
* Licensed in CA
On Tue, Apr 21, 2015 at 2:00 PM, R Grace Rodriguez _rgracelaw@gmail.com_
(mailto:rgracelaw@gmail.com) [cdcbaa] wrote:
Anyone heard of this? Can they do this?
R. Grace Rodriguez, Esq.
Full service Real Estate Attorney
California State Bar
Certified Bankruptcy Specialist
OFF: (818) 734-7223
CEL: (818) 554-9922
The debtor is not simply saving him/herself from a lump sum payment the
following April. The IRS requires quarterly estimated payments from those
not withholding or underwithholding from a paycheck. If not made, this
usually results in interest and penalties being added to the tax bill for the
late payments. There is a 90% of the prior years taxes owed threshold
that comes into the calculation of interest and penalties along with the
quarterly division.
Mark T.
JesseeLaw Offices of Mark T. Jessee"A Debt Relief Agency"50 W.Hillcrest Drive, Suite 200Thousand Oaks, CA 91360(805) 497-5868 (805)
497-5864 (Facsimile)
In a message dated 4/22/2015 2:41:54 P.M. Pacific Daylight Time,
cdcbaa@yahoogroups.com writes:
The post was migrated from Yahoo.