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QUESTION: Earned income Credits
Yes, that is the way to do it every time. In my case, there is no withholding.
Debtors take care of foster children. There is not one dollar of withholding
from this income. There is also self employment income. There are no
deductions to adjust!
Steve Burton
________________________________
To: "cdcbaa@yahoogroups.com"
Sent: Wed, November 3, 2010 9:11:22 PM
Subject: Re: [cdcbaa] QUESTION: Earned income Credits
Adjust no. of deductions with IRS so there is no refund.
Sent from my iPhone
On Nov 3, 2010, at 7:20 PM, stephen burton wrote:
>I do not know whether anyone has replied to or expanded upon this thread, but I
>too have a similar problem. I have a chapter 13 where a large part of the tax
>refunds the debtors receive are from the EIC. The purpose of the EIC, among
>other things, was to help low income families with living expenses. It was also
>intended to put money into economically challenged lower income communities to
>stimulate those local economies.
>
>Is anyone else encoutering this problem? Seems to me turning over refunds from
>primiarly the EIC source so the stripped second trust deed or to a bunch of
>credit cards so theywill receive a few more pennies on the dollar does not
>seem to be the intent of Congress.
>
>Steve Burton
>
>
>
>
________________________________
>To: cdcbaa@yahoogroups.com
>Sent: Tue, April 27, 2010 11:21:41 AM
>Subject: [cdcbaa] QUESTION: Earned income Credits
>
>
>Question: I have a client that owes 33K on a 2nd mortgage which is wholly
>unsecured. Which I know we can avoid. However, he gets about $8000 a year in
>tax refunds due to his earned income credits. About $1000 of this is money he
>pays into the system, and then his credits cause him to get back about $7,000.00
>extra. I suspect that if he files bk the trustee will want him to pay at least
>the first 3 years of tax refunds into the plan. But by time he pays three years
>he will have given up $24,000 in refunds. When he could settle the claim with
>his 2nd for about 12,000. So my question to the group is this. >needs that money to survive and pay his property taxes every year. Is there an
>argument to be had that this tax refund is income from the government for tax
>credits and not subject to being given to the trustee? What if i claim it as a
>once a year payment by the government in Schedule B as Income. Its not like he
>can reduce what the government withholds from his pay check in this case because
>its an earned income credit refunded to him at the end of the year because he
>makes so little money. However he makes just enough to afford his house in
>Palmdale at an 850 a month payment and has 3 kids. Appreciate any feedback you
>have?
>
>--
>R. Grace Rodriguez, Esq.
>OFF: (818) 734-7223
>CEL: (323) 304-5496
>
>NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice for
>ex parte Applications via voicemail or by email. You must comply with California
>Law and give notice to a person in my office during regular business hours.
>
>CONFIDENTIALITY STATEMENT: This message contains privileged and confidential
>information and is intended only for the individual named. If you are not the
>intended recipient you should not disseminate, distribute, store, print, copy or
>deliver this message. Please notify the sender immediately by e-mail if you have
>received this e-mail by mistake and delete this e-mail from your system.
>
>
Yes, that is the way to do it every time. In my case, there is no withholding. Debtors take care of foster children. There is not one dollar of withholding from this income. There is also self employment income. There are no deductions to adjust!
Steve Burton
From: Dennis <easky1@yahoo.com>To: "cdcbaa@yahoogroups.com" <cdcbaa@yahoogroups.com>Sent: Wed, November 3, 2010 9:11:22 PMSubject: Re: [cdcbaa] QUESTION: Earned income Credits
Adjust no. of deductions with IRS so there is no refund.Sent from my iPhone
On Nov 3, 2010, at 7:20 PM, stephen burton <stephenburtonlaw@yahoo.com> wrote:
I do not know whether anyone has replied to or expanded upon this thread, but I too have a similar problem. I have a chapter 13 where a large part of the tax refunds the debtors receive are from the EIC. The purpose of the EIC, among other things, was to help low income families with living expenses. It was also intended to put money into economically challenged lower income communities to stimulate those local economies.
Is anyone else encoutering this problem? Seems to me turning over refunds from primiarly the EIC source so the stripped second trust deed or to a bunch of credit cards so they will receive a few more pennies on the dollar does not seem to be the intent of Congress.
Steve Burton
From: R Grace Rodriguez <rgracelaw@gmail.com>To: cdcbaa@yahoogroups.comSent: Tue, April 27, 2010 11:21:41 AMSubject: [cdcbaa] QUESTION: Earned income Credits
Question: I have a client that owes 33K on a 2nd mortgage which is wholly unsecured. Which I know we can avoid. However, he gets about $8000 a year in tax refunds due to his earned income credits. About $1000 of this is money he pays into the system, and then his credits cause him to get back about $7,000.00 extra. I suspect that if he files bk the trustee will want him to pay at least the first 3 years of tax refunds into the plan. But by time he pays three years he will have given up $24,000 in refunds. When he could settle the claim with his 2nd for about 12,000. So my question to the group is this. Because he needs that money to survive and pay his property taxes every year. Is there an argument to be had that this tax refund is income from the government for tax credits and not subject to being given to the trustee? What if i claim it as a once a year payment by the government in
Schedule B as Income. Its not like he can reduce what the government withholds from his pay check in this case because its an earned income credit refunded to him at the end of the year because he makes so little money. However he makes just enough to afford his house in Palmdale at an 850 a month payment and has 3 kids. Appreciate any feedback you have?-- R. Grace Rodriguez, Esq.OFF: (818) 734-7223CEL: (323) 304-5496NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice for ex parte Applications via voicemail or by email. You must comply with California Law and give notice to a person in my office during regular business hours.CONFIDENTIALITY STATEMENT: This message contains privileged and confidential information and is intended only for the individual named. If you are not the intended recipient you should not disseminate, distribute, store, print, copy or
deliver this message. Please notify the sender immediately by e-mail if you have received this e-mail by mistake and delete this e-mail from your system.
The post was migrated from Yahoo.
Adjusting the deductions only solves the problem for the amount
withheld. Typically a "taxpayer" receiving an Earned Income Credit
receives more back than was ever withheld from paychecks or made as
estimated quarterly payments. The question really boils down to
whether these government benefits provided to working low income
earners in the guise of a "tax refund" should be treated the same as a
true refund of overpaid taxes contributed by the debtor during the
prior year?
The way I see it, EIC benefits are just another government benefit
like unemployment or welfare. They just are paid to the debtor with
the tax refund at the end of the year instead of more frequently. I
see no difference under the code in treating earned income credit any
differently from other government benefits, with of course the
exception of social security. They should be included in Schedule I,
if the debtor income is projected to qualify for EIC benefits in the
future. Payroll taxes are an expense deducted from gross income to
determine the debtor's disposable income. When there is a refund that
means the debtor did not actually have that expense and the money
should be paid into the plan. Hence the logic behind the standard
language in confirmation orders that refunds will be paid into the
plan. If the debtor has enough income to meet necessary maintenance
and support of the debtor or debtor's dependents and make regularly
scheduled plan payments, then EIC paid as a refund are just additional
revenue to the debtor which is available to pay into the plan. If on
the other hand the debtor is counting on EIC benefits to meet
necessary maintenance and support of the debtor or debtor's
dependents, then I see a very reasonable argument that EIC should be
included as income and the proposed plan should reflect language that
any EIC portion of a tax refund should not need to be paid to the
trustee.
If the EIC is new postpetition, and debtor's income as decreased,
and it is feasible, the plan needs to be modified accordingly to
maintain that the EIC benefit is necessary for the maintenance and
support of the debtor or debtor's dependents. In instances where a
debtor lost a job postpetition, I have successfully moved to modify
the plan and allow a debtor to keep a tax refund to make up for the
loss of other income needed for the necessary maintenance and support
of the debtor or debtor's dependents.
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
On Wed 3/11/10 9:11 PM , Dennis easky1@yahoo.com sent:
Adjust no. of deductions with IRS so there is no refund.
Sent from my iPhone
On Nov 3, 2010, at 7:20 PM, stephen burton wrote:
I do not know whether anyone has replied to or expanded upon this
thread, but I too have a similar problem. I have a chapter 13 where a
large part of the tax refunds the debtors receive are from the EIC.
The purpose of the EIC, among other things, was to help low income
families with living expenses. It was also intended to put money into
economically challenged lower income communities to stimulate those
local economies. Is anyone else encoutering this problem? Seems to
me turning over refunds from primiarly the EIC source so the stripped
second trust deed or to a bunch of credit cards so they will receive
a few more pennies on the dollar does not seem to be the intent of
Congress. Steve Burton
FROM: R Grace Rodriguez
TO: cdcbaa@yahoogroups.com [3]
SENT: Tue, April 27, 2010 11:21:41 AM
SUBJECT: [cdcbaa] QUESTION: Earned income Credits
Question: I have a client that owes 33K on a 2nd mortgage which is
wholly unsecured. Which I know we can avoid. However, he gets about
$8000 a year in tax refunds due to his earned income credits. About
$1000 of this is money he pays into the system, and then his credits
cause him to get back about $7,000.00 extra. I suspect that if he
files bk the trustee will want him to pay at least the first 3 years
of tax refunds into the plan. But by time he pays three years he will
have given up $24,000 in refunds. When he could settle the claim with
his 2nd for about 12,000. So my question to the group is this.
Because he needs that money to survive and pay his property taxes
every year. Is there an argument to be had that this tax refund is
income from the government for tax credits and not subject to being
given to the trustee? What if i claim it as a once a year payment by
the government in Schedule B as Income. Its not like he can reduce
what the government withholds from his pay check in this case because
its an earned income credit refunded to him at the end of the year
because he makes so little money. However he makes just enough to
afford his house in Palmdale at an 850 a month payment and has 3 kids.
Appreciate any feedback you have?
--
R. Grace Rodriguez, Esq.
OFF: (818) 734-7223
CEL: (323) 304-5496
NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail
notice for ex parte Applications via voicemail or by email. You must
comply with California Law and give notice to a person in my office
during regular business hours.
CONFIDENTIALITY STATEMENT: This message contains privileged and
confidential information and is intended only for the individual
named. If you are not the intended recipient you should not
disseminate, distribute, store, print, copy or deliver this message.
Please notify the sender immediately by e-mail if you have received
this e-mail by mistake and delete this e-mail from your system.
Links:
[1] mailto:stephenburtonlaw@yahoo.com
[2] mailto:rgracelaw@gmail.com
[3] mailto:cdcbaa@yahoogroups.com
[4] mailto:cdcbaa@yahoogroups.com?subjectRe: [cdcbaa] QUESTION:
Earned income Credits
[5]
The post was migrated from Yahoo.
I do not know whether anyone has replied to or expanded upon this thread, but I
too have a similar problem. I have a chapter 13 where a large part of the tax
refunds the debtors receive are from the EIC. The purpose of the EIC, among
other things, was to help low income families with living expenses. It was also
intended to put money into economically challenged lower income communities to
stimulate those local economies.
Is anyone else encoutering this problem? Seems to me turning over refunds from
primiarly the EIC source so the stripped second trust deed or to a bunch of
credit cards so theywill receive a few more pennies on the dollar does not
seem to be the intent of Congress.
Steve Burton
________________________________
To: cdcbaa@yahoogroups.com
Sent: Tue, April 27, 2010 11:21:41 AM
Subject: [cdcbaa] QUESTION: Earned income Credits
Question: I have a client that owes 33K on a 2nd mortgage which is wholly
unsecured. Which I know we can avoid. However, he gets about $8000 a year in
tax refunds due to his earned income credits. About $1000 of this is money he
pays into the system, and then his credits cause him to get back about $7,000.00
extra. I suspect that if he files bk the trustee will want him to pay at least
the first 3 years of tax refunds into the plan. But by time he pays three years
he will have given up $24,000 in refunds. When he could settle the claim with
his 2nd for about 12,000. So my question to the group is this. Because he
needs that money to survive and pay his property taxes every year. Is there an
argument to be had that this tax refund is income from the government for tax
credits and not subject to being given to the trustee? What if i claim it as a
once a year payment by the government in Schedule B as Income. Its not like he
can reduce what the government withholds from his pay check in this case because
its an earned income credit refunded to him at the end of the year because he
makes so little money. However he makes just enough to afford his house in
Palmdale at an 850 a month payment and has 3 kids. Appreciate any feedback you
have?
R. Grace Rodriguez, Esq.
OFF: (818) 734-7223
CEL: (323) 304-5496
NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice for
ex parte Applications via voicemail or by email. You must comply with California
Law and give notice to a person in my office during regular business hours.
CONFIDENTIALITY STATEMENT: This message contains privileged and confidential
information and is intended only for the individual named. If you are not the
intended recipient you should not disseminate, distribute, store, print, copy or
deliver this message. Please notify the sender immediately by e-mail if you have
received this e-mail by mistake and delete this e-mail from your system.
I do not know whether anyone has replied to or expanded upon this thread, but I too have a similar problem. I have a chapter 13 where a large part of the tax refunds the debtors receive are from the EIC. The purpose of the EIC, among other things, was to help low income families with living expenses. It was also intended to put money into economically challenged lower income communities to stimulate those local economies.
Is anyone else encoutering this problem? Seems to me turning over refunds from primiarly the EIC source so the stripped second trust deed or to a bunch of credit cards so they will receive a few more pennies on the dollar does not seem to be the intent of Congress.
Steve Burton
From: R Grace Rodriguez <rgracelaw@gmail.com>To: cdcbaa@yahoogroups.comSent: Tue, April 27, 2010 11:21:41 AMSubject: [cdcbaa] QUESTION: Earned income Credits
Question: I have a client that owes 33K on a 2nd mortgage which is wholly unsecured. Which I know we can avoid. However, he gets about $8000 a year in tax refunds due to his earned income credits. About $1000 of this is money he pays into the system, and then his credits cause him to get back about $7,000.00 extra. I suspect that if he files bk the trustee will want him to pay at least the first 3 years of tax refunds into the plan. But by time he pays three years he will have given up $24,000 in refunds. When he could settle the claim with his 2nd for about 12,000. So my question to the group is this. Because he needs that money to survive and pay his property taxes every year. Is there an argument to be had that this tax refund is income from the government for tax credits and not subject to being given to the trustee? What if i claim it as a once a year payment by the government in
Schedule B as Income. Its not like he can reduce what the government withholds from his pay check in this case because its an earned income credit refunded to him at the end of the year because he makes so little money. However he makes just enough to afford his house in Palmdale at an 850 a month payment and has 3 kids. Appreciate any feedback you have?-- R. Grace Rodriguez, Esq.OFF: (818) 734-7223CEL: (323) 304-5496NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice for ex parte Applications via voicemail or by email. You must comply with California Law and give notice to a person in my office during regular business hours.CONFIDENTIALITY STATEMENT: This message contains privileged and confidential information and is intended only for the individual named. If you are not the intended recipient you should not disseminate, distribute, store, print, copy or
deliver this message. Please notify the sender immediately by e-mail if you have received this e-mail by mistake and delete this e-mail from your system.
The post was migrated from Yahoo.
Question: I have a client that owes 33K on a 2nd mortgage which is wholly
unsecured. Which I know we can avoid. However, he gets about $8000 a year
in tax refunds due to his earned income credits. About $1000 of this is
money he pays into the system, and then his credits cause him to get back
about $7,000.00 extra. I suspect that if he files bk the trustee will want
him to pay at least the first 3 years of tax refunds into the plan. But by
time he pays three years he will have given up $24,000 in refunds. When he
could settle the claim with his 2nd for about 12,000. So my question to the
group is this. Because he needs that money to survive and pay his property
taxes every year. Is there an argument to be had that this tax refund is
income from the government for tax credits and not subject to being given to
the trustee? What if i claim it as a once a year payment by the government
in Schedule B as Income. Its not like he can reduce what the government
withholds from his pay check in this case because its an earned income
credit refunded to him at the end of the year because he makes so little
money. However he makes just enough to afford his house in Palmdale at an
850 a month payment and has 3 kids. Appreciate any feedback you have?
R. Grace Rodriguez, Esq.
OFF: (818) 734-7223
CEL: (323) 304-5496
NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice
for ex parte Applications via voicemail or by email. You must comply with
California Law and give notice to a person in my office during regular
business hours.
CONFIDENTIALITY STATEMENT: This message contains privileged and
confidential information and is intended only for the individual named. If
you are not the intended recipient you should not disseminate, distribute,
store, print, copy or deliver this message. Please notify the sender
immediately by e-mail if you have received this e-mail by mistake and delete
this e-mail from your system.
Question: I have a client that owes 33K on a 2nd mortgage which is wholly unsecured. Which I know we can avoid. However, he gets about $8000 a year in tax refunds due to his earned income credits. About $1000 of this is money he pays into the system, and then his credits cause him to get back about $7,000.00 extra. I suspect that if he files bk the trustee will want him to pay at least the first 3 years of tax refunds into the plan. But by time he pays three years he will have given up $24,000 in refunds. When he could settle the claim with his 2nd for about 12,000. So my question to the group is this. Because he needs that money to survive and pay his property taxes every year. Is there an argument to be had that this tax refund is income from the government for tax credits and not subject to being given to the trustee? What if i claim it as a once a year payment by the government in Schedule B as Income. Its not like he can reduce what the government withholds from his pay check in this case because its an earned income credit refunded to him at the end of the year because he makes so little money. However he makes just enough to afford his house in Palmdale at an 850 a month payment and has 3 kids. Appreciate any feedback you have?
-- R. Grace Rodriguez, Esq.OFF: (818) 734-7223CEL: (323) 304-5496NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice for ex parte Applications via voicemail or by email. You must comply with California Law and give notice to a person in my office during regular business hours.
CONFIDENTIALITY STATEMENT: This message contains privileged and confidential information and is intended only for the individual named. If you are not the intended recipient you should not disseminate, distribute, store, print, copy or deliver this message. Please notify the sender immediately by e-mail if you have received this e-mail by mistake and delete this e-mail from your system.
The post was migrated from Yahoo.