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Are Taxes "Consumer" Debt
>
> No, taxes are NOT consumer debt.
David is right. In a case in Santa Ana where the Assistant UST was
sitting at the table, I refused (before January 1) to file a b22 for a
debtor in a tax case, the Ass't UST just gave a wry smile and told the
trustee he did not need a b22 from my client.
dennis
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Taxes are not consumer debt everyone. There are circuit cases on point.
In re Westberry, 215 F3d 589, 591, (6th Cir. 2000), In re Reiter, 126 B.R.
961 (Bankr. W.D. Tex. 1991).
Michael R. Totaro J.D., L.LM.
Totaro & Shanahan
P.O. Box 789
Pacific Palisades, CA 90272
310 573 0276 (v) 310 496 1260 (f)
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Home.
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Note that 101(8) of the bk code defines consumer debt as debt incurred by
an individual primarily for a personal, family, or household purpose. Isure that if I did two verbal whirlygigs, a cerebral half gainer, followed
by a cortical half Lutz, I could torture the English language and common
sense by saying that one pays taxes so that ones person and ones family
will not be harassed by the IRS or the FTB, which would upset the household
purpose of tranquility and which is the primary purpose of ones personal
family household. However, one should be careful about using such an
argument as your primary argument, if you dont want your familys household
upset by the sanctions which might be incurred. And would those sanctions
be a consumer debt
Patrick T. Green, Esq.
Fitzgerald & Green
Attorneys at Law
1010 E. Union Street
Suite 206
Pasadena, CA 91106
Tel: 626-449-8433
Fax: 626-449-0565
pat@fitzgreenlaw.com
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That is the $64,000 question. I treat the taxes in my cases as non consumer
and check the new box on the revised means test as non consumer and do not
do it. I also list the case as a business case (non consumer) if the
majority is non consumer debt (I do the same with investment no residential
real property) There I think you are fine. The real issue comes with I/J.
I am very conservative (as are some others on this list serve). I think the
abuse issue is alive and well and believe you will face challenge from the
UST if it is out of line (for all kinds of reasons). Then again, there are
others that are less conservative and will say that is non consumer. Be
prepared for a war if income far exceeds expenses. This is also a question
for the Peter Anderson session.
Hank
Henry M. Toles, J.D., M.B.A.
Henry M. Toles, A Law Corporation
11746 Goshen Avenue, No. 1
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jbsesq1965
Sent: Tuesday, March 18, 2008 09:31
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Are Taxes "Consumer" Debt
I think this was discussed some months ago, but I could not find it in
archives.
Prospective debtor is a dentist. His two biggest debts are a lease on
dental equipment (deficiency, clearly not consumer) and income taxes,
incurred individually while running his practice as a dba. Are the
income taxes "consumer debt"?
Assuming that his case is not "primarily consumer" and per 707(b)(1)
there is no means test, do I still face a challenge under 707(b)(3)
(i.e. "totality of the circumstances")? There is curious language in
707(b)(3): "In considering UNDER PARAGRAPH [707(b)(1)] whether the
granting of relief would be an abuse....[totality of
circumstances]..." Since (b)(1) is limited to "primarily consumer"
debtors, it seems the statute has no provision to allow for a dismissal
challenge under ANY provision of 707 other than 707(a), (i.e.
unreasonable delay, non-payment of fees, failure to file schedules).
Anyone aware of any cases that support or debunk my reading of this?
Thanks for any input.
Yahoo! Groups Links
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I think the issue is settled. If anyone has ever seen any case which says
that taxes ARE consumer debt, I would very much like to read that case.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
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No, taxes are NOT consumer debt. The IRS spent millions of dollars in
litigation to get this finding so that they are NOT subject to the co-debtor
stay under Sect. 1301.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
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It's not 100% settled, but the vast majority of opinion--plus common
sense--concludes that income taxes are non-consumer. They are a debt
derived from working (i.e. business) and not in purchasing goods.
If the debts are primarily non-consumer, a challenge cannot be made under
707(b) or any of its subsections. However, 707(a) is always available and
there are some recent cases (sorry don't have the cites handy) showing how
"for cause" is interpreted. Essentially, if you're talking about a surplus
on I&J, it would need to be a significant enough one to warrant cause, and
that usually means able to pay more than 50% of the total debt over 60
months, but there's no bright line rule.
______________________
Mark J. Markus
Law Office of Mark J. Markus
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)509-1460 (fax)
web: http://www.bklaw.com/
This Firm is a Qualified Federal Debt Relief Agency
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To:
Sent: Tuesday, March 18, 2008 10:30 AM
Subject: [cdcbaa] Are Taxes "Consumer" Debt
>I think this was discussed some months ago, but I could not find it in
> archives.
>
> Prospective debtor is a dentist. His two biggest debts are a lease on
> dental equipment (deficiency, clearly not consumer) and income taxes,
> incurred individually while running his practice as a dba. Are the
> income taxes "consumer debt"?
>
> Assuming that his case is not "primarily consumer" and per 707(b)(1)
> there is no means test, do I still face a challenge under 707(b)(3)
> (i.e. "totality of the circumstances")? There is curious language in
> 707(b)(3): "In considering UNDER PARAGRAPH [707(b)(1)] whether the
> granting of relief would be an abuse....[totality of
> circumstances]..." Since (b)(1) is limited to "primarily consumer"
> debtors, it seems the statute has no provision to allow for a dismissal
> challenge under ANY provision of 707 other than 707(a), (i.e.
> unreasonable delay, non-payment of fees, failure to file schedules).
>
> Anyone aware of any cases that support or debunk my reading of this?
> Thanks for any input.
>
>
> ------------------------------------
>
> Yahoo! Groups Links
>
>
>
The post was migrated from Yahoo.
I think this was discussed some months ago, but I could not find it in
archives.
Prospective debtor is a dentist. His two biggest debts are a lease on
dental equipment (deficiency, clearly not consumer) and income taxes,
incurred individually while running his practice as a dba. Are the
income taxes "consumer debt"?
Assuming that his case is not "primarily consumer" and per 707(b)(1)
there is no means test, do I still face a challenge under 707(b)(3)
(i.e. "totality of the circumstances")? There is curious language in
707(b)(3): "In considering UNDER PARAGRAPH [707(b)(1)] whether the
granting of relief would be an abuse....[totality of
circumstances]..." Since (b)(1) is limited to "primarily consumer"
debtors, it seems the statute has no provision to allow for a dismissal
challenge under ANY provision of 707 other than 707(a), (i.e.
unreasonable delay, non-payment of fees, failure to file schedules).
Anyone aware of any cases that support or debunk my reading of this?
Thanks for any input.
The post was migrated from Yahoo.