Central District Consumer Bankruptcy Attorney's Association

A couple of days ago many of us got an e-mail from Liz Rojas' office
stating that they are NOT going to go after the tax rebates. I called
Aki, at Kathy Dockery's office and he said that they got word from the
OUST that they will be making the decision as to whether or not the
trustees will be entitle to take the tax rebates. Aki said that if our
clients received a letter from Dockery's office regarding the tax
rebates, they should be told to disregard the letter until further
notice.
Nancy B. Clark
Attorney at Law
Borowitz, Lozano & Clark, LLP

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If this is in regards to the economic stimulus payments, I dont think
the payment is an "advance " on the 08 tax refunds. In fact the IRS
website says,
"What is it? It's an economic stimulus payment that more than 130
million households will receive starting in May. It's not taxable, and
it won't reduce your 2007 or 2008 refund or increase the amount you owe
when you file your 2008 return."
So if it's not taxable, and has nothing to do with the refunds, then I
dont see why it should be paid to the Trustees. Also, it's not
an "overpayment" of taxes on earned income, meaning yet again that it
is not a refund.
And if we are to really get technical, the language in the Orders
confirming Ch. 13 Plans says that "federal income tax REFUNDS" are to
be turned over to the Trustees. This is not a refund.
So far, I'm sure everyone has received Elizabeth Rojas' email
indicating that she will NOT be asking for the stimulus payment checks
UNLESS the Court orders otherwise. That was a relief.
However, as per Rod Danielson's mass mailing to all confirmed Ch. 13
Debtors, he specifically stated that all payments received under
the "tax incentive" or "economic stimulus payment" plan must also be
turned over to him.
I personally disagree with that and if necessary wouldn't mind letting
a Judge decide this if the Trustee were to bring a Motion to Dismiss
for failure to pay the meager $600 over to him.
My 2 Pennies on this...
Thoughts? Comments?
>
> Is anyone planning on fighting the Chapter 13 and Chapter 7 Trustees
> regarding the tax rebate? If you are what is your argument. I spoke
to
> Aki and he said that the rebate is an advance on 2008 tax refunds,
and
> since the trustees are entitled to the refunds (especially in 13),
> those funds need to be turned over to the chapter 13 trustee.
>
> If this is true, what happens if a debtor does not get a refund but
has
> filed their 2007 taxes and receives the rebate? Those funds will have
> to be paid back to the IRS. Therefore, the debtor/taxpayer should be
> entitled to sent the funds back to the IRS, correct?
>
> Nancy B. Clark
> Borowitz, Lozano & Clark, LLP
>

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My understanding is that while the rebate is an advance of the refund for 2008, it is not necessarily owed back if there is not a refund due. This is why all the senior citizens who have not filed tax returns in years because they did not have enough taxable income to require a return, had to file one this year for 2007 in order to obtain the rebate. Those same seniors will presumably not make enough money this year to be required to file a tax return for 2008, but are able to keep the rebate monies. That does not help the bankruptcy debtors much. Otherwise it is a bit of a dilemma. For those that do owe for 2008 as a result of the rebate amount, it is clearly unfair for them to have to pay any rebate into the Chapter 13 trustee now. Yet if they receive a refund for 2008, then the rebate monies were supposed to be paid into the plan. I will argue to let the debtor keep it now and make the debtor pay later if there is a refund for 2008. There is always to social policy argument that Congress meant for the rebate to be spent to stimulate the economy (Even if it is a pitance and months delayed in issuance). It will be interesting to see how the issue is resolved.
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
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On Fri Apr 25 15:10 , 'nancybonaccorso' sent:

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charset="windows-1251"
Nancy:
Really good argument. Suggest you talk it through with Aki first and see
what he says. If neither of you convinces the other, then pick a test case.
He wants these issues clarified as much as we do.
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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Is anyone planning on fighting the Chapter 13 and Chapter 7 Trustees
regarding the tax rebate? If you are what is your argument. I spoke to
Aki and he said that the rebate is an advance on 2008 tax refunds, and
since the trustees are entitled to the refunds (especially in 13),
those funds need to be turned over to the chapter 13 trustee.
If this is true, what happens if a debtor does not get a refund but has
filed their 2007 taxes and receives the rebate? Those funds will have
to be paid back to the IRS. Therefore, the debtor/taxpayer should be
entitled to sent the funds back to the IRS, correct?
Nancy B. Clark
Borowitz, Lozano & Clark, LLP

The post was migrated from Yahoo.