Client seeks to discharge $200k of taxes
CLIENT is an investment & financial broker who advises people how to invest their retirement accounts. He is now 60 years old. During the heyday of the stock market boom before it’s collapse in 2007, client made a lot of money. Year after year, he was making between $250K to $400K a year. The problem of course, when you are a high-income earner, is that you will owe money to the IRS, which you should pay in full when it’s due. Otherwise, if you don’t have the discipline or the cash flow to pay the IRS in full, then, even if you are an astute investment & financial broker like my client, you can end up owing the IRS a small fortune of $200,000. With interest and penalties accruing everyday, client can owe the IRS half a million dollars when it is time for him to retire. That’s not a pretty picture to look at. Right now, client’s current income is under $100K a year. That’s still good income, but with a $200K tax liability, client is getting depressed and has lost his love for life. That’s very unfortunate because he actually owes the IRS a large debt, but he does not owe the IRS his life.
The question is: Can client discharge $200K of income taxes owed for the years 2004, 2005, 2006 and 2007? Bankruptcy law states that taxes owed to the IRS are DISCHARGEABLE provided certain factors are met: 1) The taxes owed are at least three years old before the bankruptcy is filed; 2) A tax assessment must have been made at least 260 days before the bankruptcy is filed. 3) There was no fraud involved. There are other factors but let’s not discuss those here. The first three factors are the generally applicable factors that debtors have to contend with. Since these tax returns were filed at least 8 years ago, the first factor is easily complied with. It appears from the documents I see that all taxes were assessed in 2010, so the second factor is also complied with. Since these tax returns were pretty much routine, nothing to hide, there was no fraud involved. Neither did the IRS state that there was some kind of fraud involved when it made the tax assessment. Consequently, it is safe to assume that client’s Chapter 7 discharge will discharge all of the $200,000 of taxes owed.
If the IRS contests dischargeability, either client or the IRS will file an adversary case to have a ruling on dischargeability. However, this appears as a prima facie slam dunk case in favor of client who will discharge everything he owes to the IRS with a Chapter 7 discharge. With this wipe out of his staggering debt owed to the IRS, client can face his golden years in peace, and even be productive again. Client now has a new zest for life, which he had lost in the last 8 years.
Parents hurry to legalize status to cover daughter who actually qualifies for Obama amnesty
The OBAMA AMNESTY which allows people who are here without legal status provided they have a qualifying child who is an American citizen or legal permanent resident, to get a work permit valid for 3 years and renewable for periods of 3 years per renewal is getting into higher gear because the USCIS was directed to start accepting applications by February 19, 2015. People who entered as minors and who graduated from a US high school or obtained a GED also qualify. Applications will be decided by the USCIS on a case-by-case basis. Documented entries with passports and I-94’s, or undocumented entries through the border, or otherwise undocumented, it doesn’t matter as long as AMNESTY requirements are met. I urge you to see me now. Now is the time to apply.
CLIENTS entered the United States 10 years ago with their 2 daughters under father’s H1-B visa. Mother and two daughters entered with father as H1-B dependents. Father was a teacher sponsored by a private high school. During a transition period where father was transferring to another job, his H1-B status lapsed, and so, the entire family went out of status. Older daughter is now 29 and became an American citizen by marriage. Note at this point, that parents can actually qualify for OBAMA AMNESTY because they have a daughter who is a US citizen. However, the problem is that their younger daughter who is now 16 is graduating high school next year, and wants to go to a university of California. Note also that this younger daughter can also qualify herself under OBAMA AMNESTY because she is currently in high school in the United States and entered the United States as a minor and currently has no legal status.
Even though younger daughter can get AMNESTY that will not be good enough for her because she needs student loans for her college expenses and in-state tuition at the UC, as well as to qualify for student loans .To enter UC, in addition to being a CA resident, daughter must be a permanent resident of the United States, not just holding a work permit under AMENSTY. Further, even if parents also qualify for OBAMA AMNESTY with an American citizen older daughter, that will not be good enough to give any permanent resident derivative status to younger daughter for her to get into UC with in-state tuition and get Federal student loans. Younger daughter needs at the very least, an approved derivative permanent resident status, to make her eligible for UC in-state tuition, and Federal student loans. Time is of the essence.
With this situation, CLIENTS will have to move quickly to have their older daughter petition them for permanent residency right now, and hopefully, we can get younger daughter to have at the very least an approved permanent resident derivative status petition by the time she starts applying for college later this year.
“As for me, I watch in hope for the Lord, I wait for God my savior; my God will hear me.” – Micah 7:7.
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Lawrence Bautista Yang specializes in bankruptcy, business, real estate and civil litigation and has successfully represented more than five thousand clients in California. Please call Angie, Barbara or Jess at (626) 284-1142 for an appointme nt at 1000 S Fremont Ave Mailstop 58 Bldg A-1 Suite 1125 Alhambra, CA 91803.