Debtor’s Passport Can Be Revoked/Not Renewed If They Owe $51k+ Taxes to IRS

How many clients do you have that owe the IRS more than $51k in back-taxes?  If so, the State Department can revoke your passport entirely or decline to renew until taxes are paid off or you enter into a repayment plan.  See IRS Notice Here

Would that be a stay violation?  Hmmm, maybe not under 362(b)(9) and (26)?  Perhaps it can be argued that it is not an act to collect against the debtor at all?  hmmm I’ll punt on this!

Why Non-Individuals Do Not Have To Turn Over Tax Returns Prior to 341

Read another great piece from Colliers and I reconcile with Rule 4003(b).   Corporation files bankruptcy, trustee requests tax returns 7 days prior….do you have to send it?   Well let’s see what the statute says…

Rule 4002 Duties of Debtor

(b) Individual Debtor’s Duty To Provide Documentation.

(3) Tax Return. At least 7 days before the first date set for the meeting of creditors under §341, the debtor shall provide to the trustee a copy of the debtor’s federal income tax return for the most recent tax year ending immediately before the commencement of the case….

The statute is pretty clear to me in the title of that section — Individual Debtor’s Only.

UPDATE:  Yes, section 521(e)(2) says “debtor shall turnover tax returns” but 521(e)(1) has the word “individual” and under some statutory interpretation or canon I would argue that since (e)(1) comes before (e)(2) that Congress implied  “individual” in (e)(2)  but I know it’s a far stretch.  Thanks Michael Avanesian, I enjoy our stimulating conversations.

FRBP versus the Code — both are federal statutes with conflicting language– who wins?  (turning to 2L conlaw outline).

Scope of Examination for 341 with Trustee

My morning ritual involves reading Colliers while enjoying my homegrown coffee beans that I roast myself  (coffee snob?  absolutely!).  I stumbled across this great piece of information from Collier’s re: scope of 341 examination with the trustee.  I particularly enjoyed reading the legislative history of what the trustee can/cannot ask.  Turns out the 341 examination is not a carte blanche, ask anything you want type of meeting.  Nay!

If you represent debtors and attend 341(a) meeting of creditors then you should read the below….

Read more…

Equipment / Inventory / Accounts Receivable

I had to refer to Article 9 to make sure I understood the difference.   We all know about cash collateral.  The most common business assets that are used for procuring a loan is inventory / equipment / accounts receivable.  Let’s break down the difference in order to understand what the secured creditor has a lien against.

Read more…

Dower and Curtesy? Sounds like a restaurant on Melrose

I had no idea what a dower and curtsy are.  Where did I find these words?  In Section 363 sale/use/lease of property.   Section 363(g) says the trustee may sell property free and clear of any right in nature of a dower or curtesy.    ::::go to google.com::::

A dower or curtesy is a surviving spouse’s right to receive a set portion of the deceased spouse’s estate (1/2 in California).  Dower (not dowry) refers to the portion to which a surviving wife is entitled, while curtesy refers to what a man may claim.  However, because discrimination on the basis of sex is now illegal in most cases, most states have abolished dower and curtesy and generally provide the same benefits regardless of sex — and this amount is often known simply as the statutory share.

Learn something new everyday.

Listening Session in Riverside July 9, 2018 re Chapter 13

This is a great concept.  Judge Scott Clarkson, Chair of the Central District of California Case Management Committee, is going to preside over a “Listening Session” which will allow him to listen to “community members and canvass arising issues regarding current chapter 13 procedures after the implementation of the new chapter 13 form plan.”   You can see the flyer here.  Listening Session Clarkson  I might have to attend myself.

Let’s go to SCOTUS — Can a Trademark Licensee keep using the mark after the Licensor files bk?

A good article I pasted below by David Kluft on an important Circuit Split headed to SCOTUS.   Can a Trademark Licensee keep using the mark after the Licensor files bk?  7th Circuit says yes but 1st Circuit says no.  Not that it has weight but I agree with 7th Circuit’s analysis.

All you trademark lawyers better sit down, because this may come as a shock: You are not “intellectual property” lawyers . . . at least not according to Section 11 U.S.C. § 101(35A) of the Bankruptcy Code, which intentionally omits trademarks from the definition of “intellectual property.”

Owing in part to this omission, there is an ongoing circuit split as to the rights of a trademark licensee when a licensor declares bankruptcy. Can the licensee keep using the licensed mark even if the debtor-in-possession of the bankrupt estate rejects the license? The Seventh Circuit says yes. The First Circuit says no.

But this split could be resolved soon. Last week, a petition for writ of certiorari to the Supreme Court was filed in Mission Products Holdings, Inc. v. Tempnology, LLC.

Read more…

Deadline to File Petition for Review with Tax Court is Jurisdictional says the 9th Circuit

Summary written by Pardis Akhavan, associate at Resnik Hayes Moradi LLP

Duggan v. Commissioner of IRS, 879 F.3d 1029 (9th Cir 2018)      

Issue: Is the thirty-day deadline to file a petition for review of IRS’s determination with the Tax Court jurisdictional or can the deadline be tolled equitably?

Holding: No, § 6330(d)(1) conditions the Tax Court’s jurisdiction on timely filing of a petition for review.

The IRS mailed two Notices of Determination to taxpayer which proposed collection of unpaid income taxes.  Both notices informed the taxpayer that he could dispute the IRS’s determination by “fil[ing] a petition with the United States Tax Court within a 30-day period beginning the day after the date of this letter.”  Thirty one days after receipt of the Notice of Determinations the taxpayer mailed a petition for review to the Tax Court.  The IRS Commissioner moved to dismiss the petition for lack of jurisdiction.  The Tax Court agreed and granted the motion dismissing the petition on jurisdictional grounds. Read more…

Ethics Corner: B & P 6068. “It is the duty of an attorney to do all of the following:”

I have been reviewing the Business & Professions Code section 6000 et seq, preparing for the cdcbaa Ethics program on July 21, 2018.  Here is a pretty key section:

6068.  

It is the duty of an attorney to do all of the following:

(a) To support the Constitution and laws of the United States and of this state.

(b) To maintain the respect due to the courts of justice and judicial officers.

(c) To counsel or maintain those actions, proceedings, or defenses only as appear to him or her legal or just, except the defense of a person charged with a public offense.

(d) To employ, for the purpose of maintaining the causes confided to him or her those means only as are consistent with truth, and never to seek to mislead the judge or any judicial officer by an artifice or false statement of fact or law.

(e) (1) To maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client. Read more…

Public Counsel Reaffirmation Clinic – June 28, 2018

Email from Christian Cooper,

Did you know that bankruptcy filers with auto loans can not only keep their cars, but may be able to lower their payments substantially? Learn how at Public Counsel’s “Reaffirmation and Redemption in Chapter 7 Bankruptcy” MCLE program next Thursday in Downtown L.A. There is no cost to attend, and lunch is provided.

More info: surveymonkey.com/r/reaffmcle

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