LostHead Wonders Where The CtC Savvy Lawyers Are

[Doktor Avalanche]

Once we CTC members are notified by the IRS that we have an IRS debt amounting to tens of thousands to hundreds of thousands of dollars, we know for sure the IRS will continue to hound us until a settlement of some sort is reached and fulfilled. The alleged debt will not go away by ignoring it. It must be addressed.

In my case there is an alleged debt of almost $700,000, and I have now decided I will need legal assistance to resolve this matter. I have spoken with several tax attorneys who are more than willing to help, but they know nothing about the book "Cracking the Code". Richardf614 recommended going to http://www.minnslaw.com which I have done, but I have not checked whether or not they know anything about CTC. Have any of you had cause to seek legal assistance and if so do the attornenys in the firm/law practice know anything about CTC? I am interested in your response.

This is just priceless.

I love how taxdoc says that his debt is alleged and in the same breath decides he's going to need an attorney to get his ass out of this alleged sling it's in.

And so the panic builds.

I'll save you the bother, taxdoc: no reputable attorney takes CTC seriously. In a recent survey, 10 out of 10 tax attorneys who actually do real tax law have correctly identified CTC and it's purveyor as a total scam.

Come January 13th this truth will be revealed.

[.]

they know nothing about the book "Cracking the Code"

That's unpossible! Surely they are aware of the magic words.

$700K is probably bankruptcy time, but the poor clown may have to wait for a couple of years before it's dischargeable.

[Nikki]

TaxDoc is completely mistaken.

Every single one of those tax attorneys is fully aware of CtC.

[wserra]

If he keeps looking long enough, "taxdoc" will find his lawyer. There are members of every profession, certainly including law, who will tell the mark what he wants to hear in order to get his money.

[webhick]

I love how taxdoc says that his debt is alleged and in the same breath decides he's going to need an attorney to get his ass out of this alleged sling it's in.

People accused of a crime they did not commit need lawyers, too. But taxdoc isn't one of them.

[Gregg]

What's the line on someone telling him (on JH or off) that he might come here?

[Doktor Avalanche]

Kensei chimes in:

My father-in-law runs his own company and has a lawyer that works with him, and I want to talk to them about CTC as well, but due to the complexity and the fact that said father-in-law doesn't particularly like to read books, we are working on a strategy to provide info, high points, etc. and have the lawyer read the book to help explain it too. The more lawyers that know, the better. After all, they understand the importance of terms for specific situations, and they also know court procedures and when unsavory attorneys pull B.S. tricks to fool the average person.

Yeah, tricks like telling you that CTC is a total scam and that you're an idiot for listening to anything Hendrickson says.

Whoops...I think I just predicted the explanation the lawyer will give.

[Doktor Avalanche]

If he keeps looking long enough, "taxdoc" will find his lawyer. There are members of every profession, certainly including law, who will tell the mark what he wants to hear in order to get his money.

That's why I was careful to include the word "reputable".

[Prof]

they know nothing about the book "Cracking the Code"

That's unpossible! Surely they are aware of the magic words.

$700K is probably bankruptcy time, but the poor clown may have to wait for a couple of years before it's dischargeable.

A false, fraudulent, etc. return generates a non-dischargeable obligation. Ordinary tax debt -- except the portion secured by lien -- is dischargeable if more than 3 years has passed excluding any extensions, etc. Late filed returns are not dischargeable until a minimum of two years has passed. The trust fund portion of withholding is never discharged.

CTC is false/fraudulent, I suppose (I've not looked for a case); a CTC filer would have to file amended returns, wait two years, and then could only discharge the portion not secured by a tax lien.

If you file before the three/two year periods, the tax will become forever non-dischargeable (a debt denied a discharge in one case is never discharged in a later case).

[The Observer]

The more lawyers that know, the better. After all, they understand the importance of terms for specific situations, and they also know court procedures and when unsavory attorneys pull B.S. tricks to fool the average person.

Uh, Kensei, every one of those attornies are members of the BAR, that sinister organization that continually plots to subvert the law and force people to pay taxes. So what makes you think that they are going to be convinced by what is in Hendrickson's book?

And then there is the little matter of Pete actually consorting with one of those BAR-registered attornies regarding his indictment. How do you think that is going to turn out?

[grixit]

So if they had an alleged tumor of 700g, would they bewail the scarcity of doctors who understand the book "All Disease is Caused by Pixie Dust"?

[Judge Roy Bean]

Not to imply that there is more sophistication among the TD/TP crowd than there is, but you have to consider that anyone as self-indulgent as those who would deliberately engage in illegal acts aren't above simply trying to play a PR game with an amateur 'net posting strategy.

Trust me, professionals are used to affect outcomes, including not only monitoring but intervention tactics designed to shape opinion in high-stakes issues. I doubt Hendrickson's minions have the resources to bring that kind of weapon to bear, but let's not ignore the potential for some inadvertent cleverness.

There are such things as professional trolls. The real difference is they have insider sources they can "drip" information from into the mix that the amateurs never have access to.

[Brian Rookard]

If you file before the three/two year periods, the tax will become forever non-dischargeable (a debt denied a discharge in one case is never discharged in a later case).

If I'm not mistaken, I think they can still get a discharge in a Chapter 13. Although with $700,000+ of tax debt ... he's pushing the Chapter 11 envelope.

[Prof]

If you file before the three/two year periods, the tax will become forever non-dischargeable (a debt denied a discharge in one case is never discharged in a later case).

If I'm not mistaken, I think they can still get a discharge in a Chapter 13. Although with $700,000+ of tax debt ... he's pushing the Chapter 11 envelope.

No discharge for non-dischargeable taxes in ch.13 anymore (there was a glitch in the 2 year/old/stale return rule) that was fixed the last time the statute was amended. If you're curious, the only taxes not dischargeable in the old version of 13 were those listed as priority claims -- i.e., due within the past three years or false/fraudulent. The 2 year late filed return rule did not apply in ch. 13, so those could be discharged with a plan paying X%.

Now, the only thing you can do in 13 is pay 100% over five years maximum. There is no other discharge unless the portions of the taxes due are unsecured claims for the non-trust fund portion of withholding, which portion is also dischargeable in 7, along with certain penalties and interest claims.

This guy owes too much -- probably -- to get into Ch. 13, anyway.

He could also file an 11 if he needs more than 5 years and the IRS and other creditors don't object.

None of this discussion applies to the value of collateral secured by a tax lien; that is an ordinary secured debt, and must be paid to the extent of the value of the collateral.

[Brian Rookard]

If you file before the three/two year periods, the tax will become forever non-dischargeable (a debt denied a discharge in one case is never discharged in a later case).

If I'm not mistaken, I think they can still get a discharge in a Chapter 13. Although with $700,000+ of tax debt ... he's pushing the Chapter 11 envelope.

No discharge for non-dischargeable taxes in ch.13 anymore (there was a glitch in the 2 year/old/stale return rule) that was fixed the last time the statute was amended. If you're curious, the only taxes not dischargeable in the old version of 13 were those listed as priority claims -- i.e., due within the past three years or false/fraudulent. The 2 year late filed return rule did not apply in ch. 13, so those could be discharged with a plan paying X%.

Now, the only thing you can do in 13 is pay 100% over five years maximum. There is no other discharge unless the portions of the taxes due are unsecured claims for the non-trust fund portion of withholding, which portion is also dischargeable in 7, along with certain penalties and interest claims.

If the return is not fraudulently filed, and is on time, the debt still appears to be discharbeable. 523(a)(1)(A) is still available to discharge. It pays to file the return on time.

Furthermore, even late filed returns can result in discharged taxes. 523(a)(1)(B) is limited to tax years where the tax returns were filed within 2 years of filing the bankruptcy petition ... wait more than 2 years, and the debt can be discharged. Timing, timing, timing.

This guy owes too much -- probably -- to get into Ch. 13, anyway.

With that size of tax debt ... I'm sure he's pushing the envelope.

He could also file an 11 if he needs more than 5 years and the IRS and other creditors don't object.

Except see 1129(a)(9)(C) - can't do it over 5 years.

None of this discussion applies to the value of collateral secured by a tax lien; that is an ordinary secured debt, and must be paid to the extent of the value of the collateral.

What if the value of the collateral is less than a prior mortgage so that the second tax lien is completely unsecured? Maybe able to treat the debt as unsecured. I'll admit that this is one of the areas that (as a newer bankruptcy attorney) we bankruptcy attorneys need to be more knowledgeable about (tax lien priority (or non-priority)). We have some clients with some large tax debts, but, so far, no tax liens.

[Prof]

BRIAN: In response to your comments:

He could also file an 11 if he needs more than 5 years and the IRS and other creditors don't object.

Except see 1129(a)(9)(C) - can't do it over 5 years.

None of this discussion applies to the value of collateral secured by a tax lien; that is an ordinary secured debt, and must be paid to the extent of the value of the collateral.

What if the value of the collateral is less than a prior mortgage so that the second tax lien is completely unsecured? Maybe able to treat the debt as unsecured. I'll admit that this is one of the areas that (as a newer bankruptcy attorney) we bankruptcy attorneys need to be more knowledgeable about (tax lien priority (or non-priority)). We have some clients with some large tax debts, but, so far, no tax liens.

[/quote]

Sorry that I wasn't clear: tax obligations based upon returns properly filed for more that three years (or at least 2, if the return was late filed) are generally dischargeable; however, false/fraudulent filing create permanently non-dischargeable debts, as do trust fund obligations.

There is some debate about extending tax debts in chapter 11 cases beyond 5 years if there is no IRS objection.

As to tax liens, like other liens, IRS tax liens create secured debt only to the extent of the value of the collateral. If the tax lien is a second lien, and the first lien gets the collateral, the debt is an ordinary unsecured debt. Most states, however, priovide that ad valorem tax liens on real estate prime all other liens, including purchase money mortgages.

For IRS tax lien priorities over article 9 liens, look at the statute -- the IRC recognizes article 9 liens, but limits liens as to after acquired property and future advances. This is particularly important in the business context, for inventory and equipment are replaced, etc. Also, revolving loans -- which are by definintion "future advance" facilities -- are limited by the IRC. See the provisions dealing with these issues at IRC sec. 6331 and following (I don't have quick access to an IRC or the relevant sections here at home).

The IRC was amended to deal with the judicial rejection of article 9 liens securing future advances and attaching to after acquired property. This is the so called "choatness" doctrine, which held that the IRC created tax lien was supperior to the ""inchoate" or not fixed in amount lien created under article 9 to secure future advances or reach after acquired property as new/replacement collateral.

(I actually think this stuff is fun; I need to see a mental health professional -- fast!!!)

[Famspear]

. . . . (I actually think this stuff is fun; I need to see a mental health professional -- fast!!!)

OK, well, it's good to know I'm not alone......

[The Observer]

And in all of that, I can't believe one person didn't mention Isom.

[Brian Rookard]

(I actually think this stuff is fun; I need to see a mental health professional -- fast!!!)

Me too. I never would've thought that I would end up in bankruptcy ... and I love it.

I take a real pride in the "strategery" in my Chapter 13 cases where I've saved our clients literally tens of thousands of dollars over the life of their plans. There's a real sort of art to pre-bankruptcy planning, and knowing all the little tips and tricks that will save your clients a lot of money.

I had one client where I went into his case (after my boss had started the case) and I redid all of his expenses that were never listed originally ... the result was saving almost $1,000 per month. I've gone into other cases and saved $500/month here, hundreds there. It's fun.

I've had clients wait for months before filing, while they ramped up charitable contributions, 401k contributions, etc. all so that their disposable income test would be hundreds and hundreds less, with the consequent reduction in their plan payments, while they were spending the money on the things that were important.

I've seen debtor's attorneys who will just file someone without any sort of planning for the disposable income test, taxes, etc. It really pisses me off.

I guess I take pride in what I do.

[Famspear]

(I actually think this stuff is fun; I need to see a mental health professional -- fast!!!)

Me too. I never would've thought that I would end up in bankruptcy ... and I love it.

I take a real pride in the "strategery" in my Chapter 13 cases where I've saved our clients literally tens of thousands of dollars over the life of their plans. There's a real sort of art to pre-bankruptcy planning, and knowing all the little tips and tricks that will save your clients a lot of money.

I had one client where I went into his case (after my boss had started the case) and I redid all of his expenses that were never listed originally ... the result was saving almost $1,000 per month. I've gone into other cases and saved $500/month here, hundreds there. It's fun.

I've had clients wait for months before filing, while they ramped up charitable contributions, 401k contributions, etc. all so that their disposable income test would be hundreds and hundreds less, with the consequent reduction in their plan payments, while they were spending the money on the things that were important.

I've seen debtor's attorneys who will just file someone without any sort of planning for the disposable income test, taxes, etc. It really pisses me off.

I guess I take pride in what I do.

Chapter 13 for me is like the dark side of the Moon.

Here's a Chapter 7 problem:

Individual comes to you, and you decide he needs to file Chapter 7 (let's say, for reasons unrelated to taxes). He meets the means test, etc., etc. Individual has a sole proprietorship business which he has been reporting on his Schedule C (Form 1040) for years and years. For years 2007 and prior, he has generated humongous, unused net operating loss carryovers. Although he does need to file bankruptcy, he had mucho grande net income from his Schedule C business for January thru November 2008. You are going to file his bankruptcy petition on December 1, 2008. What federal income tax advice do you give him for 2008?