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THE CONSUMER BANKRUPTCY LETTER
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In This Issue:
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Dec. 29, 2003
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FEATURED BOOK: King's Discharging Taxes
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NO EXEMPTION FOR CONCEALED ASSETS
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CONSUMER CREDIT PERFORMANCE IMPROVES
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BANKRUPTCY ACADEMY READIES FOR 2004
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The One-Stop site for Consumer Bankruptcy Lawyers
Books / Software / Periodicals
FEATURED -
King's DISCHARGING TAXES IN BANKRUPTCY ed. 2000
5th ed. • 915 pages • 75 exhibits and checklists • over 1,000 cases cited • indexed $95 - 2002 Supplement available
This book has been called "the bible" for discharging taxes in consumer bankruptcy cases. Used by thousands of lawyers, trustees, judges and other tax professionals across the country, it explains in simple yet comprehensive terms what kinds of taxes can be erased, when they can be erased, and how they can be erased in chapter 7, 13, or 11. It covers all the issues and traps for the unwary. This book is even used by revenue officers!
Says Ike Shulman, former President of the National Association of Consumer Bankruptcy Attorneys, "Every serious bankruptcy practitioner should have this book!"
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OTHER POPULAR TITLES -
King, Discharging Taxes in Bankruptcy with 2002 supplement $135
King, Marketing A Consumer Bankruptcy Practice $89
King, Chapter 7 Law & Practice $129.50
King, Chaper 13 Law & Practice $129.50
King, Fees & Ethics in Consumer Bankruptcy Cases $79.95
NCLC, Consumer Bankruptcy Law & Practice $140
James Pub, Bankruptcy Courts & Procedures $110
Aspen, Basic Bankruptcy Law For Paralegals $79.95
Aspen, Automatic Stay Litigation $195
Juris, Fundamentals of Bankruptcy & Corporate Reorganization $80.75
CD TimeValue, TValue5 Interest Calculator $149.00
CD Gold, Tax Discharge Chronometer $139.00
CD Collier TopForm Bankruptcy System $700
OVER 100 SELECTIONS TO CHOOSE FROM
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CONSUMER CREDIT PERFORMANCE IMPROVES
NEW YORK - The credit performance of U.S. consumers showed signs of improvement in October 2003. Credit card loans written off as uncollectible, though still slightly higher than last year's rate, fell to the lowest rate of the year. For the third consecutive month, cardholder payments classified as delinquent improved. Also in October, in another sign of consumer credit strength, cardholders repaid a record-high proportion of their outstanding debt.
These findings are detailed in Moody's Credit Card Credit Indexes for October 2003, which track over $390 billion of U.S. bank credit card loans backing securities rated by Moody's.
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PENTHOUSE MAGAZINE FILES CHAPTER 11 PLAN
Penthouse magazine publisher General Media filed its reorganization plan with the bankruptcy court Tuesday, a move it said will allow the continuation of the financially troubled men's magazine.
"We believe the continued publication of Penthouse is now ensured for many years," said a statement from Robert Guccione, chairman and CEO of General Media, Inc., the publisher of the magazine, who has announced plans give up his current post and serve the company as publisher emeritus for the next 10 years. The company said it expects to emerge from bankruptcy court protections by the end of February.
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CONCEALED ASSETS CANNOT BE CLAIMED EXEMPT FOLLOWING DISCOVERY BY TRUSTEE
A debtor is not entitled to a claim of exemption on an asset which she knowingly concealed and failed to disclose and then later disclosed and claimed as exempt.
Debtor concealed receipt of approx. $4k in personal injury settlement funds, and concealed bank account into which the funds were deposited on the eve of bankruptcy. Assets were discovered by the trustee several months after the bk was filed.
COMMENT: The court followed the majority rule that debtors may not claim as exempt assets which they knowingly concea and which are determined to be property of the estate, even if debtors argued that the property was not property of the estate.
In re Grogan, __ B.R. __ (Bkrtcy.Utah 2003)
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HORSES ARE TOOLS OF THE TRADE
Debtors used four horses to give riding lessons to children, and four heffers to teach rodeo roping and penning. She, therefore, used the livestock as tools of her trade.
The court relied on a functional approach. The functional approach, or “use test,” requires a court to look to the function or use of the property to determine if it is, indeed, a tool of debtor’s trade.
COMMENT: The courts are split on whether animals may be deemed tools of the trade, some opinions drawing a distrinction between animate and non-animate objects. However, the federal tools of the trade exemption makes no such distinction.
In re Gray, __ B.R. __ (Bkrtcy.W.D.Missouri 2003)
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RETURN FILED AFTER IRS SFR AND ASSESSMENT IS NOT A TAX RETURN FOR PURPOSES OF THE 2-YEAR RULE
Taxpayer filed returns several years late, following IRS assessments; the returns showed less tax due. Held, income tax forms unjustifiably filed years late, where the IRS has already prepared substitute returns and assessed taxes, do not constitute "returns" for purposes of 11 U.S.C. § 523(a)(1)(B)(i).
“We hold then that income tax forms unjustifiably filed years late, where the IRS has already prepared substitute returns and assessed taxes, do not constitute "returns" for purposes of 11 U.S.C. § 523(a)(1)(B)(i). For its part, the government urges a broader rule than we adopt here, namely, that any post-assessment filing can never qualify as a return for purposes of Section 523(a)(1)(B)(i). This simply goes too far. Circumstances not presented in this case might demonstrate that the debtor, despite his delinquency, had attempted in good faith to comply with the tax laws.”
COMMENT: The majority rule is that a taxpayers' filed return, following a substitute-for-return filed by the IRS but prior to assessment of tax, is a “return” for purposes of the 2-year rule for discharge; however, if the return is filed following an assessment of an amount due, the opinions are split on whether the return satisfies the rule. Some courts hold that, following an assessment, a return filed by the taxpayer disclosing corrected financial information and changing the amount of the tax due, is a return for purposes of the rule. Note: many post-SFR assessments are mere estimates by the taxing entity, and may be corrected by a taxpayer's later-filed return.
Unlike most of the opinions on this issue, the ruling here does not hang on whether the late-filed return serves any useful purpose (such as correcting the amoung due), but rather the debtor's good-faith effort to comply with the tax reporting laws. Debtor's explanation that he “simply didn't get around to it” did not satisfy that criterion.
In re Moroney, __ F.3d __ (4th Cir. 2003)
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MORGAN KING'S TAX DISCHARGE WORKSHOPS
King Bankruptcy Academy will schedue three, and perhaps four seminar/workshops on Discharging Taxes in Bankruptcy, for 2004. Exact dates are to be determined. The Academy tax discharge seminar is a 2 1/2 event, featuring Morgan King and other highly qualified presenters.
Locations the Academy will appear include; Montery, California; San Antonio, Texas, New Orleans, LA, and New York.
To keep current with Academy dates and places, visit BankruptcyAcademy.com, or call (925) 829-6460.
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