Jeffrey M. Rosenblum, P.C.
A Fresh Start

September 2012 Archives

Financial life after bankruptcy not so bad

The expected negative financial aftereffects of bankruptcy are often cited as a reason people delay in filing for bankruptcy protection. Many filers believe that the years following a bankruptcy will be credit-free, removing their ability to obtain loans for the seven- to 10-year period that a bankruptcy remains on a credit report. This belief is incorrect and, as many Long Island filers have discovered, financial life after bankruptcy isn't necessarily all bad.

Long Island housing prices continue to drop

Financial difficulties can strike anyone at any time. Whether they are the result of an extended illness or a period of unemployment, financial troubles can have far-reaching consequences. Many people's most valuable assets are their homes, and protecting their homes from foreclosure is critical in ensuring their security while they are rebuilding their finances.

Chapter 11 bankruptcy doesn't have to be ugly

Businesses across New York and elsewhere have faced significant economic struggles in recent years. Consumers have been hesitant about spending money and millions of people have wrestled with periods of unemployment and difficulty finding new jobs. The state of the economy forced many business owners to make a difficult decision. Should we file for bankruptcy protection?

The Taxpayer Advocate Service (TAS)

The Taxpayer Advocate Service (TAS) is designed to be a "safety net" for taxpayers who are experiencing problems with the IRS. However, because the TAS has been inundated with requests from six million to 12 million taxpayers who may be having problems at any given time, TAS recently stated "we need to focus on cases where we can add the most value. These tend to fall into four categories. 1. Where a taxpayer is experiencing some financial difficulty, emergency, or hardship, and the IRS needs to move much faster than it usually does (or even can) under its normal procedures. In those cases, time is of the essence. If the IRS doesn't act quickly (for example, to remove a levy or release a lien), the taxpayer will experience even more financial harm. 2. Where many different IRS units and steps are involved, and the case needs a "coordinator" or "traffic cop" to make sure everyone does their part. TAS plays that role. 3. Where the taxpayer has tried to resolve a problem through normal IRS channels but those channels have broken down. 4. Where the taxpayer is presenting unique facts or issues (including legal issues), and the IRS is applying a "one size fits all" approach, isn't listening to the taxpayer, or doesn't recognize that it needs new guidance for those circumstances. Last year, TAS assessed where its efforts have the greatest impact, and identified four types of issues in which the TAS seemed to get the right answer. Those cases involve the processing of original tax returns, amended returns, rejected and unpostable returns, and injured (but not innocent) spouse claims. We determined that TAS generally won't accept cases involving these pure processing issues so we could focus on higher-impact problems. However, there are many exceptions to this policy. If the taxpayer is suffering an economic burden, TAS will take the case. If the case involves other issues, as in the example below, TAS will take the case. If the taxpayer is referred by a congressional office, TAS will take the case. And if the taxpayer specifically requests and insists, TAS will take the case. "Finally, the IRS through the TAS provided several examples of the kinds of cases that TAS will and won't accept.
"Example 1:
A taxpayer has more than one issue. The normal processing time for an amended return is approximately eight to 12 weeks. The taxpayer filed a 2010 Form 1040X more than four months ago expecting a refund, but also has an outstanding balance for tax year 2009 and is receiving IRS collection notices. The 2010 refund would pay the balance in full and leave a small amount for the taxpayer. TAS will accept the inquiry and establish a case because expediting the processing will resolve a collection issue. Example 2: Single issue. The taxpayer filed a 2010 Form 1040X more than four months ago expecting a refund but this time has no audit or collection issues and is not facing an economic burden. TAS won't open a case, but instead will refer the matter to the appropriate IRS unit. "