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IRS Claims R Kelly Owes IRS Back Taxes

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R Kelly is the latest celebrity the IRS is after.  The IRS claims R. Kelly owes nearly $5 million dollars for taxes going back to 2005.  R. Kelly has attorneys working on his side to resolve his IRS back taxes.  If you owe the IRS any back taxes, you, too, should find an attorney to help you resolve your IRS back taxes.  Opem Tax Resolution, and the Law Office of Steven A. Leahy, PC helps businesses and families fight the IRS.  If you have IRS back taxes or other tax issues, you need an attorney. You need me, Steven A. Leahy.  Call right now – 312-664-6649.  We can help.

Foreclosures in Illinois Rise 29% in May 2012

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Foreclosures are on the rise again in Illinois.  May 2012 saw the total number of foreclosure cases rise 29% from the total number in April 2012 – and 54% from May 2011.  In Chicago, 1 in every 252 housing units are now facing foreclosures.  If you are facing foreclosure, you need an experienced attorney to help you through this time.  Our office has helped 100’s of Illinois families fight their foreclosure case.  You have lots of options – make sure you understand each and every one.  If you are facing foreclosure, you need and attorney.  You need me – and the Law Office of Steven A. Leahy, PC. Call me on 312-664-6649.

Lauryn Hill Faces Jail Time for Un-filed Tax Returns

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Many of my clients ask me about criminal charges for un-filed tax returns.  While the IRS doesn’t always seek criminal action against non-filers.  It DOES happen.  Singer Lauryn Hill was recently charged with failing to file 2005-2007 tax returns. She faces JAIL time – one year in prison and $100,000 on each count if convicted.  So, be careful. If you haven’t filed your tax returns, you need an attorney.  Call me at 312-664-6649.

Student Loan Garnishment

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Another great question by a former client today: She has some outstanding student loans and is worried about student loan garnishment on her wages and/or her checking account.  She also questioned whether she was breaking the law. Here is my answer:

First, it is NOT illegal to owe someone money.  So, it is not a crime.

Usually, the loan company can get a student loan garnishment  without a court order – they don’t have to go to court. All they have to do is send you written notice:

  • at your last known address (right?)
  •  at least 30-days before issuing a garnishment order to your employer.

With a student loan garnishment, they get 15% of your after tax income (The amount must be less than 30 times the hourly minimum wage). – Unless, the student loan company takes you to court and gets a judgment (they usually don’t).  The rules are a little different for a judgment creditor garnishment. The creditor gets 15% of the gross.

It is my understanding, if you were recently unemployed, the student loan garnishment cannot be issued until you have been continuously re-employed for more than 12-months.

Without a court order, I do not believe they can reach the money in your bank account (I have seen some conflicting stories on that). I have never seen that happen.  (remember, without a court order).

You have to know they can take your Tax Refund too, again without a court order.  Same rules apply. They have to send you notice, just like the wage notice.  If you file married filing  jointly (usually the best way for a husband and wife to file) any refund will be used to set off the student loan – all the refund.  They do not split between husband and wife – they take it all.

It may be best to try to workout some sort of payment with them.  You know I would be happy to help you do that.

 

Child Exemptions on Taxes for Divorced or Separated Parents

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I am a contributor on the Web Site Avvo.com.  I answer legal questions in the Tax, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, and Foreclosure Practice areas (mostly) posted by “Askers.”  The most common question, by far, asked in the Tax Practice area concerns child exemptions on taxes for divorced or separated parents.

So I thought it was a good area to post on our blog.  Generally, the parent who has custody (the “custodial parent”) is entitled to take the child exemptions on taxes.  The custodial parent is defined as the parent having custody for the greater part of the calendar year and the one who provides more than half of the child’s support.  The other parent (the “noncustodial parent”) may be entitled to the deduction when:

  • The custodial parent releases or gives the exemption to the noncustodial parent for the year
  • The child lives with the noncustodial parent for more than half the year

When both parents have joint physical custody of their child, it may not be clear which parent is entitled to the exemption. This can be avoided by agreeing, in advance,  on who will take the exemption and having the other parent sign a release (IRS Form 8332)  of the exemption and/or including your agreement concerning the child exemption on taxes in your Divorce Decree or Child Custody Agreement.

What should you do if the other parent claims the exemption when you are entitled to the exemption?  

I had a client call today who filed his return electronically, and his return was rejected because the noncustodial parent claimed the child exemption of taxes first.  He wanted to know what he could do. I told him, there are four steps to to take in this situation:

  1. First, determine if you want to make an issue of the exemption.  If you do,
  2. make SURE you are entitled to the exemption.
  3. Next, print, sign and date your return and MAIL it to the IRS.
  4. Expect to receive paperwork from the IRS – the noncustodial parent will also receive the same paperwork. Once you receive the paperwork from the IRS:
  • complete the paperwork and send it back promptly.
  • provide evidence that the child lived with you – school records are VERY persuasive.  But you could use Doctor visits, day care receipts, etc.  If your child has lived with you, you will find something to prove it.  The noncustodial parent will also have to complete the paperwork and send it back to the IRS.  The noncustodial parent will not be able to prove that your child lived with them – because your child didn’t.

I hope this post answers your questions about Child Exemptions on Taxes for Divorced or Separated Parents. If you have IRS problems, you need an attorney. You need me Steven Leahy. Call me (312) 664-6649 or Toll Free (866) 664-6647. 150 North Michigan Avenue, Suite 1120 Chicago, 60601

 

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