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Peter Bella – TheCookingCop.com

by

Steven A. Leahy

Peter Bella – TheCookingCop.com

By Steven A Leahy

Regular listeners to The IRS Radio Hour know my family members were union iron workers for three generations. I was a member of the Riggers, Machinery Movers & Erectors Local 136 for many years before I started practicing law. As a Rigger, I met and became friends with many Chicago Police Officers (still am). I always enjoyed their refreshing honesty about life in Chicago – It isn’t always what we think it is.

This week on the IRS Radio Hour we welcome Peter Bella to the show. I have known Mr. Bella for some time, he hired me to help him solve his IRS problem – it turns out he knew my brother Jim before he hired me. They were friends through mutual work with conservative causes. Peter Bella is a retired Chicago Police officer, photographer, blogger, chef and Chicago life observer.

PeterBella

I follow Mr. Bella’s blog posts on chicagonow.com. “Chicagonow.com is an online community created for Chicagoans by Chicagoans. Every day, ChicagoNow bloggers post more than 100 entries to the site about local topics. And every day, thousands of ChicagoNow users comment on those entries. The result is a lively, authentic conversation about all things Chicago.”

His recent articles include “Is it time to start Tentbnb in Chicago”; What cops know can solve some of America’s problems”; “Don’t bite the hand that fed you”; “Ignorant and uninformed rhetoric over police killings is disgraceful”; Just to name a few. Each article is a blunt, “as I see it” response to the biggest issues facing Chicago.

Mr. Bella also blogs about another subject I love: Food – as the Cooking Cop. Why Cooking Cop? He writes, “Cooking Cop sounded better than the Cooking Dude, Cooking Goof, Cooking Mook, or Cooking Mamaluke. I cook. I eat. I drink. I write about it. I shoot pictures too. That is my game.”

On TheCookingCop.com, Mr. Bella shares his “passion for eating, drinking, and cooking.” He shares “recipes, techniques and methods, handy kitchen tips and advice.” He also writes about his favorite Chicago restaurants, usually out of the way joints with little fanfare, but great food. I have to say, the pictures of the food he prepares are mouth-watering.

So, tune in to the IRS Radio Hour to meet Mr. Peter Bella, the Cooking Cop, on Sunday August 7, 2016 at 5:00 on AM 560 The Answer.

And remember, if you have an IRS problem – like the Cooking Cop did – Call Opem Tax Resolutions and the Law Office of Steven A. Leahy, PC at 312-664-6649.

Who Files Bankruptcy – The Answer Will Surprise You

by

Steven A. Leahy

Who Files Bankruptcy – The Answer Will Surprise You

By Steven A Leahy

With the Trump Bankruptcies in the news lately, you may be wondering “Who Files Bankruptcy?” The answer may surprise you. Bankruptcy is a Federal Law and is administered by the Federal Court System under the rules of the U.S. Bankruptcy Code. “The primary purposes of the federal bankruptcy laws are to give an honest debtor, either a person or a business, a ‘fresh start’ in life by relieving the debtor of most debts, and to repay creditors in an orderly manner to the extent that the debtor has property available for payment.”

In the first three months of 2016, 201.906 bankruptcy cases were filed nationwide – a vast majority (195,679) were consumer cases. There are 90 Bankruptcy Courts – each a unit of a U.S. District Court. The Northern District of Illinois is comprised of the Eastern and Western Divisions, and has 10 bankruptcy judges. 11, if you count the retired Judge that handles a limited case load. The Northern District of Illinois encompasses 18 counties – with court locations in Chicago, Joliet, Rockford, Lake County and Geneva.

The Northern District of Illinois leads the nation in bankruptcy filings with 47,535 case filings over the 12 month period ending March 2016. That is actually a decrease of 6.6% compared to the previous 12 month period. A recent study revealed the top reason people file for protection under the bankruptcy code is – Medical Bills! The second reason is – Job loss! Both of these reasons may have nothing to do with the person filing bankruptcy.

I help people resolve their IRS problems. As I have mentioned many times – there are only 6 things you can do if you owe the IRS money. One of those six things is bankruptcy. Many of my clients are reluctant to even consider bankruptcy as a remedy. They believe it isn’t morally available to them. They have always paid their debts, and filing bankruptcy would go against that value.

First, often a tax debt includes an unreasonable amount of penalties and interest. A debt that may not hold the same moral obligation as the underlying debt. Second, as I explain to my clients, bankruptcy does not protect you from your moral obligations. Bankruptcy only protects you from some legal obligations. My favorite example is Abraham Lincoln. That’s right Honest Abe sought protection under the bankruptcy laws. You see, he had creditors taking legal action against him after a failed partnership in a General Store.

The Bankruptcy Code protects a person from their creditors. Most creditors are prohibited from collecting on the debt. It does not, however, prevent that person from repaying their creditors if they elect to do so. Honest Abe is a good example of this concept. Once granted legal protection from his creditors, Abraham Lincoln felt he still had moral obligations to repay his creditors. He paid every creditor back. It took some time to accomplish this – but in the end, his creditors were paid.

If you were to seek legal protection from your creditors, like the IRS, you could still repay the debt, at your convenience, should you feel a moral obligation to do so. Maybe you feel a moral obligation to pay the underlying debt, but not the unreasonable penalties and interest. You could do that. The IRS would accept the money!

If you have IRS problems and need the help of a professional to resolve it – I encourage you to call my office. Opem Tax Resolutions and the Law Office of Steven A. Leahy, PC helps taxpayers resolve their IRS problems

How Long Can You Dodge the IRS? The Answer May Astound You…

by

Steven A. Leahy

How Long Can You Dodge the IRS? The Answer May Astound You…

By Steven A Leahy

Most of the taxpayers who come to see me have been playing hide-and-seek from the IRS for some time. They wonder “How long can I Dodge the IRS”? They hope the IRS will forget about them. I hear, “can I fly under their radar” a lot. The truth is – it may take some time before the IRS catches up with you. But in the end, they will find you. The IRS is like a battle ship: It may take a long time to turn on you and get you in their sites. But, once they do, the damage can be devastating.

The common scenario follows this pattern: The taxpayer owes the IRS on tax day, but doesn’t have the money to pay. The taxpayer gets VERY UPSET and SCARED. So, the taxpayer files an extension. The extension pushes the due date of the return to October 15th, typically. By filing an extension, the taxpayer feels a false sense of relief. It is false because, the taxpayer doesn’t recognize that they have already sustained a penalty for not paying any tax owed. That’s right – the extension, extends the time for filing the return, not for paying the tax. Next, as time goes by, the tax deadline gets lost in life, and goes by without notice.

The next time the taxpayer worries about their tax return is when the next tax year is upon them. The taxpayer has yet to file the previous year, and believes they have to file that year before filing the current year. So, you guessed it, as the April 15th deadline approaches, the taxpayer files another extension – Peace settles in until the next year. This is when the sleep starts to evade the taxpayer. They can bury the thought of their tax problem during the day. But, while laying in bed at night, their tax problem in all they can think of.

The IRS Has 3 Years to Audit

Did you know that the IRS has three years to audit a tax return. If you haven’t filed, they can’t audit the return. But they can file a return for you. When the IRS files a return for you, that is called a Substitute for Return, or SFR. The taxpayer may believe the IRS has forgotten about them, only to learn later (much later) that the IRS has filed the SFR and assessed a tax far in excess of what the taxpayer actually owes. So, often the IRS won’t even begin coming after you 5 years, or more, after the original return was due. This is what gives taxpayers’ with unfiled returns a feeling the IRS has forgotten them.

Now, not filing returns limits you options on resolving your IRS problem. For example, if you haven’t filed a tax return, the tax for that year will never be dischargeable in bankruptcy. That is true, even if the IRS filed an SFR for you. One more problem – if you file your tax return on time, the Collection Statute Expiration Date, or CSED, begins to tick right away.

If, however, the IRS files an SFR, the CSED begins on the date the tax is assessed, not on the date the tax was due. CSED is the time limit set on the IRS to collect a tax debt or file a complaint in court. Generally, CSED is ten years from the date of assessment. Although there are some events that may extend that date. If the IRS believes you are trying to avoid paying your taxes, they will simply file a complaint in court, obtain a judgment and seek to collect that judgment. There isn’t a time limit on collecting a judgment. That means the IRS may never go away until they are paid in full.

Dodging the IRS causes bigger problems down the line. Resolve your IRS problem today. So, if you have ANY IRS questions, Call me, Attorney Steven A. Leahy at 312-664-6649. I am the Chicago IRS Answer Man.

Why You Must Think Twice Before You Refinance Your Home To Pay The IRS…

by

Steven A. Leahy

Why You Must Think Twice Before You Refinance Your Home To Pay The IRS…

By Steven A Leahy

The housing market is making a come back! That is good news for home owners. It may also be good news to taxpayers. Here’s why. There are only Six Things You Can Do If You Owe the IRS. The first is to Pay the IRS what they claim you owe. I often tell clients it is better to owe anyone else instead of the IRS. The IRS has vast powers of collections. Powers other creditors do not have. Powers like liens and levies. The IRS can take you stuff without a court order!

With the value of property increasing, homeowners may be able to tap into that equity to resolve IRS problems. There is a catch. If you wait too long the IRS will file a lien. The lien covers all your property – everything you own, AND, everything you will own. If you try to refinance after the lien has been filed, the IRS will have a superior right to your property. In real estate law, that is known as “First in Time, First in Right.” Meaning, the IRS lien would pre-date a new loan, so the new loan would be a second lien. Mortgage Companies aren’t likely to give you a loan if they have take a position behind the IRS. There is another problem too. Once the IRS files a lien against you, your credit score is likely to plunge at least 80 to 100 points! Ouch!

The first problem can be solved by paying the IRS in full out of the proceeds of the refinance. You can ask the IRS to provide you a Payoff letter for the closing. If the IRS is paid in full, the lien will be released and the Title Company will insure over the IRS Claim.

But what if the refinance won’t pay the IRS in full? In that case, you can work with the IRS to subordinate their claim to the new mortgage. Subordination is when one party agrees to let another party jump in front of them in order of liens. That way your new mortgage will be in front of the IRS and more likely to agree to fund the loan.

Problem solved, or is it. Remember, the lien will clobber your credit score. So, even if the IRS will release the lien after refinance, or agree to a second position, your new credit score may prevent any mortgage company from providing a loan.

To work around this we may be able to use the new program under the IRS Fresh Start Initiative. This new program allows some taxpayers to have the lien Withdrawn completely, not just released. If the IRS agrees to Withdraw the lien, you can have the lien information REMOVED from your credit report! Like it never existed! A lien Release does NOT have the same effect. Once a lien is released, the blemish on my credit report remains, and continues dragging down your credit score. I have seen a lien Withdraw have a near instant increase in credit scores by 80 – 100 point. The increase in the credit score makes the refinance work, at a much lower interest rate, solving the IRS problem.

In order to get the IRS to Withdraw their lien, you have to follow all the IRS procedures. And it may take some months to accomplish. But it can work. If you are looking to resolve your IRS problem any you have equity in your home, this may be your solution.

Let’s find out. Call me, Attorney Steven A. Leahy and I will provide you with a free in office consultation to review your situation and see it this program is right for you. Call me, the Chicago IRS Answer Man at 312-664-6649 and let us resolve your IRS problem for good.

If You Have An IRS Tax Lien – Avoid This Common Mistake Or You Could Regret It Forever!

by

Steven A. Leahy
If You Have An IRS Tax Lien – Avoid This Common Mistake Or You Could Regret It Forever!

By Steven A Leahy

Today I received an email from my friend David Hochberg, the mortgage specialist, asking questions about IRS Tax Liens. I checked my past blog posts, and did not find an article about IRS Tax Liens. So, I thought that I would correct that oversight.

One of the IRS’s collection tactics is filing a tax lien. An IRS tax lien is the government’s legal claim against a taxpayer’s property when a tax debt exists. The lien protects the government’s interest in all your property – what you own now, and what you will own in the future.

A lien automatically comes into existence if a taxpayer fails to pay taxes after receiving the first bill. To publish a lien the IRS files a Notice of Federal Tax Lien with the county where the taxpayer lives. The purpose of the tax lien is to alert creditors that the government has a legal right to your property. IRS tax liens have a detrimental impact on credit scores and limit the taxpayer’s ability to get credit. Taxpayers have a right to appeal the IRS tax lien, called a Collection Due Process hearing. But there are strict time limits to a right to appeal. So, if you receive a Notice of Federal Tax Lien, take action.

Once there is an IRS tax lien, there are several ways to get rid of the lien. The most obvious way to release a lien is to pay the tax debt in full. The IRS must release your tax lien within 30 days after the tax debt has been paid.

If a taxpayer can demonstrate that it is in the government’s best interest to reduce the impact of the tax lien on the taxpayer the IRS may Discharge the property, Subordinate the government’s interest to another creditor or withdraw the tax lien.

A discharge removes the lien from specific property. This option is useful for taxpayers seeking to sell property with a lien attached. If a taxpayer has an IRS tax lien and sells their home, the IRS tax lien remains on the property, unless the lien is paid in full or the IRS agrees to discharge the property from the IRS tax lien. The discharge removes the lien from that specific asset, while maintaining the lien on all other of the taxpayer’s property. This allows the property to pass to the buyers without the IRS tax lien attached. Without discharging the lien, the property is nearly impossible to sell.

Subordination of the lien is a process whereby the IRS allows a creditor to take a superior position over the IRS claim. Subordination is used when a taxpayer wants to refinance or obtain a loan using the property as collateral. Generally, lenders will not loan money on property when the IRS has a tax lien. The old adage: first in time, first in right applies here. If the taxpayer is seeking to borrow money, either through a refinance or a new loan, that will not pay the IRS in full, the IRS may agree to take a second position behind the new lender in order to allow the loan to come to fruition.

A “withdraw” removes the Notice of Federal Tax Lien from public record. The “withdraw,” however, does not release the tax lien or the taxpayer’s obligation to pay the debt. A taxpayer may convince the IRS to withdraw a Notice of Federal Tax Lien if:

The taxpayer’s tax obligation has been satisfied and the taxpayer remains in compliance for the past three years – that means all tax returns and estimated tax payments; or,

A taxpayer owes less than $25,000.00. Has an installment agreement in place with direct debit payments that have been on time for at least 3 consecutive payments, the installment agreement will full pay the IRS obligation and the taxpayer is in full compliance.

A tax lien remains on your credit report for seven to ten years, even after the taxes have been paid in full. However, since 2011, under the IRS Fresh Start Program, a taxpayer can remove the tax lien from their credit report, but it doesn’t happen automatically. The taxpayer must apply using IRS form 12277 “Application for Withdrawal of Filed Form 668 (Y), Notice of Federal Tax Lien.”

If you have an IRS tax lien and are looking to resolve your tax problems, you should find out what your options are. Before you do anything, you should give me a call. We can discuss your all your options. Opem Tax Resolutions & The Law Office of Steven A. Leahy, PC (312) 664-6649. Call NOW to set up your FREE Consultation.

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