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Our recent 'offer in compromise' to BOE (in CA) has been denied. Can we appeal? Would (personal) bankruptcy resolve lien?

Los Angeles, CA |

We recently submitted an 'offer in compromise' to California Board of Equalization for the corporation that failed several years ago, and is now our personal responsibility to pay back, but we have only $300/mo. income (basic living is supported by my grown up child but not sure for how much longer he'll be able to support us) and living on food stamp and healthy way LA as our health condition is not so great either.
So we were really hoping that our OIC would be accepted but since it's denied and they're asking us to pay in full, we really can't and want to know if we can appeal.
If not, then we heard it'll go to collection, but we have no assets (just 2 old cars that we're using. We'll be fililng for a personal bankruptcy soon..would that resolve this collectio/debt/lien?
Please advise..

Attorney Answers 2

Posted

Bankuptcy is a possible option. You need to consult with a bankruptcy practitioner to determine if you qualify for bankruptcy, and provide the attorney with the relevant documents of your tax liablity as well as your other debts. You may not be able to discharge your tax debt if you have a lot of credit card debt.

There is an appeal process with the BOE. You may not have offered enough because of your limited resources which is why your Offer was denied. This means your appeal would also be denied. See BOE Publication 17 for the appeal procedure.

Good luck!
Phillip M. Smith Jr.
Los Angeles Tax & Business Attorney
www.culvercitytaxandbusinesslaw.com
www.corporateattorney.com
Call: 323-292-4116 or 562-505-1004

THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can only be provided after consultation by an attorney licensed in your jurisdiction. The answer to question does not create an attorney-client relationship or otherwise require further consultation. Mr. Smith is licensed to practice law throughout the state of California with offices in Los Angeles County. He is authorized to handle IRS matters throughout the United States, and is also licensed to practice before the United States Tax Court. His phone number is 323-292-4116 or his email address is philsmithjr@worldclasslawyers.com.

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Asker

Posted

Thanks so much Mr. Smith! We know for sure that we qualify for Chpt. 7 bankruptcy, however, as much as we wanted to offer bigger sum amount of money, we really dont't have it to offer so we're not sure what to do. we have combined credit card debt of about 35k-40k + $10k line of credit debt which we couldn't pay back and need to file bankruptcy on. Would you be able to determine whether we may be able to discharge our tax debt based on this info just so we can have a better idea?

Phillip Monroe Smith

Phillip Monroe Smith

Posted

How do you know for sure that you qualify for BK? Sent from my Verizon Wireless 4G LTE DROID -----Original message-----

Asker

Posted

we've consulted a local bk attorney recently and meets all criteria, however, unfortunately don't have the money to hire an attorney right now, and couldn't find pro bono attorney either, so we're trying file on our own..

Posted

Don't forget that there are state exemptions that operate as a threshold as well. In some cases, depending upon how much of other assets you have and what the source of your income is; what if you are living below the exemption level? What if you are judgement proof?

BOE may not think so, but has a collectibility analysis been computed?

BOE is a hard case for sure.

Have the analysis done by a bankruptcy attorney who knows tax.

Curt Harrington Patent & Tax Law Attorney Certified Tax Specialist by the California Board of Legal Specialization PATENTAX.COM This communication is general information and not legal advice, and does not create an attorney-client relationship. This communication should not be relied upon as any type of legal advice. Please note that no attorney-client relationship exists between the sender and the recipient of this message in the absence of either (1) a signed fee contract and (2) remission of an agreed-upon retainer. Absent such an agreement and retainer, I am not engaged by you as an attorney, nor is any other member of my law firm.

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Asker

Posted

Thanks, Mr. Harrington Jr! We are almost 100% sure that we do fall in the 'judgement proof' category since we have no valuable assets and barely making our living month-to-month, with food stamp and other documents to back it up. However, we weren't sure if BOE tax we owed would also be resolved by bankruptcy or not. And if we are exempted and 'judgement proof', what is that really mean? do we need to file something to prove that we're judgement proof and would the debt go away? or at least don't bother us until we have above exemption level income? (we're well below exemption level right now) Any advice would be very helpful, thanks so much!

Curtis Lamar Harrington Jr

Curtis Lamar Harrington Jr

Posted

You have assets and categories of income. If the assets are below a minimum and the income is of an exempted character, the "judgement proof" moniker you used might be applicable. There is no "blessing" on this and (1) it won't prevent them from dogging you and (2) it won't prevent accidents like "oops, I just levied your SS disability but we will return it real soon" scenarios. I.e, no finality. You need to have someone look at everything. You talk as if destitute and destitute cases are the type the BOE may typically take, but I also know that your facts don't describe everything. If you are living with the grown up child, they may be imputing his SALARY to your household income. Also I have no idea whether you have assets they can seize. You need to talk to someone in detail and hire them to do a complete analysis of ALL your assets and WHEN the tax arose and WHAT TYPE of tax is it, etc. Its quite involved.

Asker

Posted

Thank you again for your prompt and helpful feedback! Our child is already married and does not live with us. Upon reviewing your feedback, it sounds like being judgement proof does not mean the debt will dissolve. We're just wondering how the tax attorney can help us in this case and what would they try to accomplish? Local bankruptcy attorney advised us we should qualify for chpt 7 bankruptcy but does that affet this BOE debt at all? we currently have combined debt of 35-40k credit card debts + 10k line of credit debt. And about 10k debt with BOE.

Curtis Lamar Harrington Jr

Curtis Lamar Harrington Jr

Posted

There are tax rules on bankruptcy. Tax year due date 3 years ago, tax return filed 2 ago, assessment 240 days ago + compute the effects of tolling. You need to get everything together, lists of creditors, exact tax years, call for transcript explanation by BOE etc. You didn't say if there was sales tax equivalent liability, etc etc etc etc etc. You will probably need $1500 for the bankruptcy plus about ~$300 for the filing fee.

Asker

Posted

That's a very helpful information. Our one last question is... so should we be fine just giong with the Bankruptcy attorney? or are we better off to work with a tax attorney or do we need both? Really strained on budget right now, so our main goal is to take of this issue as efficiently and as economically as possible. In anyway, we truly appreciate ALL of your advices and precious time reviewing our request/questions! Thanks so much!!!

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