Archive for June, 2013

Happy Independence Day!


The Law Office of Gregory A. Ross, PC will be closed the week of July 1 – 5 to celebrate the July 4th holiday. We will return July 8th. Happy Independence Day!

Filing Bankruptcy on an IRS Lien

If you have back taxes or even an Internal Revenue Service lien, you are not barred from filing for bankruptcy. In fact, parts of the U.S. Bankruptcy code deal specifically with taxes. If you hold an IRS lien, however, there’s a good chance the lien will still be waiting for you when your bankruptcy case is finalized. The code is designed to force you to pay the lien, whether you’re in bankruptcy or not.

Back Taxes and Liens
If you’re preparing to file bankruptcy, it’s important to note the difference between back taxes and liens. Back taxes are considered the money you owe to the government in taxes not paid. You don’t have to have a lien to have back taxes, and these back taxes could be as simple as a shortfall of $100 of a federal income tax return three years ago. A lien results when the IRS attaches your tax debt to your property, usually your house, as a way of securing the debt. It also gives the IRS the legal right to your property, and is sometimes a precursor to selling the home to satisfy the debt.

How Liens Happen
The IRS periodically reviews tax liabilities; if you have one, you’ll receive what is called a Notice and Demand for Payment. This will tell you what you owe. If you either ignore this letter, or talk to the IRS but cannot fully repay what you owe, within 10 days of receiving the letter, this can trigger a lien. The lien doesn’t start right away, however. For the lien to be valid, the IRS must file the motion according to your state’s property laws. For example, in California, the IRS would file the motion with your county tax clerk.

A Lien’s Validity in Bankruptcy
A federal tax lien is valid only if it was filed before you filed for bankruptcy. When a lien is created, the federal bankruptcy code recognizes this as secured debt, meaning it’s treated the same as debt with collateral in bankruptcy. Even in bankruptcy, the lien will not go away. The IRS’s lien is given a high priority in both Chapter 7 and Chapter 13 proceedings. Even if you go through Chapter 7–which wipes out all your debts–the lien does not go away.

Paying Liens in Bankruptcy
Because federal tax liens are considered secured debt and receive priority in bankruptcy, it’s likely you’ll be paying at least some, if not all, of it back. In Chapter 7, this likely means the sale of real property such as your home and other assets to satisfy the lien. In Chapter 13, where you repay some part of what you owe your creditors, the bankruptcy trustee must make every attempt to create a plan that pays back your priority claims in full, which can include the lien. Once the plan is finalized, the IRS is bound to it, even if it does not receive full payment.

Discharging Liens
While the bankruptcy code can help you discharge back taxes, it can provide little help for IRS liens. Liens are designed to get the debtor to repay, no matter the circumstances. The only way to be rid of a lien is to repay the money owed, whether you’re going through bankruptcy or not. There are ways to appeal and get rid of the lien, but these are usually due to procedural circumstances. An attorney who specializes in bankruptcy or tax law can tell you if you the IRS violated your rights or its procedures during the lien process.

Call the Law Office of Gregory A. Ross, PC
Call us at 940-692-7800, or email at to discuss your options.

Celebrate Flag Day

United States Flag
The Law Office of Gregory A. Ross, PC wishes our clients a Happy Flag Day!

Today, June 14, is Flag Day. It commemorates the adoption of the flag of the United States, in 1777 by resolution of the Second Continental Congress. The United States Army also celebrates its birthday on this date.

The tradition of the first flag day observance began on June 14th, 1885. Bernard J. Cigrand, a 19- year-old teacher at Stony Hill School in Waubeka Wisconsin, placed a 10 inch, 38- star flag in a bottle on his desk then assigned essays on the flag and its significance. This observance was also the beginning of Cigrand’s long years of fervent and devoted effort to bring about national recognition and observance of Flag Day. The crowning achievement of his life came at age fifty when President Wilson, on May 30, 1916, issued a proclamation calling for a nationwide observance of Flag Day. Then in 1949, President Truman signed an Act of Congress designating the 14th day of June every year as National Flag Day.

Flag Day is not an official federal holiday; it is at the President’s discretion to officially proclaim the observance. On June 14, 1937, Pennsylvania became the first (and only) state to celebrate Flag Day as a state holiday. New York statutes also designate the second Sunday in June a state holiday as Flag Day.

Perhaps the oldest continuing Flag Day parade is at Fairfield, Washington. Beginning in 1909 or 1910, Fairfield has held a parade every year since, and celebrated the “Centennial” parade in 2010, along with other commemorative events.

One of the longest-running Flag Day parades is held annually in Quincy, Massachusetts, which began in 1952. The 59th Annual Appleton, Wisconsin 2009 Flag Day Parade featured the U.S. Navy. The largest Flag Day parade is held annually in Troy, New York, which bases its parade on the Quincy parade and typically draws 50,000 spectators.

Federal law stipulates many aspects of flag etiquette. The section of law dealing with American Flag etiquette is generally referred to as the Flag Code. Some general guidelines from the Flag Code answer many of the most common questions:

•The flag should be lighted at all times, either by sunlight or by an appropriate light source.
•The flag should be flown in fair weather, unless the flag is designed for inclement weather use.
•The flag should never be dipped to any person or thing. It is flown upside down only as a distress signal.
•The flag should not be used for any decoration in general. Bunting of blue, white and red stripes is available for these purposes. The blue stripe of the bunting should be on the top.
•The flag should never be used for any advertising purpose. It should not be embroidered, printed or otherwise impressed on such articles as cushions, handkerchiefs, napkins, boxes, or anything intended to be discarded after temporary use. Advertising signs should not be attached to the staff or halyard.
•The flag should not be used as part of a costume or athletic uniform, except that a flag patch may be used on the uniform of military personnel, fireman, policeman and members of patriotic organizations.
•The flag should never have any mark, insignia, letter, word, number, figure, or drawing of any kind placed on it, or attached to it.
•The flag should never be used for receiving, holding, carrying, or delivering anything.
•When the flag is lowered, no part of it should touch the ground or any other object; it should be received by waiting hands and arms. To store the flag it should be folded neatly and ceremoniously.
•The flag should be cleaned and mended when necessary.
•When a flag is so worn it is no longer fit to serve as a symbol of our country, it should be destroyed by burning in a dignified manner.

Do you celebrate Flag Day? Do you fly a flag?