|
Burton J. Haynes, a tax lawyer and former IRS Special Agent, has
written a new article explaining how the Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005 will make it harder for individuals to
resolve unmanageable tax debts through bankruptcy after the October 17,
2005, effective date of most of the Act's "reform" provisions. The article
was written for publication by the Maryland Society of Accountants in its
journal "The Freestate Accountant," and is available at www.bjhaynes.com.
(PRWEB) June 1, 2005 -- The bankruptcy reform legislation just passed
by the Congress and signed by President Bush will do almost nothing to
protect consumers, according to tax lawyer and former IRS special agent
Burton J. Haynes. Instead, it will protect the big banks and credit card
companies from consumers, Mr. Haynes says in a new article.
The new
legislation will have another effect as well -- protecting the government
itself (namely the IRS) from taxpayers by making it much harder for them
to discharge taxes in bankruptcy.
Mr. Haynes’ new article explains
how the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
will make it harder for individuals to resolve unmanageable tax debts
through bankruptcy after the Oct. 17, 2005, effective date of most of the
Act's "reform" provisions. The article was written for publication by the
Maryland Society of Accountants in its journal, "The Freestate
Accountant." MR. Haynes serves on the editorial board of the Freestate
Accountant and writes a series of articles on "Dealing with the IRS
Collection Division."
The article explains that the
"superdischarge" provisions of Chapter 13 have been eliminated; the time
required between bankruptcy cases has been increased; and the period of
time tax debts retain a priority nondischargeable status has been
lengthened. The status has been lengthened to include any period of time
the IRS is barred from taking collection action because of an
administrative procedure such as the filing of an installment agreement
request, a request for a collection due process hearing, or the filing of
an offer in compromise, Haynes said.
Furthermore, the IRS's miserly
standards for "allowable" living expenses have been engrafted into the
Bankruptcy Code, with the result that debtors will be deemed to have a
greater ability to repay their debts -- often much greater than is
realistic, Mr. Haynes added. The entire bankruptcy process for individuals
will utilize a "means tested" approach, under which anyone with any
significant ability to make payments on his or her debts (applying the
IRS's standards) will be forced out of Chapter 7 and into either Chapter
13 or Chapter 11, where payments for at least five years will be
required.
The Act, Mr. Haynes concludes, will be a disaster for
debtors, particularly taxpayers with income tax debts that they can't
afford to pay, and will be a boon to their creditors -- the banks, the
credit card companies, and ironically the IRS. Since the bankruptcy reform
bill had a 180-day delay period for most of its provisions, Mr. Haynes
notes that there is a deadline of Oct. 16th to file cases under the
current law. As of Oct. 17th, the bankruptcy world as we know it will be
gone, and will be replaced by a much less debtor-friendly set of rules, he
said.
Mr. Haynes' series of articles on "Dealing with the IRS
Collection Division," as published by the Maryland Society of Accountants,
is available on his website at www.bjhaynes.com.
# # #
Source : http://www.prweb.com/releases/2005/6/prweb239555.htm
|