MySpace and Taxes

Taxes

According to The Wall Street Journal, the taxman may be checking MySpace and Facebook to find tax evaders.

In an article released on Aug. 27 by The Wall Street Journal¹, several state tax agencies have started mining social networks to find tax evaders. These evaders are found by looking at publicly posted information such as posts about them moving, or starting a new job. In several cases tax collectors have collected several thousand dollars from individuals.

Now, when a tax dodger can’t be found, said Nebraska tax official Steven Schroeder, agents often turn to Google. One agent collected $30,000 of unpaid tax from a resident after a Google search found him listed as a high-ranking local marketing rep for a national firm. If a Google online search isn’t productive, agents use the social sites or chat rooms in a last-chance hunt for their quarries.

However, there are limits to what these tax agents can do. In Nebraska and California, agents can only look at public information and cannot “’…’friend’ someone using false information.’…” Because of this, agents tend to turn to MySpace instead of Facebook because of the default settings on MySpace make adult profiles public whereas Facebook makes them viewable to only friends.

Not every state is using this method, although several states are considering using the social networks to help find tax evaders. Massachusetts said that is has “no systematic program” for mining the social media networks. The Wisconsin Department of Revenue and the Oregon Department of Revenue said that will consider using the web to help with collection. Many state tax authorities have access to social networks blocked on the workplace computers so that employees will not spend personal time on them, however they may now change their minds.

Other states are looking to the internet to aide them in audits and negotiations. In Minnesota, they use the web by checking businesses websites when they try to claim that they are cash strapped and cannot make payments. “At the time one tanning business was crying poverty to the state, agents pointed out that its site boasted of supplying all the tans for participants in a big body-building contest.”

This is just one example of how what people post on the web can actually come back to hurt them in the long run, not that people should be avoiding paying their taxes anyway. For those who may be avoiding paying their taxes, consider filing for a Chapter 13 bankruptcy. This can allow you to make affordable payments on back owed taxes.

-Randolph Goldberg

¹Saunders, Laura “Is ‘Friending’ in Your Future? Better Pay Your Taxes First.” The Wall Street Journal Aug 2009: 1 Dow Jones & Company The Wall Street Journal 27 Aug 2009 <http://online.wsj.com/article/SB125132627009861985.html>

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a repayment plan, sometimes called a “wage earners’” plan. It allows people that have a regular income to repay all or part of their debts. With a chapter 13, a repayment plan is proposed that will make payments to the creditors over a three to five year period. The court will approve the plan, or revise it based on the debtor’s situation and eligibility. A chapter 13 also has its own advantages compared to a chapter 7.

The Advantages

There are several advantages that a chapter 13 offers over a chapter 7. One of the most significant advantages is that a chapter 13 allows people the opportunity to save their homes from foreclosure. A chapter 13 can stop the foreclosure process and may resolve past due mortgage payments. A chapter 13 also allows the individual the ability to pay other secured debts they may have incurred over the span of the bankruptcy (3-5 years). This may also lower the monthly payments of those debts. This chapter may also protect co-signers of those debts. The final advantage of a chapter 13 is that it acts as a consolidation loan. This means that the debtor will make payments to a trustee overseeing the bankruptcy and distribute those payments to the individual creditors. As a result the debtor will have no contact with the creditors which may prevent many financial headaches in the long run.

Eligibility Requirements

A chapter 13 is, however, not for everyone. There are several eligibility requirements that the debtors will have to meet. The first is that the unsecured debts must be less than $336,900 and the secured debts must be less than $1,010,650 (11 U.S.C.  § 109(e)). These amounts are changed periodically due to changes in the consumer price index and inflation. A person is not eligible for a chapter 13 if, in the past 180 days, a prior bankruptcy petition was dismissed due to failure to appear in court, comply with orders, or was dismissed voluntarily after the creditors sought relief from the courts to recover property which the held liens upon (11 U.S.C. §§ 109(g), 362(d) and (e)).  The debtor must have also, in the past 180 days, attended credit counseling from an approved credit counseling agency to file any kind of bankruptcy (11 U.S.C. §§ 109, 111). Any debt management plan made during credit counseling must be filed with the court.

To learn more about chapter 13 bankruptcy and how to file one visit Randolph Goldberg or US Bankruptcy Court.

A chapter 13 is defiantly a long process, but unlike a chapter 7, you get to keep all of your personal property. Although you should always sit down with an attorney and look at all of your options before filing any kind of bankruptcy to see if there is any other way to resolve your debt problems.

-Randolph Goldberg

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Chapter 7 bankruptcy

Chapter 7 bankruptcy, sometimes called a “straight bankruptcy”, is one of the simpler chapters to file under. In short it is the liquidation of the debtor’s property in order to pay off their outstanding debts. However, there are several alternatives to a chapter 7 which should be looked in to before filing.

Alternatives

Alternatives to a chapter 7 include filing a chapter 13 or a chapter 11 if you own a business and wish to stay in business. A chapter 13 allows you to save your home from foreclosure and to catch up on outstanding debts by making a repayment plan. A chapter 11 bankruptcy is generally for business owners who wish to say in business. This is done by either adjusting the debt that is owed by reducing it or extending the repayment time. The owner may also seek reorganization, which is more comprehensive.

Eligibility

To be eligible to file a chapter 7 bankruptcy your income must be below average for your area. If this is not the case then you must pass a means test to determine whether you are eligible to file a chapter 7, or if you must file a chapter 13 instead. This will be determined when you meet with your attorney to file for bankruptcy. A chapter 7 also does not take care of all debts. Debts that it does not cover include taxes, child support, student loans, fines and restitution, and alimony.  Filing a chapter 7 also does not mean you will lose everything.

“Will I Lose Everything?”

A common concern that people have is whether or not they will lose everything. The answer is no, some of your property is exempt from liquidation. These include your car, your home, clothing, and anything else necessary for survival and to earn a living. This comes as a relief to a lot of people worried that they may lose their home and general livelihood due to a bankruptcy. This is one of the many benefits of filing a chapter 7 bankruptcy.

Benefits of Chapter 7

There are many benefits to filing a chapter 7 other than just keeping your house and car. Speed is a big factor when it comes to chapter 7. As opposed to a chapter 13 which can take up to 5 years to complete, a chapter 7 only takes about 5 months. There is also no repayment plan to deal with which means less hassle in the long run. While filing you are also protected from annoying creditors. This means no more phone calls, wage garnishment, repossessions, and foreclosure proceedings. Also you will benefit from an improved credit rating. This may sound weird, but it’s true, most people come out of a bankruptcy with a higher credit rating in the long run. For tips on how to do this see “Your Credit After Bankruptcy”

Cost

In addition to attorney’s fees, a chapter 7 does not cost much. There is a required filing fee of $300 due to the bankruptcy court, and a credit counseling course before and financial management course after filing as required by the new bankruptcy law in 2005. These can cost anywhere from $35 to $50 per course.

-Randolph Goldberg

Loan Modification

We hear about loan modification all the time, but what is it exactly?

When borrowers are unable to make their loan payments due to fiscal hardship, the bank has a few options. These options are not pretty for anyone, but the best option is usually loan modification.

Loan modification means negotiating with your bank in an effort to come up with a more realistic payment plan. A successful loan modification also means that you don’t lose your home to foreclosure.

Loan modifications allow the bank to make loan payments more affordable for borrowers. They may change interest rates, loan terms, loan balances, or other parts of the loan agreement.

A loan modification allows the bank to make the loan more affordable for the borrower. They may change the payment amount, loan balance, interest rates, loan terms, or other parts of the loan agreement.

Come visit my site to learn more about loan modification and how it can benefit you.