Wednesday, April 3, 2013

Biggest Tax Time Mistake Is Not To File You Return

There are a lot of mistakes one can make at tax time. One of the leading mistakes, in fact it is absolutely the biggest, is to fail to file a tax return on time. That particular mistake can also cost a person plenty, especially if the person is in bankruptcy or needs to file bankruptcy.

The temptation not to file a return is sometimes great.  One may know that s/he owes taxes, but is faced with a situation in which the money to pay the taxes is simply not available.  This common situation may leave one confused as to how to best proceed.  Unfortunately, the option often selected is to not file the return at all.  This is in fact exactly the wrong way to proceed.

You see, the IRS penalizes you TEN TIMES as much for not filing a return as it does for just failing to pay the taxes owing! Ten times. The penalty for failure to file a return is 5% of the amount you owe; if you file the return but can’t pay the tax, the penalty is 1/2 of 1%.

Now, that this little fact impact a bankruptcy? Well, if you are considering a bankruptcy filing  your bankruptcy attorney and bankruptcy trustee will require a copy of your most recently filed tax return.  Delay in filing a tax return can (and usually does) result in delay in obtaining a bankruptcy discharge and may case a dismissal of the bankruptcy altogether.  Moreover, a bankruptcy may actually help address the unpaid taxes.  For instance, a Chapter 13 case will give the taxpayer up to five years to pay off the taxes, usually with no interest or penalties. 

So, file those tax returns – even if you do not not have all of the money to pay the taxes.  If you have any questions and need help, call us to arrange a free consultation.

Considering Filing Bankruptcy? Maybe You’re A Popular Celebrity

In the mid 80′s to early 90′s, a television show, “Lifestyles of the Rich and Famous” was one fo the most popular television shows, with its host, Robin Leach.  The show trumped the everyday American how the rich and famous lived - often on exotic vacations. The “Rich” and Celebrities are often admired, imitated and fawned over in our society. But when you look closely, at those individuals, they are not any different from the average  person on the street.  Just like the average person, celebrities often find it beneficial to file for bankruptcy relief. While the celebrity lifestyle may be quite different then yours or mine, financial distress has the same effect on everyone. And everyone is entitled to a fresh start, no matter how many parapazzi stalk them.  Listed below are a few (but certainly not all) bankruptcies of film and television stars as well as a partial list of other celebrities who have filed for bankruptcy protection..
Film and Television Industry
Real Housewives of New Jersey: Terese and Joe Giudice, Danielle Staub, Chris Manzo (his company)
Real Housewives of Orange County: Alexis and Jim Bellino, Simon Barney, Tammy Knickerbocker, Lynne and Frank Curtin
Real Housewives of Atlanta: Lisa Wu Hartwell
Real Housewives of Beverly Hills: Taylor and Russell Armstrong
Real Housewives of D.C.: Michaele and Tareq Salahi
Stephen Baldwin, one of the Baldwin brothers/acting family, featured in an article by Carmen Dellutri,.
Kim Basinger, who bought a town for $20 million right before she was sued for more than $8 million (breach of contract case)
Lorraine Bracco, who admitted when interviewed that bankruptcy is a humbling experience.
Tia Carrere, who was accused of filing bankruptcy to get out of her contract with ABC.
Gary Coleman, now deceased, but who was once the highest paid child actor in his era.
Francis Ford Coppola, who had many box office successes, also had failures that put his studio at risk.
Walt Disney, who created Mickey Mouse AFTER his bankruptcy and went on to fantastic success as explained by Rachel Foley, our Kansas attorney
Burt Reynolds, whose bad investments caused his financial distress.
Zsa Zsa Gabor, who filed bankruptcy after losing a libel suit filed by Elke Sommer
Mickey Rooney, who also became a victim of elder financial abuse after his bankruptcy
Corey Haim, now deceased, filed for Chapter 11 bankruptcy. Haim was best known for his roles in Lost Boys and Lucas, both 80s films.
Don Johnson, another actor who rose to success in the 80s.
Margot Kidder, actress, whose illness amplified the financial turmoil in her life in the late 80s and early 90s.
Randy Quaid, another 80s star, who filed for bankruptcy in 2010s.
Debbie Reynolds, who liquidated some of her memorabilia during the bankruptcy process.
Famous for being Famous Celebrities
Nadya Shuleman (who ended up dismissing her bankruptcy as explained by our Georgia member, Jonathan Ginsberg)
Heidi Fleiss, aka the Hollywood Madam.
John Wayne Bobbitt, whose angry wife dismembered him, filed for bankruptcy, went on to become a adult film star.
Casey Anthony, who was found not guilty for the murder of her child while most of America believes that the wrong verdict was reached.
Anna Nicole Smith, whose real name was “Vicki Lynn Marshall”, rose to fame as the 1993 Playboy Bunny of the Year. In 1994, she married J. Howard Marshall, a wealthy 89 year old. In 1995, Marshall died.