I am not a lawyer, I am a judgment referral expert. This article is my opinion, and is not legal advice, based on my experiences in California. If you ever need a strategy to use or legal advice, please contact an attorney. In judgment enforcement, often you have to subpoena records from 3rd-parties, for example banking records from banks, to discover where your judgment debtor's money goes and where it is coming from. Preferably, you could ask the judgment debtor directly, for a copy of their tax return(s) for you to inspect. Unless in bankruptcy court, that could be problematic, because the judgment debtor's tax return is most often exempt, even if you have served a subpoena served on the debtor, that requested them in a request for the production of documents. Not all people puts the truth on their tax return. The Internal Revenue Service wants all taxpayers to be truthful on each tax return, and says they "shouldn't be subject to subpoena, or else people will lie on their tax returns to avoid creditors". Nothing stops one from requesting a tax return at a judgment debtor examination, and if your debtor brings them, they are fair game for one to copy or inspect. However if your debtor or their lawyer says "that is private info, you cannot have it", you will need to work around this situation. A first workaround is requesting other kinds of info, such as paycheck stubs and W-2s; or convincing your debtor to voluntarily sign a 4506-T form. The 4506-T form allows one to obtain a copy of someone else's tax return. One way to get the debtor to sign a 4506-T form, is if you can make it a requirement for settling in a payment agreement, or some other kind of settlement. If you can get a 4506-T form signed, it's always much quicker to order a transcript (summary) of their tax return, than to try and get an actual copy of their return. And if the judgment debtor's return had been e-filed, only a transcript of the tax return is available. What if your judgment debtor hired an accountant to do their tax return? My non-legal opinion is that the tax preparer's worksheet and notes are discoverable. I also assert the tax preparer's copy of the debtor's tax return is discoverable, because of The Internal Revenue Service Restructuring and Reform Bill of 1998 (HR 2676). This bill introduced a very limited confidentiality privilege to non-attorneys. Internal Revenue Code Section 7525(a)(1) 26 USC §7216, includes section (B): "pursuant to an order of a court". That requirement for an order of the court (in my opinion) is met by serving a court-scheduled judgment debtor exam which includes a request for documents for a tax returns. (Refer to http://www.law.cornell.edu/uscode/text/26/7216). When your debtor or their 3rd-party accountant, or their lawyer(s) objects - showing the judge printouts of the cites above, may not work, however it is worth a try. If those work arounds don't get you what you want, maybe you may find a copy of the judgment debtor's taxes by subpoenaing records from another creditor, for example a vehicle or large equipment dealer, or a mortgage lender. Their records sometimes include previously requested copies of your judgment debtor's income tax returns. Certain "clever" people hide some of their claimed income on tax returns sent to the Internal Revenue Service, to try to paying less taxes, and then includes all their assets and income on financial documents submitted to lenders, in hopes of getting the lending package they want. Finding out about this offers you a more accurate road map to their actual assets (such as unreported non-interest bearing accounts, cash income, etc.) When you encounter this type of situation, you are also probably discovering tax fraud and/or bank or mortgage fraud. There may be a chance that discovering this, and asking your judgment debtor about it at court, will get their attention, and may lead to a settlement. http://www.JudgmentBuy.com - Judgment Enforcement. Referring Judgments Nationwide. The easiest, fastest, and best way to be paid the most for your judgment. Mark Shapiro, an expert on judgments. I pay for leads, and have the best quality free judgment referral leads for enforcers, collection agencies, and contingency collection attorneys.
Related Articles -
debtor tax returns, examining tax returns, debtor exams and tax returns, subpoenaing tax returns, 4506 forms, tax return privacy,
|