What could you do when a judgment debtor seems to be employed at, and/or owns part of some tiny or family business; and appears to live well, although doesn't get much of, or any regular paycheck? In community property states, could you also levy any revenue going to the judgment debtor's spouse, when they also work or get benefits from the business? This article is my opinion and is not, legal advice. I'm a judgment matchmaking expert, and not an attorney. If you want legal advice or a strategy to use, please contact an attorney. Regular wage garnishments just reach W2 reported wages coming from regular employment. Regular levies can't attach perks, benefits, personal expense reimbursements, money under the table, or any other payments or asset moving kind of tricks. If your judgment debtor's non-W2 reported revenue turns out to be revenue which is reported on some 1099 form, then a proposed assignment order to reach this revenue stream may work. If the debtor's revenue source and/or perk isn't listed on some W2 or a 1099 form, that income is probably imputed (occasionally called impuned, and after the benefit transfer happens, impugned) income, that may become taxable. Impugned income is non-W2 or 1099 income, which may be certain or uncertain payments, commissions, benefits, or bonuses. The majority of impugned revenue has a cash value, which if discovered by the Internal Revenue Service, might get taxed. One example of impugned revenue would be a hotel worker who receives W2-based income of $35,000 per year, and also the opportunity to spend 5 nights in the best suite at that hotel for free. The five nights are a form of impugned income. When employees drive in cars which a company pays either the monthly lease payment, insurance payment, or both, that is impugned income. One more example would be some airline worker who gets to fly free, on flights other than the flights they are working on. Not all companies report impugned income, as that means the company would likely need to pay some taxes on the impugned income. Sometimes the impugned benefit has little or free to an employer. Certain impugned payments are considered perks. Perk examples are donuts on Friday, coffee at work, or pizza if you work on the weekends. Such perks come with no tax liability for the employee, and are a complete tax write-off for the employer. Our IRS doesn't usually focus on a perk which give workers free goods or services, as long as they are cheap. When a judgment debtor's impugned benefit is free rent, free meals, free use of a car, free travel, free gasoline, free internet, etc.; this might be of interest to the Internal Revenue Service, however these kinds of impugned benefits aren't usually available to creditors. Even when impugned income is in the form of cash or checks given to your judgment debtor, attaching that revenue (except by garnishing your debtor's bank account) needs a new lawsuit with a court hearing; and then getting your proposed order approved by the court. Company expense accounts offer many impugned income opportunities. Top-level workers may have a corporate credit card to pay for necessary expenses. Impugned income happens when the business pays for personal expenses of their worker (or through mischief, some non-employee). Certain judgment debtors earn no income, however a company's credit card records may reveal that debtor charging $7,000 a month, with a lot of withdrawals for "walk-around" cash. Maybe a judgment owner may one day persuade a court to approve their assignment order asking for twenty five percent of the $7K a month of impugned benefit. A type of small-company shenanigan circumstance that may interest a judgment owner, would be if the debtor works at some small or family business that provides the debtor a corporate credit card to pay for their personal expenses. By scheduling a judgment debtor examination, one can most likely subpoena the 3rd-party company, to obtain copies of your debtor's credit card statements. It takes some work to find out the quantity of a company's assets or revenue goes toward your judgment debtor's pocket. It often takes two debtor/3rd-party examination hearings with document production requests. The first one is to obtain a copy of the business's credit card statements. On the 2nd level of exams, one might hire a court reporter. At that exam hearing, ask the business person and the debtor about any payments made to your judgment debtor with their business credit card. The recorded answers can later be used on a transcript, which describes the credit card payments and the calculation of impugned income. Mark D. Shapiro of: http://www.JudgmentBuy.com - The fastest and easiest free way to find the right expert to buy or recover a judgment.
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