Stuart A. Bronstein <spamtrap[at]sbcglobal.net> wrote:

- quote -

So if you want to avoid taking deductions, make them
non-legitimate.

Hold your child's birthday party in the premises you rent as
an office.

Play games on your computer.

Don't keep records of business vs. personal use. Don't keep
receipts.

Seth

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sethb[at]panix.com (Seth Breidbart) wrote:

- quote -

Excellent point. If he failed to do that, his creditors
might be justified reopening the bankruptcy to make claims
against the undisclosed asset.

Stu

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Dick Adams <rdadams[at]smart.net) wrote:

- quote -

You're absolutely right. In that kind of a situation it would
certainly be fraud against someone. Taking deductions doesn't
have to be required for that to be the case.

But I'm beginning to be convinced that reducing taxes by not
taking legitimate deductions might well be frowned on by the
courts.

Stu

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"Stuart A. Bronstein" <spamtrap[at]sbcglobal.net> wrote:
- quote -

I called someone whom I knew back in the 70's. He vaguely
recalls it and says it was one of the reasons the Bankruptcy
Fraud Statute was extended. (He is a long retired CPA, not a
bankruptcy attorney, and thinks the statute is now at least
four to five years).

The thread was in response to idea that a self-employed
individual could ignore Schedule C deductions in order to
increase EITC. Think about it. With the exception of 179
items which are a matter of choice, my example is just as
much a fraud against one's creditors as the other is a fraud
agaainst the government.

Dick

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Stuart A. Bronstein <spamtrap[at]sbcglobal.net> wrote:
- quote -

Suppose his tax return had been included in the bankruptcy
filing papers? Then the information is available.

More important, isn't he supposed to list his assets? "I
overpaid my taxes by $3 million and will get that back when
I file an amended return" is certainly an asset.

Seth

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Dick Adams <rdadams[at]smart.net> wrote:

- quote -

I don't remember hearing that story. But if any of the
creditors had a smart attorney it could have been attacked
as a fraudulent transfer (to the IRS) which could be
recovered by creditors when they learned about it. I don't
know for sure but I'd guess that the statute of limitations
on fraudulent transfers doesn't start to run until creditors
could reasonably have discovered it.

Stu

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Dick Adams <rdadams[at]smart.net> wrote:

- quote -

Dick

How could the bankruptcy statute run but the tax statute did
not? Seems to me this would not be possible.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

Moderator:
The Bankruptcy Statute was two years. The Income Tax
Refund Statute is three years.

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I heard this story well over 20 years ago and it may be
apocryphal.

Individual owned a large business as a sole proprietor.
He filed his current year tax return omitting cost of goods
sold and filed bankruptcy. The bankrupty went through
without a glitch. Two years after the bankruptcy statute
of limitations expired. He filed an amended return and
received a multi-million dollar refund.

His creditors wanted to sue everyone they could find, but
the bankruptcy statute had passed. He had used a tax
attorney and the Disciplinery Committee took no action.
The reason I recall this was that someone with whom I was
discussing it said "If he was a CPA, they'd have shreded his
license by now."

Does anyone else recall this?

Dick

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