by Chris Dietrich
In the start of a family law case with minor children, the parties often devote much attention to establishing an amount for child support. In almost all cases when parents separate the court will institute an amount of support payable by one part to the other for the parties’ children. This ordered support continues until support is modified by the court or terminated by law. This article addresses those circumstances which give rise to the termination of child support and circumstances which may allow it to continue into adulthood.
Termination of Child Support
As a matter of law there are certain conditions which terminate an obligation to provide support for a child. Generally child support will end when:
- The child dies.
- The child is emancipated.
- The child gets married.
- The child is adopted terminating the parental rights of the supporting parent.
- The child reaches the age of 18 and is no longer a full time high school student.
- The child reaches age 19 (regardless of whether the child is still in high school or not).
Absent certain exceptional circumstances if one of the terminating conditions listed above occurs, child support terminates as an operation of law. After such happens the parent receiving support is obligated to notify the parent paying support and is obligated to refund any support paid after support obligation terminates.
Child Support into adulthood
The court can in certain circumstances, as listed below, order that support for a child continues into adulthood. However, if these circumstances do not exist the court lacks the authority to continue child support.
Support to pay for colleges
While some states have instituted laws that require parents to chip in for their adult child’s college education, California has not done so. The court cannot order a parent to contribute to an adult child’s college expenses over that parent’s objection. However, the parents can agree to pay for a child’s college education, whether informally or as a court order, and if made into a court order the court can enforce that agreement according to its terms. Absent such an agreement, a court order to pay for an adult child’s college education expenses is invalid and is beyond the court’s authority.
Support for adult disabled children
Family code 3910(a) creates an obligation for a parent to support “a child of whatever age who is incapacitated from earning a living and without sufficient means”. The courts have generally imposed a support obligation under this statute when the facts or circumstances indicate that the child has a physical or mental disability which prevents them from being able to work if they chose to do so. In cases where a now adult child has such a disability a careful examination of the facts is needed to determine the child’s vocational interests and their ability to work (whether with or without accommodations). Cases dealing with support for adult children who may be disabled are incredibly complicated and fact specific and should not be undertaken without legal assistance.
If you have any questions regarding child support and its termination please contact our office and set up a time to meet with our attorneys.
by Tom Hogan
If you have already spoken with an attorney and determined that bankruptcy will not discharge all of your tax debt, and an installment agreement is not a feasible way to satisfy your remaining tax debt, then you will want to try to make an Offer In Compromise to the IRS.
What Is an “Offer In Compromise”
An offer in compromise is an agreement between you (the taxpayer) and the IRS that settles a tax debt for less than the amount owed. Like bankruptcy, it gives the eligible taxpayer a chance to satisfy their tax debt and get a “fresh start” with respect to the tax debt.
Why Would the IRS Accept Less than What Is Owed?
When a troubled taxpayer prioritizes between buying food, paying the mortgage or paying taxes – taxes often got the short shrift. Nonetheless, that tax debt continues and continues to grow.
Three tax consequences often accompany an economic downturn and rapid changes in asset ownership and/or income, and these consequences also form the bases for the IRS accepting an offer in compromise:
- Doubt as to collectability
- Doubt as to liability
- Effective tax administration
Doubt as to Collectability: If taxpayer’s assets and income are less than the full amount of the tax liability, then the IRS has doubt as to collect-ability, and is authorized to negotiate and accept an offer in.
Doubt as to Liability: Rapid economic change comes with chaos, and tracking income and tax liability across a shifting economic landscape is not easily accomplished. As a result, a genuine doubt as to tax liability can result. Here again, the IRS is authorized to investigate and accept an offer in compromise when there is doubt as to liability.
Effective Tax Administration: This last basis for accepting an offer in compromise takes more of a public policy perspective on the tax administration process, and determines whether the taxpayer would suffer “economic hardship” or whether accepting a compromise would promote effective tax administration where the taxpayer provides a “compelling public policy or equity consideration” to support such compromise.
“Economic hardship” is a legitimate basis for an offer in compromise where the taxpayer can show that although full collection of tax debt could be achieved, it would cause the taxpayer “economic hardship” as specified in the Treasury regulations.
“Compelling public policy or equity considerations” require the taxpayer to demonstrate exceptional circumstances which render the collection of the full tax liability as an act that undermines the public confidence that the tax laws are being administered in a fair and equitable manner.
These are the reasons why the IRS might accept an offer in compromise, but a taxpayer must do his or her due diligence before being eligible to submit such an offer.
Are you eligible to submit an offer in compromise?
If you wish to submit your offer in compromise, you must first:
- File all tax returns you are legally required to file;
- Make all required estimated payments for the current year; and
- Make all required federal tax deposits for the current quarter if you are a business owner with employees.
Note – If you are in an open bankruptcy case, then you are not eligible to submit an offer in compromise. You must first address the pre-petition tax debt through the bankruptcy case, and thereafter address any outstanding tax debt once the bankruptcy case closes.
It is important to be aware of this partial list of concerns when submitting an offer:
- Penalties and interest will continue to accrue during the offer evaluation process.
- Besides the continuing penalties and interest, the IRS can also file a Notice of Federal Tax Lien during the Offer investigation; however, unless a jeopardy situation exists, a request for a Tax Lien will not usually be made until after the final determination has been rendered.
- You cannot make an offer that is only for a tax year or tax period that has not been assessed.
- Any tax refunds or money from a levy served prior to you submitting an offer, will be applied to the tax liability.
- Any payments made with an offer or during the course of the offer investigation will be applied to your tax liability, whether the offer is accepted or not.
- If your offer is accepted, you must continue to file and pay your future tax obligations as they become due for the next 5 years. If you fail to do so, your offer may be defaulted and the compromised tax debts, including penalties and interest will be reinstated.
Making the Offer:
There is an application fee of $150 required when submitting your offer. However, this fee can be waived for individuals meeting the Low Income Certification guidelines. If the fee is not waived, it will not be returned to the taxpayer, but will be applied to the tax liability.
The Offer in Compromise can be made in a couple different ways:
- Lump Sum Cash: requires that 20% of the total offer amount be paid at the same time the offer is submitted. The remainder will be paid within 24 months in accordance with the offer terms.
- Periodic Payment: requires that the taxpayer make an initial payment with the offer, and then make continuous payments on the remaining balance over a period of not more than 24 months in accordance with the proposed terms of the offer.
This is a good stopping point. The general benefits and considerations of the Offer In Compromise have been laid out. But making an offer in compromise is a complicated undertaking, and there are IRS forms to be completed and supporting documents to be gathered. You should become very familiar with the IRS website or obtain the services of a tax professional when getting ready to make an offer in compromise; but be leery of fly-by-night tax outfits. Obtaining the services of an experienced and knowledgeable attorney is a smart choice.
by Katie Cochran
No creditor knocks quite as loudly as the Internal Revenue Service when they come to collect. The consequences of not timely paying your personal income tax debt can result in the seizure of your personal property, levying of your bank accounts, garnishment of your wages , and/or foreclosure of real property.
You may be considering bankruptcy as a way to discharge your personal income tax liability, but before you rely too heavily on bankruptcy to discharge that tax debt completely, you need to ask yourself some important questions to determine what portion of your tax debt can be discharged.
Rather than listing what tax debt is dischargeable, it is more efficient to identify which income tax debt is not dischargeable:
- Priority income tax debt is not dischargeable. Several types of this non-dischargeable tax is identified in bankruptcy code section 507(a)(8)(A). Priority status of tax debt often relies heavily on timing, and includes:
- Taxes for which a return, if required, is last due, including extensions, on a date more than 3 years before the date that the bankruptcy case was filed.For example, if Mary Smith filed bankruptcy on July 4, 2015 and she listed tax debt for tax years 2010, 2011, and 2012. If no tax filing extensions were obtained, then the 2010 and 2011 tax debts would be dischargeable in Mary’s bankruptcy case because those tax returns were due by April 15 of the following year: i.e. 2010 tax return due by April 15, 2011 and 2011 tax return due by April 15, 2012. Because April 15, 2012 is the latest date that either of these returns was due, and that date is more than 3 years before the date that the bankruptcy case was filed, then the 2010 and 2011 tax debt is dischargeble.
Now consider that Mary received an extension until October 2012 to file her 2011 tax return. As a result of the extension, the last date the 2011 return is due is less than 3 years from the filing date of the bankruptcy case. Consequently, the 2011 income tax debt is no longer dischargeable in the bankruptcy case. The 2012 income tax was due by April 15, 2013 and was never eligible for discharge in a bankruptcy case filed on July 4, 2015.
- Priority debt also includes any tax assessed within 240 days before the filing date of the bankruptcy case, exclusive of-
- Any time during which an offer in compromise with respect to that tax was pending or in effect during that 240 day period, plus 30 days; and
- Any time during which a stay of proceedings against collections and arising out of an earlier bankruptcy filing was in effect during that 240 day period, plus 90 days.
- Tax debt is not dischargeable in bankruptcy for tax years for which:
- returns were never filed;
Note – late filed returns should be reviewed thoroughly with an attorney to determine the circumstances and timing, and whether that tax is likely to be deemed dischargeable.
- Tax debt is not dischargeable with respect to returns in which the debtor fraudulently filed a return or willfully attempted in any manner to evade or defeat such tax.
It is tempting to believe that any tax debt not described here as non-dischargeable is therefore dischargeable, but this conclusion will not always be true. Always seek legal advice when you need greater clarity regarding your specific circumstances, and especially when the amounts at issue are large.
by Katie Cochran
A wage garnishment is the most common type of garnishment. It is the process of removing money from an employee’s monetary compensation it can also includes a garnishment on 1099 income.
Garnishments are the result of a court order, abstract or judgment or lien for an outstanding balance to a creditor and the wage garnishment will proceed until the debt is paid in full or alternative arrangements are made to pay off debt.
Like most creditors, the IRS has the authority to garnish your wages for outstanding taxes owed. But, not to panic, there are many solutions that can take care of your wage garnishments. Below are top 3 ways to handle wage garnishments for tax debts that you owe.
- Setting up a payment plan to pay the taxes owed over a period of time; while writing a check in full to the IRS is most ideal, many cannot afford to pay all at once, which is understandable, making payments is much more affordable and possible and the installment agreement is based on your financial ability to pay – if you are going through a hardship, the IRS may even deem your account as noncollectable for up to a year which means your wage garnishment would stop and they would hold off on collections until your financial situation improves.
- If you do not show an ability to make monthly payments an OIC may be an option, known as an Offer in Compromise (OIC); we review your financial situation to determine if an OIC is possible and in your best interests.
- Filing for bankruptcy is also an option our office would review your liabilities to see if a bankruptcy filing could alleviate your tax liabilities. The bankruptcy filing would immediately stop the wage garnishment and give you breathing room in order to be able to set a payment plan after the bankruptcy case is discharged.
While a wage garnishment may seem overwhelming and impossible to overcome, there are actually many options that our office can offer to help deal with outstanding tax debts. The Law Offices of Thomas P. Hogan works with the IRS every day on behalf of our clients to resolve issues that seem overwhelming and impossible. We work hard for our clients to provide the best possible service and optimum results. Our group of lawyers and experts will make sure that your tax issues are taken care of in a timely matter in order to get you back on track and out from under the oppressive burden of back taxes.
by Tom Hogan
Q: Do I need to name a legal guardian for my children?
A: As parents, we would do anything to protect our children. We buy the best and safest car seat, the best strollers, we make sure they attend the best schools and receive the best education possible. But what if something happens to you? Have you done what you need to do to protect your children? Have you made plans to best prepare your children for a future without you? No parent wants to think about not being around to raise their children. I get it. It’s a scary thought. But what is scarier, is NOT thinking about it. If you do not decide proactively what will happen to your children if anything happens to you, a court will decide for you. The problem with that is the court doesn’t know your children. While the judge is obligated to consider the best interests of your child when appointing a legal guardian, the judge won’t know your children like you do.
As a parent, I want to be the one to decide who will raise my children if I cannot. I have worked hard to raise my children a certain way. Naming a legal guardian ensures that your children are raised by the person you want, in the way you want. When you name a legal guardian, you take the control into your own hands. You name the person/couple you trust, love and know would care for your children the way you want your children to be raised. You get to choose the guardian with whom your children have a close relationship, a guardian who has a similar parenting philosophy, similar moral and values, similar religious beliefs and a similar discipline style as you.
I have clients who tell me they know exactly what would happen to their children… “My sister (mother, brother, etc.) would raise my kids.” However, they do not have legal documentation in place to ensure their sister (mother, brother, etc.) would become their children’s legal guardian. The truth is, unless you have legal documentation in place, you don’t know who would raise your children if anything happens to you. That is why, if you have minor children at home, you need to have legal documentation in place naming a legal guardian to raise your children if anything happens to you.
Naming a guardian for your children can also help alleviate unnecessary confusion and conflict that could result if more than one family member petitions the court to become guardian of your children.
This is not an uncommon issue. This is what happened to the Barber Family. The Barbers were a young family from Southern California with three sons. The Barbers took their family on a road trip to Arizona and were involved in a fatal car accident. The parents passed away and all three children survived. They were placed in foster care until a relative came to get them. What happened next could have been avoided if the Barbers had taken the time to name a legal guardian for their children. More than one family member petitioned the court for guardianship of the boys. The family fought for months over what the parents would have wanted for their boys. Accusations were made, nine attorneys were retained and many thousands of dollars were spent fighting in court. In the end, the court made a decision to place the boys with one family member. However, by this time, damage had already been done, relationships were strained and the boys missed out on relationships with their extended family.
While the court did make a decision, we still don’t know what the parents would have wanted because they did not name guardians for their boys. What I can imagine is that the Barbers did not want their familial relationships torn apart fighting over who would be named legal guardian for their boys. This is one of the biggest personal risks we face when we do not take the time to name legal guardians for our children.
If you have minor children at home, it is imperative you take the time to legally document who you would want to be the guardian of your minor children if anything happens to you. If you cannot decide who you would choose, we can walk you through a series of steps that will help you reach the best decision for you and your children. It is not easy to make these decisions and they should not be made on your own. It is important to have good legal guidance. Contact an attorney in our office to help guide you through the process, answer all of your questions, help you consider all of your options and to help avoid harm in the future.
by Chris Dietrich
Parties who are filing or responding to a petition for dissolution of marriage will quickly come across a section for them to state their “date of separation” on the court’s pleading forms. The question for almost all parties then immediately becomes, when did we separate? And why does the court need to know? Why does this matter?
Why does date of separation matter?
The date of separation is important in California divorces for two main reasons:
- Property Division: California law provides that generally property which is acquired by either spouse after the date of separation is the separate property of that spouse, which is 100% theirs. This can include salaries, real property, personal property, accumulation of retirement benefits, as well as other property items. While there are major complications which can arise in determining whether an item was received fully from a party’s separate property, in general the date of separation can have a significant impact on how the parties’ property is divided.
- Spousal Support: One of the biggest factors that the court considers in setting the duration and amount of spousal support is the length of the parties’ marriage. Generally, the longer the parties are married the longer the spousal support will last (and potentially the higher it will be). So, a choice between two different dates of separation can have a major impact on the support rights and obligations of the parties.
How does the court determine our date of separation?
Determining the exact dates that parties did in fact separate is a question that has perplexed the courts throughout the years and has led to inconsistent decisions. For some parties there is no dispute and the separation is clear. For example, if a husband and wife decide to live in separate residences on January 1st and the husband moves out that same day to his own apartment with the wife staying the marital home, January 1st is their separation date. For other couples with multiple move-ins and move-outs, ongoing financial ties, and other ongoing joint activities the question of a date of separation can be even more complicated. A third common category of couples may live under the same roof but separate their finances, schedules, and activities and live together as “roommates”. What is the court looking for in deciding when the parties separated? Is it about parties emotional connection? Physical intimacy? Their living situation?
In 2015 the California Supreme Court weighed in on the issue of the parties’ date of separation for the first time. In the case In Re Marriage of Davis the Supreme Court established that for parties to be separated they must be living in separate residences. In essence, parties are not separated until they no longer live under the same roof. However, the court also recognized the reality that parties may live in the same household and still be separated in certain exceptional circumstances, but did not elaborate on what those circumstances could be. This caveat, buried in a footnote in the court’s opinion, leaves the door open for this rule to change in the future. As it stands now though, parties must first and foremost be living in separate residences to establish their separation.
Other older cases make clear that parties can still be married (unseparated) even though they do not live in the same residence. In essence it is not enough for the parties to live in different residences; the parties’ conduct and the circumstances of their marriage may refute a finding that they are separated. The best example of this comes from the case Marriage of Baragry, where the husband lived with his girlfriend/employee in his own apartment, but often went home to his wife and children to enjoy her home cooked meals, have her do his laundry, and otherwise maintained ongoing ties with his wife while living with his girlfriend. The court refused to allow the husband to claim that they separated when he first moved out in light of the benefits husband continued to receive due to his ongoing relationship with his wife, even though he didn’t actually “live” there. Essentially, the court will not allow parties to have it both ways.
The cases on date of separation are complicated and at times contradictory. As discussed above, this issue can be critical and can have a substantial impact on the rights of the parties. If you have questions about the date of separation in your case and the best approach to take, it is important that you contact one of our attorneys to guide you through this process.
What to do when the house is in the other spouse’s name. Use of a “Notice of Pendency of Action” in California Divorce Cases.
by Chris Dietrich
For many divorcing couples, what will happen with a house after the divorce is a critical concern for both spouses. These concerns only increase when title to the house is only in one of the spouse’s name. For the spouse who is not on the deed, it is important to take steps to protect their interest in the house to prevent the other spouse from borrowing against, selling, or losing the house to foreclosure prior to a final Judgment.
One of the best tools a spouse can use to protect their interests in a house that titled in the other spouses’ name is to file and record a “Notice of Pendency of Action” against the house. This document becomes a public record, which when properly drafted and recorded gives notice to the other spouse, and anyone else that there are pending court proceedings regarding this house. With this notice, the other spouse will not be able to effectively sell the house to a third party. This notice will come up on any title search and will be flagged to the attention of any buyer of a house or any bank who might lend funds to purchase the house. It also provides a mechanism for you to be notified about important occurrences with the house, such as default and foreclosure, allowing you to step in and take other actions to protect your interests. Also, this Notice of Pendency of Action may work to prevent a party from borrowing against the equity in their house during the divorce, either through a home equity line of credit or a Family Law Attorney’s Real Property Lien.
The Notice of Pendency of Action is a tool which can be used in conjunction with the Standard Family Law Restraining Orders to prevent one spouse from taking actions to unilaterally undermine the other spouse’s interest in a property item away during a pending family law proceeding. Use of the notice of pendency of action gives additional “teeth” to the Standard Family Law Restraining Orders and allows for additional remedies which you may not have been able to use otherwise.
The Notice of Pendency of Action is a valuable tool and should be used carefully and properly. This document puts a “cloud” on title and once the family law proceeding is finished needs to be removed to avoid future hardship for both parties. Further, there are circumstances when the court can remove the Notice of Pendency of Action from the house.
A final related note, it is important to remember that in California community property law that whose name is on a house is not the final determinative issue in deciding who gets the asset and whether the other spouse has to be “bought out” from the house. Rather, there are multiple ways in which the spouse not on title can claim an interest, including seeking a determination that the asset is community property in spite of its title, seeking a percentage of the house under a Moore/Marsden theory, or requesting reimbursement for expenses paid towards another spouse’s separate property home. Therefore, it is important to consult with an experienced family law attorney to discuss the use of this tool and what interest, if any, you may have in a house in the other spouse’s name.
by Chris Dietrich
One of the most pressing concerns for any parent going through a divorce, legal separation, or break up is what will happen with the children. Even in the most amicable of breakups numerous new challenges arise, including changes in housing, finances, scheduling, work, and many other areas of life, all of which must be considered and addressed to create a parenting plan in the children’s best interest. In more contentious breakups there may be additional serious issues present such as neglect, abuse, addiction, as well as other serious concerns.
California Family Code §3170 requires that in any contested custody case that the parties first participate in mediation to attempt to resolve custody disputes with an agreement before the issues are tried in front of a judge. This requirement is imposed under the belief that an agreement which the parties come up with themselves for their children is usually better and will be more successful in the long term than one imposed by the courts. To assist the parties in working through these various difficult issues the mediation is conducted with the assistance of highly trained therapists who are familiar with the common issues that need to be addressed in custody disputes.
In some counties, commonly referred to as “recommending” counties the mediator has an additional role when the parties are unable to reach an agreement. In these counties the mediator will present a written recommendation to the court regarding a parenting plan for the minor children. In these counties the mediation process has increased significance as the mediator’s recommendations are often adopted in whole or in large part by the court. Many local counties, including Sacramento, Placer, Yolo, San Joaquin, and Stanislaus counties are recommending counties. In other counties, the mediation process is entirely confidential and the mediator does not make recommendations to the judge if the parties are unable to reach an agreement.
All courts in California have an office called Family Court Services to provide mediation services to the parties in contested custody cases. Most custody mediation is handled through these court offices that provide their mediation services at no cost to the parties. As an alternative parties may request (either with an agreement or without) that the parties be referred to private Child Custody Recommending Counseling (CCRC) to assist parties in resolving contested custody issues and if needed, to investigate and prepare a recommendation to the court regarding custody. This counseling is done by an experienced therapist within special training dealing with contested custody issues. The expense of the private CCRC is paid by the parties, usually with the party who requested it advancing or paying 100% of the cost upfront with the court reserving the ability to divide the cost between the parties at a later date. Due to limited resources in the office of Family Court Services, most mediation sessions last between 15 minutes to one hour, whereas when the case is set for private CCRC the parties will spend multiple hours with the counselor who will also invest time outside of these meetings investigating and preparing recommendations. While it is not necessary or affordable for parties in all cases, private CCRC provides a valuable service to resolve difficult custody disputes.
If you are facing decisions regarding custody issues it is important that you contact an experience family law attorney who can advise you regarding your options and strategies to obtain a custody order in your children’s best interests.
by Chris Dietrich
The fundamental purpose of child support in California is to ensure that the needs of children are provided for. Under California law each parent has an obligation to financially support their children (Family Code §4053(b)). Practically, the state has adopted a uniform guideline formula to calculate the amount of support that should be paid keeping in mind each parent’s obligation to support their child. Simply speaking, the guideline formula calculates support based upon each parent’s income and the amount of time each parent has with her child.
To ensure that a child is supported, in the appropriate case the court may count a new spouse’s income in calculating support. However, under the law a new spouses’ income should not be considered except in an extraordinary case (Family Code §4057.5(a)(1)). The family code lists examples of these extraordinary cases, including when a parent “voluntarily or intentionally quits work or reduces income” or when a parent “intentionally remains unemployed or underemployed and relies on a subsequent spouse’s income” (Family Code §4057.5(b)). The law recognizes that in this case it is appropriate to use a new spouse’s income to calculate support so that the entire burden for supporting a child does not fall on the parent who is still working. (Marriage of Paulin (1996) 46 Cal.App.4th 1378, 1384, fn. 5).
It is important that if you are facing these issues that you contact an experienced family law attorney to ensure that child support is set in an amount that is fair and proper.
by Chris Dietrich
On October 4, 2013 Governor Jerry Brown signed into law Senate Bill 274 which enacted new statutory amendments to clarify that a child may have more than two parents in the appropriate circumstance. This means that in certain circumstances more than two parties can have the rights to custody and visitation of a minor child, and that more than two parents may have the obligation to support a child.
The new law provides that a child may be found to have more than two parents if it would be detrimental to the child to recognize only two parents. To determine whether there would be detriment to a child in this circumstance the court is called to consider various factors including whether a proposed third parent has met the physical needs of that child, whether they have met the psychological needs of a child for care and affection, and how long they have assumed that role, among other factors.
In addition to showing that there would be detriment to the child if there are only two parents, one of several existing statutory grounds to establish paternity will have to be proven as to the non-biological parent. Some examples of these methods of establishing paternity are (1) being married to the mother of the child, (2) attempting to marry the mother of the child before or after the child’s birth, (3) or receiving that child into their home and holding it out as their own.
Demonstrating to a court that these facts exist can be complicated and may require expert testimony from child psychologists or other child custody professionals and will often have to be resolved with a trial or evidentiary hearing. It is important if you are facing these complicated issues that you consult with a family law attorney right away to assist you in navigating these very tricky claims.