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IRS collections led to the agent issuing me a summons to

produce financial docs, etc. I...
IRS collections led to the agent issuing me a summons to produce financial docs, etc. I refused as I was about to file a BK on this issue, I just needed to wait out the 3 yr, 2 yr 240 period. After refusal, I received a OSC in the district Court. I subsequently filed the chapter 7 and currently it's open. The us atty office(IRS) and the District Court were notified of this filing and a proposal ( by the us atty ofc) to stay the OSC was filed with the district court. The Dstrict Court issued an order to conitnue the OSC for approx 1 week after the original hearing date. If indeed the bk law stays ALL collections, and since he )OSC is a direct result of the irs collections, why then did the District Court order this OSC and how do I stop it considering the BK halts these actions?
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8/25/2016
Maverick
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The automatic stay prevents the commencement or continuation of any judicial, administrative, or other action or proceedings against the Debtor. 11 U.S.C. section 362(a)(1). However, the following is not stayed:

  • Tax audits, issuance of a notice of tax deficiency, or seeking assessments of non-dischargeable tax debts. (Section 362(b)(9)).

That said, there is not way to stop it if the district court want to continue with the OSC hearing; but any order that it issues is challengeable on appeal as either void or voidable. See this link.

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Customer reply replied 1 year ago
Hi, lets dicuss this briefly ,,,,Tax audits, issuance of a notice of tax deficiency, or seeking assessments of non-dischargeable tax debts. (Section 362(b)(9))there is no tax audit going on currently, the only audit happened back in 2013..... Notice of tax deficiency came in 2013 as well, the tax debts are 100% dischargeable.. As mentioned the 3 yr, 2 yr 240 day time period past, there was no fraud involved, there is no criminal matters related and although I hear what you're saying as logical and understandable.So, if what I understand is correct, i'll appear in District court for the OSC at which time I will testify that the reason I have not surrendered the requested documents to the IRS is simple, I am currently in BK and and the taxes are dischargeable, the Court should allow the bk proceeding to end ( discharge or not discharge) before it orders me to surrender the docs. The Court will,( more than likely from what it sounds like) order me to surrender these docs, they will give me x days to do so, is this correct? assuming yes,. at this point I can appeal the district courts order to surrender the docs as violative of 11 U.S.C. section 362(a)(1)? is this correct as well?Finally, why dont I just give the IRS agent the 23 months of bank statements and my financial prior to the osc hearing? My reasoning here is 1) the bank records show nothing, at all nor indicate I have or make over $750k to replay them, there are no off shore accounts etc.. the IRS did subpoena 3 banks and received these records as well as contacted several of my customers ( I am a hvac contractor) and informed them they are the IRS and I owe lots of money and IF they owed my any money, they are to send it directly to the IRS. My point here is what the IRS wanted, they ALREADY have, . less my financials,, again, they will not find any money, they will not find anything out of the ordinary, they will find the meek income of a struggling business owner. Your thoughts?
Customer reply replied 1 year ago
I read the attached article, and very interesting. So, I go the OSC, the Court will ask me to show cause why i havent produced docs to the irs, i will state, because this matter is in a BK and section 11 of the usc code 362 stops all collection proceeding, the judge will probably laugh at me or become upset that here I am , a non lawyer trying to recite laws and codes, he will then order me to provide the docs per irs summons, the court will give me x amount of days to do so. In the interim, I can appeal, with the appropriate appellate court this " Order" as voidable under bk codes and statutes and NOT have to worry about the district courts order,( to produce the said docs) or 2) just give the IRS what they asked for knowing it's for naught as the taxes are dischargeable in the open bk?. Assuming I went with the appeal, is this appeal a simple matter? meaning would it be "just" a matter of filing correctly, in pro-per, points and authorities, following the appeal rules etc? This question is asked to determine if indeed its something I can do myself versus hiring an appellate lawyer
Customer reply replied 1 year ago
Above was supposed to be 2-3 months of bank statements from 10/2015 thru 12/2015 with 3 months of financials ( the items stated in the IRS summons)

Q. The Court will,( more than likely from what it sounds like) order me to surrender these docs, they will give me x days to do so, is this correct? assuming yes,. at this point I can appeal the district courts order to surrender the docs as violative of 11 U.S.C. section 362(a)(1)? is this correct as well?

A. Yes.

Q. Your thoughts?

This strategy often works well and sometimes it is easier to comply in this fashion so they get off your back since it appears that they will find nothing from the financials. Trying to appeal the court's order and ask for a stay of that order [yes, in addition to the BK stay which was supposed to be in effect] so that you are not held in contempt of court is not going to be fun or easy. Appellate courts are notorious dismissing appeals on even a minor technicality so you would be advised to hire appellate counsel. Even the smallest of appeals cost about $20K.

Maverick
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Customer reply replied 1 year ago
Noted and thank you . Finally, and to recap, easiest to submit the docs to the irs now,( or prior to the osc), attend the osc and advise all the doc have been submitted. I assume that if I submit the docs accordingly, the us atty ofc will notify the district court that they have what they want and submit motion vacating the order, would this be correct? Only thing I'm unsure of is, on the summons, it also lists giving "verbal" information as well, would the irs even attempt to question me knowing I am in bk? or would they say to hell with it and question me anyways? assuming they would, thats fine, nothing to hide. And more importantly, their taxes are indeed dischargeable,. No matter what info they get from me, it'll all be for naught
Customer reply replied 1 year ago
On second thought, I think it best to wait until the court orders me to produce the docs etc.. My thinking here is that I MUST go to Court regardless of if I send the docs now or not, . When asked why haven't I produced said doc, I am stating the bk code 1111 U.S.C. section 362(a)(1) and if the Court cites Section 362(b)(9)), i'll argue the taxes are from 2008, assessments have been made years ago, audits complete and to rely on this section ( if indeed he is) is prejudicial towards respondent . He will then probably order me to meet with the irs, show docs, give testimony etc...Hopefully by the time all this happens, the bk would be discharged and I no longer am responsible nor owe the back taxes. Such a huge annoyance and waste of time
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