Delinquently

A psychic, Dani Pedlow from Los Angeles is demanding reward money in the Sandra Cantu case for her predictions.

Police said they had no contact with Pedlow. Tracy Sgt. Tony Sheneman said "we never reviewed or utilized any information from a psychic during this investigation." 

When married taxpayers elect to file a “Married Filing Joint” tax return, both taxpayers are responsible for the accuracy of the income and other items reported on the tax return. So, what happens if a taxpayer who filed a joint return is later in a situation where there is tax owing, but the tax is attributed to only one of the spouses?

Congress enacted section 6015 of the Internal Revenue Code to allow for three types of relief from joint tax obligations: Innocent Spouse, Separation of Liability, and Equitable Relief. To review all of the factors the Internal Revenue Service (IRS) considers for each type of relief pursuant to section 6015, please visit http://www.irs.gov/pub/irs-pdf/p971.pdf A copy of Form 12510, Questionnaire for Requesting Spouse, which the IRS uses to help determine eligibility for relief, is available at http://www.irs.gov/pub/irs-pdf/f12510.pdf

Among the factors the IRS considers when determining a spouse’s eligibility for relief is whether he or she actually knew or should have known of the facts and circumstances which gave rise to the tax obligation. The IRS test for determining whether a spouse actually knew is different from the test for determining whether a taxpayer should have known.

To evaluate actual knowledge, the IRS will examine whether the innocent spouse knew that he or she omitted income or took a baseless deduction on his or her income tax return. In cases where taxpayers filed their return correctly, but did not pay the obligation, the IRS will examine whether a spouse had a reasonable belief that his or her spouse would pay the tax.

When determining whether a spouse should have known, the IRS considers: a spouse’s education and background, his or her involvement in household financial affairs, whether the spouse purchased lavish or unusual items, and the evasiveness or deceit of the other spouse or ex-spouse.

The IRS will often deny relief if it determines a spouse knew or should have known of the events which gave rise to a tax obligation. Simply having knowledge of these events, however, does not necessarily disqualify a spouse from relief. For example, in Reser v. Comm’r, 112 F.3d 1258, (5th Cir. 1997), the husband created a corporation for the purpose of acquiring a shopping mall. The wife was not involved in the activities of the corporation, although she had advanced some of her personal funds to her husband to invest in his corporation. The couple filed a joint tax return for that year. She was the sole earner of the income reported on the return. Later, the IRS disallowed some of the corporate deductions the husband reported on the couple’s joint income tax return. The Court held that, in spite of the wife’s actual knowledge of the events giving rise to disallowed deductions and her contribution of capital to his business, she was not responsible for the tax because she was not personally involved in her husband’s business affairs.

The decision in Reser demonstrates that a taxpayer, even when having knowledge of the events giving rise to the obligation, can still qualify for Innocent Spouse, Separation of Liability, or Equitable Relief when the other criteria are met.

Sean Ferguson could have contributed to North Carolina's prison crowding had a judge refused to let him enter a rigorous two-year substance abuse treatment program instead of a cell.

The chief investment officer of troubled Stanford Financial Group was due in court Friday, as new details emerged showing the head of the firm borrowed $1.6 billion from the troubled company's assets.

A prominent national Islamic civil rights and advocacy group today called on Attorney General Eric Holder to protect the right of American Muslims to participate fully in the political process and to practice their faith without fear of government intrusion.
The Washington-based Council on American-Islamic Relations (CAIR) issued that appeal following a number of recent government-related incidents targeting Islam, American Muslim lobbying efforts, American mosques, and Muslim religious practices.

In a letter to Attorney General Holder, CAIR Executive Director Nihad Awad wrote:
"Today in Congress, taxpayer funds are being used for the screening of a virulently anti-Islam film and to promote the Islamophobic views of its producer. Despite appeals to offer a balancing perspective to the closed-door screening, elected officials and congressional staff will hear only anti-Muslim invective, without an opportunity for response from American Muslims.

In what strikes the Law Blog as an unusual move, a New Jersey bankruptcy judge on Thursday denied a Chapter 11 plan filed by Congoleum Corp. and also dismissed the company from bankruptcy, citing concerns about fees that were to be paid to famed lawyers Joe Rice (pictured) and Perry Weitz.

Congoleum, a New Jersey maker of flooring products, filed for bankruptcy in 2003 facing massive liability for asbestos-related injury suits. But U.S. Bankruptcy Judge Kathryn Ferguson has repeatedly raised concerns that Congoleum, in negotiating its bankruptcy exit plan, had not dealt sufficiently at arms’ length with plaintiffs’ lawyers whose asbestos clients would stand to recover money under the plan.

Critics have taken issue with many asbestos bankruptcies. They claim that they too often are pushed through quickly, letting the plaintiffs’ lawyers collect potentially excessive awards for their clients while the manufacturers’ insurance companies foot the bill.

In her latest ruling Thursday, Judge Ferguson cited concerns about $2 million that Congoleum had agreed to pay to Rice and Weitz, who represent clients with asbestos claims against the company. “The Debtors offer no explanation for this munificence,” the Judge said, citing a complaint that she had made earlier about the proposed $2 million payment.

Rice and Weitz did not return calls for comment. Kerry Brennan, counsel to Congoleum, did not return a call for comment.

Judge Ferguson not only denied Congoleum’s reorganization plan but dismissed the bankruptcy, effective 20 days from the Feb. 26 order. Congoleum has appealed the judge’s order. If the order stands, Congoleum no longer has protection from creditors in bankruptcy and will have to resolve asbestos claims brought by alleged victims in civil court.

But it has not been all bad news of late for Joe Rice, the South Carolina lawyer who became famous and wealthy taking on Big Tobacco.

Last week, Rice teamed up with professional golfer Dustin Johnson to win the Pebble Beach National Pro-Am. Here’s an article from Charleston, S.C.’s The Post and Courier. The Johnson/Rice team shot a combined 23 under par; Johnson, no surprise, accomplished most of that, shooting a 15 under. But Rice, a 17-handicapper, picked up a respectable 8 strokes for the team, helping out in particular on two holes in which Johnson shot a bogey and double bogey.

William Osborne says he's a victim of mistaken identity and a DNA test would prove it. Alaska prosecutors say his rape and attempted murder convictions are as solid as can be, and would be pointless to revisit.

Osborne's attorneys will argue before the U.S. Supreme Court on Monday that DNA testing is not something states can choose to allow when they have doubts about a conviction, but a constitutional right.

They note that 232 prisoners around the country have been exonerated by such tests, and that Alaska is the only state that hasn't even tried to use the ever-evolving technology to see if it might have gotten a conviction wrong.

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