Delinquently

President Barack Obama's commitment to take on climate change and put science over politics is about to be tested as his administration faces a politically sensitive question about the widespread use of ethanol: Does it help or hurt the fight against global warming? The Environmental Protection Agency is close to proposing ethanol standards.

Lilli Vincenz started demonstrating for gay rights at Independence Hall in the 1960s, when the activists had a strict no-hippies dress code: suits and ties for men, dresses or skirts for women.

A divorce is usually stressful enough without the added concern of obligations to the IRS. Unfortunately, many couples must deal with an IRS obligation as part of dissolving their marriage. The family law court may designate who is ultimately responsible between the parties to pay the debt. But, it cannot stop the IRS from pursuing both spouses, if both were originally liable for the debt. A court order designating that only one spouse is responsible for the taxes simply gives the non responsible spouse the right to seek reimbursement from the responsible spouse for any taxes paid.

The non responsible spouse may ask the IRS to find him or her to be an “innocent spouse,” and therefore not liable for the tax obligation, but that is a separate procedure involving negotiations with the IRS, not something the family law court can decide.

Even if a spouse was never originally liable for the taxes or has been relieved of the liability as an innocent spouse, he or she must still be concerned about the impact of a Notice of Federal Tax Lien against their spouse. The lien will encumber the liable spouse’s interest in his or her non marital property and marital property. The parties must take these liens into account when negotiating a property division. A court order awarding property from one spouse to another does not eliminate the tax lien.

The lien is even more treacherous when the non liable spouse does not know about the obligation and, at the time the petition for dissolution is filed, there is no Notice of Federal Tax Lien filed with the county or the state. The parties may negotiate or the court may be ready to order a division of property that grants the liable spouse’s property to the non liable spouse, completely unaware that the IRS is about to file a Notice of Federal Tax Lien. If the IRS files its Notice of Federal Tax Lien before the order granting the transfer, it could encumber the liable spouse’s interest in property and possibly destroy the value of the property to the non liable spouse. The non liable spouse may not learn of this problem until months or years after the dissolution is final and long after there is anything practical that the court can do about it.

Some taxpayers have argued that Minnesota Statutes Section 518.54, Subd. 5, protects marital assets from a creditor like the IRS who files a federal tax lien after the petition for marital dissolution is filed. The argument is that the marital interest in property vests in the spouse as of the date the petition for divorce is filed. See Gardner v. United States, 34 F.3d 985 (10^th Cir. 1994) (interpreting a Kansas statute similar to Minnesota’s statute). Therefore, if the IRS files its lien after the petition is filed, it is too late to encumber the property. This allows the family law court to make an allocation of assets from the marital estate without having to worry about what transpires between the date the petition is filed and the date of the final order.

Minnesota courts have not followed Gardner in applying this statute in areas beyond marital dissolution. The Minnesota statute was simply meant to clarify that divisions of marital property are not taxable events. No Minnesota court has applied the statute to change property ownership in a way that will affect claims by the spouses’ creditors. See In re Johnson, 210 B.R. 153 (1997).

To avoid problems with undisclosed or unknown tax obligations and tax liens, the parties to a marital dissolution should ask the IRS for an account transcript showing the status of their tax obligations. They can obtain this transcript by filing a Form 4506-T and requesting account transcripts for all relevant years. If either spouse owns or has owned a business, the parties may need to investigate further to obtain a clear picture of all of the existing or potential obligations.

A Los Angeles Police Department (LAPD) officer shot a suspect who threatened him with a machete in Highland Park.   

On May 3, 2009, at about 6:30 p.m., 911 operators received an anonymous report of “screaming and yelling” coming from a residence in the 300 block of N. Avenue 66, north of Ruby Street.  The call was dispatched to Northeast Area patrol officers as an “unknown trouble” at the residence.

The officers arrived at the residence and encountered a male Hispanic adult, later identified as
50-year-old Ramon Alaniz of Highland Park, armed with a machete.  When Alaniz refused to comply with the officers’ commands to drop his weapon and moved toward the officers, an officer-involved shooting occurred.  Police Officer II Gregory Ibanez, 3 years 9 months with the Department, fired multiple rounds at Alaniz, striking him once in the head.  Alaniz was then taken into custody without further incident and transported by ambulance to a local hospital where he is listed in stable condition.  No officers were injured.

The LAPD Force Investigation Division is responsible for conducting the investigation.  Charges against Alaniz are pending, based on additional investigation.

We can say with some amount of confidence that the past six-months or so have been some of the most challenging ever for law-firm managing partners. And prognosticators seem to think that the next six will be — if not quite as hard — no cake-walk either.

So what are these fearless leaders to do to come out the other end — sometime in 2010? — with their partnerships intact and work coming in? Let’s get you up to speed with a handful of ideas.

Profit Projections? According to this story in Tuesday’s Chicago Tribune, Seyfarth Shaw put out a profit projection for the rest of the year. In an internal memo sent around the firm last week in which the firm announced 50 layoffs, the firm also projected that it’s 2009 profits would be down between 5 and 7 percent. The Trib writer, Ameet Sachdev, gets the significance of this pretty much spot on:

The projection was not extraordinary because of the rate of decline but rather that Seyfarth, one of the largest firms in Chicago, found it necessary to set expectations about its financial health. Lawyers rarely talk publicly about in-house financial matters, except once a year when American Lawyer magazine ranks the most profitable big law firms.

The firm didn’t explain the move, nor did it comment to the Trib. But legal consultants speculated to the paper that the firm is trying to put a positive spin on its third round of layoffs since December. The executive committee said the firm from a profitability standpoint will fare better than “general predictions for our industry (down on average 10% to 15%).”

So will this — a profit projection — become part of standard operating practice? Maybe, but don’t count on it, said Alan Rubenstein, executive vice president of Chicago Legal Search. “Seyfarth now has created expectations, but who knows where the economy will be in six months,” said “I don’t think you’re going to see a bunch of firms following Seyfarth’s lead on this.”

A legal “communication” issued on Monday by the legal consultancy the Zeughauser group encourages firms to adopt a handful of fairly dramatic measures, given that “we expect that 2009 will be another grim year for most of the Am Law 100 firms.” Namely, Peter Zeughauser et al. recommend:

More layoffs: How’s this for pointed?: “We encourage firms to take a sharp knife to payroll and other expenses. As painful as the exercise may be, we think firms should continue to lay off unproductive associates and counsel out chronically under-productive equity and non-equity partners. In addition, we recommend a salary rollback for all non-partner
attorneys. Rolling back salaries not only will enhance profitability, but will boost a firm’s credibility with clients at a time when maintaining and strengthening client relationships is crucial.

Go Big in BRIC: Laid-off associates, how does Shanghai sound? Writes Zeughauser: “Law firms with a presence in the BRIC markets (Brazil, Russia, India and China) would be wise to add new emphasis to their practices in those markets, particularly in China, which likely will roar out of the recession. . . .”

Drop the Hour: “Except in limited circumstances, the hourly rate system is, after all, the worst of all worlds from a client’s point of view. . . . While client discomfort with hourly billing may be assuaged partly through a reduction in rates, we think firms should work aggressively to create win-win billing arrangements that more closely align the client’s and the law firm’s economic interests for the type of work being performed. . . . We are certain . . . that the firms that are willing to make the effort will be rewarded for having done so.”

Los Angeles police are investigating the death of a homeless man who was killed early this morning in the 500 block of North Glendale Boulevard in Los Angeles.

Shortly after 2:30 a.m., the man’s unresponsive body was found near the door way of a commercial business.  An unidentified person actually discovered the body and called 911.

According to detectives, an unknown assailant approached the victim and viciously struck him in the head with a blunt object.  The suspect then turned over a large planter to cover the victim’s head and fled.

Investigators believe the victim was homeless based on his appearance.  He did not have any identification on him and is being listed as a John Doe.  The man was described as a male Hispanic between 40-50 years of age, with black hair and brown eyes.  He stood around 5 feet 7 inches tall and weighed approximately 170 pounds.

The person who reported the incident stayed at the scene and was interviewed by detectives.  The individual was not a witness to the assault and was unable to provide any type of suspect information.

The detectives have few leads and the motive for the murder is unclear.

Sewage from toilets flows in open ditches here, spilling into back yards and even onto the lone baseball diamond where children play after school.

John Floyd Thomas Jr., 72, has been arrested after his DNA sample matched him to evidence from two killings in the 1970s.

A baggage handler has been accused of stealing a secured handgun from the suitcase of an NYPD sergeant boarding a flight at John F. Kennedy International Airport.

Why? Why does this
Nazi filth get to live? And live free? Because Europe and most especially countries like Austria learned nothing from the Holocaust. They were monsters. They were evil. And they still are. And please don't tell me not to lump all Austrians together until you can show me the rallies and the protests in the street against such a heinous action. Where is the outrage? In Austria? At the UN? (/sarc tag off)

Perhaps Ahmadinejad has a seat on his cabinet for this kindred spirit. (hat tip Kasper)

A NAZI war criminal exposed by The Sun is to escape justice after Austrian officials refused to deport him to face trial.

Croatian police chief Milivoj Asner signed orders for the deportation of Jews, gipsies and Serbs to death camps in the town where he lived in World War Two.

After the war, Asner fled and went into hiding. The Sun tracked the 96-year-old to a flat in Klagenfurt, Austria, where he was living under a false name.

His lawyers insisted he suffered dementia and was too ill to face trial.

A face-to-face interview with The Sun showed that he was lucid and defiant. But justice officials in Austria last night insisted he is unfit to stand trial.

Holocaust campaigner Dr Efraim Zuroff said: “His tranquil life in Klagenfurt, protected by the Austrian legal system, is an insult to victims.”

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