Recently as we get closer to the tax deadline, several clients have approached me after receiving 1099’s after filing bankruptcy and having their debts discharged. Obviously they were concerned about the tax consequences. After hearing their stress on the phone or in person, I told them to relax and gave them IRS Form 982.

Why did they receive the 1099? Good question – whenever debt is forgiven, it is considered income for purposes of taxes. Here’s an example: Mr. Smith has a $10,000 debt, he files bankruptcy and the $10,000 debt is forgiven, he is now $10,000 better off than he was before he filed bankruptcy, so the IRS considers this to be income. Doesn’t sound right does it? You don’t actually get the $10,000 – so why should you be taxed on it? Well, fortunately the IRS agrees with you.

IRS Form 982 - Reduction of Tax Attributes Due to Discharge of Indebtedness, applies to many situations where your debt may be reduced by a discharge, however you should talk with your CPA or Tax Specialist before filing this form with your taxes.

So, if you find yourself in the situation where you received a 1099 after a bankruptcy, make sure that you get the proper form and talk with your accountant.

*- This information is purely for educational purposes only and is accurate at the time that it is written, but it could change so talk with a professional before taking any action based on this article. Also, this article or any other information on this website is purely for educational or commercial purposes and does not create an attorney client relationship in any way. The Shepard Law Office PLC is a debt relief agency in Michigan helping people file bankruptcy under the bankruptcy code. If you are looking for a Michigan bankruptcy lawyer, this is the right place for you.

How A Michigan DUI Lawyer Protects From The System

With the following two DUI cases, this article shows you how a Michigan DUI lawyer protects people from the system

Approximately 9 months ago I was approached by a young lady who was arrested and charged for OWI. She explained to me how she had 2 glasses of wine with a friend and drove home. While driving home she was pulled over for speeding and asked had she been drinking. She, of course, told the truth and stated that she had a couple glasses of wine. However, she was not drunk. The officer was already convinced that she was drunk (or, at least, he was going to be arrested for DUI) and had her perform field sobriety tests.

After performing the tests (which she passed) the officer asked her to take a preliminary breath test. She did take the test but he wouldn’t show her the results. She was arrested and taken back to the police department and charged with drunk driving.

Now, most attorneys (who do not specialize in criminal defense / DUI defense) would tell their client that they will get them some sort of deal and the case would be over. However after reviewing the police report and accompanying documents, there were numerous “little issues.”

To make a long story short, after reviewing the case in more detail and holding an evidentiary hearing, the criminal charge was dismissed and this young lady doesn’t have an alcohol offense on her record.

People ask me, “do you think what you are doing is right?”

Absolutely.

I wholeheartedly believe that she wasn’t drunk that night; I believe that the officer was just after another arrest. I don’t fault the officer; I believe that he is so accustomed to dealing with drunk drivers that even when an innocent person is in front of him, he assumes the worst. That is why I do what I do. The system is made to protect the people but someone has to protect the people from the system. Hiring a Michigan criminal defense lawyer or Michigan DUI attorney will make big difference.

In another DUI case, a man was arrested for his 3rd DUI. This sounds pretty bad but consider the fact that he was 45 years old and hadn’t been arrested for anything in over 20 years. He was with a friend and did have a couple too many. Not to the point of falling over drunk, but enough where he should have considered another way home.

The evidence against him was strong however after talking with the city attorney about the matter, we were able to get the charge reduced from the Felony to a Misdemeanor, and he will be on probation but he won’t be going to jail.

Again, is that the right thing to do?

Absolutely.

In this case, he was guilty of the crime but the punishment didn’t fit the crime. He would have gone to jail where he wouldn’t be able to work and support his family. He did have a rough youth but he had put that behind him, he deserved a second chance. Again hiring a Michigan criminal defense attorney or Michigan drunk driving attorney will make big difference.