California Tax Attorney Blog

Often, before your tax problem is assigned to a revenue officer for collection “in the field”, tax collection is handled by a branch of the Internal Revenue Service called “ACS” (Automatic Collection Service). This is where the computer generated notices come from. ACS has developed this check sheet to help expedite the resolution on accounts in the Large Dollar Unit of ACS. The check sheet is for those accounts with a balance due of $100,000 or more.

To expedite the resolution on accounts in the Large Dollar Unit, please have the following information available when contacting ACS.

• Valid Power of Attorney (Form 2848) covering all tax periods
• Explain in detail why the taxpayer is not able to full pay or borrow to full pay
• Completed Collection Information Statement (Form 433- A, B or F)
• Number of individual’s living in the house hold
• Value of 401K/Retirement
• Copies of delinquent tax returns and /or ASFR returns
• Rental income
• Spouse’s income and source with name/address/phone number
• Three months of current bank statements (all accounts)
• Investment income
• Year make of vehicles, value, equity, balance owed, and monthly payments
• Employer’s information including work number
• Secured loan(s) - amount of loan and remaining balance(s)
• Life insurance policies, (whole or term), any borrowing ability? And/or value of policy
• Profit and Loss statements for self-employed taxpayers
• Three months of current pay stubs for both the taxpayer and the taxpayer’s wife
• Out-of-pocket medical expenses
• Commission statement
• Value of all property and/or available equity
• Substantiation of Court ordered payments
• Substantiation of payments being made
• Pension income and/or Social Security income

For additional help, call a tax attorney. Call Mitchell A. Port at (310) 559-5259.

In California, an attorney handling your probate case gets paid a statutory fee as well as a possible extraordinary fee. California statutory probate fees have been discussed elsewhere in this blog. In this particular blog post, I will discuss extraordinary fees.

The Los Angeles Superior Court has issued guidelines on attorney compensation. Here is what it says about extraordinary fees:

CALIFORNIA PROBATE CODE sections 10801, 10811 - Allowance of additional compensation for "extraordinary services . . . in an amount the court determines is just and reasonable."

8.1.1 Sales or mortgages of real or personal property

8.1.2 Contested or litigated claims against the estate

8.1.3 The defense of a will contested after its admission to probate. In a post-probate contest, the estate may be required to pay the cost of defense even if the defense is NOT successful, i.e., Section 10801 expenses and Section 10811 expenses can be awarded against and made payable from the estate so long as the representative's defense was in GOOD FAITH.

8.1.4 The successful defense of a will contested before its admission to probate Although expenses in preprobate contests require a "successful defense", the term is construed broadly. It matters not whether the "success" was by judgment after trial OR BY PRETRIAL SETTLEMENT, or whether the representative fails to "win" on all issues. So long as the defense BENEFITTED the estate -- in the sense of preserving decedent's desires and intentions as expressed in the will -- it is "successful". Compensation payable by estate where contest settled by dismissal with prejudice; immaterial that estate did not prevail on challenge to contestant's standing.

8.1.5 Preparation of estate, inheritance, income, sales or other tax returns or the adjustment, litigation, or payment of any of said taxes

8.1.6 Litigation involving estate property

8.1.7 Carrying on of the decedent's business pursuant to COURT ORDER. If not pursuant to Court order, there is no "guarantee" that extraordinary compensation will be approved; the result will likely turn on the circumstances involved and whether continuing the business was profitable to the estate.

8.1.8 "Other litigation or special services that are necessary for the executor or administrator to prosecute, defend or perform."

8.2 Probate Code section 8547 - Allowance of compensation to an attorney out of estate funds for extraordinary services to a special administrator

8.3 Probate Code section 10953 - Allowance of compensation for the extraordinary service of filing an accounting for the administration of a deceased, incompetent or absconding representative by his attorney, or the attorney of record for the estate, when such an accounting is required

8.4 Probate Code section 11003 - Recovery of compensation and expenses for "bad faith" contest or opposition to contest

8.4.1 If the court determines that a contest to the representative's account was brought "WITHOUT REASONABLE CAUSE AND IN BAD FAITH", the court may award against the contestant the compensation, and costs of the personal representative, as well as other expenses and costs of litigation, including attorney compensation, incurred to defend the account. The amount so awarded is a charge against the contestant's interest in the estate, and the contestant is personally liable for any amount remaining unsatisfied. (Emphasis added)

8.4.2 Conversely, upon determining that the REPRESENTATIVE'S OPPOSITION to a contest was "WITHOUT REASONABLE CAUSE AND IN BAD FAITH", the court may award the CONTESTANT the costs and other expenses, including attorney compensation, incurred to contest the account. The award is a charge against the compensation or other interest of the personal representative in the estate, and the representative is personally liable and on the bond (if any) for any amount that remains unsatisfied.

8.5 Probate Code section 11624 - Costs of preliminary distribution paid by distributee or estate in proportions determined by Court.

8.6 Paralegal Services. The above sections (except sections 11003 and 11624) provide that extraordinary compensation for probate counsel may also include compensation for extraordinary services performed by the attorney's PARALEGAL under the direction and supervision of the attorney. The application for such compensation must set forth the "hours spent and services performed by the paralegal.”

8.6.1 It is doubtful that the Legislature intended to equate "legal secretary" work with work performed by a "paralegal" (the Legislature expressly chose the term "paralegal" rather than "legal secretary.") Thus, to justify payment for paralegal services, counsel should set forth IN DETAIL, the paralegal's EXPERIENCE AND CREDENTIALS.

8.6.2 The amount requested for the extraordinary services of the attorney and paralegal COMBINED must not exceed the amount that would be appropriate if the attorney had provided the services WITHOUT paralegal assistance.

The Los Angeles County Superior Court web site will provide help with California probate matters in general, but focuses on areas where parties tend to be self-represented (without an attorney to help them). The information and links contained on that web site are intended to help you help yourself through the California court system and probate matters.

You may find it difficult to proceed without an attorney familiar with California Probate law. Only a licensed attorney can give legal advice. If you do not understand any information or if you have trouble filling out any of the forms located here, see an attorney for help.

Self help topics include the following:

Probate Guardianship/Conservatorship Information Sheet

Conservatorship

Guardianship

Transfer Of Small Estates Without Probate

Glossary of Probate Terms

Probate Forms Packets

Creditor's Claims

Estate Planning

Links To Other Probate Self-Help Web Sites

Call a qualified probate attorney for help. Call Mitchell A. Port at 310.559.5259.

You don't need a tax lawyer if you owe the federal government (IRS) $25,000 or less in income tax, penalties and interest. Instead, you can access an online payment agreement.

For tax debts larger than $25,000, speak with a qualified tax attorney about your options. Call Mitchell A. Port at (310) 559-5259.

Los Angeles County Court Rule 10.28(c) for probate provides that in connection with a request to waive the requirement of a bond, the following must be satisfied:

In all cases where bond is not waived in the will, or the proposed personal representative resides out-of-state, and a waiver of bond is being requested, the petitioner must submit a declaration which states:

(1) the number of unsecured creditors of the estate and the estimated estate liability to such creditors;

(2) whether the estate is solvent;

(3) all estimated tax liabilities, if any;

(4) the amount of any known contingent liabilities; and,

(5) the due diligence performed to ascertain the above information.

Another terrific newsletter has been published by my friend and asset protection attorney Jacob Stein of Klueger & Stein, LLP. In it Jacob discusses the limitations of single member LLCs as an asset protection device. Read more here.

When does hiring a California estate planning attorney make sense? Here are a few reasons:

You have a taxable estate

You have minor children and want to provide for distributions to them at intervals or for specific purposes

You have a beneficiary who is disabled

Your children have drug or alcohol problems and need a trust that will take that into consideration

You want to benefit a charity

You own a business and want to provide for someone to take over the business after your death

You own real estate in more than one state

You are in a second marriage with children of other relationships

You have substantial assets in 401(k)s or IRAs

You want to have someone you can call when you have questions or want to make changes in your documents

Contact an experienced California lawyer to get advice on your estate planning needs. Call Mitchell A. Port at 310.559.5259 to minimize the impact of death and taxes.

Since California estate planning documents provide for your wishes in the event you become incapacitated and later distribute the wealth you have accumulated over your life at the time you die, your will, living trust and durable powers of attorney are some of the most important documents you will sign. Where to keep these documents is an important decision.

While a safe deposit box or a home safe is probably the most secure place to keep any documents where you can be assured that they are protected from theft, fire, damage, tampering or loss, I recommend leaving them in a more accessible place.

A power of attorney is used during your incapacity and if the person who has been given power by you cannot get into your safe deposit box or home safe because they either don’t have a bank key or combination to a lock, those documents won’t be too helpful in your time of need.

Don’t be too concerned about your will, living trust or power of attorney being stolen: who wants those documents anyway? They cannot be used if you are alive and well. At the moment you die, just pre-arrange with your executor or trustee of your living trust to be sure he or she knows where your originals are so they can get to them before anyone else. As for the possibility of losing them in a fire, simply get another original set from the lawyer who wrote the documents if they are burned or destroyed.