Legal Question in Bankruptcy in New York

Re: IRS leans against Veterans

Your question is more properly categorized under TAX LAW, NOT Bankrupty Law.

As with the preceding answers to this queation, I am NOT familiar with this area of the law.

However, my preliminary research indicates that VA disability benefits are TOTALLY EXEMPT from federal income tax, that this is NOT a matter to be argued from case precedents but which is instead a settled, unquestionable matter of law.

Threfore, based only on the facts you have related, I would NOT be considering BANKRUPTCY, since the IRS can probably be STOPPED from taking the 15% of VA disability benefits here.

I find the statement: "VA benefits are exempt from federal income tax" on a Question and Answer format on the United States Department of Veterans Affairs own Internet website and on a U.S military website.

Therefore: I strongly recommend that (among other options) you RESUBMIT this question to LawGuru as a TAX category question and see how LawGuru's TAX lawyers may respond and what services they may offer.

I re-iterate: My preliminary research indicates that there should be NO REASON to be considering BANKRUPTCY simply based on the facts you have presented:

Section 104(a)(4) of the United States Internal Revenue Code EXCLUDEs from taxable gross income "amounts received as a pension, annuity, or similar allowance for PERSONAL INJURIES or sickness RESULTING from ACTIVE SERVICE in the ARMEND FORCES . . . " of any country, including the United States. (My emphasis added in the form of UPPERCASE letters. This law also specifies that for injuries received after September 1975, this exclusion is only for combat-related disabilities, but as a Viet Nam veteran, your relative probably suffered the disability prior to that).

This exclusion is explicitly applied to veterans' VA disabilities in various IRS publications (including page 49 of

IRS Publication 17) which is on the IRS Internet website and which is downloadable as an Adobe Acrobat "pdf" extension file.

As regards conducting your own research:

Aside from the IRS' own Internet website, I list some resources in my answer on LawGuru's Questions And Answers database in the 6/3/06 Family Law category labelled "Information".

Note also that Georgetown University Law Center's Library's Internet website has some excellent material very "user friendly" and usable by somebody with little or no experience, on how to conduct tax research and research tax law cases. (You may have to first search for Georgetown University Law Center and/or GULC website to get to the GULC library's website.)

Re: IRS leans against Veterans

This is an area of the law with which I am not familiar. However, to do your own legal research, you might go to your nearest law school library (Syracuse?) and tell the reference librarian what you wrote here. She or he will certainly be a HUGE help in your research of the statutes and the caselaw (law librarians are your Friends). Another source of legal research materials is your county courthouse.

Also, get with an attorney who works with veterans. I can recommend one in the Albany area (email or call me for details on that if interested), but I don't know of any out in the 13xxx zip codes.

Good luck.

THE INFORMATION POSTED HERE IS GENERAL IN NATURE AND IS NOT INTENDED AS, NOR SHOULD IT BE CONSTRUED AS, LEGAL ADVICE. FOR ADVICE CONCERNING YOUR PARTICULAR SITUATION, CONSULT YOUR ATTORNEY.

Re: IRS leans against Veterans

IRS Taxes May be Dischargeable in Bankruptcy, if you meet the Requirements of the Dischargeability provisions.

It may make sense to file.

You need to contact a Bankruptcy Attorney.

Jacob Silver

Attorney At Law

26 Court Street

Suite 2511

Brooklyn, NY 11242

[email protected]

http://www.silverbankruptcy.com

Re: IRS leans against Veterans

This TAX AND TAXATION LAW question (as it should have been categorized)has received several responses.

Again: based on my preliminary research, it seems that your cousin's VA disability are EXEMPT by law from the IRS collecting on a tax lien; however, I am not sure whether or not time DEADLINEs (statutes of limitation) may have already passed for challenging and stopping the IRS on this legal basis.

However, in re-reading my own response, I see that I did not provide the most important information which I now provide below:

First, some definitions: A LIEN is a legal claim on property; a LEVY is an actual COLLECTION or SEIZURE of such property based on that claim; i.e., the IRS is executing a TAX LEVY on 15% on your cousin's VA disability benefits.

If your cousin is able to get a lawyer to represent him in this matter, you may want to provide that lawyer with both of my answers to your question in order to save time on research ppreliminaries and get your cousin's case off to a running start.

You may also want to RE-SUBMIT this question to Law Guru as a TAX AND TAXATION LAW question so that tax law experts may be able to provide detailed guidance and/or offers of legal representation.

The Internal Revenue Code's Section 6334(a) lists "Property EXEMPT from (tax) Levy" as follows: "There shall be EXEMPT from [tax] levy . . . . certain service-connected disability benefits . . . [including] any amount payable to an individual as a service-connnected disability benefit under 38 USC 1110" such as VA disability benefits.

You may read this in its entirety by using the Internet search 26 usc 6334 (the Internal Revenue Code is title 26 of the U.S. Code (usc).

Other tax laws which may be of interest include procedures for appealing tax liens

(26 usc 6320) and for appealing tax levies

(26 usc 6330) and time DEADLINEs, statutes of limitation, for such appeals and procedures for such appeals. 26 usc 6343 entitled "Authority to Release Levy and Return Property" may also be of interest. 26 usc 6321 and 26 usc 6322 and 26 usc 6323 and 26 usc 6324 may also be of interest.

You asked about researching cases. Another method of research is to search for "united states tax court" which will get you to the

tax courts' website where tax court opinions can be searched for online.