Defaulted SBA EIDL Loans, Limited Liability Company (LLC) and Cancellation of Debt Income (COD) under Section 108 of the Internal Revenue Codehttps://shenwick.blogspot.com/2023/07/defaulted-sba-eidl-loans-limited.htmlOffers In Compromise ("OIC") for Defaulted SBA EIDL loans and Section 108 of the Internal Revenue Code ("IRC"), Relief of Indebted Income, a Trap for the Unwary!https://shenwick.blogspot.com/2023/05/offers-in-compromise-oic-for-defaulted.htmlEIDL LOAN WORKOUTS AND BANKRUPTCY   https://shenwick.blogspot.com/2022/07/eidl-loan-workouts-and-bankruptcy.htmlEIDL Loan Default Questions & Answers https://shenwick.blogspot.com/2022/10/eidl-loan-default-questions-answers.htmlEIDL LOAN DEFAULT DOCUMENT REVIEW, WORKOUT, BANKRUPTCY FILING & OFFER IN COMPROMIS Ehttps://shenwick.blogspot.com/2022/07/eidl-loan-default-document-review.htmlEIDL Defaulted Loanshttps://shenwick.blogspot.com/2022/07/eidl-defaulted-loans.htmlNew Relief Program for SBA EIDL Borrowers Who are Having Difficulty Repaying EIDL Loans " Hardship Accommodation Plan"https://shenwick.blogspot.com/2023/05/new-relief-program-for-sba-eidl.htmlEIDL LOANS and SBA OFFER IN COMPROMISE PROGRA Mhttps://shenwick.blogspot.com/2022/07/eidl-loans-and-sba-offer-in-compromise.htmlPPP & EIDL Fraudhttps://shenwick.blogspot.com/2022/08/ppp-eidl-fraud.htmlBetter to connect-What small business owners need to know about repaying loans tied to pandemic relief from the SBA EIDL Loanshttps://shenwick.blogspot.com/2022/11/better-to-connect-what-small-business.html

 Defaulted SBA EIDL Loans, Limited Liability Company (LLC) and Cancellation of Debt Income (COD) under Section 108 of the Internal Revenue CodeAs many readers of our emails and blog posts know, Shenwick & Associates  has developed a specialty helping borrowers, who have defaulted on SBA EDIL loans. Jim Shenwick, Esq  has an LLM in taxation from NYU Law School and is familiar with many tax issues involving SBA loan defaults.Provided at the end of this email are links to many articles he has  written about defaulted SBA EIDL loans.There are actually two issues involved in Limited Liability Company SBA EIDL loan defaults, the first one involves  a workout with the SBA to cure the loan default (or a bankruptcy filing by the LLC)  and the second which gets much less focus and attention are the tax consequences to the borrower  or members of the LLC, when an SBA loan  goes into default.An LLC  is a pass-through entity for tax purposes, which means no taxes are paid by the LLC, they are paid by the members who own the LLC.Section 108 of the Internal Revenue Code pertains to income from the discharge (non payment) of indebtedness and is also known as cancellation of debt income (COD).  Section 108 provides that if an individual or a business borrows money and the loan is not repaid, the individual or business  are enriched by the amount of the non-payment. The amount of no-payment is deemed ordinary income for tax purposes.As an example, assume an LLC borrows $100,000 from a bank and does not repay the loan. The bank sends the IRS and LLC a Form 1099-C, reporting $100,000 of ordinary income. Since the LLC is a pass through entity, that $100,000 of ordinary income is reported by the LLC members (owners of the LLC).If those members are in a  24% tax bracket, they would have to pay $24,000 in federal income tax on income from discharge of indebtedness.If the member or owner of the LLC does not report that income on their tax return and pays tax on that income, the IRS will audit them. It will then assess penalties and interest on the unpaid taxes.Many clients, accountants and lawyers are unaware of this issue or do not focus on the income from indebtedness issue (COD), regarding SBA EIDL loan defaults. WHAT CAN BE DONE TO AVOID INCOME FROM DISCHARGE OF INDEBTEDNESS?Section 108 of the IRC provides two exceptions to COD income.The first is that  if the LLC or a member files for Bankruptcy (IRC 108(a)(1)(A)) then no COD income is reportable or payable.  The second is the Insolvency Exception (IRC 108(a)(3)). Insolvency means that the taxpayer's liabilities are greater than their assets.  Individuals using the  Insolvency Exception need to attach Form 982 to their  federal income tax return.This email provides a brief  overview of EIDL loan default tax issues. Clients are advised to consult with a specialist in this area of law and a tax adviser. Jim Shenwick, Esq. is available to speak with client’s or their advisors.Jim Shenwick, Esq  917 363 3391  [email protected] Please click the link to schedule a telephone call with me.https://calendly.com/james-shenwick/15minWe held individuals & businesses with too much debt!--------------Jim Shenwick, Esq/Shenwick & Associates Blog Posts on SBA EIDL LoansOffers In Compromise ("OIC") for Defaulted SBA EIDL loans and Section 108 of the Internal Revenue Code ("IRC"), Relief of Indebted Income, a Trap for the Unwary!https://shenwick.blogspot.com/2023/05/offers-in-compromise-oic-for-defaulted.htmlEIDL LOAN WORKOUTS AND BANKRUPTCY    https://shenwick.blogspot.com/2022/07/eidl-loan-workouts-and-bankruptcy.htmlEIDL Loan Default Questions & Answers https://shenwick.blogspot.com/2022/10/eidl-loan-default-questions-answers.htmlEIDL LOAN DEFAULT DOCUMENT REVIEW, WORKOUT, BANKRUPTCY FILING & OFFER IN COMPROMIS Ehttps://shenwick.blogspot.com/2022/07/eidl-loan-default-document-review.htmlEIDL Defaulted Loanshttps://shenwick.blogspot.com/2022/07/eidl-defaulted-loans.htmlNew Relief Program for SBA EIDL Borrowers Who are Having Difficulty Repaying EIDL Loans " Hardship Accommodation Plan"https://shenwick.blogspot.com/2023/05/new-relief-program-for-sba-eidl.htmlEIDL LOANS and SBA OFFER IN COMPROMISE PROGRA Mhttps://shenwick.blogspot.com/2022/07/eidl-loans-and-sba-offer-in-compromise.html

 Biden's Plan B on student loan forgiveness relies on Higher Education Act: What to knowSee article at https://abc7chicago.com/joe-biden-student-loan-forgiveness-plan-higher-education-act/13465176/Jim Shenwick, Esq  917 363 3391  [email protected] Please click the link to schedule a telephone call with me. https://calendly.com/james-shenwick/15minWe held individuals & businesses with too much debt!

Not Clear for Takeoff: How a Lawyer Loses an Airline Lawsuit for Using ChatGPT You may have read the story of the lawyer who filed a brief using artificial intelligence. Representing his client in a personal injury suit against Avianca Airlines, the lawyer presented a brief to the judge, which contained falsified cases written by Open AI’s ChatGPT. Oops! The cases cited by ChatGPT simply don’t exist. The lawyer was fined $5,000, publicly humiliated, and may even face disciplinary proceedings against him by the State Bar. Why? Well, a lawyer has the duty to represent their client competently. It is incompetent to rely on artificial intelligence to write your briefs. It is incompetent not to read the cases that you cite. It is incompetent not to check and verify the citations that you provide to the Court. Beyond that, a lawyer has the duty of candor to the court. This lawyer had the gall to tell the court that he asked ChatGPT to verify its work and that he relied upon ChatGPT when it told him that the citations it had provided were authentic. As a fellow lawyer, this was stupid. How AI Improves the Quality of Our Legal Services We at Lakelaw have used ChatGPT to help us work more effectively. For example, it is good at doing complex calculations quickly. It is also good at helping us to identify people and places. ChatGPT is not good at practicing law. And let me tell you this, every word that you see in any of our articles is written by lawyers at Lakelaw. We may sometimes ask ChatGPT to rewrite things we wrote to make they are easier to understand.   So, how do we use artificial intelligence at Lakelaw? Well, for one thing, we subscribe to Case Text and CoCounsel. This tool is a large language model that has access to just about every legal decision ever decided in the United States. It has a robust understanding of questions that we might ask about the legal issues arising in your case. It has the capability of summarizing and analyzing complex legal documents.  We don’t rely on the output from Case Text and CoCounsel as the final product, but we do regard it as a decent starting point. We have found its skill set like that of a third-year law student. We also use this tool to effectively represent our clients using the latest technology. Under the Model Code of Professional Conduct as well as the Illinois Code of Professional Conduct, we lawyers have the obligation to be up-to-the-minute from a technological standpoint. After all, we are required to assimilate data, organize it, think about it, and communicate about it effectively. Today, we can no longer rely on paper, pens, and pencils. We must leverage our abilities with every computational and electronic tool available.   Even though we used typewriters and carbon paper when we started our practice almost 50 years ago, being a small and nimble firm using the latest in technology, we can run circles around our more hide-bound competition in giant law firms. They need committees to make the slightest change. When we find innovative tools, we put them to work for you immediately. And we do so efficiently and effectively. The Future Starts Here at Lakelaw From embracing digital transformation like artificial intelligence to providing high-quality and ethically-sound legal services, Lakelaw is the leading law firm for personal and business bankruptcy in Chicago.  Count on our lawyers to represent you zealously and fearlessly. Our firm has been named one of the best law firms by U.S. News & World Report, voted among the top 500 US bankruptcy and restructuring lawyers by Lawdragon, and peer rated for highest level of excellence by Martindale-Hubbell. Get a free confidential consultation today. The post Evolution of AI: How Our Law Firm Uses Artificial Intelligence appeared first on Lakelaw.

 Commercial Chapter 11 Filings Increased 68% Y/Y in the First Half of 2023 see the article at https://www.monitordaily.com/news-posts/commercial-chapter-11-filings-increased-68-in-the-first-half-of-2023/

 The Motley Fool has an article titled Here's What Happens When You File For BankruptcyThe article can be found at https://www.fool.com/the-ascent/personal-finance/articles/heres-what-happens-when-you-file-for-bankruptcy/Clients with questions about a Bankruptcy Filing or Bankruptcy should contact Jim Shenwick, EsqJim Shenwick, Esq  917 363 3391  [email protected] Please click the link to schedule a telephone call with me. https://calendly.com/james-shenwick/15minWe held individuals & businesses with too much debt!

 Forbes has an excellent titled"Yes, The IRS Can Sue To Collect On A Debt"The article discusses the IRS assessment statute of limitations (three years from the time a tax return is filed to make the assessment) and the IRS   collection statute of limitations of 10 years. During the 10 years, the IRS has the power to garnish wages, impose a levy on bank accounts and file a lien against real property (e.g. a person’s homeThe article can be found at:https://www.forbes.com/sites/jessicaledingham/2023/06/28/yes-the-irs-can-sue-to-collect-on-a-debt/?sh=759b0cac5c1dJim Shenwick, Esq  917 363 3391  [email protected] Please click the link to schedule a telephone call with me.https://calendly.com/james-shenwick/15minWe held individuals & businesses with too much debt!

Most lawyers were torn between wincing and laughing when a lawyer filed a brief packed with case authority created out of whole cloth by an AI bot. Meanwhile, a segment of the bar is fretting that we will be replaced by powerful artificial intelligence. My concern, based on a couple of casual forays into AI, […] The post Today’s AI Stands To Create Work For Lawyers appeared first on Bankruptcy Mastery.

"Facing Bankruptcy After a $700 Million Bailout"" New York Times article about Wasted Pandemic Loans from Government.  The article can be found at https://www.nytimes.com/2023/06/27/business/yellow-trucking-bailout-teamsters.htmlJim Shenwick, Esq  917 363 3391  [email protected] Please click the link to schedule a telephone call with me. https://calendly.com/james-shenwick/15minWe held individuals & businesses with too much debt!

Social Security Disability Insurance (SSDI) is a program that provides benefits to workers who have become unexpectedly injured before reaching the age of retirement. You can earn coverage under this program by working and paying social security taxes on your earnings. In New Jersey, your SSDI benefits are calculated based on your work history, earnings record, and the severity of your disability. Unfortunately, the process of applying for these benefits can complicated. There are multiple reasons that the Social Security Administration (SSA) may choose to deny your claim. If you need to apply for SSDI benefits in New Jersey, get help from our experienced New Jersey disability lawyers at Young, Marr, Mallis & Associates by dialing (609) 557-3081. Calculating SSDI Benefits in New Jersey SSDI benefits in New Jersey, like in other states, are calculated based on several factors. These factors can include an applicant’s work history, earnings record, and the severity of their disability. The Social Security Administration (SSA) will follow certain guidelines when awarding these benefits. Still, each case is unique. Our experienced Marlton, NJ disability attorneys can review your application to determine how each of the following factors may affect the amount of benefits awarded in your case: Work Credits and Eligibility To qualify for SSDI benefits, an applicant must have accumulated a sufficient number of work credits. Work credits are earned by working and paying Social Security taxes. The number of work credits required for eligibility depends on the applicant’s age at the time of disability onset. In general, younger individuals require fewer work credits than older individuals. The SSA determines an applicant’s eligibility based on their work history and the number of work credits they have earned. Average Indexed Monthly Earnings (AIME) After establishing eligibility, the SSA calculates the applicant’s Average Indexed Monthly Earnings (AIME). The AIME is determined by adjusting the applicant’s lifetime earnings for inflation using the national average wage index. The SSA considers the applicant’s highest-earning years, up to a maximum of 35 years, when calculating the AIME. The more an applicant has earned during their working years, the higher their AIME will be. Primary Insurance Amount (PIA) The AIME is then used to calculate the applicant’s Primary Insurance Amount (PIA). The PIA is the base amount of SSDI benefits the applicant is entitled to if they reach full retirement age. Full retirement age varies depending on the applicant’s birth year. For example, for individuals born in 1960 or later, full retirement age is 67. The SSA applies a formula to the AIME to determine the PIA. Disability Benefit Calculation The next step involves adjusting the PIA to account for the applicant’s disability and age at the time of disability onset. The SSA uses a formula to calculate the applicant’s disability benefit, which takes into consideration the PIA and the applicant’s disability onset date. The formula reduces the PIA based on the number of months between the full retirement age and the disability onset date. The reduction is typically a fixed percentage for each month. Family Benefits In certain cases, family members of the disabled worker may also be eligible for SSDI benefits. Spouses, children, and even divorced spouses may be entitled to auxiliary benefits based on the disabled worker’s record. The total amount of benefits payable to the family is subject to a maximum limit known as the Family Maximum Benefit. If the sum of all family benefits exceeds this limit, each family member’s benefit is reduced proportionately. Cost-of-Living Adjustments (COLA) SSDI benefits are subject to annual Cost-of-Living Adjustments (COLA) to account for inflation and rising living expenses. The SSA determines the COLA based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The COLA percentage is applied to the applicant’s benefit amount to ensure that it keeps pace with the cost of living. Common Reasons Why SSDI Applications are Denied in New Jersey There are many potential reasons why your application for SSDI benefits may be rejected. For instance, the following are common reasons why SSDI applications are denied in New Jersey: Insufficient Medical Evidence One of the primary reasons for denial is a lack of sufficient medical evidence to support the claimant’s disability. This could occur if the medical documentation fails to demonstrate the severity and duration of the impairment, or if there is a lack of medical records altogether. It is crucial for applicants to provide detailed medical records, including diagnoses, treatment history, and objective medical evidence, to support their claim. Failure to Meet the Duration Requirement To qualify for SSDI benefits, the disability must be expected to last for at least 12 months or result in death. If the medical evidence does not establish the anticipated duration of the impairment or if the condition is expected to improve within 12 months, the application may be denied. It is important to provide medical documentation that clearly indicates the long-term nature of the disability. Engaging in Substantial Gainful Activity (SGA) SSDI benefits are reserved for individuals who are unable to engage in substantial gainful activity, meaning they cannot work and earn above a certain income threshold. If the Social Security Administration determines that the claimant’s work activity exceeds the SGA limit, their application may be denied. It is crucial to provide accurate and detailed information about any work activity to avoid this denial reason. Failure to Follow Treatment If an applicant fails to comply with prescribed medical treatment without a justifiable reason, their SSDI application may be denied. The Social Security Administration expects individuals to undergo appropriate medical treatment to improve their condition or alleviate symptoms whenever possible. Failure to follow prescribed treatment may raise doubts about the severity of the disability and its impact on the ability to work. If You Need to Recover SSDI Benefits in New Jersey, Our Law Firm Can Help Seek guidance from our experienced Trenton, NJ disability lawyers by calling Young, Marr, Mallis & Associates at (609) 557-3081 to review your case for free.