Removal Of Cases To Bankruptcy Court
Removal Generally

Removal of cases from one court to another is typically done when a party involved in a legal dispute believes the case should be heard in a different jurisdiction or court. Removal is governed by specific legal procedures and statutes, and it can occur for various reasons, depending on the nature of the case.

One common reason for removal is jurisdictional considerations. If a party believes that the case is better suited for a federal court rather than a state court, or vice versa, they may seek to remove the case to the more appropriate jurisdiction.  One of the most common scenarios of “removal” is based on what is known as diversity jurisdiction exists.  In the United States, diversity jurisdiction allows a party to move a case from state court to federal court if the parties involved are from different states and the amount of controversy exceeds a certain threshold.

Another common basis for removal is the existence of a federal issue.  If a case involves a “federal question,” which is based on federal law, the party may seek to remove it to a federal court. Federal courts have jurisdiction over cases that involve federal laws or the U.S. Constitution.

In cases involving complex legal issues, a party might argue that the case should be heard in a court with specialized expertise. This is often the case in matters involving bankruptcy, intellectual property, or other specialized areas of law.

Removal to Bankruptcy Court

In some situations, having a case transferred from another court to a bankruptcy court makes sense.  This makes sense, for example, when a defendant in a case in another court files for bankruptcy.  Because the Bankruptcy Court is responsible for adjudicating claims against a bankruptcy estate, it makes sense for the Bankruptcy Court to be involved in the matter.  Bankruptcy courts are often able to move cases along quicker than other courts, which is important in the context of bankruptcy cases where the ability of a debtor to exist as a going concern often requires expedited action.

28 U.S.C. §1452(a) provides as follows:

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EA Prep Exam

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Introduction To TRUST, ESTATE, and GIFT TAXES (Free Webinar With 1 IRS CE)

The transfer taxes are the gift tax, the estate tax, and the generation skipping transfer tax. While these are separate taxes from the income tax, some of the core concepts inform income tax issues as well. This webinar is a high-level overview of the gross estate and completed gifts, highlighting the intersection between estate inclusion and income tax issues.

1 IRS CE REGISTER HERE

Self-Study recording not available for NASBA CPE credit. However, you receive 1 IRS CE Credit.

As part of our strategic plan, we offer free courses to give back to the tax community by providing free CE. It is our way of thanking you for supporting us!

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Form 4797, Tax Planning, Sales Allocation And More (Free Webinar With 1 IRS CE Credit)

Simply put, IRS Form 4797 is a tax form that’s used specifically for reporting the gains or losses made from the sale or exchange of business and income producing property used in a trade or business. However, this form often generates countless amounts of uncertainty and anxiety.

This course will assist tax pros in determining whether a transaction is a capital gain or ordinary income and what tax consequences are associated with each. Furthermore, assist on allocation of sales price and provide tax planning overview. Join us in deciphering the mystery of Form 4797.

Learning Objectives REGISTER HERE

– Analysis of Tax Planning and difference between the Seller’s and Buyer’s tax treatment
– Analysis of Allocation of Sales Price on different classes of assets
– Discovery Basic choices regarding the Allocation of Sales Price
– Correctly identify § 1231 Property.
– Examine the difference between §§ 1245 and 1250 Property.
– Inspect issues surrounding de minimis safe harbor of repair regulations.
– Assess Form 8594 and the seven classes of assets
– Differentiate between depreciation recapture and capital gain.
– Identify Unrecapture Depreciation.

1 IRS CE
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How To Successfully Submit Forms 2848 & 8821(Complimentary Webinar With IRS CE)

TaxConnections thanks CPE provider Tax Practice Pro for this complimentary On Demand webinar from TaxPracticePro.com with two IRS CE earned. This On Demand webinar is called “How To Successfully Submit Forms 2848 & 8821”. Tax Practice Pro is a nationwide provider of live and webinar based Continuing Education. We help tax professionals grow.

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100% no charge. We do 25-30 CE each month, all based on a theme for the month. Tax Practice Pro kicks off each month with a free program, mostly to give back to the industry.

This webinar teaches the most effective process of preparing and submitting form 8821 (Tax Information Authorization) and form 2848 (Power of Attorney) to the IRS CAF unit in order to successfully access your taxpayer’s IRS records.
(2 IRS CE)
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IRS To Establish Special Pass-Through Organization To Help With High-Income Compliance Efforts
IRS to establish special pass-through organization to help with high-income compliance efforts; new workgroup to blend current employees and new hires to focus on complex partnerships, other key areas

As work continues to focus more attention onto high-income compliance issues, the Internal Revenue Service announced plans to establish a special area to focus on large or complex pass-through entities.

The new work unit will be housed in the IRS Large Business and International (LB&I) division. In addition, the new pass-through area will include the people joining the IRS under the new IRS hiring initiative announced last week. As part of larger transformation work underway at the IRS, the Internal Revenue Service last week announced the opening of more than 3,700 positions nationwide to help with expanded enforcement work focusing on complex partnerships, large corporations, and high-income and high-wealth individuals.

“This is another part of our effort to ensure the IRS holds the nation’s wealthiest filers accountable to pay the full amount of what they owe,” said IRS Commissioner Danny Werfel. “We are honing-in on areas where we believe non-compliance among our wealthiest filers has proliferated over the last decade of IRS budget cuts, and pass-throughs are high on our list of concerns. This new unit will leverage Inflation Reduction Act funding to disrupt efforts by certain large partnerships to use pass-throughs to intentionally shield income to avoid paying the taxes they owe. These efforts are consistent with our broader commitment to use Inflation Reduction Act dollars to end the era of historically low error rates for wealthy and large entities, while making sure middle- and low-income filers continue to see no change in audit rates for years to come.”

Following a top-to-bottom review of enforcement efforts, the IRS announced on Sept. 8 the start of a sweeping, historic effort to restore fairness in tax compliance by shifting more attention onto high-income earners, partnerships, large corporations and promoters abusing the nation’s tax laws.

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Adapting To New Tax Laws And Regulations

Tax laws and regulations are ever-changing, making it crucial for small business owners to stay informed. This blog post highlights recent and upcoming changes that may impact your business this summer, offering insights on how to adjust strategies to remain compliant and optimize financial performance.

Tip 1: Monitor Federal Tax Law Changes. The federal government periodically updates tax laws, which may affect small businesses. To stay current, follow news from the IRS, subscribe to tax-related newsletters, or consult with a tax professional like Essential Accounting. By staying informed about federal tax law changes, you can adapt your strategies to maximize deductions, credits, and overall financial performance.

Tip 2: Keep an Eye on State and Local Tax Regulations

State and local tax regulations can also change, impacting your small business operations. Some updates may include adjustments to income tax rates, sales tax rules, or payroll tax requirements. Monitor updates from your state’s Department of Revenue and local government agencies to stay compliant and adjust your strategies accordingly. Working with a local tax professional can be invaluable in understanding state and local tax law changes.

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Tax Professionals Are Elevating Their Tax Expertise And Services Online With A Virtual Office

Another valuable feature of TaxConnections Membership is our Virtual Office technology. Although you gain several features in a TaxConnections Virtual Office, we believe the most important feature in your Virtual Office is your ability to store all your important business links.

If your computer shuts down due to a storm, fire, hurricane, or any other disaster which occurs where you are displaced from your business office, our Members store important links to services in the cloud in their TaxConnections Virtual Office. It is very easy to upload links in your Virtual Office as we do not ever ask for or need your passwords. TaxConnections Virtual Office is a smart way to organize all your links in the cloud in case you lose access to them due to an unforeseen event. A TaxConnections Virtual Office is your backup insurance plan to easily organize and access your entire business operation in the cloud from your cell phone. It is very easy to input the links in your Virtual Office simply by clicking on your “Welcome YOUR NAME” green dropdown navigation bar that appears in the upper right hand corner only after you Login first. You then click on Virtual Office and follow instructions from there.

 

Additional Features And Benefits Of A TaxConnections Virtual Office

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Surprise! The Mutual Fund Tax Trap
Too often taxpayers receive tax surprises at year-end due to actions taken by mutual funds they own. What can add insult to injury is the unsuspecting taxpayer who recently purchases the shares in a mutual fund only to be taxed on their recent investment. How does this happen and what can you do about it?

Tax surprises

Towards the end of each year, many mutual funds pay a dividend to the holders on record as of a set date. The fund might also distribute funds deemed as capital gains based upon buying and selling activity that takes place in the fund throughout the year. This can create many problems:

  • Taxable paybacks. If you purchase shares in a mutual fund just before a distribution of dividends, part of your purchase includes the dividends that are effectively paid right back to you. Not only will the asset value of your recently purchased shares in the mutual fund go down after the distribution, but you will owe tax on a distribution that is effectively your own money!
  • Kiddie tax surprise. Many taxpayers purchase mutual funds in their children’s names to take advantage of their lower-tax rates. By keeping their child’s unearned income below $2,100 the tax is low or non-existent. A surprise dividend or capital gain could expose much of this unearned income to higher tax rates.
  • The $3,000 loss strategy. Each year, you may take a net of up to $3,000 in investment losses. Your losses can offset high rates of income tax with correct tax planning. But first, these losses need to offset capital gains. If you receive a surprise capital gain, you could be reducing the effectiveness of this tax strategy.

What To Do

Here are some ideas to help reduce this mutual fund tax surprise:

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Michigan Sales Tax Exemption For Implants

The Michigan sales tax exemption for implants was expanded when the Michigan Governor signed into law Public Act #46 with an effective date of 3/3/2020. This law modified the definition of prosthetic devices that qualify for exemption when purchased by a Hospital, or Freestanding Surgical Outpatient Facilities that are licensed under Part 208 of Michigan’s Public Health Code. The tax professionals at Agile Consulting Group recently filed a request for a Technical Advice Letter to obtain additional clarification as to what will qualify for exemption.

Prosthetic Implant Exemption: Prior To March 2020 Law Change

Prior to this law change in March 2020, the Michigan sales tax exemption for implants was limited to purchases of prosthetic devices that were “resold” to patients of Hospitals and Freestanding Surgical Outpatient Facilities. Prosthetic devices are defined in Mich. Comp. Laws Ann. Sec. 205.51a(q) as a “replacement, corrective, or supportive device, other than contact lenses and dental prosthesis, dispensed pursuant to a prescription, including repair or replacement parts for that device worn on or in the body” that does one or more of the following:

  • Artificially replace a missing portion of the body;
  • Prevent or correct a physical deformity or malfunction of the body; or
  • Support a weak or deformed portion of the body.

The prior rule stated that implantable prosthetic devices were only “dispensed” when sold to a patient. Consequently, the implantable prosthetic devices needed to be administered contemporaneously with, or prior to, the transaction for which the exemption is claimed, rather than some future transaction for the exemption to apply. Michigan Letter Ruling 2019-2 offers a more detailed explanation of the exemption requirements prior to 3/3/2020.

Prosthetic Implant Exemption: After March 2020 Law Change

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Statements At Finance Committee Hearing Examining Tax Schemes Used by Ultra-Wealthy Americans

Senate Finance Committee Chairman Ron Wyman (Senator Oregon – Leading U.S. Senate Democrat Statement)

This Congress the Senate Finance Committee has investigated a number of tax schemes that the very wealthy – with the help of armies of high-priced tax lawyers and accountants – use to pay virtually no federal tax for years on end.

Today, we’ll examine one strategy – among others – called “Buy Borrow Die.” Just three little words on the chart behind me, that have a huge impact. Here’s how it works:

A corporate raider buys a business, and then borrows against its growing, untaxed value to fund their extravagant lifestyle. Everything from superyachts, to luxurious vacations, expensive art deals, you name it. It goes up and up in value all while not paying a dime in tax. And when they die, their assets are passed to their kids – often entirely tax-free – and the cycle continues.

Now let’s contrast Buy Borrow Die against the tax system mandated for everyone else.

A nurse or a firefighter living in Philomath, Oregon are required to pay taxes out of each paycheck. Working people don’t get to play by the same rules as billionaires. They don’t get to call up an accountant every time they don’t feel like paying taxes.

Right now, the average billionaire wriggles their way into a measly 8 percent tax rate while a nurse or firefighter making $45,000 is paying a 22 percent tax on their wages.

How is that fair? Americans overwhelmingly believe it’s not. So it’s time to look to solutions that restore fairness to the tax code while still rewarding success. After all, that’s what our country is founded on: the idea that everyone has a chance to get ahead.

Luckily, there’s a solution that achieves both fairness and economic growth. It’s called mark to market. And here’s the kicker: there’s already a version of it in the tax code. That means we have the blueprint right in front of us to use as a model for mark-to-market provisions for billionaires. Put simply: mark-to-market would require billionaires to pay tax every year, just like everyone else.

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300 Million Of Taxpayer Money Goes To New FBI Building: Want To Know Who Voted To Fund?

Although Matt Gaetz, Florida First District Representative spearheaded an “Amendment to Stop The Spending of 300 MILLION of Taxpayer Money On A New FBI Building”, it was squashed in defeat. The Amendment to the House of Representatives Appropriations Bill on Wednesday , November 8, 2023, to prohibit funding for new FBI headquarters; 70 Republicans and 2043 Democrats rejected the Gaetz Amendment in a 273 -145 Vote, according to the House of Representatives Clerk Kevin McCumber.

Watch The Video Discussing Why Gaetz Presented this Amendment to House Members.

https://twitter.com/i/status/1722370295116206564

Want to know what House of Representatives supported the funding and who was against the Amendment, look at the chart below:

H R 4664      RECORDED VOTE      8-Nov-2023      9:27 PM
AUTHOR(S):  Gaetz of Florida Part B Amendment No. 54
QUESTION:  On Agreeing to the Amendment

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