Richardson Law Legal Blog

Posted By Steven J. Richardson on February 15, 2010

Tax debt is often a driving force behind the filing of a bankruptcy, either for individuals, or a business.  If it is income tax for individuals, it can be discharged in bankruptcy if it is more than three years old and meets certain requirements under the bankruptcy code.  However, one kind of tax debt that will never go away, like alimony and child support, is something called trust fund tax debt.  This is not so much a tax on individuals as a penalty levied upon them that is equal to the funds withheld from employee wages by a business that it should have turned over to the appropriate taxing authority, but did not.  This raises a couple points.

First of all, if your business is going through a rough patch, do not use the trust fund money to pay operating expenses. That money is not yours, it is payment on the tax debt of your employees, and must be preserved.  It must also be turned over to the taxing authorities within a particular period of time, so don’t even be late!  If your business goes under, let regular unsecured creditors go wanting.  If you do that to the IRS or the New Jersey State Department of Revenue, they will hold you personally responsible, and it will never go away.

Second of all, if it is not your business, you can still be held personally responsible for this unpaid tax debt (whether it is trust fund or unpaid business income tax) if you hold certain positions in the company, like bookkeeper, comptroller, or are an officer of the corporation (especially treasurer).  As the Bankruptcy Law Network Site pointed out in a recent post, some of the factors the courts look at include:

• did the employee serve as an officer or director of the company?
• did the employee control the company’s payroll?
• did the employee determine which of the company’s creditors to pay and when to pay them?
• did the employee participate in the corporations day to day management?
• did the employee have the ability to hire and fire employees?
• did the employee possess the power to write checks?

In this instance, you come first, and not the business; be sure that your employer understands that you cannot allow that tax to remain unpaid, as you could be made to pay it yourself.   Do not let a drowning man take you down with him.

The bottom line here is that if you are contemplating filing bankruptcy, and you think that you may have one of these problems, you need to bring this to the attention of your attorney, so he or she can be sure to deal with it properly.  Even better, heed the advice above and try to keep yourself from being in this position in the first place!

Category: Bankruptcy | No Comments »
Tags: Bankruptcy, taxes

Posted By Steven J. Richardson on February 9, 2010

As I have posted in the past, refusing to give two breath samples after being arrested for drunk driving can have serious consequences.  Under New Jersey law, more specifically NJSA 39:4-50.2, a driver is deemed to have consented to providing said samples if he or she operates a motor vehicle on a public road, street, highway or quasi-public area of the State, providing that the police have probable cause.   Thus where you are driving your vehicle can become very important in a drunk driving or refusal charge.

Until this past summer, there has been very little case law defining the concept of “quasi-public area.”  In August of last year, however, the New Jersey Appellate Court ruled, in State v. Bertrand, that a private parking garage with sufficient room for 300 spaces constituted a quasi-public area sufficient to trigger the requirement that the intoxicated defendant (who was a trespasser there) submit to providing samples of his breath.  Although this does help in defining the language of a particular statute, the ultimate outcome also provides an ironic lesson.

In that case, the Defendant was found passed out on a bench in the garage a distance from his vehicle, which had car keys in the ignition.  He was belligerent with the police officers, showing clear signs of intoxication, so he was asked to submit to a field sobriety test.  He refused to without consulting with an attorney first.  He was then arrested and asked to submit breath samples; he refused.  As a result, he was charged with both drunk driving and refusal to submit to a breathalyzer test.   Because the state could not prove he was operating the vehicle while intoxicated, the court dismissed the charge.  However, he was ultimately convicted on the refusal.  If he had simply given the breath sample, he would have been cleared!  Instead, he must suffer the same penalty as a drunk driving charge, and also, possibly, have that conviction interpreted as a prior offense if he does get convicted and sentenced for DUI in the future (even though he was never proved to have been guilty in the prior instance)!  Again I say, if you are stopped for DUI and asked to give a breath sample, comply.  Not doing so will simply land you in trouble no matter what!

Category: DWI/DUI | No Comments »
Tags: DWI/DUI, refusal

Posted By Steven J. Richardson on February 8, 2010

I have been helping people deep in debt to get a fresh start in bankruptcy for over 18 years now, and my clients most often find themselves in financial straits due to out-of-control credit card debt, medical bills (whether they have health insurance or not, which is another story!), job loss, divorce, and the like.  Usually it is because of debts they incurred themselves and could not repay.  However, there is another way to get into financial trouble, and it is one many people don’t think about: co-signing for someone else’s debt.

As was recently observed on an excellent bankruptcy site, the Bankruptcy Law Network, “cosigning is not a character reference , [nor is it] . . . a vote of confidence that you think your friend has the ability to pay the debt.”  Far from it; you are agreeing to pay the debt if they do not. This should give you very serious pause before you sign on the dotted line.  What do you know of this person?  Is he/she in good financial shape?  Is he/she, a mature, responsible person?  They had better be, because you are putting your own wallet (and credit rating) on the line if they are not.  Asking you to cosign on a loan or other type of debt is asking a lot.  If you have the slightest doubt, don’t do it. It goes back to the old adage about saving a drowning man; don’t try it if you are just going to be dragged down with him.  Sometimes it is better to lose a friend than to risk losing your financial future.

Category: Bankruptcy | No Comments »
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Posted By Steven J. Richardson on February 5, 2010

Many of us, I am sure, have a bad habit of hanging things from our rear view mirrors.  I am not talking about parking garage passes and smaller items; I mean those things that hang down a ways from the mirror itself.  This can be a problem.  New Jersey law, under NJSA 39:3-74, states that “[N]o person shall drive any vehicle so constructed, equipped or loaded as to unduly interfere with the driver’s vision to the front and to the sides.”  In other words, you can get pulled over for hanging on your mirror those beads from last Mardi Gras.

This stop, however, could lead to bigger trouble.  In a case this past summer, the New Jersey Appellate Court ruled in State v. Barrow that a pair of tiny boxing gloves, measuring 3 ½ inches by 3 ½ inches that were hanging from the defendant’s rear-view mirror, provided a police officer with sufficient reasonable suspicion to stop of the defendant’s car. This stop ultimately resulted in the discovery of drugs in the defendant’s possession. The irony of the case is that the court commented that the tiny gloves may not have been large enough to support a conviction under NJSA 39:3-74; they just provided enough probable cause to support the stop and the discovery of the drugs!  Two things to bear in mind here: 1) be sure that your rear view mirror is clear of items that may obstruct your view; and 2) Once the police have justification to stop you for one offense, said stop may well lead to other, bigger, problems for you!

Category: Traffic Court | 1 Comment »
Tags: motor vehicle stop, probable cause

Posted By Steven J. Richardson on February 2, 2010

Under New Jersey law, if a police officer has probable cause to believe that you were operating a motor vehicle while under the influence of drugs or alcohol, he has the right to arrest you and require you to submit two breath samples to an Alcotest breathalyzer machine to determine your blood alcohol content.   You must do this.  You have no fifth amendment right to refuse nor a 6th amendment right to have an attorney present. Should you persist in refusing to do so, you can be charged with a separate offense of Refusal, in addition to drunk driving (DWI).  Both charges carry the same penalties in terms of fines and license suspension.  Basically, there is no upside to refusal, as the penalties are the same. In fact, there is a downside if you are a first offender.  If you take the breathalyzer and get a reading of .08 to .1, the license suspension is three (3) months, while if it is .1 or above, it is seven (7) to twelve (12) months.  With a refusal, it is a flat seven (7) to twelve (12), as there is no breathalyzer reading to grade the offense.

On January 7, 2010, the consequences became even more serious.  New Jersey’s Appellate Division reversed a long-standing precedent, ruling that a prior conviction for refusal will now count as a prior DWI conviction for purposes of sentence enhancement.  Under New Jersey law, a second offense carries a two (2) year license suspension, while a third offense carries a ten (10) year suspension and mandatory jail time.  This ruling becomes important in cases where, because of a lack of evidence as to impairment, the DWI is dismissed, but the refusal still stands.  I had this happen to a client a few months ago, where the field sobriety test was not enough to prove impairment, but was enough to show probable cause to arrest and obtain a breath sample.  The DWI was dismissed, but he plead to the refusal.

There is another impact to the ruling as well.  Under New Jersey law, if there is more than a ten (10) year period between a first and a second offense DWI, the second is treated like a first for sentencing purposes.  In the case before the Court, the defendant had a 1979 DWI conviction and a 2006 Refusal Conviction. The defendant argued that she should be considered a first offender since the only prior DWI case was more than 10-years old and the refusal does not enhance the DWI sentence. The Appellate Division ruled that she should be treated as a third offender as the refusal conviction must now be regarded as a DWI conviction for sentencing purposes.  Ouch!  All of this simply reinforces what I tell my clients: blow into the tube and take your chances.  Maybe your reading will be too low (below .08), the machine won’t be working properly that day, or the police may not follow proper procedures or be properly trained.  In other words, if you comply, you have possible defenses and a fighting chance; if you refuse, you are dead in the water, absent an issue of probable cause to arrest.

Category: DWI/DUI | 3 Comments »
Tags: dwi, DWI sentencing, refusal