Must-Read Opinion Regarding Return-of-Service Affidavits

Mesa SW Management, LP v. BBVA USA

Dallas Court of Appeals, No. 05-20-01091-CV (February 24, 2022)

Justices Myers, Osborne, and Nowell (Opinion available here)

Kelli Hinson

Hanging on to a no-answer default judgment is hard. And it may have just gotten harder. In this restricted appeal, the appellants sought reversal of the default judgments against them, arguing BBVA failed to strictly comply with multiple requirements governing service of process. The Dallas Court of Appeals agreed. In particular, the Court took issue with the Affidavit of Service regarding each appellant. The affidavits provided in relevant part:

The Court held the affidavits failed to comply with Rule 105, which states: “The officer or authorized person to whom process is delivered shall endorse thereon the day and hour on which he received it, and shall execute and return the same without delay.” By its language, the rule requires the same person to whom process is delivered to then execute and return the process without delay. Because the affidavits indicated that Austin Process LLC received the process and Roger Bigony served it, the affidavits did not strictly comply with Rule 105. Failure to show strict compliance with Rule 105 renders attempted service invalid and of no effect. So the default judgments were reversed, and the case was remanded back to the trial court. The Court did not reach appellants’ other complaints about service, including whether an entity such as Austin Process LLC is an “authorized person” to receive the process under the rules.

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Seminole Freedmen and Black Native Citizenship

The widespread recognition of Native Americans’ participation in and profit from the institution of slavery is relatively new. More attention has been focused on the issue with recent re-evaluations of the United States’ history of racism, and it remains a complex issue for many Americans who identify as both Black and Native. This history of enslavement of African Americans and people of African descent by Native Americans results in bureaucratic, political, and social challenges for descendants of those enslaved, such as the Seminole Freedmen, or Black Seminoles.

The Seminole are one of the Five Tribes of Native Americans who, historically, first lived in what is known now as Florida in the 18th century, and who today live in the states known as Oklahoma and Florida, comprising three federally recognized tribes: the Seminole Nation of Oklahoma, the Seminole Tribe of Florida, and Miccosukee Tribe of Indians of Florida.

By the beginning of the Civil War in 1861, Native American members of the Five Tribes owned approximately ten thousand enslaved African Americans. Many of them had made the perilous passage on the Trail of Tears to Indian Territory (Oklahoma) in the 1830s. The emancipation of enslaved African Americans brought contention and murkiness to the situation of Native Freedmen and their descendants.

In 1866, in a treaty between the Seminole Nation and the United States, Seminole Freedmen were promised “all the rights of native citizens.” However, living ancestors of Seminole Freedmen and Black Seminole Natives continue to report experiences of systemic racism within the Seminole Nation that they claim directly contradict the treaty’s agreements. These experiences include claims of segregation and denial of the rights of tribal citizenship within their respective tribes. Because many Seminole Freedmen are not recognized as full citizens of their respective Seminole tribe, but rather as “members,” they don’t have access to crucial tribal services such as healthcare, life insurance, burial assistance, and even doses of the COVID-19 vaccine that are relegated to Native American tribes.

The Seminole Freedmen plan to take their case to the Supreme Court, and it won’t be the first case of its kind. In Davis v. United States, decided in 1999, plaintiff Sylvia Davis claimed that the rights of her son Donell E. Davis, a descendant of Seminole Freedmen, was denied his rights as a Seminole citizen – upon applying for a tribal funding program, Donell was rejected because he lacked the identification card necessary to qualify; this identification card was denied because Ms. Davis was unable to prove her son’s descendance from the Seminole Nation “as it existed in Florida on September 18, 1823.” The 1823 Treaty of Moultrie Creek established the reservation on which the Seminole were required to settle after forced relocation.

Similar cases have appeared previously in which Black Native Americans have claimed discrimination within other Native American tribes. In 2017, a U.S. District Court ruled that descendants of Cherokee Freedmen have a right to tribal citizenship with the Cherokee Nation. In 2021, U. S. House Representative Maxine Waters, who chairs the House Financial Services Committee, which oversees the reauthorization of funding the Native communities, attempted to encourage tribal leadership into reconciling issues with Native Freedmen by suggesting the withholding of federal funds from tribes that violate their treaties.

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The Tragedy of H. Rap Brown and the Legacy of Imam Jamil Abdullah Al-Amin

He was born Hubert Gerold Brown. He would become known as H. Rap Brown. He evolved into Imam Jamil Abdullah Al-Amin. 

 

His name became legendary in the tumultuous civil rights era of the 1960s. The mere mention of “H. Rap Brown” struck outrage born of historical fears in the hearts of George Wallace segregationists. 

 

As a young man in his 20s, this native of Baton Rouge, Louisiana, looked directly into the eyes of George Wallace adherents, stared them down, and dared them to stand in the way of his march toward racial equality and social justice for Black Americans.

 

Leading Civil Rights Activist Becomes Target 

 

In the early to mid-1960s, H. Rap Brown was a leading civil rights activist in several non-violent organizations in Mississippi, Alabama, and Washington, D.C. He was gifted at organizing the Black vote in America’s racially segregated Deep South, where racial violence killed thousands and was not only protected but encouraged by all-White political and law enforcement institutions.

 

H. Rap Brown became a state and federal law enforcement target and was tagged as a violent antagonist during this racially charged era. There was no evidence that he met this description. Still, law enforcement at federal and state levels continuously harassed him with trumped-up charges and arrests, such as Federal Firearms Act violations. 

 

In that Deep South racist social era, it was legal for a White man carry a gun and use to murder innocent Black people, while it was illegal for a Black man to carry a gun to protect himself, his family, and community.

 

By 1967, H. Rap Brown had become a primary target of former FBI Director J. Edgar Hoover’s unconstitutional “COINTELPRO” surveillance program designed to disgrace, disrupt, arrest, and neutralize Black civil rights activists like Brown.

 

In 1968, following Director Hoover’s lead, Republican Party leader Gerald Ford said it was time to “slam the door” on H. Rap Brown and other “Black power” advocates. With the passage of the “Anti-Riot Act that effectively gave corrupt law enforcement and racist prosecutors a vehicle to stifle the “Black Power” movement in America, elected officials gave the nod to Wallace’s “segregation today, segregation tomorrow, segregation forever” dogma.

 

In 1971, with federal convictions, numerous arrests, and racist-inspired prosecutions against him, H. Rap Brown entered New York’s infamous “Rikers Island Jail,” proclaiming he had accepted Islam and adopted the Muslim name Jamil Abdullah Al-Amin. 

 

Al-Amin was prosecuted and imprisoned by the federal government and state authorities for the next five years on additional charges. His appeals became a fixture in the nation’s judicial system, including the U.S. Supreme Court.

 

Between 1976 and 1986, while under parole supervision in both New York and Georgia, Al-Amin continued his activism fighting drug abuse, poverty, and violence in Black communities. 

 

Between 1990 and 1995, while living in the State of Georgia, Al-Amin founded numerous religious organizations, created social programs, and participated in movements designed to end the violence crippling Black communities. He also led several prominent Muslim organizations and became president of the American Muslim Council, the first Muslim organization based in Washington D.C. to promote Muslim issues. 

 

War on the Muslim Community

 

In August 1995, as federal law enforcement waged an undeclared war on the American Muslim community in the wake of the 1993 World Trade Center bombing, authorities arrested Al-Amin. The Muslim Imam was hounded by an FBI counter-terrorism task force and a Georgia police officer for allegedly assaulting a neighborhood resident and an illegal firearms violation. Despite concerted efforts by both federal and state authorities to get the resident to identify Al-Amin as his attacker, the resident refused to do so. The charge was dropped after the resident became a Muslim and joined Al-Amin’s mosque. 

 

But Georgia law enforcement authorities refused to end their vendetta against Al-Amin. IN March 2000, the Muslim peace activist, then 57 years old, was arrested for killing a Fulton County, Georgia sheriff’s deputy during a shootout with a heavily armed task force trying to serve a minor bench warrant intended for Al-Amin.

 

Although “on scene” descriptions varied, a surviving sheriff’s deputy identified Al-Amin as the shooter. An ensuing massive search led by Georgia state, local, and federal officials resulted in the capture of Al-Amin in neighboring Alabama on March 16, 2000.

 

Life Without Parole

 

In March 2002, Al-Amin was convicted in Fulton County of the killing of the sheriff’s deputy and sentenced to life without parole. He was placed in the corrupt, violent Georgia prison system, where he was placed in maximum security lockdown and subjected to a continuing pattern of physical and verbal abuse by prison guards, conduct sanctioned at the highest levels of the prison system.

 

The Georgia Supreme Court upheld Al-Amin’s conviction and sentence in November 2004. 

 

Between 2007 and 2019, Al-Amin engaged in repeated post-conviction relief efforts to have his conviction reversed based on egregious prosecutorial misconduct and Brady violations. These efforts were rejected by state and federal courts, all the way to the U.S. Supreme Court.

 

Evidence Supports Innocence

 

From the time of his arrest, Al-Amin stated that he was not involved in the 2000 shootout with the police and was at another location. The prosecution’s own evidence lends support to Al-Amin’s claims of innocence. The wounded but surviving deputy testified that he had shot the assailant in the stomach, but when Al-Amin was arrested by the FBI a short time later, he did not have bullet wounds or gun powder residue on his body.

 

Trail of Blood

 

Further, law enforcement recovered the assault rifle and ammunition that killed the sheriff’s deputy in a wooded near an abandoned house not far from the crime scene. A trail of blood led from the crime scene to the abandoned house. An ensuing search of the house led to the discovery of blood evidence; however, the blood evidence did not match Al-Amin’s. No fingerprints or other physical evidence tied the Imam to either the weapon or ammunition. 

 

Al-Amin has argued that the rifle/ammunition and other evidence were planted by former FBI agent Ron Campbell, who was assigned to Al-Amin’s case. Al-Amin charged that Campbell kicked and spat upon him while making the arrest. This former FBI agent had a sordid history of attacking Black suspects. In 1995, Campbell killed a Black man in Philadelphia while serving a warrant for assaulting two police officers. The agent said he shot the man after he pulled a weapon, but an autopsy revealed the man had been shot in the back of the head.

 

Two decades after his conviction Al-Amin’s supporters continue to raise the following issues that surfaced during the trial which lend credence to his claims of innocence:

 

• Prosecution almost systematically eliminated older African American women from the jury, who could have some knowledge of the FBl’s COINTELPRO program, which targeted African American leaders.
• The surviving deputy stated that at least one of the deputies had shot the assailant.
• The surviving deputy was emphatic when describing the assailant as having grey eyes – Imam’s eyes are brown. 
• The crime scene contained blood on the street and in a neighboring abandoned house; however, Al-Amin was not shot. 
• The deputies offered conflicting accounts of the assailant’s description and clothing that did not match the Imam. 
• The testimony of 911 tapes confirming reports of a wounded person in the area on the night of the shooting was not admitted into evidence. 
• The Imam’s fingerprints were not found on the firearm or ammunition associated with the crime. 
• Pieces of evidence relating to the sheriff’s vehicle were either lost or destroyed before court proceedings. 
• FBI agent Ron Campbell who admitted to kicking and spitting on the Imam during the arrest escaped all scrutiny of his role in the case.
• Local residents refuted the account of the U.S. Marshals who claimed the Imam shot at them in White Hall.
• Evidence that an individual, Otis Jackson, confessed to being the shooter on the evening of March 16, 2000, was never introduced at trial by the prosecution or defense-Otis Jackson continues to maintain that he was the assailant.

 

In 2007, Georgia prison officials transferred Al-Amin from state custody into the custody of the U.S. Bureau of Prisons. 

 

Isolated in Federal Custody

 

The civil rights icon and Muslim activist has been and is being held virtually incommunicado in a federal prison facility in Arizona. He is now legally blind and is 79 years of age. The federal Bureau of Prisons continues to pursue the FBI vendetta launched against Al-Amin by the disgraced and psychologically unhinged former FBI Director J. Edgar Hoover.

 

At the behest of Georgia officials, the federal government is determined to keep Al-Amin silenced in a prison cell until he dies.

 

What has been done, and continues to be done, to Imam Jamil Abdullah Al-Amin is a travesty—and despite all the political efforts to stifle “critical race theory,” Al-Amin is today and will be tomorrow, a symbol of America’s sordid history of racism.

 

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Tax Court in Brief | Hicks v. Commissioner: Dependency Deductions

The Tax Court in Brief – February 21 – 25th 2022

Freeman Law’s “The Tax Court in Brief” covers every substantive Tax Court opinion, providing a weekly brief of its decisions in clear, concise prose.

For a link to our podcast covering the Tax Court in Brief, download here or check out other episodes of The Freeman Law Project.

Tax Litigation:  The Week of February 21, 2022, through February 25, 2022

• Hoops, LP v. Comm’r, T.C. Memo. 2022-9 | February 23, 2022  | Nega, J. | Dkt. No. 11308-18

Hicks v. Comm’r, T.C. Memo. 2022-10 | February 23, 2022  | Gale, J. | Dkt. No. 10406-17

Opinion

Short Summary: This case presents a unique situation of when a noncustodial parent may claim a dependency deduction for a child. Petitioner conceded that the two children in issue (C1 and C2) did not reside with Petitioner for more than one-half of the tax year and thus could not be “qualifying children” for dependency purposes. But, Petitioner claimed that the children were still “qualifying relatives” since Petitioner provided over one-half of their support; thus, Petitioner claimed that the dependency deductions and child credits remained available.

Primary Holdings: 

• Under the general dependency rules, C1 and C2 were each a “qualifying child” of their grandmother with whom the children resided along with their mother, and thus, neither child may be claimed as a “qualifying relative” of Petitioner for dependency purposes.
• However, and, pursuant to the special dependency rule for separated parents that allows a non-custodial parent to claim a dependency deduction, Petitioner presented sufficient evidence of an agreement in the form of a court order (i.e., the 2006 Shared Parenting Plan) which substantially satisfied the requirements of Form 8332, being a written declaration of the custodial parent that she would not—and that Petitioner would—claim one of the children as a dependent during the tax year. Therefore, Petitioner was entitled to one dependency exemption deduction and one child tax credit for the tax year.

Key Points of Law:  

• An individual is allowed a deduction for an exemption for “each individual who is a dependent of the taxpayer for the taxable year.” 26 U.S.C. § 151(c). “Dependent” includes “a qualifying child” or a “qualifying relative.”
• To qualify as a “qualifying child” the child must: (1) bear a specified relationship to the taxpayer (e.g., be a child of the taxpayer), (2) have the same principal place of abode as the taxpayer for more than one-half of such taxable year, (3) meet certain age requirements, (4) not have provided over one-half of such individual’s support for the taxable year, and (5) not have filed a joint return for that year. See 26 U.S.C. § 152(c)(1)-(c)(1)(E).
• “Qualifying relative” means an individual: (A) who bears a specified relationship to the taxpayer, including being a child or grandchild thereof; (B) whose gross income is less than the exemption amount; (C) with respect to whom the taxpayer provides over one-half of his or her support; and (D) who is not a qualifying child of the taxpayer or of any other taxpayer. at § 152(d)(1)-(2).
• If an individual may be claimed as a “qualifying child” by two or more taxpayers, such individual shall be treated as the qualifying child of (1) the taxpayer who is the parent of the individual or (2) if a parent does not so qualify, the taxpayer with the highest adjusted gross income for the taxable year. at § 152(c)(4)(A). However, if a parent is a dependent of a taxpayer for a tax year, that parent is treated as having no dependents for that year, and thus the above-noted “tie-breaker” rule does not apply. Id. at § 152(b)(1).
• In the case of divorced or separated parents, special rules apply to determine which parent may claim a dependency exemption deduction for a child. When certain criteria are met, a child may be treated as a qualifying child of the noncustodial parent rather than of the custodial parent. See 26 U.S.C. § 152(e)(1)-(2) (qualification criteria); Reg. § 1.152-4(a)-(d). Key criteria include that “the custodial parent sign[]a written declaration . . . that such custodial parent will not claim such child as a dependent for any taxable year beginning in such calendar year,” and “the noncustodial parent [must] attach[]such written declaration to the noncustodial parent’s return” for the relevant taxable year. See 26 U.S.C. § 152(e)(2)(A)-(B). 
• A court order or decree or a separation agreement entered after July 2, 2008 may not serve as a written declaration under section 152(e), but one entered before July 2, 2008 may, provided that it contains substantially the same information required by Form 8332. See Reg. § 1.152-4(e)(1)(ii), (h) (providing that the Regulation applies to tax years beginning after July 2, 2008).
• Section 32(a)(1) provides an eligible individual with an earned income credit against the individual’s income tax liability. The amount of the credit to which an eligible individual is entitled increases if the individual has a qualifying child, as defined in Section 152(c), and determined without regard to the special rule for waiver from the custodial parent under section 152(e).   

Insights: When a non-custodial parent requests a dependency exemption for a child, the person should be prepared to show that the child is, under law, a “qualifying child” or a “qualifying relative,” and the taxpayer should obtain and submit with his or her returns, an IRS Form 8332, Release/Revocation of Claim to Exemption for Child by Custodial Parent, signed by the former spouse or the other parent. A court order entered after July 2, 2008 may not be used as a substitute for IRS Form 8332. A court order entered before July 2, 2008 may be used as a substitute for IRS Form 8332, provided the order contains substantially all information required by Form 8332.

 

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Tax Court in Brief | Hoops, LP v. Commissioner: Deductibility of Deferred Compensation

The Tax Court in Brief – February 21 – 25th 2022

Freeman Law’s “The Tax Court in Brief” covers every substantive Tax Court opinion, providing a weekly brief of its decisions in clear, concise prose.

For a link to our podcast covering the Tax Court in Brief, download here or check out other episodes of The Freeman Law Project.

Tax Litigation:  The Week of February 21, 2022, through February 25, 2022

• Hicks v. Comm’r, T.C. Memo. 2022-10 | February 23, 2022  | Gale, J. | Dkt. No. 10406-17

Hoops, LP v. Comm’r, T.C. Memo. 2022-9 | February 23, 2022  | Nega, J. | Dkt. No. 11308-18

Opinion

Short Summary: Hoops, LP owned the Memphis Grizzlies, an NBA franchise. In 2012, Hoops sold substantially all its assets, and assigned its liabilities to a buyer. The liabilities included two NBA player contracts and deferred compensation that earned by the players but not due to be paid by Hoops until after the 2012 sale. In computing its gain on the 2012 sale, Hoops claimed $10,673,327 (total deferred compensation discounted by 3%) as a deduction on Hoops’ 2012 return. The IRS issued a notice of final partnership administrative adjustment (FPAA) for the 2012 tax year, disallowing the deduction. Heisley Member, Inc., the tax matters partner of Hoops, filed a petition for readjustment. By the parties’ concessions, the case focuses on Section 404(a)(5) of the Internal Revenue Code and the deductibility of compensation that is earned but payable in a later year under a nonqualified plan of deferred compensation.

Primary Holdings: 

• Section 162(a) contains the general rule for allowing a deduction for expenses incurred in carrying on any trade or business, including a reasonable allowance for compensation for personal services. However, if amounts are contributed by an employer under any plan of deferred compensation, deductibility is governed by Section 404(a).
• Under Section 404(a)(5), if an employer on the accrual basis defers paying any compensation to the employee until a later year or years, the employer will not be allowed a deduction until the year in which the compensation is paid.
• Hoops had not paid any amounts owed to the players with respect to the deferred compensation liability in 2012, and thus, Hoops is not allowed to deduct the amount of the deferred compensation.
• When Buyer assumed the deferred compensation liability, Hoops was discharged from its obligation to pay deferred compensation. Thus, pursuant to Section 1001, Hoops was required to take into account the amount of the deferred compensation liability in computing Hoops’ gain or loss from the sale.

Key Points of Law:  

• The Tax Court is a court of limited jurisdiction. The Court’s jurisdiction over a TEFRA partnership-level proceeding is invoked upon the Commissioner’s issuance of a valid FPAA and the proper filing of a petition for readjustment of partnership items for the year or years to which the FPAA pertains. See 26 U.S.C. § 6226(a).
• The Commissioner’s determinations in an FPAA are presumed correct, and the party challenging the FPAA bears the burden of proving that those determinations are erroneous.
• A disregarded entity for federal tax purposes but a general partner under state law may be designated the tax matters partner of a partnership subject to the TEFRA partnership provisions.
• Deductions are a matter of legislative grace, and the burden is on the challenging party to prove entitlement to any claimed deductions.
• Section 162(a) allows a deduction for all ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including a reasonable allowance for salaries or other compensation for personal services actually rendered. See 26 U.S.C. § 162(a)(1). However, if amounts are contributed by an employer under any plan of deferred compensation, Section 404(a) governs the deductibility of such amounts and prescribes limitations as to the amount deductible for any year. Treas. Reg. § 1.404(a)-1(a)(1); see also Reg. § 1.162-10(c).
• Section 404(a)(5) covers all cases for which deductions are allowable under Section 404(a) but not allowable under paragraph (1), (2), (3), (4), or (7) of that subSection. See Reg. § 1.404(a)-12(a).
• Section 404(a)(5) provides that, in a case of a nonqualified plan, a deduction for deferred compensation paid or accrued is allowable for the taxable year for which an amount attributable to the contribution is includible in the gross income of the employees participating in the plan. See also Reg. § 1.404(a)-12(b)(1).
• Under an accrual method, a liability is incurred, and generally taken into account for federal income tax purposes, in the taxable year in which all the events have occurred that: (1) establish the fact of the liability, (2) the amount of the liability can be determined with reasonable accuracy, and (3) economic performance has occurred with respect to the liability. See 26 U.S.C. § 461(h); Treas. Reg. §§ 1.446- 1(c)(1)(ii)(A), 1.461-1(a)(2)(i). However, if another provision of the Code or the Regulations prescribes the manner in which deferred compensation liability is taken into account, that prescription controls over the economic performance rule. In this case, Section 404(a)(5) prescribes the manner in which the deferred compensation in issue is taken into account.
• Section 1001(a) provides that the gain from the sale or other disposition of property shall be the excess of the amount realized therefrom over the adjusted basis. The “amount realized” is the sum of any money received plus the fair market value of the property (other than money) received, including the amount of liabilities from which the transferor is discharged as a result of the sale or other disposition. 26 U.S.C. § 1001(b); Treas. Reg. § 1.1001-2(a)(1).

Insights: When a taxpayer, as part of the sale of a business, assigns to the buyer, liabilities for earned compensation that is payable in a later tax year pursuant to a nonqualified deferred compensation plan, the taxpayer should take into account and closely evaluate Section 404 of the Code and its effect on the proper account of gain to be realized from the sale of the business. As shown in Hoops, L.P., and under the special rules for deductions set forth in Section 404, if an employer on the accrual basis defers paying any compensation to the employee until a later year or years, the employer will not be allowed a deduction until the year in which the compensation is paid, even if the compensation would otherwise be deductible under Section 162.

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The Closer-Connection Exception

While the “substantial presence” test often determines whether a nonimmigrant alien individual will be treated as a U.S. person for federal tax purposes, the test is subject to an important exception: the closer-connection exception.  Generally, under the substantial presence test, an alien individual is classified as a U.S. person for federal tax purposes if he or she is physically present in the United States for 183 or more days during a calendar year, after applying a weighted formula across a three-year “lookback” period.  But even where an individual satisfies the substantial presence, the closer-connection exception may prevent U.S.-resident status.  To determine whether the exception applies, it is necessary to analyze the taxpayer’s presence in the U.S., tax home, and relative connection to the foreign country.

A Closer Connection to a Foreign Country

An individual who meets the substantial presence test may nonetheless be treated as a nonresident alien if they:

• Are present in the United States for less than 183 days during the year,
• Maintain a tax home in a foreign country during the year, and
• Have a closer connection during the year to one foreign country in which the individual has a tax home than to the United States (note that an exception applies where the taxpayer has a closer connection to two foreign countries).[1]

Tax Home

While there are some splits of authority, depending on the taxpayer’s location, a taxpayer’s tax home is generally considered to be the area of their main place of business, employment, or post of duty.

That is, regardless of where the taxpayer maintains their family home, their tax home is the place where the taxpayer permanently or indefinitely works as an employee or a self-employed individual.

If the taxpayer does not have a regular or main place of business because of the nature of their work, the taxpayer’s tax home is the place where they regularly live.

Taxpayers who do not fit either of these categories are considered to be itinerant, in which case the taxpayer’s tax home is wherever they work.

For purposes of the closer-connection exception, the taxpayer’s tax home must be in existence for the entire current year and must be located in the same foreign country to which the taxpayer is claiming to have a closer connection.

Establishing a Closer Connection

A taxpayer has a closer connection to a foreign country if they have maintained more significant contacts with the foreign country than with the United States.  This inquiry is based upon the facts and circumstances, which may include:

1. The country of residence that the taxpayer designated on forms and documents.
2. The types of official forms and documents that the taxpayer filed, such as Form W-9, Form W-8BEN, or Form W-8ECI.
3. The location of the taxpayer’s:
   • permanent home;
   • family;
   • personal belongings, such as cars, furniture, clothing, and jewelry;
   • current social, political, cultural, professional, or religious affiliations;
   • business activities (other than those that constitute your tax home);
   • jurisdiction in which you hold a driver’s license;
   • jurisdiction in which you vote; and
   • Charitable organizations to which the taxpayer contributes.

No Closer Connection

The IRS maintains that a taxpayer generally cannot claim a closer connection to a foreign country if either of the following applies:

• The taxpayer personally applied, or took other steps during the year, to change their status to that of a permanent resident;[2] or
• The taxpayer had an application pending for adjustment of status during the current year.

Form 8840

A taxpayer must file a Form 8840 with their income tax return to claim a closer connection to a foreign country or countries.  The Form 8840 must be filed by the due date for filing Form 1040-NR.

A taxpayer who does not timely file Form 8840 may be prohibited from claiming a closer connection to a foreign country or countries.  A narrow exception, however, applies where the taxpayer can show by clear and convincing evidence that they took reasonable actions to become aware of the filing requirements and significant steps to comply with those requirements.  Because the stakes are often high, a taxpayer seeking to make a late election on Form 8840 should consult a tax attorney.

 

Tax Treaties

Even if a taxpayer does not qualify for the closer connection exception, they may nonetheless qualify for nonresident status under a tax treaty.  For example, if the individual is a dual-resident under the tax laws of both the U.S and a tax treaty country, the taxpayer may qualify to claim benefits under an income tax treaty.

Our Freeman Law interactive treaty map provides a link to treaty materials for each U.S. tax treaty partner:

 

[1] A taxpayer can generally demonstrate a closer connection to two foreign countries if the taxpayer met the following conditions:

• The taxpayer maintained a tax home beginning on the first day of the year in one foreign country.
• The taxpayer changed their tax home during the year to a second foreign country.
• The taxpayer continued to maintain their tax home in the second foreign country for the rest of the year.
• The taxpayer had a closer connection to each foreign country than to the United States for the period during which the taxpayer maintained a tax home in that foreign country.
• The taxpayer is subject to tax as a resident under the tax laws of either foreign country for the entire year or subject to tax as a resident in both foreign countries for the period during which the taxpayer maintained a tax home in each foreign country.

[2] Steps that may constitute efforts to change a taxpayer’s status to that of a permanent resident include, but are not limited to, the filing of the following forms:

• Form I-508, Request for Waiver of Certain Rights, Privileges, Exemptions, and Immunities.
• Form I-485, Application to Register Permanent Residence or Adjust Status.
• Form I-130, Petition for Alien Relative.
• Form I-140, Immigrant Petition for Alien Workers.
• Form ETA-750, Application for Alien Employment Certification.
• Form OF-230, Application for Immigrant Visa and Alien Registration.

 

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Ugly divorce? Would you want that spouse to claim your body if you should pass away?

Control is something that we all desire to one extent or another. So much of our lives are spent trying to figure out ways to stabilize our lives for ourselves and our children. We work, at least in part, to be able to provide a home environment for our children so that they can grow up and not wonder about where they will lay their heads at night. We exercise and eat right so that we do not have medical issues that require a great deal of medical intervention in the future. Taking medication, attending physical therapy, and seeing the doctor frequently probably is not what you or I have in mind in terms of stability or control in our golden years. 

We can look at divorce in the same way. If you have gone through a divorce, then you know firsthand the difficulties associated with that process. The time that went into hiring an attorney and going through the case. The stress that came with needing to decide important issues regarding child custody and property division. Even the uncertainty that came with no longer being married can be stressful to you. All of this was done to help to ensure a better future for yourself and your children. But for this possibility going through the hardships of divorce would not be worth the trouble. 

A divorce case can decide a great deal for you. What your custody situation will look like with your children was negotiated upon. How frequently you would be able to see your children is often a subject that is debated back and forth in divorce. Debts, property, and the division of those items can shape your post-divorce life a great deal given that your financial wherewithal can be determined a great deal by how your property is split up after a divorce. Many people struggle financially after a divorce due in no small part to the disruption of the normal course of their life. Having your income cut in half is something that impacts your budget tremendously. 

Helping yourself prepare for life after a divorce

There are steps that you can take during and after a divorce to prepare yourself for life as a single person. One of those steps that would make a great deal of sense would be to create a will for yourself. Or, in the alternative, if you already have a will you may need to update the will based on the changes in your life. Updating the beneficiaries on your will probably means removing your ex-spouse from being able to receive property of yours when you pass away. For instance, you may want to include the names of your children, another relative, or even your church or charity of choice as a key beneficiary under your will. 

That is the beauty of having a will: that you will be able to determine where your property goes after you pass away. This would be as opposed to allowing a probate court judge to make that determination for you. Getting back to the subject that I brought up at the beginning of today’s blog post you can exert a great deal of control over your situation when you have a will. Once you pass away without a will you are leaving a lot up to chance. The great part about having a will is that a small bit of effort can yield great results not only for you but for your family as well.

What happens to your body after you pass away?

this is probably not a question that you considered very much during your divorce or even during the process of drafting and signing a will. Of course, it is inescapable to consider your death when you are drafting a will. However, what happens to your body after your passing it’s a specific question to ask and one that I don’t encounter much in my work as an attorney. However, this is a question that has been asked and answered by Texas legal decisions. It may impact your willingness to have a will drafted for yourself. 

let’s suppose that your l we’re driving home from work one day and was broadsided by another vehicle. Unfortunately, you passed away in the accident and your daughter was contacted regarding what to do with your body. Your daughter was a big believer in donating organs and therefore she allowed an organ donation charity to harvest your organs After an autopsy was performed. An issue could arise if your daughter later takes issue with how your organs are treated or how they are donated once they have been harvested. For example, your daughter may argue that she suffered anguish since your organs may not have been donated in the way that she understood that they would be.

Texas courts would likely hold that your daughter, in this case, would not have a specific property interest in your organs and likely would have what they call a quasi-property interest. This means that your daughter may have the authority to determine where your organs and body end up after you pass but not to the point where she could collect damages based on mental anguish over how the organs were harvested and distributed. however, courts in Texas have issued decisions regarding this subject that are important regarding property rights if you have a will.

Historically, your body wants deceased is not technically counted as property. Under English common law your next of kin, such as your spouse or children, have held a property right to the body insofar as burial is concerned. This is not a complete property right, however. In my mind, complete property right means the ability to cell, divide, or otherwise have complete control over an item or asset. It is strange to think about your physical body in this way but when we are talking about property and wills, I can’t see another way to avoid it. Texas courts have held for many years that there is no property right in a dead person’s body. However, your family must bury, cremate or otherwise handle the body once you have died. 

What is the anatomical gift act?

The Texas Legislature has recognized how quickly medical science has progressed around a deceased person’s body. The quasi-property rights of your family regarding your body have been expanded under the revised uniform anatomical gift act. This revised act grants your family the right to make an anatomical gift of your body or part of your body for a transplant, therapy, research, or education. The act even goes into detail on how to make a gift before your death. To determine whose property your organs are alleged to be, we must look at the circumstances of your life before your passing.

in this case, your daughter would have the right to direct the burial of your body after your passing. This much we have already discussed. Next, there are rights for your children to be able to sue for mental anguish damages when acts are performed on your body or tissues without their consent in limited circumstances. Finally, the Texas anatomical gift act has also provided the ability for you or you’re next of kin to be able to gift your tissues and organs to medical causes.

What your next step kin would not have the right to do in this situation would be to have your body for any other purpose than to bury it or otherwise attend to its final disposition. Your daughter or any other person would not have the right to use tissues unless they have been designated by the individual as a transplant to the recipient as seen through the anatomical gift act. In short, a family member or next of kin of yours has limited rights and it certainly is not true that your organs would become the property of your loved one once you pass away.

This is not to say that your next of kin do not have some right to perform certain actions regarding your body once you pass away period to preserve its remains and to bury your body is a legal right that we have already talked about is well established under Texas law. Note that a decent burial of your body includes the right to possess your body in the same condition it was in at the top time of your passing. Husbands and wives also have the primary paramount right to possess their spouse’s body above that of any other person. Exposes would not appear to have the same right and would not even qualify as next of kin given the dissolution of the marriage that occurred previously.

Would your organs become part of your estate after your passing?

The anatomical gift act gives you the right to designate a recipient of your organs and tissues while you are alive. Additionally, the act also gives you’re next of kin or executor at the time of your death the right to designate a recipient immediately. However, the anatomical gift act does not give you are state the right to designate a recipient once you pass away. Additionally, your estate cannot be compensated financially for having sold your organs. All the anatomical gift act does is allow for a person to charge a reasonable amount of money for certain services such as removing and processing your organs. Compensation for the tissue itself is not provided for in the act.

What does this all mean for you? To sum everything up, you can designate a recipient for your tissues before you pass away. However, once you pass away your estate cannot then designate a recipient or receive compensation for those issues. Even if you have a will set up this cannot be the job of your executor. You must provide for something inside your will and likely notify the intended recipient before the passing of your intent to give them your body or organs for any purposes scientific or otherwise. you are a state that would have fewer rights to your body and tissues than your next of kin would. At least your next of kin can designate a recipient once you pass away.

This is all rather complicated. We have a situation where Texas courts have ruled that your body and your organs after your passing cannot be characterized as property of either you’re next of kin or your estate. Your next of kin have a right to determine, to an extent, what should be done with your body insofar as it includes burial or the proper and final disposition. However, this is far from clear-cut in terms of how the circumstances of your life will be impacted by these types of decisions. We know what the law says but ultimately how and plays out in your specific situation is something different altogether.

Rather than leave this situation to chance there are some steps that you can follow through with that will better position you to be able to exert as much control as possible over your body both after divorce and after you pass away. We have already discussed that this subject matter can be complicated and the more circumstances that you have going on in your life the less likely that you will be able to say for certain what will or will not happen.

What can you do to prepare for an end-of-life situation?

the first thing that I will mention in this regard is that you cannot let’s say for certain when you will pass away. what this means for you is that if you are planning on dealing with this issue at some point in the future that is a mistake. Since you do not know when the end of your life will come, you should seriously consider acting and dealing with what needs to be done now in terms of planning for your life moving forward. deciding to take concrete steps towards having a wheel drafted is probably where you should begin.

You can begin by thinking about what assets are property you own which do not need to be covered by a will for your wishes to be followed your passing as far as inheriting property. assets such as life insurance, retirement plans, and pensions I’ll allow you to list beneficiaries within the plan or policy itself. These items can pass directly through to these folks without first having to go through probate. The important thing for you to stay up to date on is to ensure that your beneficiaries are based on your current circumstances. What you should be sure of is that your ex-spouse there’s not listed on any of these forms of your policies unless it is your intent for your ex-spouse to inherit this property from you.

Next, when it comes to your life and the drafting of a will you should consider what circumstances are relevant to you and make sure to include language in your will that accounts for those circumstances. The best way to do this is to consult with experienced probate or estate planning attorney. I’m going to an experienced attorney who knows how to structure a will and can creatively help you to think of solutions to problems that you are encountering in your post-divorce life regarding estate planning and preparation for end-of-life scenarios.

As we saw in today’s blog post your next of kin has some degree of authority regarding your body and your organs in terms of donation after your passing. He or she will have more authority in terms of being able to claim your body and determine details for your burial. However, your estate has no property rights to your body and even your next of kind has little in the way of property rights beyond what we have already covered. For this reason, the best thing that you can probably do regarding your wishes for your body after your passing is to think ahead. 

From where I sit, that means including language in your will with your specific desires for what is to be done with your body. This means specifying your burial method, Funeral Home, other details about what you want to be done with your body after your passing before burial. If you want to donate your body to science, a hospital, or for research purposes you should notate this as well. Also, merely selecting on your driver’s license that you are now an organ donor would not be sufficient for me. You should make note of this in your will so there will be fewer questions about your true intentions after you pass away. 

Questions about the material contained in today’s blog post? Contact the Law Office of Bryan Fagan

If you have any questions about the material contained in today’s blog post, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed family law and probate law attorneys offering have charged consultations six days a week in person, over the phone, and via video. These consultations are a great way for you to learn more about the world of probate and estate planning as well as about how your family circumstances may be impacted by the filing of a divorce or child custody case. 

from Texas Bar Today https://ift.tt/udRjGPT
via Abogado Aly Website