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I have worked with a number of bankruptcy trustees in the Washington DC area and its surrounding cities.  As a reference, please feel free to contact Bryan Ross at (202) 716-1187 or Wendell Webster at (202) 659-8510.  Also, I am currently working with Marc Albert and Jason Gold on cases.

Background in Bankruptcy Taxation

Arthur Lander CPA, PC has decades of experience in individual, corporate, and bankruptcy accountancy, offering a full spectrum of services. The firm has one office location, located in Alexandria, Virginia, and has the facilities to expand and meet any future workflow. The firm’s accounting services include bookkeeping, financial statement preparation, financial and service audits, client representation in IRS audits, tax return preparation, payroll preparation, software installation, and the development of accounting systems. The firm provides bookkeeping services to local, nationwide, and international businesses, analyzing and processing transactions to classify them in accordance with the client’s chart of accounts. To maximize flexibility, the firm can process bookkeeping in its office, in the offices of the client, or remotely on a server. The firm maximizes efficiency by utilizing the latest bookkeeping technology to electronically access clients’ records. The firm is experienced with many tools to efficiently and accurately produce quality work.

Arthur Lander, CPA, PC has years of experience working with area bankruptcy trustees to assist them on their cases. Services have included accounting and bookkeeping, tax projections, tax preparation, payroll tax calculations and preparation, automatic 401k rollovers, preparation of monthly operating reports, and forensic tax analysis to discover preferential payments and fraudulent transfers. Service can be provided on short-term and long-term cases, for example, to determine the tax implications of selling the single property of an individual estate in a single year, to, for example, preparing the final payroll for a large corporation, to tax preparation and analysis over a multi-year case.  Please review some of our experience below.

Case Studies

Carteret Mortgage Company c/o Richard Bartl, Trustee

Carteret Mortgage Company, then largest independent mortgage company in the country, filed for bankruptcy in 2008. Arthur Lander, CPA, PC was appointed by the U.S. Bankruptcy Court as the certified public accountant of the estate of Carteret Mortgage Company. Part of this responsibility requires the analysis, processing, and classification of the remaining accounting records in order to complete the required tax returns. The firm prepared amended tax returns for 2004 and 2005 and tax returns for 2006, 2007, and 2008 for the IRS and for over forty states, amounting to over 200 tax returns. Account analysis revealed net operating losses in 2006 and 2007; the firm prepared the NOL carrybacks to 2004 and 2005 to reduce the client’s tax liability. Some states do not allow net operating loss carrybacks, so the firm researched tax laws for every state for which a return was filed in order to ensure compliance with state statues.

The firm was involved in advising the trustee regarding what was necessary to bring the client current and in compliance with IRS and state requirements for bankruptcy. These actions must be executed timely to avoid penalties and fees.

The payroll documents for the company had not been prepared satisfactorily and so the firm was required to organize the data so it could be finalized by the filing deadline. This required an analysis and preparation of the payroll documents and discussions with the processing company to determine what needed to be filed. The firm was also responsible for the issuing of W2’s to Carteret’s 700+ employees.

The firm represented Carteret in an audit with the IRS and negotiated over a one-year period regarding its audit findings to come to a common agreement as to the tax liability.

The firm’s first priority was to procure any remaining records still on site at the business locations. This is a challenge in and of itself simply because one must enter a foreign, deserted environment with no staff available to locate documents. Once the documents were found, it was required for the firm to process the records and discern what was relevant to the clients needs. Because the client is usually evicted in a bankruptcy, the landlord discards accounting records not successfully captured as space is cleared for the new tenant, meaning documents must be recovered completely and timely.

When the records were obtained, the firm contacted the IRS to determine which returns were outstanding and needed to be filed. All appropriate schedules, transactions, worksheets and ledgers were analyzed and processed in order to prepare the tax return. Research was done on each of the states that required a return (in excess of 40) in order to comply with each state’s tax laws. The firm then advised the client on outstanding tax matters, as well as the potential sale of any assets. The firm analyzed payments made to creditors prior to the bankruptcy in order to detect fraudulent transfers.

During the course of the bookkeeping and tax preparation, the firm represented the client in an IRS tax audit. Here, the firm met with the IRS to discuss IRS codes and how they are applied to the client’s tax returns. The results of this audit were instrumental in the successful completion of the project as the outcome of the audit defined the income’s taxable income.

Finally, the firm continued to advise the client as to which steps are necessary until the assets were liquidated, claims are prioritized, payments are made, and the estate is closed.

The result of Arthur Lander, CPA, PC’s involvement with the Carteret case was the successful completion of all necessary measures needed to fulfill state and federal requirements for the bankruptcy.

Bankruptcy Estate of Charles Sisson c/o Robert Tyler, Trustee

Charles Sisson was involved in real estate development when the market collapsed and he was forced into bankruptcy.  Arthur Lander, CPA, PC was appointed by the U.S. Bankruptcy Court as the Certified Public Accountant of the Bankruptcy Estate of Charles Sisson. The firm was responsible for analyzing, processing, and classifying transactions on Form 2’s and the remaining accounting records in order to complete the tax returns. The firm prepared tax returns for 2006, 2007, 2008, and 2009 for the IRS and for Virginia and Washington, DC. The firm was responsible for contacting the IRS to request copies of information they had on file. Additionally, the firm performed tax research to determine the basis of various real estate transactions so that the gain could be accurately calculated. The firm was involved in advising the trustee regarding what was necessary to ensure compliance with IRS and state requirements for bankruptcy.

The firm was responsible for summarizing Form 2s and various journal entries in order to prepare accurate tax returns for the Sisson estate. The firm classified transactions based on what was deductible (business) or non- deductible (personal transactions paid on behalf of the estate). When the firm receives the Form 2, it w responsible for classifying the various receipts and disbursements, as they are simply recorded chronologically and haven’t been assigned to expense or revenue accounts. Additionally, the firm was requested by the trustee to analyze the monies earned by the debtor and to reconcile what had been reported on the debtor’s tax return to what was turned over to the state.

Charles Sisson filed for bankruptcy during the 2006 year. This means part of the deductions and expenses are allocable to the estate and some are to his individual return. Part of the firm’s responsibility was to allocate various income and expenses between the two period—pre- and post- bankruptcy. This gives the estate an accurate picture of its tax liabilities. Additionally, during this process the firm was responsible for reporting to the debtor how his shares of the deductions were calculated and what the amounts would be.

The firm was an important factor in determining the marketability, management, and resolution of the client’s remaining assets. In this bankruptcy case, the estate possessed various assets that must either be sold to repay creditors or disposed of to reduce tax liability. Arthur Lander, CPA, PC acted as the council for the trustee regarding these assets, performing due diligence and assistance in resolution, as well as legal support of these services. Duties included collecting and organizing data, performing valuations, advising on the profitability of sale verses disposition of assets, and offering legal guidance on the available options. The firm advised the trustee as to what the taxable gain and the cash flow would be from the sale of those properties. An important responsibility was to inform the trustee if the tax liability would be larger than the cash flow, in which case we would advise he abandon the asset.

The firm’s assistance in the management of these assets was a critical area of the accounting work and was crucial to the success of the project. Mishandling the assets would result in an increased tax liability, which would reduce money available to creditors and damage the estate. As demonstrated here, part of the tax planning and analysis is not only related to the issues of tax calculation, but also to the calculation of available cash flow.

The result of Arthur Lander, CPA, PC’s involvement with the Sisson case was the successful completion of ongoing measures to fulfill state and federal requirements for the bankruptcy.

Let us help you. Call (703) 486-0700 today.

Call today to learn how Arthur Lander, CPA, PC can assist you in the successful recovery and distribution of assets, and how we can offer you peace of mind on the accurate preparation of your estate’s tax returns.