F. Lee Bailey – O.J’s Lawyer – Files for Bankruptcy

Buckle up folks, it’s going to be a bumpy ride. First of all, I know some of my readers weren’t even born in 1995 when O.J. Simpson stood trial and was acquitted of the murdering his ex-wife Nicole Brown-Simpson and her friend Ronald Goldman. Aside from Simpson, Baily had some colorful clients over the years, such as Dr. Sam Sheppard and Albert de Salvo – the reputed Boston Strangler. The high profile lawyer was disbarred in Florida in 2001 for findings of egregious misconduct with a reciprocal disbarment in Massachusetts in 2003.

“It’s Not Over Yet.”

In an interview with the Washington Post, Bailey was candid about the reversal of fortune. He has property and a car worth about $2,000 and a condominium with a mortgage, and a debt to the IRS that is roughly $5 million and growing daily. At 83, he runs a small consulting business in Portland, Maine. It’s a long way from the private planes and book deals, and the fees for his legal expertise that made him a very wealthy man. However, the pot of gold ran out and he has filed for bankruptcy as a way to reduce his federal tax burden.

Discharging Tax Debt in Bankruptcy

When a tax burden is too steep for a repayment plan, and offers to compromise go nowhere, bankruptcy is often the solution. It’s hard medicine to take, but there are times when it’s the only choice to make. Your tax debt does have to meet the following qualifications before being discharged through bankruptcy:

1. You must have filed your returns for the past four years prior to your filing for bankruptcy;
2. You must complete any current returns, even if you have to ask for an extension;and
3. You must pay all current taxes.

Failing to follow the above guidelines can cause your filing to be dismissed. However, there are also differences in how tax debt is handled between the different bankruptcy chapters. Chapter 9, 12, and 15 are very different filings covering municipalities, family farms and fishing operations, and a US bankruptcy filing that recognizes bankruptcy proceedings in other countries. Chapter 7, 11, and 13 are the most common for businesses and individuals seeking relief from their debts or reorganization.

Let’s make this clear. This is not “beating” the IRS, and concealing assets that would be accounted for in a bankruptcy filing will land you in a whole lot of trouble with a federal judge. Anyone who contemplates doing this because they don’t want to pay a big tax bill and shifts assets to hide them is an the sharpest tool in the box. Moreover, even if bankruptcy attorneys might initially be misled into taking the case, as soon as they figure out that they’re being used to commit a federal crime, things will become extremely unpleasant for the perpetrator.

Now, if you are in this predicament – although I hope you don’t owe the IRS $5 million – come down and talk to us. We can help you figure out a lawful way forward without all the interest and penalties hanging over your head.