[ 3.2.1 - Waiver of Sovereign Immunity and Preferential Transfers ] [ 3.2.2 - Bankruptcy Claim Writing ] [ 3.2.3 - Review Employer Files for Claim Writing ] [ 3.2.4 - Obtain Current Case Information ] [ 3.2.5 - Determine if the Debtor is an Employer ] [ 3.2.6 - Request for Reports ] [ 3.2.7 - Determine whether a Claim Should Be Written ] [ 3.2.8 - Pre-Petition Claims ] [ 3.2.9 - Priority Claims ] [ 3.2.10 - Secured Claims ] [ 3.2.11 - General Unsecured Claims ] [ 3.2.12 - Administrative Expense Claims ] [ 3.2.13 - If a Claim Will Not Be Filed ] [ 3.2.14 - Chapter 13 ("Ndosi") Claims ] [ 3.2.15 - Chapter 13 Cases for Corporate Accounts - Officer Liability ] [ 3.2.16 - Partnership Bankruptcies ] [ 3.2.17 - NDOSI Worksheet ] [ 3.2.18 - Bankruptcy Claim Requirements ] [ 3.2.19 - Update Fiduciary Record to Reflect Claim Information and/or to Produce Proof of Claim ] [ 3.2.20 - Update CFI Record to Reflect Quarter(s) Claimed and/or to Produce C-100 ] [ 3.2.21 - Update Claims Database ] [ 3.2.22 - Electronic Filing of Claims and Notices of Withdrawal of Claim ] [ 3.2.23 - Assemble and Mail Claims and Copies of Claims ] [ 3.2.24 - Express Mail Authorization Form ] [ 3.2.25 - Destination Address ] [ 3.2.26 - Traces for Claims and Amendments ] [ 3.2.27 - Objections to TWC Claims ] [ 3.2.28 - Processing Adjustments to Quarterly Reports (C-5/C-7) ] [ 3.2.29 - Bank Freezes and Levies on Bankrupt Employers ] [ 3.2.30 - Authorizing Rate Changes for Bankrupt Employers (Daily List) ] [ 3.2.31 - Authorizing Refunds for Bankrupt Employers ] [ 3.2.32 - Wage Credits/Priority Wages ] [ 3.2.33 - Employer Account not Terminated ] [ 3.2.34 - Employer Account Terminated ] [ 3.2.35 - Tax Rate for Priority Wage Credits and Post-Petition Quarters ] [ 3.2.36 - Delinquency Comments Update/No Claims for Priority Wage Reports from Trustee ] [ 3.2.37 - Plans of Arrangement/Debtor's Plans ] [ 3.2.38 - Remittance Application and Adjustments ] [ 3.2.39 - Standard Algorithm Allocations ] [ 3.2.40 - Non-Algorithm (Restricted) Allocations ] [ 3.2.41 - Allocation Screens Used ] [ 3.2.42 - Remittances which Controller Cannot Associate with an Employer Account ] [ 3.2.43 - "Request for Prompt Determination of Unpaid Tax Liability under 505(b)" ] [ 3.2.44 - Probate Claims ] [ 3.2.45 - Field Assignment ] [ 3.2.46 - Status Section Assignment ] [ 3.2.47 - Fiduciary Record for Probate Claim ] [ 3.2.48 - Request C-100 for Probate Claim ] [ 3.2.49 - Make Exhibit Copies ] [ 3.2.50 - Objection to Probate Claim ] [ 3.2.51 - Receiverships and Assignments for the Benefit of Creditors ] [ 3.2.52 - Sale/Acquisition of a Bankrupt Employing Unit and Effect on Tax Rate ]

The primary actions that SAU Accounts Examiners (AE's) take involve filing fiduciary claims, and taking appropriate actions on Notices, Objections, and other documents so as to avoid violating the Automatic Stay. AE's make decisions concerning other collection actions, payoff amounts on bankrupt employers, and so on. They will identify those matters that require referral to the OAG. As appropriate to the disposition of a case, AE's will prepare and send Employers' Default Notices and recommend other collection actions.

The TWC will occasionally be notified (Summons, Subpoena, etc.) that it has been sued, usually in matters involving payments in the "preferential transfer" period that is in the 90 days prior to the filing of a petition. While many of the "transfers" are normally quarterly reporting and payment (often by a Servicing Agent), the issue must be immediately referred through channels to the TWC Legal Department, who will forward the matter to the OAG, Collections Division, Bankruptcy Section for response and guidance.

These matters are extremely important and time-sensitive, and can directly affect the protections afforded to TWC as a governmental entity by the 11th Amendment to the United States Constitution, Waiver of Sovereign Immunity (Section 106 of the Code). Until guidance is received back from the OAG, a claim should not be filed.

Claims are written in most bankruptcy cases, and normally in time-sequenced fashion. Accounts needing claims are assigned to AE’s according to the last two numbers of an account. Employer files are sequenced for review at least two months prior to the official bar date, which helps ensure timeliness, and the posting of additional quarterly reports. No asset cases are traced for assets or discharge/closing. Claims are filed in Chapter 9 cases as soon as possible, without reference to time sequencing, and are then tracked for additional delinquencies.

The majority of the employer files received for claims review are requested to the Claims user number as a result of the daily listings of new bankruptcy filings. These files should already have the Fiduciary record or Delinquency Comment referencing at least one bankruptcy case number. It is vital to verify all information on all current or closed cases.

In some instances, a field AE will contact SAU to provide with bankruptcy information by e-mail at RED.taxbankruptcy@twc.state.tx.us or by telephone. After you verify the filing information, you may have to create the Fiduciary record and/or add delinquency comments referencing the bankruptcy case(s).

If the court in which an employer filed is not known, there are several search methods.

Many corporate filings are out-of-state, with most of those being filed in the District of Delaware.

You may use the Employer Master File county code for an employer account and the "County and County Code by Division Designation" lists below to determine which bankruptcy district to access for each case. Obtain current case, party, and docket information for the debtor from PACER/CM/ECF. An additional search tool is to use the bankruptcy courts list found on the Federal Judiciary web site or on the U.S. Party Case web site. There some instances where the information is not presently accessible electronically, requiring a Voice Case Information System (VCIS) lookup for the affected court. Check the court web site or the Bankruptcy Courts and Procedures book (blue binder) in the Supervisor’s bookcase.

Bankruptcy Districts of Texas:

Tyler Division *TY Anderson 001 Cherokee 073 Gregg 183 Henderson 213 Panola 365 Rains 379 Rusk 401 Smith 423 Van Zandt 467 Wood 499

Beaumont Division *BE Hardin 199 Jasper 241 Jefferson 245 Liberty 291 Newton 351 Orange 361 Lufkin Division *LF Angelina 005 Houston 225 Nacogdoches 347 Polk 373 Sabine 403 San Augustine 405 Shelby 419 Trinity 455 Tyler 457 Marshall Division *MA Camp 063 Cass 067 Harrison 203 Marion 315 Morris 343 Upshur 459 Texarkana Division *TE Bowie 037 Franklin 159 Titus 449

Sherman Division *SH (Located in Plano) Collin 085 Cooke 097 Denton 121 Grayson 181 Paris Division *PA (Located in Plano) Delta 119 Fannin 147 Hopkins 223a Lamar 277 Red River 387

Dallas Division *DA Dallas 113 Ellis 139 Hunt 231 Johnson 251 Kaufman 257 Navarro 349 Rockwall 397 Wichita Falls Division *WF Archer 009 Baylor 023 Clay 077 Cottle 101 Foard 155 Hardeman 197 King 269 Knox 275 Montague 337 Wichita 485 Wilbarger 487 Young 503     Fort Worth Division *FW Comanche 093 Erath 143 Hood 221 Jack 237 Palo Pinto 363 Parker 367 Tarrant 439 Wise 497

Amarillo Division * AM Armstrong 011 Briscoe 045 Carson 065 Castro 069 Childress 075 Collingsworth 087 Dallam 111 Deaf Smith 117 Donley 129 Gray 179 Hall 191 Hansford 195 Hartley 205 Hemphill 211 Hutchinson 233 Lipscomb 295 Moore 341 Ochiltree 357 Oldham 359 Parmer 369 Potter 375 Randall 381 Roberts 393 Sherman 421 Swisher 437 Wheeler 483 Abilene Division *AB Callahan 059 Eastland 133 Fisher 151 Haskall 207 Howard 227 Jones 253 Mitchell 335 Nolan 353 Shackelford 417 Stephens 429 Stonewall 433 Taylor 441 Throckmorton 447

Lubbock Division *LU Bailey 017 Borden 033 Cochran 079 Crosby 107 Dawson 115 Dickens 125 Floyd 153 Gaines 165 Garza 169 Hale 189 Hockley 219 Kent 263 Lamb 279 Lubbock 303 Lynn 305 Motley 345 Scurry 415 Terry 445 Yoakum 501       San Angelo Division *SN Brown 049 Coke 081 Coleman 083 Concho 095 Crockett 105 Glasscock 173 Irion 235 Menard 327 Mills 333 Reagan 383 Runnels 399 Schleicher 413 Sterling 431 Sutton 435 Tom Green 451

 

Houston Division *HO Austin 015 Brazos 041 Colorado 089 Fayette 149 Fort Bend 157 Grimes 185 Harris 201 Madison 313 Montgomery 339 San Jacinto 407 Walker 471 Waller 473 Wharton 481 Galveston Division * GA Brazoria 039 Chambers 071 Galveston 167 Matagorda 321 Victoria Division *VI Calhoun 057 De Witt 123 Goliad 175 Jackson 239 Lavaca 285 Refugio 391 Victoria 469

Corpus Christi Division *CC Aransas 007 Bee 025 Brooks 047 Duval 131 Jim Wells 249 Kenedy 261 Kleberg 273 Live Oak 297 Nueces 355 San Patricio 409   Brownsville Division *BR Cameron 061 Hildago 215 Starr 427 Willacy 489

Laredo Division *LA Jim Hogg 247 La Salle 283 McMullen 311 Webb 479 Zapata 505

 

WESTERN DISTRICT OF TEXAS

County and County Code by Division Designation
*Bankruptcy Court ID Codes for system use

Austin Division *AU Bastrop 021 Blanco 031 Burleson 051 Burnet 053 Caldwell 055 Gillespie 171 Hays 209 Kimble 267 Lampasas 281 Lee 287 Llano 299 McCulloch 307 Mason 319 San Saba 411 Travis 453 Washington 477 Williamson 491 Waco Division *WA Bell 027 Bosque 035 Coryell 099 Falls 145 Freestone 161 Hamilton 193 Hill 217 Leon 289 Limestone 293 McLennan 309 Milam 331 Robertson 395 Somervall 425

Midland-Odessa Division *MI Andrews 003 Crane 103 Ector 135 Martin 317 Midland 329 Upton 461 Pecos Division Brewster 043 Culberson 109 Hudspeth 229 Jeff Davis 243 Loving 301 Pecos 371 Presidio 377 Reeves 389 Ward 475 Winkler 495

San Antonio Division *SA Atascosa 013 Bandera 019 Bexar 029 Comal 091 Dimmit 127 Frio 163 Gonzales 177 Guadalupe 187 Karnes 255 Kendall 259 Kerr 265 Medina 325 Real 385 Wilson 493 Del Rio Division Edwards 137 Kinney 271 Maverick 323 Terrel 443 Uvalde 463 Val Verde 465 Zavala 507 El Paso Division *EL El Paso 141

Review docket information and 341 First Meeting Notices (when available) to verify debtor is an employer, officer of a corporation which is an employer, or a partner of a partnership which is an employer. Compare SSN’s, FEIN’s, names, and addresses on the dockets to the information on the Employer Master File records and Employer Status Report (C-1).

If the debtor is not an employer, an officer of a corporation which is an employer, or a partner of partnership which is an employer, and a Fiduciary record has been created for an employer account, update the record Memo field to read "not a TWC ER" (employer). Delete the Fiduciary record(s) the next day. Discard the bankruptcy information and return the employer file to RMC.

Likewise, delete any incorrect comments concerning officers, partners, etc.

The bar date is the final day the court will accept priority, secured, or general unsecured pre-petition proofs of claim for a particular case. For the Texas Workforce Commission, as a governmental agency, the bar date is 180 days from the petition date. The bankruptcy claim must be received and file-stamped by the court by the bar date in order to be considered timely. Special attention must be given to calculating the bar date when a Leap Year is involved.

There are also other bar dates for cases in which assets have been discovered, and for administrative expense (post-petition) claims. The courts set these dates, and notice is given, and will appear in the docket.

On occasion, express mail will be utilized in order for the court to receive a claim timely. Express mail must include an authorization form signed by Supervisor and a label for the envelope with a physical address (do not use a Post Office Box number).

The TWC has begun filing claims electronically, attaching a copy of its proofs of claim to the filing. This manner of filing is instantaneous, produces an electronic confirmation, and is immediately available for viewing. This will help avoid problems associated with mailing and receipt of claims by the courts.

If the employer account reflects delinquent report(s), request the report(s) via an e-mail field assignment to the field AE responsible as per the AE Information screen. A copy of the e-mail assignment should be forwarded to the AE’s Supervisor and/or Regional Tax Manager. Taking into account the applicable bar date, provide the field AE a date by which the report(s) must be obtained or estimated, and submitted to you.

REP1

TEXAS WORKFORCE COMMISSION
INTEROFFICE MEMORANDUM
November 12, 1999

Account No.

TO: - , Tax,

FROM: Tax, Collections,

SUBJECT:

THIS IS A PRIORITY ASSIGNMENT

The above referenced employer filed a Chapter _, on _ . To date we have not received the employer’s quarterly report(s) for the _ quarter(s).

Please make one attempt to obtain the delinquent report(s). If you are unable to locate the employer by _, estimate the report(s).

Do not delay this assignment by requesting a subpoena. Respond to this assignment by e-mail, and fax a copy of the report(s) to my attention, Fax No. 512/463-9125. Send original C-3 to Controller as usual.

REP2

TEXAS WORKFORCE COMMISSION
INTEROFFICE MEMORANDUM
November 12, 1999

Account No.

TO: - , Tax,

FROM: Tax, Collections,

SUBJECT:

THIS IS A PRIORITY ASSIGNMENT

The above referenced employer’s Chapter 11 or 13 converted to a Chapter 7 on ______. To date we have not received the employer’s quarterly report(s) for ________quarter(s).

Please make one attempt to obtain the delinquent report(s). If unable to locate employer by _ , estimate the report(s).

Do not delay this assignment by requesting a subpoena. Fax a copy of the report(s) to my attention, Fax No. 512/463-9125. Send original C-3 to Controller as usual.

If the debtor is an employer and the total pre-petition or post-petition delinquencies meet criteria, file the appropriate proof of claim.

Exception: Do not file a pre-petition claim for delinquency incurred by a debtor who has filed a Chapter 7 No Asset Case. With a Chapter 7 No Asset case, update the memo field of the Fiduciary Record with "no asset." Annotate, date and initial the bankruptcy notice or docket print out with the actions taken, and file the information appropriately. Trace the account for four months to see if assets have been discovered, or if the individual debtor has been discharged.

Review the posting of reports and proper application of payments, depending on the type of case (officer liability, etc.). This is also required when previous bankruptcies are involved with the account, and payments may have reallocated differently when Fiduciary records have been added or deleted. (Refer to Section 3.2.38)

Delinquency accrued prior to the petition date (bankruptcy filing date) is pre-petition debt and is claimed through the bankruptcy court by filing a priority claim prior to the bar date.

According to Section 507(a)(8)(D) of the Bankruptcy Code, pre-petition delinquency that is not secured by a lien recorded before the petition date, or by an assessment or judgment which became final before the petition date, is considered a priority claim. File priority claims for any tax debt that is less than three years old at the time of the bankruptcy filing and is not secured. Unsecured late reporting penalties should be claimed as general unsecured debts. Contributions and late payment interest that have accrued up to the petition date may be claimed as a priority claim. The certification C-100 attached to the Proof of Claim (POC) will include both of these charges.

If a pre-petition delinquency is secured by a lien recorded before the petition date, or by a judgment or assessment that became final before the petition date, file a secured claim for the total delinquency. A secured claim may include contributions, late payment interest, late reporting penalty, and judgment interest that accrued before the petition date. It may also include lien fees or court costs if these charges are part of the judgment or final assessment that secures the claim.

File a General Unsecured Claim for:

• The total delinquency if it is older than three (3) years old at the petition date and it is not secured, or
  
  
• Late reporting penalties accrued within three (3) years of the petition date and the debt is not secured.

Note: If you receive an objection to a claim filed on a delinquency older than three years old, close the bankruptcy file, charge the delinquency to Uncollectible, and forward the files to the CAU Supervisor with a note to not renew the abstract. Do not release lien(s) or judgment(s).

Delinquency accrued subsequent to the petition date (bankruptcy filing date) of a Chapter 11 case is an administrative expense and is claimed through the bankruptcy court by filing an Administrative Expense Proof of Claim and Request for Payment (Admin Expense Claim). If there is post-petition delinquency, file an Admin Expense Claim at any time before the administrative expense bar date. These claims are usually, but not always, to be paid at or shortly after the confirmation date. The treatment will be discussed in the debtor’s Plan of Arrangement.

Do not file Admin Expense Claims in Chapter 13 proceedings. On occasion, debtors will add post-petition debt into their plans, as allowed by the Code, but TWC does not normally request such inclusion.

On occasion, an Admin Expense Claim will be filed in a Chapter 7 case, most usually if the trustee is running the business.

If the debtor is an employer (individual or partner), a Fiduciary Record has been created, and you have determined a claim will not be filed, update the Fiduciary Record memo field with a short note as to why no claim was filed. For example, use "no cl/no asset" when no claim is filed because the case is a no asset case. Use "no cl/too small" when no claim is filed because the delinquency was below criteria for a claim. Use "no cl/no $ due" when no claim is filed because no delinquency exists on the account. Use "no cl/too old" when no claim is filed because the delinquency consists of statute quarters only.

Add explanatory comments to the Delinquency Comments screen as appropriate.

If no claim is filed, return the employer file to RMC. If you anticipate a report may post and create a delinquency before the bar date, trace the file in your database for claim review.

The following procedures are in effect for Chapter 13 cases in which a claim was not filed:

• If TWC is not listed on the creditor’s mailing matrix, the bar date has passed, and the plan has confirmed, TWC may be stayed from active collection action on the pre-petition debt. Appropriate matters will be referred to the OAG, as there are many factors involved, such as the re-vesting of assets, etc.

If the amount of the pre-petition delinquency:

• Meets criteria for the involvement of the OAG, Collection Division, Bankruptcy Section, notify them of the situation. They may contact the debtor’s attorney to amend the plan to include TWC. A claim would be prepared only at the direction of the OAG in this situation. If this cannot be accomplished, the OAG may move for dismissal, depending upon the circumstances of the case.
  
  
• Does not meet OAG criteria, do not file a claim if it is late. This preserves our rights as having not been properly notified. When the plan payment period has ended, TWC could then take appropriate collection action.
  
  
• Cases in which we do not file a claim will be tracked long-term to check for dismissal, conversion, or completion of plan, and any appropriate collection action.

TWC does not usually file a post-petition claim in a Chapter 13 claim, although it is authorized to do so by the Bankruptcy Code. Consult with the OAG in any appropriate circumstances.

An "Ndosi" claim is the type of claim filed when the debt of a corporation is claimed in the personal Chapter 13 filing of an officer. The details below refer to an Ndosi claim prior to confirmation. After confirmation of the Chapter 13 plan, collection action cannot be taken against the corporation on the claimed periods.

• If the officer of the corporation files a petition in bankruptcy, and names the corporation as a dba and the debt owed is less than the current criteria, SAU will document the file and the Delinquency Comments screen giving the specifics of the case. We will not file a claim. DO NOT CREATE A FIDUCIARY RECORD.
  
  
• If the officer of the corporation files a petition in bankruptcy, and names the corporation as a dba and the debt meets current criteria, SAU will document the file and the Delinquency Comments screen giving the specifics of the case. A priority claim will be filed with the Bankruptcy Court for the corporation’s debt. DO NOT SET UP A FIDUCIARY RECORD. The certification C-100 will state that the debtor is an officer of this corporation.
  
  
• If the officer of the corporation files a petition in bankruptcy, names the corporation as a dba and if the debt owed is more than a specified amount, and there is no existing officer liability judgment or final assessment, SAU will document the file and the Delinquency Comments screen giving the specifics of the case. We will then file a claim with the Bankruptcy Court for the corporation debt as above. The claim is filed as a priority claim, and the certification C-100 will state that the debtor is an officer of this corporation. DO NOT SET UP A FIDUCIARY RECORD. The filing of this claim does not preclude collection action against the non-bankrupt corporation. SAU then sends the file to CAU for review of any Assessment action needed on other officers and the corporation.
  
  
• If the officer of the corporation files a petition in bankruptcy and names the corporation as a dba, and the debt owed is more than a specified amount, and there is an existing officer liability judgment or final assessment, SAU will use the abstract of judgment or assessment on the officer as the basis for filing a claim in the bankruptcy. If necessary, SAU may request that CAU review the case for additional quarters of officer liability. SAU will document the file and the Delinquency Comments screen giving the specifics of the case. DO NOT SET UP A FIDUCIARY RECORD. The claim is filed as a secured claim.
  
  
• ****BOTH SAU AND CAU WILL GIVE EFFECT TO THE "WILBURN" CASE WHEN COMPUTING THE AMOUNTS OWED BY A LIABLE OFFICER.
  
  
• The following must be added as item 10 on the Proof of Claim on all claims filed in an officer’s bankruptcy for corporate debt:
  
  "The debt represented by this proof of claim is for employment taxes owed by [corporation]. The TWC files this proof of claim on the assumption that the individual debtor is accepting responsibility for the payment of the corporation’s debt due to the individual debtor’s listing of the corporation as a d/b/a in the debtor’s bankruptcy petition. By the filing of this proof of claim, the TWC in no way waives, or intends to waive, its rights to proceed against the corporation for any civil liability owed to the TWC."
  
  
• If the officer of a corporation files a petition in bankruptcy and does not name the corporation as a dba the SAU will document the file and the Delinquency Comments screen giving the specifics of the case. If there is an officer liability judgment or assessment on the bankrupt individual, SAU may file a claim based on that instrument. SAU may request CAU check for officer liability, if the amount due exceeds a specified amount. Otherwise take no further action. DO NOT SET UP A FIDUCIARY RECORD.
  
  
• If an officer of a corporation files a petition in bankruptcy and does not name the corporation as a dba, and you determine that no claim will be filed, add comments to state that no claim was filed, and why.

After reviewing for claim and writing claim, as needed, forward all bankrupt corporate accounts with more than the specified delinquency to the CAU Supervisor with a request to review for officer liability.

Account No. ________________

Date: _______________________

TO: XXXX - ASSESSMENT ACTION

FROM: ________________ - SAU, _______________________________

BANKRUPTCY CASE NO. _______________________________________

STYLED AS ____________________________________________________

________ The above corporation filed bankruptcy.

Please investigate officer liability, and if officer liability is found, please commence assessments on the liable officers. Note: officer liability stops as of ______________, the petition date.

If there is no officer liability, return the status file to SAU AE#_______.

________ The above officer filed a personal bankruptcy.

Please investigate officer liability, and if no officer liability is found, please document the file.

If officer liability is found, please calculate the office liability below and commence assessments against the non-bankrupt officers and/or the corporation.

Officer Liability Quarters

Taxable Wages

Tax

Interest

Penalty

Return the status file to SAU AE#_____ by _______ for bankruptcy follow up.

After writing claim, as needed, for a partner, remove any Fiduciary record for that partner, if one was set up. Add comments to the Delinquency Comments screen to record to reflect action taken in partner’s bankruptcy. This will allow ACAP to cycle for the other partners. Do not remove the bankruptcy record if the partnership is bankrupt.

Verify that an "Officer/Partner Bankrupt" Stop is on the account.

If filing an NDOSI claim, complete and attach the NDOSI worksheet to the copies of claims for the Bankruptcy File, Status File, Collections Files and the OAG.

NDOSI Worksheet

TWC Account No.:

Name of Officer:

Bankruptcy Case No.:

This claim is being filed because there is provable officer liability.

OLD Date:

FOCP Date:

Charter Forfeiture Date:

Reinstatement Date:

OR

This claim is being filed because the officer listed the corporation as a dba.

Prepare Worksheet

Most of the information required to complete the worksheet is readily available on the 341 First Meeting Notice or the docket print.

Record IID - Write the appropriate IID Number from the Fiduciary screen.

When a Fiduciary record is keyed, it will create, depending on the type of bankruptcy, one or two Fiduciary Records for that case number. If two Fiduciary Records are created, the "claim" field of one record will read PRE and the other will read POST. If you are filing a pre-petition claim you will enter on the worksheet the IID record number which corresponds to the Fiduciary record which reads PRE. If you are filing a post-petition claim you will enter on the worksheet the IID record number which corresponds to the Fiduciary record which reads POST.

Account Number - Write the employer’s account number for the debtor. If there is more than one account number, list them in numerical order.

Name - Write the debtor’s name exactly as it appears on the notice/docket printout. Include AKA’s and DBA’s.

Case Number - Write the bankruptcy case number for the debtor exactly as found on the docket.

Type of Bankruptcy - Write 7, 9, 11, 12 or 13 for the type of bankruptcy.

District: Circle N (northern), S (southern), E (eastern) or W (western) for the appropriate District of Texas that the case was filed in. Write the Division where the bankruptcy case was filed. If the case was filed in an out-of-state (OS) court write the complete district, division, and state for the out-of-state court.

Court - Write the two letter Bankruptcy Court ID Code (from the courts list, above) for the division where the case was filed.

Petition date: Write the date the petition was filed.

Bar date: Write the Proof of Claim (POC) date or last date claims may be filed. The bar date for all governmental entities is 180 days from the petition date.

Pre-petition Date or Post-petition Date - Write the date you will be mailing the claim to the court. You will write the date for only one or the other because you must complete a separate worksheet for each pre-petition and post-petition claim.

Last Quarter Claimed - Check the Employer Master File and any quarterly reports available to determine last quarter claimed.

Note: The quarterly report for the last quarter claimed may not be posted to the system at the time you are writing the claim. The delinquency should be claimed based on all information you have, and amended as necessary. On occasion a regular report and a supplemental report have posted to the system for the pre-petition and the post-petition portions of the delinquency. If partial payment has been received for a split quarter, consider that as post-petition, and claim the balance as pre-petition only (do not split it again).

If only one report has posted for the petition quarter, you may be required to calculate the pre-petition portion or post-petition portion of a delinquency on a petition quarter based on the petition date.

To determine the tax due for the pre-petition portion of a quarter, divide the total tax due by 90 (use 30 days for each month of a quarter). Multiply your answer by the number of days in the pre-petition portion of the quarter including the petition date itself. This product will be the pre-petition portion of the tax due for the petition quarter.

To determine the tax due for the post-petition portion of the quarter, repeat this calculation using the number of post-petition days in the quarter. Any payments made to a petition quarter should be considered payments to the post petition portion of the delinquency.

Amount Claimed - this is the total of all amounts on C-100’s for this claim.

• Amount in Characters -Related Account.
  
• Who Entered - Accounts Examiner’s Initial used for claim count.
  
• Date Mailed - Date claim is mailed.

Carbon Copy To - Determine who will get copies of the claim. Circle Attorney General, Trustee, and/or Debtor’s Attorney as appropriate.

Forward a copy of all claims for a total claim amount of more that the current specified amounts to the OAG.

Forward a copy of the claim to the trustee if it is a Chapter 7 or 13 case, or if the case is a liquidating Chapter 11 or other type of proceeding. If the docket information or bankruptcy notice does not provide the trustee’s name and address, obtain this information from the debtor’s attorney.

Forward a copy of the claim to the debtor’s attorney if the bankruptcy notice or docket provide the debtor’s attorney’s name and address. If the bankruptcy notice or docket do not provide the debtor’s attorney’s name and address, or if it shows the case is a pro se case, mail a copy of the claim to the debtor at the address listed for the debtor on the notice or docket.

Need Label - Circle "yes" if this is the first claim the TWC has filed in this bankruptcy case. If this is not the first claim the TWC has filed in this bankruptcy case, a bankruptcy file should already exist and there is no need for a bankruptcy file label.

Address - This field will alert you of mailing labels needed for mailing copies of claims. Write the debtor’s attorney’s name, the trustee’s name and address, and/or the debtor’s name and address as appropriate (see above "Carbon Copy To").

If the claim is for a case filed out-of-state write the court’s address. This should be available on the appropriate court site.

Claim Type - Enter the type of claim you are filing in the blank and circle the claim type. If it is a 13-Other write in the blank the type of claim.

BANKRUPTCY CLAIMS WORKSHEET (SAMPLE)

ACCOUNT # NAME: CASE #:

TYPE OF BANKRUPTCY DISTRICT: N S E W DIVISION: COURT

PETITION DATE / / BAR DATE / /

PRE-PETITION DATE / / POST-PETITION DATE / / LAST QUARTER CLAIMED:

AMOUNT CLAIMED AMOUNT IN CHARACTERS:

RELATED ACCOUNT: WHO ENTERED: DATE MAILED:

CARBON COPY TO: ATTORNEY GENERAL, TRUSTEE, DEBTOR’S ATTORNEY, TAX AREA

NEED LABEL FOR FILE: YES NO CLAIM TYPE
01-PRE-PETITION UNSECURED POC
02-PRE-PETITION POC SECURED BY TL
03-PRE-PETITION POC SECURED BY JUDGMENT.
04-PRE-PETITION POC SECURED BY ASSESSMENT
05-PRE-PETITION AMENDED UNSECURED POC
06-PRE-PETITION AMENDED SECURED BY TL
07-PRE-PETITION AMENDED SECURED BY JUDG.
08-PRE-PETITION AMENDED SECURED BY ASSESSMENT
09-POST PETITION POC
10-POST PETITION AMENDED POC

OTHER CLAIMS
13-POST PETITION PRE-CONVERSION
14-CHAPTER 7 ADMINISTRATIVE EXPENSE
15-GENERAL UNSECURED

TWO HOLE PUNCH: WESTERN, DALLAS, CORPUS CHRISTI

[ ] FIDUCIARY CLAIM UPDATE ORDERED [ ] FIDUCIARY C-100 REQUEST ORDERED [ ] KEYED [ ] DATABASE

Data keyed on the Fiduciary Claim Update screen while in the "C" (change) mode will update the respective record and/or create a proof of claim, if requested.

Display the appropriate update screen. From the information on your worksheet, key the Record IID that will be updated or for which a Proof of Claim will be produced. Press Enter. This will display current fiduciary information for this fiduciary record. Key the debtor name if Proof of Claim is to be produced. Key any corrections necessary to the "Type of Bankruptcy" and the "Case Number" fields, appropriate court abbreviation and claim type. In the memo field enter any information about the claim which other users should notice, for example, Jdgmt (if claim secured by Judgment), Q/YY split (if petition quarter amount was split for claim), Ptr Bkt (if partner bankrupt).

In Carbon Copy To fields mark with a "Y" all who will be receiving copies of the claim.

If you do not wish to print a Proof of Claim, press Enter. System will update the fiduciary record but will not print claim if Print Claim field is not changed to "Y".

If you wish to print a Proof of Claim, type "Y" in Print Claim field. In # To Print field, key number of copies of Proof of Claim you would like printed.

Press Enter. System will update overnight and print a Proof of Claim, if it was requested, on the next tax run.

Once the record is updated, indicate it with check mark on the worksheet at the Fiduciary Claim Update Ordered field.

Data keyed on the update screen while in the "C" (change) mode will update the respective Fiduciary record and create C-100’s, if requested.

Display the appropriate update screen. Key the information on your worksheet, the Record IID which will be updated, or for which a C-100 will be produced. Press Enter.

All general unsecured claims will be keyed on the system as priority secured claims so as to reflect penalties claimed.

This database of claims is maintained to keep an accurate record of claim information, and supplements the computer-generated listing of monthly claims filed.

Electronic Filing is done through the appropriate court’s web site, and can only be done by personnel who have been trained and certified by any court. Our training can be done in person at the Clerk’s office at the Western/District court in Austin, or on-line through PACER/CM/ECF. A court-specific User ID and Password are supplied after certification by each court.

Case filing requires only that we identify TWC as a creditor in a particular case at the court site, and then file a copy of our POC as a PDF attachment. As soon as the information is entered, the claim is filed, receives an electronic file time-stamp, and is immediately added to the claims register of the case. The claim can then be viewed for correctness.

If the claim is discovered incorrect in some manner on the same day it was filed, the current procedure is to immediately notify the court Clerk’s office by telephone or e-mail. The Clerk’s office can usually expunge the claim at that time. If the error is discovered after a day has passed, the claim must be withdrawn with a formal Notice of Withdrawal of Claim, also a PDF file. The claim can then be replaced with a corrected one.

A copy of the electronically file-stamped claim must be printed and retained in the SAU files for that case. The claims register, of course, will have the record of the time and date of filing. This time-stamp may determine the validity of other collection actions that have been taken.

Check Proofs of Claim and C-100’s for accuracy.

For courts still accepting paper claims, send original and one copy of the claim to the court for Chapter 7, 9, and 11 cases. (Stamp copy "COPY").

Send original and two copies of claim and C-100’s to court for all Chapter 13 and 12 cases and all out-of-state court cases. (Stamp copies "COPY").

Claims for the court, debtor’s attorney, and trustee should contain, in this order; the Proof of claim, C-100’s, and copies of tax liens, judgments, and abstracts if claim is secured.

Claims for the SAU file, the employer file and other Collections files (such as Judgment and Assessment folders) should contain the POC, C-100’s, copies of tax liens, judgments, and abstracts if claim is secured and a copy of docket case information or first meeting notice, in that order.

Claims for the OAG should contain the docket information or first meeting notice, the proof of claim, C-100’s, and copies of tax liens, judgments, and abstracts, if the claim is secured.

Complete this form and attach it to the item you require to have the claim mailed by express service so as to avoid missing a bar date. A Supervisor must authorize this request. The Outgoing Mail Unit is required to ship all express packages by the State contract courier. ANOTHER COURIER CAN ONLY BE USED IN INSTANCES WHERE THE PACKAGE IS TO BE BILLED TO THE RECIPIENT’S ACCOUNT NUMBER OR BY PRIOR APPROVAL FROM FISCAL.

Fill in the form with this information:

DEPARTMENT: Tax SENDER’S NAME: Collections/SAU

COST CENTER #: ____APPROVED BY:

IF SHIPPING OTHER THAN STATE CONTRACT COURIER: COURIER ACCOUNT #:

EXPRESS AIR SERVICES FOR STATE CONTRACT COURIER:
(CHECK ONE)

Delivered next business day by 10:30 a.m. or noon

Delivered second business day by 5:00 p.m.
(Packages weighing over 5 lbs.)

Saturday Delivery (Extra Charge)

EXPRESS AIR SERVICES FOR OTHER COURIERS:
(CHECK ONE)

• Delivered next business morning
• Delivered next business afternoon
• Delivered second business day
• Saturday Delivery (Extra Charge)

RECIPIENT’S NAME:

COMPANY:

EXACT STREET ADDRESS:

CITY: STATE: ZIP:

PHONE #: ( )

TO INSURE PACKAGE, DECLARE VALUE: $________
INDICATE ANY SPECIAL HANDLING REQUIREMENTS: _________

FOR OUTGOING MAIL SERVICES USE ONLY
TIME RECEIVED IN OMS: _______ DATE RECEIVED IN OMS: __________
RECEIVED BY: _____ PROCESSED BY: _____AIRBILL #: ______

In Chapter 11 cases where there is no pre-petition delinquency, the SAU must continue to monitor the account for post-petition delinquency. The file should be tracked by the responsible AE for quarterly review and possible claim filing until confirmation of plan according to the schedule below. The Unclaimed Delinquency List (computer-generated) will list those accounts which have received on-time quarterly reports that the system interprets as having not been claimed. This list is reviewed promptly upon receipt for any accounts that need claims or amendments.

If you have filed a claim for an active account and the claim does not include the delinquency for the petition quarter establish a trace for the file to return to the SAU Claims user ID for claim review according to the following schedule:

Petition Quarter Establish Trace for

1^st Quarter May 10
2^nd Quarter August 10
3^rd Quarter November 10
4^th Quarter February 10

Complete a cover memo to the OAG for all objections received if TWC filed a claim in the proceeding. Make a copy of the cover memo and the objection. Attach the original cover memo and original objection to a copy of the claim and forward the OAG for review. If the claim was for less than OAG criteria prepare a cover memo to TWC Legal Services and attach it to the objection along with a copy of the claim. Keep a copy of the cover memo and objection for the SAU bankruptcy file.

Annotate the Delinquency Comments screen, and update the Fiduciary Record "Object" field with "Yes."

TEXAS WORKFORCE COMMISSION
MEMORANDUM

DATE

ACCOUNT NUMBER

TO: Office of the Attorney General, Collections Division, Assistant Attorney General (Name)

FROM: Tax Department, Collection Section, Special Actions Unit, (Name)

SUBJECT: Objection to Claim in Bankruptcy Case No.

Attached is an objection to claims filed by the Texas Workforce Commission. Also attached are copies of the claims filed by TWC for your reference.

(Add any pertinent comments)

Thank you.

Attachments

(C-5) FOR BANKRUPTS

These adjustment reports are received either as audits from the tax run due to bankruptcy, or as faxed copies provided to SAU by the field examiners.

DO NOT process a C-5 if:

• The quarter is older than three years old. Exception: process if we have received a court order or authorization from the trustee, or
• The plan has been confirmed and the plan schedules TWC’s administrative expense delinquency, or
• The C-5 is a duplicate that has already been processed.

When a C-5 is not processed, return it to the Employer Accounting and Review Unit with a notation that explains the decision. That unit will write the employer to inform them adjustments have not been made.

DO Process a C-5 if:

• The plan has not been confirmed and claim can be amended.
• The pre-petition and/or post-petition claims can be amended.

WHEN a C-5 is processed determine whether:

• The amended claims should be filed.
• The late payment interest should be adjusted due to the petition date.

Procedure for C-5’s and C-7’s

If a claim has not been filed and the bar date has not passed, make the adjustments, and retain the copy of the C-5 for SAU files. Ensure that the Controller has received, or will receive the original of the adjustments and wage lists for posting to the account. The claim will reflect the current information.

If a claim has been filed or there is a problem with bar date (approaching soon), key the C-5 and check the account the next day to be sure adjustments, interests, penalties, and money application on adjusted quarter are correct. Amend claims as appropriate

If the debtor, debtor’s attorney, or bank contacts us, inform him/her that SAU will verify the bankruptcy information, and will request release of the bank freeze as appropriate. In those cases where the freeze has attached after the bankruptcy filing date, AAU will issue a withdrawal of the freeze.

When the freeze has attached before the petition date, the OAG may contact Debtor’s attorney that TWC considers the funds to be cash collateral with the bankruptcy court. Upon receipt of OAG’s guidance, AAU may issue a freeze withdrawal.

When a bank account is levied before the petition date, the TWC will keep the amount levied even if mailed from the bank and received by TWC after the petition date. In this event, TWC is deemed to have taken possession of the affected funds prior to the filing.

When a bank account is levied after the filing of a petition, the levy will be released, and funds returned as appropriate, upon advice received from the OAG.

The responsible SAU AE will review all the accounts with a Restriction Reason B to determine whether or not the rate change should be approved.

Do approve any new rate change from 0.00% rate. Do approve a rate change if the bar date has not passed and a claim can be amended.

Do not approve a rate change for pre-petition quarters after a bar date has passed.

Do not approve a rate change if an SAU AE is processing changes, as can be seen on the Transaction Log. If in doubt, do not approve the rate change.

Annotate on list, with a "yes" or "no" by each account number, whether or not the rate change is approved. Date and initial the list, make a copy, and hand deliver the copy to the Status Section, Experience Rating Unit Supervisor. Place original in Rate Change binder.

See 3.2.35 for additional information on rate changes.

The Bankruptcy Code indicates that if the debtor submits a payment subsequent to the petition date for a pre-petition delinquency (usually the petition quarter) the overpayment may be refunded to the trustee in both Chapter 7 and 13 proceedings. Verify case status, and then contact the appropriate trustee to determine the disposition of the credit. All disposition instructions should be in writing from the trustee, so as to provide a clear audit trail.

Consult with legal counsel if appropriate.

If quarterly adjustments (C-5’s) are processed for pre-petition quarters and the transaction results in a credit, the credit may not be applied to post-petition delinquency. The credit may be refunded to the debtor after consulting with the trustee. Include a letter to the debtor that explains the adjustment(s), credit, and refund. Provide the trustee with a copy of the letter.

If a post-petition payment for post-petition delinquency results in a credit, the credit remains on the account to be applied to future post-petition delinquency.

On occasion, we will receive reports for wages paid as a result of a claim filed by an employee in an employer’s bankruptcy.

The report and payment are intended to pay "Priority Wage Claims" in an older bankruptcy case, and are not related to any claim that we may have filed. The affected account will be re-opened and re-closed as appropriate, and Delinquency Comments added. If the account appears to have been purged, ask Status personnel to create an account for this purpose.

Payments of this nature can be made at the default new employer’s rate of 2.7%, or the rate in effect at the time the wages should have been paid. (Should the payment be less than sets up on the account, DO NOT request the difference from the Trustee, nor demand late payment interest or late reporting penalty from the Trustee.) Do not file claims on trustees for unpaid taxes on Priority Wages.

Check the Trustee’s web site for that case to review the claims register. If not able to locate, telephone the trustee to get account number or FEIN. With the FEIN, you may be able to search purged number books in the Status Section. If an account is located, make a copy of the pre-conversion microfiche showing delinquency on account. Try to reinstate the account using the Reinstate Account command.

If bankruptcy information available indicates the case was filed between about 1982 and 1987, lists of claims filed during these dates are located in the SAU Supervisor’s filing cabinet. Additionally, conduct a search in the Archived Database documents/diskettes and in other archived microfilm resources.

If the employer’s account has not been terminated, the account is reopened and closed to reflect an open account during the appropriate quarter(s).

For example, if an employer’s account was closed 12/31/2002 and the trustee submits an employer’s quarterly report for the quarter ended June 30, 2003 for wages which were due in May of 2002, the account must be reopened as of 4/1/2003 and closed 6/30/2003. Collections personnel do not have access to maintenance screens which adjust these dates. Contact Status personnel with bankruptcy status, and wage credit information, and request that Status make appropriate changes.

If the employer’s account has been terminated, the account cannot be reopened. Contact Status personnel to open and close a new account for the employer, regardless of the amount being reported. Annotate the Delinquency Comments screen reflecting the information concerning the Priority Wages, trustee, case number, and other pertinent matters.

If the report is submitted with payment for the tax due and the tax rate used does not match the tax rate given on the Employer Master File for the specific quarter, request the Supervisor to determine the correct rate, after consultation with legal counsel if appropriate. After this determination, contact the Status Section, Experience Rating Unit Supervisor, who will have the rate changed.

After accounts have been reopened, closed, or new accounts have been established and closed, and rates have been adjusted as appropriate, make necessary notations to the Bankruptcy file Delinquency Comments screen.

Do not file claims on unpaid taxes on Priority Wages when a trustee reports them.

Interest is usually paid on confirmed plans, regardless of chapter. The debtor’s attorney should make this information available to TWC, either directly or through the OAG, as appropriate. Plans and the treatment of our claims therein can now be accessed on the Docket for most courts. This information (amount, term, and interest rate) can then be entered into an amortization schedule for easier computation and tracking for payment by the designated AE’s.

The bulk of payments received by the agency post to the accounts automatically, through the nightly tax run. They can be identified as being "Money Only" payments, and have a one-day Stop. These will apply according to the Standard Algorithm.

Payments with documents are posted to the Employer Master File in the tax run and appear on the Cash Journal. The Unallocated Remittance List is used to verify and allocate payments for those documents which have correspondence or a screen print with possible annotations. These payments are coded with a "Money With Other Correspondence" Stop Code which must be deleted manually. Payments may be released to allocate according to the computer algorithm program, or may be detailed to specific quarters and non-quarterly charges.

• Remittances are normally allocated in the appropriate sequence by the agency’s computerized tax accounting system:
• Allocation to charges with which remittance was received (with remainder available to allocate to other charges);
• Allocation of available money (money left over as above, or money received by itself).
  

Money is normally applied to unpaid quarters and charges in the following sequence of categories (except when bankrupt, dedicated payment, prepayment, protest payment, etc.);

• Active
• Pending
• Certified
• Final Assessment
• Judgment
• Uncollectible

Within the collection categories as defined above, charges are normally paid in the following order:

• Lien Fees Abstract and Assessment Fees

• Quarterly Report
  *Tax
  *Section 213.021 Late Payment Interest
  *Section 213.022 Late Reporting Penalty
  *Section 213.025 Additional Interest on Judgment for Past Due Contribution
  *Search Charge
  
  
• *Quarterly Interest Tax
  Late Payment Interest - Section 213.021
  Additional Interest on Judgment for Past Due Contribution - Section 213.025
  
  
• Annual Surcharge
  
• Audit Charge
  
• Penalty for Other Violation - Section 213.023
  
• Attorney Fees
  
• Court Costs
• Search Charges/Other Charges
  

When there is more than one occurrence of a particular charge type, the oldest charge is paid first and the newest charge last.

All charges relating to a quarter will be cleared before the next quarter will be paid.

Surcharge quarters for a year are paid after regular quarters for that year are fully paid.

The system will apply unrestricted money to a quarterly report as follows:

• Compute Tax amount due;
  
  
• If the remittance is late, look for any previous (earlier postmark date) available (unallocated) money, and apply it;
  
  
• Apply remittance received with the report;
  
  
• If there is a balance due, apply any additional available money (later postmark date);
  
  
• Allocate money to the report:
  
  
• * Calculate Section 213.021 interest and Section 213.022 penalty as appropriate
  
  
• * Pay amounts due and compute amount of paid taxable wages.
  
  
• If remittance pays all tax, pay it. Pay penalty and interest with remaining money.
  
  
• If remittance does not pay all tax, prorate between tax and late payment interest (if remittance is late): Paid tax = Remittance X (Tax due/ Tax due + Section 213.021 due)
  
  Paid Section 213.021 = Remittance - Paid Tax
  
  Unpaid tax and not toleranced:
  Paid taxable wages - Paid tax/tax rate.
  

Restricted allocations (user-specified, nonstandard, such as specified for officer liability, court order, predecessor, successor, etc.). Most allocation, reversal and reapplication, and transfer actions can be done on the same day. Allocations and reallocations to a specific charge should not be done on the same day.

Verify dollar amount on paperwork is on daily list (Unallocated Remittance list). Notify Controller, Depository immediately if there are discrepancies, and of any unusual circumstances, such as improperly identified payments or checks found in a batch.

Determine proper allocation depending on the type and purpose of payment or case. Examples would be for release of lien, officer liability, bank levy, etc.

For bankruptcy payments, you may need to verify whether the payment is for pre- or post-petition claims. Chapter 7 payments are usually a percentage of the claim. Money may cover a claimed judgment or assessment.

You can review the Cash Journal to see where previous payments have gone: SOMETIMES THERE ARE PAYMENTS THAT MUST ONLY BE APPLIED TO PARTICULAR QUARTERS, AND THIS INFO SHOULD BE ON THE DELINQUENCY COMMENTS SCREEN, IN THE ASSOCIATED DOCUMENTS, OR IN THE FILE.

After any "Money with Correspondence" allocation, BE SURE TO RELEASE THE "Money With Correspondence" STOP, USING THE PRINTOUT FOR THE ACCOUNT NUMBERS AS A GUIDE.

If an account needs further allocation, adjustment, or review, place an appropriate Stop on it.

Sometimes there are two or more payments with the same postmark date (001,002, etc). Be sure you are entering the correct one.

You must use special identifiers to apply payments to Interest quarters, Audit Charges (i.e. interest on Plans), and certain types of accounts, such as Reimbursing accounts.

Annotate the allocation on the document accompanying the payment , date and initial. Also annotate the allocation/date on the Unallocated Remittance List, AND on any associated paperwork from trustees, etc. File appropriate documents in the bankruptcy files.

Sort documents according to disposition, such as to the AAU Supervisor to review, to Lien Release, bankruptcy files, and so on. Other documents are sent to Micrographics for filming.

If you note that this is the last payment on a claim, update the Fiduciary record, and order the tax folder in for closing, along with the bankruptcy file.

If the payment pays more than the claim, it may represent that there is a related account needing money applied (use Transfer Money to Another Entity), or it might be interest on the claim (Chapter 9, 11, 12 and 13). There may already be a comment to that effect, so allocate the money to this through use of the Change/Delete Non-Quarterly Charge screen. If no plan has been received, try to obtain it from the OAG if appropriate, or from the docket. Annotate the Fiduciary record with "...% interest on plan" in the Memo field, and add a comment if there is none.

ALLOCATIONS:
If you merely remove the Unallocated Remittance Stop, the money will normally flow to post-petition.

If you want the money to allocate to a specific quarter, you will have to indicate the quarter.

To detail the money to a specific charge you will have to "fill in the blanks" on the Allocate Remittance screen.

On occasion, Controller will receive a check that cannot be associated with an employer. In most cases, the employer record has been purged from the Employer Master File. There are a number of ways of finding the account number.

Obtain additional information from the court via PACER/CM/ECF. If you can locate the FEIN there, use the books in Status (same as above) to find employer number.

SAU maintains a claims database that includes information back to the earlier 1980’s. This is available electronically, and is also available as a paper file in the SAU files. If bankruptcy information available indicates case was filed between about 1982 and 1987, lists of claims filed during these dates are located in the filing cabinet behind the Supervisor’s desk. An account number may be found here.

On occasion, a remittance is actually intended for a Benefit Overpayment, which can usually be verified by use of the SSN on selected Benefits Claims screens. The Controller, Depository personnel, can transfer these payments from the Employer Master File to the Benefits File.

Rarely, a payment may actually be intended for Labor Law Collections, which can be easily verified with that unit. Transfer can be affected in the same manner as above.

Payments that clearly appear to not belong to TWC will be refunded to the Trustee concerned, transferred to State Comptroller, or vouchered back to the OAG, as appropriate. Refunds to trustees are usually refunded thorough an account by Status at SAU’s request set up for that purpose.

The Trustee’s web site can be accessed by an AE to obtain additional information, and the Trustee’s office can be called to help resolve the issue. Additionally, a call to the debtor’s attorney may resolve the issue.

The Remittance Allocation AE or other qualified AE will take prompt action to verify these requests from trustees and respond accordingly. They are submitted to TWC for review of the trustee’s reporting of tax liabilities on Priority Wage Claims, as filed by former employees in a Chapter 7 case. These reports, and payments, if made, may not be filed for several years after the filing of the case. They are not related to the TWC’s claim(s).

Probate claims are to be prepared by an SAU AE in accordance with the current monetary criteria. These claims will be filed in the gray folders in the SAU file cabinets and will be identified accordingly.

Upon notification that the employer is deceased, an SAU AE will make a field assignment. A copy of the assignment and the material used to notify TWC that the employer is deceased (i.e. return mail, correspondence from survivors, etc.) should be placed in the employer tax file. The responsible Field Tax AE must verify that the employer is deceased. The Field Tax AE should also inquire with the County Clerk of the county where the employer resided at the time of their death. The inquiry should determine if a Will has been filed for Probate. If a Will has been filed for Probate, the Field Tax AE must inform the SAU of the Probate Court, Probate Cause Number, date, name of the trustee, executor, or attorney of record administering the estate. Inquiries to other counties may be required if it is determined the employer has property in and/or resided in other counties, or if the TWC had filed tax liens in those counties. If no Probate can be found, verification of the employer's death can be obtained through the Social Security Administration a few months after death. This information can be obtained by accessing the Social Security Death Index on the Internet.

Upon verification that a Will has been filed in Probate Court, send an assignment to Status Section. The Status Section should send the Field AE an assignment to obtain an updated C-1 and change the styling of the account. (Note: this procedure can be completed at the same time as 3.2.45.) The assignment should also request verification whether or not the account should be inactivated.

SAU will set up a Fiduciary Record on the Fiduciary Multiple Records Update screen, using case type 20. The following information should be entered:

EID	FID TYPE	CASE NUMBER	PETITION DATE	BAR DATE
Acct#	20	Probate Cause #	Date of Probate	N/A

The day after keying the information, verify that a Fiduciary Record has been set up. Go to the Fiduciary Claim Update screen and key the following information:
COURT: __ CLAIM TYPE: 01
CLAIM DATE: (DATE OF PROBATE CLAIM)
MEMO: PROBATE/INFO
PRINT CLAIM: N

After entering the above date in the CFC screen, request a C-100 by going to the CFF (Fiduciary C-100 Request) screen the key the following information:

AE NUMBER:

EID: RECORD IID: FID RECORD#
WITHOUT NAME?: N
FID TYPE: PETITION DATE: PRE-: Y POST-: # TO PRINT: 1
TAX ONLY: Y ALL: PENALTY ONLY: Y
NAME-1 ESTATE OF -----------------
NAME-2
DBA
BEGIN END SPECIFIC CHARGES
QYY SUPP QYY SUPP TYPE QYY/IID SUPP

The day the C-100 hardcopy is produced, verify that the correct information has been entered into the Fiduciary record. Do any correction that may be needed. If there are no corrections to be done, delete the record by going to the Fiduciary Claim Update screen and entering D for the appropriate record number. Key all information relating to the Probate claim into the Delinquency Comments screen. Manually generate a corrected C-100 showing current tax, interest, penalties and fees owed by the estate.

Make copies of all supporting documents (i.e. tax liens, abstracts of assessments, judgments and abstracts of judgments) to be attached to the C-100 as exhibits. Stamp each copy document with the "EXHIBIT" stamp and label the documents using the letters of the alphabet starting with "A" and proceeding in sequence. When there are multiple pages of an exhibit, the page number of the exhibit will need to be annotated (i.e. "EXHIBIT A page 1 of 2"). Make three copies of this packet to be disbursed as follows:

1. The original
   
   
2. C-100 and one copy with a cover letter on TWC letterhead is to be sent to the Probate Court.
   
   
   
3. A copy of the C-100 and cover letter is to be filed in the SAU Probate file.
   
   
   
4. A copy of the C-100 and cover letter is to be filed in the employer's Tax account file.

If there is an objection to a TWC probate claim, the notice of objection is to be forwarded to the OAG if appropriate by criteria. A copy of the objection will be placed in the employer probate file.

Receivership is a form of protection from creditors where a third party (can be listed as Trustee, Receiver or Assignee) assumes control of the business and its assets and runs it on the behalf of and for the benefit of the creditors. Receivership usually leads to liquidating the business. Receiverships or Assignments, if filed with the courts, will be done through the District Courts, which can be accessed in the same manner as the Bankruptcy Courts.

Assignments for the Benefit of Creditors are infrequent, and are more informal. Distribution is problematical, but a claim should be filed if possible. The procedure for processing these notifications is similar to that for receiverships.

Notification of these two procedures is haphazard, sometimes as the result of a letter received, or from information received from a field AE. It is often instructive and beneficial to contact the receiver or assignee to discuss our potential claim.

Experience has shown that we benefit by doing as thorough research as possible on assets belonging to the delinquent employer, as this affords us a better chance of recovery.

A Fiduciary Record will be set up with the Receivership/Assignment code 40 with the date the business notified its creditors and with the Cause number if filed through the courts.

Claims will be filed following the normal claim filing procedures. These file folders will be gray and annotated appropriately, to distinguish them from bankruptcies.

Consultation with the OAG in some instances prior to filing a claim is recommended.

Acquisition of a bankrupt employing unit is done in accordance with the provisions of the Texas Unemployment Compensation Act (TUCA), as the Code does not set aside or subrogate State statutes.

However, the sale or acquisition of that unit must be made a matter of record in the bankruptcy proceedings, as there are many parties involved, including all creditors.

Additionally, there are questions as to whether the experience of a bankrupt company can be acquired, and whether the successor company acquires the predecessor debt.

First, the normal course of events in a bankruptcy was designed by the U.S. Congress to allow the partial or total sale of a debtor’s assets. This "good faith" effort was enhanced with the provision that a prospective buyer was purchasing those assets without being encumbered with the debts associated with those assets. Section 363(f) of the Code deals with these matters of "Use, sale, or lease of property," and states in part:

The trustee may sell property under subsection (b) or (c) of this section free and clear of any interest in such property…

Subsections (b) and (c) of the Code contain the authority for the trustee to sell assets after "notice and a hearing;"

For our purposes, the word interest encompasses the term "encumbrance" and an encumbrance includes an employer’s compensation experience. An employer’s compensation experience includes not only the tax rate, but also the taxable wages of any employees that were previously employed by the predecessor-employing unit.

Therefore, the sale of a debtor’s property free and clear of any liens and encumbrances means that the buyer acquires the business without acquiring the tax debt, the tax lien, and the tax rate.

Second, the Bankruptcy Code allows for leeway by the presiding judge to authorize exceptions to the strict interpretation of certain provisions of the Code. In this regard, the judge can authorize the buyer of a business to acquire the compensation experience of the seller. The buyer then becomes the successor and is entitled to the tax rate and taxable wages transfer of the predecessor. This transaction is authorized by an order signed by the judge, or may be contained within the (confirmed) Plan of Arrangement. This order must contain certain language that addresses the not only the transfer of the compensation experience, but also the transfer of the tax debt.

It is the responsibility of the acquiring party to provide documentary evidence (the order or Plan provision) to the TWC Status section concerning the terms of the sale or acquisition in the bankruptcy proceedings. This information can then be reviewed by SAU. Review of lengthy dockets, to attempt to find specific references, orders, and plan provisions relating to these matters is not feasible