After 10 Years: Daughter 1, Tax Man 0
I love this lawyer story.
On one side were Ron and Suzanne Walter, an Orange County couple who after declaring bankruptcy in 1986 eventually needed to pay off about $120,000 in state taxes.
Eager to collect: the formidable California Franchise Tax Board.
The lawyer part of the story? That’s getting ahead of ourselves.
In 1990, the Walters and the tax board signed a settlement agreement in Judge John Ryan’s federal bankruptcy court that resolved the tax claims against the couple.
Or so they thought.
In 1994, the tax board began collection proceedings for interest on taxes from 1980, 1985 and 1986--the exact years covered by the earlier settlement. The board at one point attached a $42,000 lien on Suzanne Walter’s condominium.
The Walters, who divorced about the time of their bankruptcy filing, went back to court. Judge Ryan sided with them and, in a May 1994 ruling, denied the FTB’s claims, saying the Walters already had paid in full.
Again, the Walters figured the fight was over.
But it’s hard to keep a good bureaucracy down. By 1997, the tax board was off the mat again. It withheld Suzanne Walter’s 1996 tax refund of $551, claiming she still owed interest that accrued after the initial settlement.
Over the next two years, Suzanne Walter says, she wrote to the board several times--each time referring to the earlier ruling and insisting she owed nothing.
Meanwhile, as the Walters’ bureaucratic nightmare stretched on year after year, their daughter, Laura, was growing up.
She was 17 and a senior at Fullerton’s Sunny Hills High School when she first learned about her parents’ mounting financial problems. It wasn’t that the sporadic battles with the board dominated family discussions, but Laura always was aware that the dispute hung over her parents’ heads.
Through her four years at Cal State Fullerton, the specter lingered.
Nor did it disappear over the next four years while Laura attended Western State University College of Law.
That’s right. She became a lawyer.
You can probably guess the rest.
Stepping Into the Ring
Last November, she passed the bar exam. She took a job as an associate with a law firm in Los Angeles. Then, when her mother asked her to review some paperwork stemming from the still-breathing saga with the tax board, Laura (by now using her married name of Citrano) hit the law library to research something she knew little about: bankruptcy law.
“I couldn’t believe this was the same thing,” she says of the dispute that had lingered since her high school days.
In the weeks and months to follow, she became a bit of an expert.
Last month, with Citrano representing her parents as their lawyer, Judge Ryan approved a settlement between the Walters and the board. The board agreed to give Suzanne Walter her $551.68 refund from 1996, plus about $177 interest, and her $12.03 refund from 1999, plus 33 cents interest.
The agreement also stipulated that the board will drop all claims to interest from the original three tax years in question, and never try again to claim them.
For Citrano, now 31 and just beginning her career, the moment in court was especially sweet. “Mom is so relieved,” she says.
No, Suzanne Walter insists with a laugh, she and her ex-husband didn’t groom their daughter to take up law to handle their case.
Walter says she didn’t hire an attorney in recent years because the issue only flared occasionally and the amounts involved were less than attorney fees--which she says she couldn’t have afforded.
But the stress remained.
“It was there every day,” Suzanne Walter says. “Just a feeling, it’s hard to describe. I would never know when they were going to come.”
Now, reflecting on that day in August as her daughter helped end the matter, Walter says, “It still makes me cry. I just couldn’t believe it. I can’t tell you how close we are. She and I were alone together for so long [while Laura was growing up], and there I am in court, and there’s my little girl Lolly [Laura’s family nickname] in a business suit, talking to the judge, taking this burden off of me. There’s no way to describe it.”
In approving the agreement, Judge Ryan said it was “disconcerting” that the tax board didn’t make it clear to Suzanne Walter in a timely manner why it continued to press its claim.
Leslie Branman Smith, a deputy state attorney general representing the board, says the tax board thought it was entitled to the interest.
However, not even she could disagree with the judge’s wonderment why the board couldn’t simply have explained things to Walter: “I didn’t think that was handled in a good manner at all, “ Branman Smith told the court.
*
Dana Parsons’ column appears Wednesday, Friday and Sunday. Readers may reach Parsons by calling (714) 966-7821 or by e-mail to dana.parsons@latimes.com
