Waivers and Adjustment of Status for Refugee/Asylee Cases

A Clever Waiver for Humanitarian Refugees and those holding Asylum

Adjustment of status for individuals granted asylum or refugee status can be tricky. Because they have no sponsor in the US, they have no easy means of converting from "legally here" to "lawful permanent resident" or LPR. In the code there exists a provision for just this case -- INA 209. Under INA 209, any refugee admitted under the 50,000 person cap as a humanitarian refugee pursuant to INA 207, and any individual granted asylum under INA 208, may apply for LPR status after 1 year (See, INA 207(a) & (c), INA 208(d)(3), and INA 209(a) & (b)).

However, what if the individual applying for adjustment has a criminal history? Typically a 212 or 601 waiver would address these problems in an I-130/I-485 context (including removal proceedings) -- however, that cannot be done when the refugee or asylum holder cannot return to his/her home country to await adjudication of the waiver. Grid lock.

The resolution is found in INA 209(c). The code specifically permits the waiver of criminal conduct for asylee/refugee applicants -- with a few provisions. In 2005, USCIS issues guidance on the application of 209(c). An excerpt dealing with what may, and may not be waived is included here:

Section 209(c) of the Act prohibits the Secretary from waiving the following grounds of inadmissibility:

• Section 212(a)(2)(C) of the Act relating to drug trafficking;
• Section 212(a)(3)(A) of the Act relating to security grounds;
• Section 212(a)(3)(B) of the Act relating to terrorist activities;
• Section 212(a)(3)(C) of the Act relating to foreign policy considerations; and
• Section 212(a)(3)(E) of the Act relating to Nazi persecution and genocide.

The Secretary may waive any other ground of inadmissibility under section 212(a) of the Act for humanitarian purposes, to assure family unity, or when it is otherwise in the public interest. (Interoffice Memo, Aytes, HQPRD 70/23.10, 31 Oct 2005)

While there are provisions that allow USCIS to enter a waiver sue sponte when reviewing an I-485 for refugees/asylees, this counselor strongly recommends that an I-602 always be included with any filing where a waiver is required. The 602 form requests USCIS waive any precluding events or history. The more serious the crime, the more information must be provided to prove the "equities" of the case -- the balance in favor of granting the waiver vs. the seriousness of the crime warranting denial. Writing the waiver brief to accompany the 602, and providing all relevant information and supporting document, is critical. Be sure to speak with a competent attorney who has experience writing 601 or 212 waivers -- much of the content will be similar. The advantage to a 602 waiver, however, is that the presumption is in favor of the immigrant for all but the most serious offenses.

More information on the application of 209(c) can be found in the case Matter of Jean, 23 I&N Dec 373 (AG 2002). This case is interesting in its own right -- the Attorney General took a direct interest in the 209(c) case after BIA applied too liberal a standard in granting 209(c) waivers. Any immigrant convicted of particularly serious crimes, or those involving violence or weapons, should read this case very carefully. Would you like help adjusting your status from asylee/refugee to lawful, permanent resident? Do you have a criminal history that might prevent you from adjusting? Talk to us! We have years of experience working with folks just like you. We can help! 703-402-2723.

Sean Hanover, Esq.
Hanover Law
www.hanoverlawpc.com
Offices in Fairfax and DC
888 16th St. NW
Washington, DC 20006

Legal Custody - a quick example

From a recent question/answer session on family law:

Question:

How does Legal Custody work?
My sister is divorced, and she and her ex-husband have joint legal custody of their 7 year-old son. He has attended a blue-ribbon private school for the past two years, and he is thriving. He absolutely loves his school, which he attends with his cousin, who is his very best friend.

His father wants to switch him over to public school, and has provided only a few (and in the mother's and my opinion, ridiculous) reasons to do so. The mother is the one who takes their son to school, picks him up, does all the volunteer hours, attends school functions, aids with homework, etc. The father has done NOTHING concerning the child's education so far, other than paying all the tuition the past 2 years (in lieu of the $300/month child support that is in the separation agreement, I might add!). The mother is willing to pay the ENTIRE tuition herself.

Can he force her to send her child to an inferior public school under these conditions?

Answer:

Legal Custody Explained
Force the matter? Perhaps. The controlling issue here is not who pays what, but rather who has legal custody. Decisions regarding education, religion, medical matters, etc. are controlled by the custody agreement -- under the title "legal custody". If mom has "sole legal custody", then she can dictate precisely where, when and how the child will engage schooling. If the matter is joint, than dad has a say, too.

In the end, mom can probably just keep the kiddo in the school. If dad is unhappy, he will have to file to enforce his view. If he has joint custody, he only needs to argue the equities of the different schools. If mom has sole legal, then he has to first prove he should have a say, and only then, if the court agrees to modify "sole" to "joint", can he argue the equities of the schools.

As to the equities of the school -- the child's two year history with the school, relationships with peers, and academic success are all key. These are strong arguments.

If you have any questions regarding legal custody -- give us a ring! 703-402-2723.

Sean Hanover, Esq.
Hanover Law
www.hanoverlawpc.com
Offices in Fairfax and DC
888 16th St. NW
Washington, DC 20006

IRS Section 1244 - Claiming Worthless Shares

What happens when you invest in a company -- large or small investment -- and the company goes belly up? Usually, you are limited to claiming a max of $3,000 against regular income (unlimited against capital gains). But what if you invested much more?

Enter 1244!

Tax code 26 USC §1244 deals with the deduction for worthless stock -- either because of mismanagement or simple bad luck. Known as "1244 stock", qualified deductions under this regulation are not limited to the capital gains deduction cap ($3K outlined above), but rather have a much higher deduction of $50,000 for individuals, and $100,000 for married couples.

To qualify for "1244" status, a company, whose stock is now worthless, must meet the following requirements:

1) The taxpayer has to be the original holder of the stock (can't inherit it, or buy it from someone else).

2) Taxpayer must be a real person (i.e., not a trust, estate, company, etc.)

3) The stock must originate from a company whose gross value (based on the value of the shares themselves) does not exceed $1 million ("small business" test). There are some qualifiers here -- stock issued for amounts invested over the $1 million threshold do not qualify for 1244 stock status (In the easiest example, if each share is worth $1, the first million shares would qualify for 1244 status; each share purchased thereafter would NOT qualify for 1244 status. If investor X held 600,000 shares (at $1), and investor Y held 500,000 shares (at $1), some portion of each set of shares would not qualify for 1244 treatment. The code states that which shares are 1244 shares should be declared if the gross investment is above $1 million; there is a formula if that fails, but it is beyond the scope of this article); also, there are computation differences when more money is put into the company, but no new shares are issued.

4) The company issuing the stock must be "largely an operating company." This is defined variously in the code, but the controlling cases are Bates v. United States, 581 F.2d 575 (6th Cir. Ohio 1978) and Crigler v. Comm'r, T.C. Memo 2003-93 (Tax Court 2003).

Most companies/taxpayors will pass the first three tests, and the last one will be a complete miss.

In Bates, the Court explains the "largely an operating company" concept. There, the plaintiffs attempted to claim $100,000 in "worthless" stock losses. BIC, the company in Bates, had never sold any product, although it worked closely with another company, National Cleveland, to develop a machine tool business, and had even sent an "employee" (who was actually the son of the owner and was never paid) to work with the other company. There was considerable development work done on ideas and prototypes. However, nothing was ever finished or produced. The Court held:

Congress created a significant tax advantage in enacting § 1244, but it was intended to have narrow application. It was not intended to provide a vehicle for favorable tax treatment of losses suffered on passive investments or investments in large enterprises. Its purpose was to offer an incentive for investment of new funds in small businesses. Other provisions limit the size of corporations which may issue section 1244 stock. The purpose of § 1244(c) (1)(E) was to prevent a mere investment entity or holding company from qualifying.

and further:

The second issue presents little difficulty. BIC never engaged in any business operations. It invested most of its resources in National Cleveland. This investment resulted in the employment of Arthur Bates by National Cleveland. Nevertheless BIC was nothing more than a holding company or vehicle for investment. (Bates at 580)

There are many ways to show that the company was largely operating, even without sales. The Court did explain that:

If National Cleveland had paid BIC for the services of either Alfred or Arthur Bates or if there had been some agreement specifying that the services were performed for National Cleveland on behalf of BIC the case would be much stronger for the taxpayers. (Bates, 580)

Other examples might be a business plan, investment in marketing and actual marketing leads, prototype deliveries and actual test deployments. In a receipt tax case Hanover Law handled, none of these factors occurred. In fact, it appears that while a few sales calls were made, and some material was produced, the thrust of the sales and marketing was fabricated (a great deal of fraud and misdirection). The moving of funds overseas further obfuscated the playing field and suggested this company was nothing more than a "holding company." The IRS is very very strick on when stock may be claimed as a 1244 writeoff. Our company did not qualify.

How do you claim "1244 shares" status on your tax return?

Complete Form 4797. 1244 losses are claimed at line 10. See: Form 4797 instructions.
Complete Form 8949 if your loss exceeded $50K (individuals) or $100K (married filing jointly). See Instructions for Form 8949

Do you have a tax question? Give us a ring or send us a note! We'll be glad to review your question and see how we can help. 703-402-2723.

Sean Hanover, Esq.
Hanover Law
www.hanoverlawpc.com
Offices in Fairfax and DC
888 16th St. NW
Washington, DC 20006

Ducking Service -- can I hide from a lawsuit?

Question:

Can I hide?
How important is it to have the parties' names spelled correctly on the complaint and other documents? An unhappy individual is attempting to sue my small corporation and me personally. If my name is John Smith and the corporation is ABC Inc. but the named defendants are John Smyth and ABCs Inc., could eventual default judgments be enforced against the correctly named parties? “John Smyth” has been "served" by posting at an incorrect address and the sheriff has been unable to locate a registered agent for the non-existent corporation, but I noticed in courthouse records that the plaintiff recently gave the sheriff a new address for an uninvolved person bearing my registered agent’s name. (Does the sheriff ask “Are you John Doe, registered agent for ABCs Inc.” or does the sheriff merely ask “Are you John Doe?”)

I know the State Corporation Commission FAQ specifically says that ABC Inc. is distinguishable from ABCs Inc., but I don’t know if the same principle applies to individuals. I’m debating whether or not to respond, despite the misspellings.

Answer:

Do names matter?
The answer is -- sort of. A typo is not going to invalidate a suit. If the Court can determine who was meant, then the name itself will not be a bar. Often, when a defendant is unknown, a suit will be brought in the name of Jane or John Doe, and only after discovery will the actual parties be named.

However, of more importance is service. Unless there has been service on the defendant, corporation of individual, the suit cannot go forward. There are ways to serve a party by publication, but this is much more difficult, and generally frowned upon.

You should be careful, however. In almost every circumstance, the Virginia Corporation Commission requires that every company, other than a sole proprietorship, have a registered agent in Virginia who is authorized to accept service on behalf of the company. If you don't have that, the person trying to sue your company can serve notice on the Corporation Commission itself, and this can, in most instances, act as sufficient service to move forward in the suit. Not to mention, you can get in hot water for not have a registered agent. Not advisable.

Also, in Virginia, other than in small claims, a corporation may only be represented by an attorney (in small claims, attorneys are not permitted in VA).

So -- as to personal service for a suit naming you -- probably can be avoided by ducking service. As to your company -- probably cannot be avoided without defaulting. Best to get an attorney and head that one off at the pass. By the way, an attorney can represent your company, but not be authorized to accept service on your personal behalf. Hence, you could still remain anonymous. At least until you had to come to court for your company...

If you need further help with company, corporation, or personal service questions, feel free to give us a ring at 703-402-2723.

Sean Hanover, Esq.
Hanover Law
www.hanoverlawpc.com
Offices in Fairfax and DC
888 16th St. NW
Washington, DC 20006

HOME EQUITY CREDIT LINES -- AND DIVORCE

At a recent discussion on family law matters, I answered the following question:

Question:

HELOC Obtained without Joint Deed Holder Signature or Approval

My spouse obtained a $50K home equity loan behind my back, without me knowing about it, on our home in Virginia. We have since divorced, and now the bank is coming to me. Nothing was ever disclosed. I had no idea. What can I do?

Answer:

Unwanted HELOC and Divorce

I am presuming that the property and the loan were taken in VA. If this is not the case, then the advice needs to modified (obviously). Two core issues:

• First, the divorce and the separation agreement attendant to the divorce;
• Secondly the Virginia Code section dealing with property and property transactions within a state.

As to individuals (vice corporations, etc.), there are three methods for holding assets -- tenants in common, joint tenants, and tenants in the entirety. The last two require assent by both parties before a property can be voluntarily encumbered. The first does not -- that portion belonging to one of the parties may be mortgaged or bound.

The code section dealing with mortgages is VA Code §55-48 thru 79. The rights of the parties is covered under §55-59. The federal law is called RESPA - Real Estate Settlement Procedures Act found at 12 USC Chapter 27 ( 12 U.S.C. § 2601). The Dodd-Frank Act does apply, as this is a protected transaction, but there is nothing therein requiring signature verification (not discussed in the Act) -- only that an investigation is done to ensure the signatory (grantor) is capable of repaying the loan adequately. Essentially, the federal laws point back to the state regulations in this matter.

If you held the property jointly, then your spouse could not be a grantor under 55-59 because it requires both parties, not a single party, to encumber a joint property. See generally: http://www.americanbar.org/newsletter/publications/law_trends_news_practice_area_e_newsletter_home/2011_summer/real_property_interests_deeds.html for an explanation of the different forms of ownership, and the rights attendant thereunto.

You can and should file an action in circuit court to stop any action of the bank. This action is called "Motion for Quiet Title" and causes the nature of the title of the property to be put before the judge, and forces all interested individuals (or banks, in your case) to present their claim and argue why they should have right to the property. If the banks (or individuals) fail to do so, or fail to provide such evidence as a judge may deduce some valid claim, then the title is "quieted" by removing those banks or individuals from the record books.

Secondly, you need to file to re-open your property settlement agreement (and/or order) from your divorce. A material omission, such as a $50K HELOC, from the asset and debt disclosures between the parties is grounds for finding fraud in the divorce proceedings. Move to amend the property settlement, and file for sanctions.

Finally, you can bring a private action against your ex for fraud and material misrepresentation in both the divorce, and the encumbrance and reduction in value of the property.

If you would like help with any of these items -- please give us a ring at 703-402-2723. We've been handling family law matters for years, and would be glad to discuss this further.

Sean Hanover, Esq.
Hanover Law
www.hanoverlawpc.com
Offices in Fairfax and DC
888 16th St. NW
Washington, DC 20006

Problems with Protective Orders

Another divorce question from the Boards:

Question:
Can i file a harassment suit against wife, she keeps taking me to court to get protective order but they won't grant and i have to keep taking off work.

Answer:

How to deal with harassment via protective orders:

A couple of potential angles.

• First, you need to review your custody or divorce order and determine if there is a provision you can charge her with violating. If so, see about a show cause (contempt) order.
• Secondly, you can possibly bring an action for interference with your employment contract. Don't know enough if that will work.
• Finally, you can file a show cause on the current protective order itself.

However, you definitely need to meet with an attorney about this. Why did you get a protective order in the first place? Why does a magistrate continue to allow complaints to be filed against you if they are groundless? What is the genesis of the problem? If you don't fix this, you'll be at this forever. An attorney can help you interpret what the heck is happening and how to stop it. Do not presume you know how to do this. You could find yourself truly violating the order, or doing something very bad. Talk to someone who handles these types of family matters. You are not the only person going through this -- not uncommon at all in family litigation. Unfortunately, there are even attorneys who tell their clients to file as many protective order violations as possible. This is never a good idea. If you would like to review those papers and discuss how you can stop this and re-take control of the situation, give us a call. 703-402-2723.

Sean Hanover, Esq.
Hanover Law
www.hanoverlawpc.com
Offices in Fairfax and DC
888 16th St. NW
Washington, DC 20006

A question of BANKRUPTCY -- can you hide an asset?

I was discussing bankruptcy on an Internet legal site, and was asked the following question:

Question:
If a family member is on the verge of bankruptcy, can I purchase their house for the small amount still owed to the bank and have the house exempt as an asset when they declare bankruptcy? Or, would this be considered conspiracy to commit bankruptcy fraud?

My answer:

There is no conspiracy here!

Interesting idea, though. Generally, when a person declares bankruptcy, any asset is fair game for creditors. If the house in question has a good amount of equity, and the person declaring bankruptcy sells it for "a song" just before declaring bankruptcy, the trustee will yank it back (generally, a sale within 2 years of bankruptcy will be scrutinized -- beyond that, only if one of creditors ask for an investigation).

He or she will void the sale and take possession of the property in the interest of the other creditors. Now this is just a general overview -- there are exemptions (called "homestead") at both the state and federal level (you must choose one, not both), and there are certain protected transactions.

The bottom line, however, is before someone declares bankruptcy, they should consult a qualified professional to make sure they don't step on a landmine. If you need help with your bankruptcy, or advice on how to proceed, feel free to give us a ring! We have considerable experience in tax, bankruptcy an maximizing exemptions for both!

http://www.hanoverlawpc.com
703-402-2723

Sean R. Hanover, Esq.
Principal Attorney
The Hanover Law Firm is located in Washington, DC and Fairfax, VA. We practice
in both state and federal courts in VA, MD, and DC.