Feds say ex-firm of Stormy Daniels' lawyer owes unpaid taxes
U.S. Court News
The Justice Department says Stormy Daniels' lawyer, Michael Avenatti, made "misrepresentations" in a bankruptcy case involving his former law firm that owes more than $440,000 in unpaid federal taxes.
Avenatti's former firm, Eagan Avenatti LLP, had agreed in January to pay about $2.4 million in back taxes and penalties as part of a resolution of a bankruptcy case involving the firm.
Court documents show some of the money was paid, but attorneys for the government said in May that the firm still owed a portion of the unpaid tax money.
On Tuesday, the U.S. attorney's office in Los Angeles filed a motion asking a federal judge to compel the payment of $440,291 in unpaid taxes and more than $11,700 in interest. Lawyers from the U.S. attorney's office represent the government in bankruptcy court when there's a debt to a government agency, like back taxes or unpaid student loans.
Avenatti, who has garnered national attention as the attorney for Daniels, the porn actress who is suing President Donald Trump following an alleged 2006 affair, said Wednesday that the court filing was "part of a smear campaign" and stressed that he doesn't personally owe any of the money.
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Workers’ Compensation Subrogation of Administrative Fees and Costs
When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.
In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.
In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.