Info for bk and taxes

[HeatherB]

Does anyone have a link that explains which, if any, taxes are dischargeable through bankruptcy.

The reason I ask is that my best friend just told me that her husband hasn't filed taxes since he owned his own business (a few years ago - think he was only in business for 2 years or so). Then she stated that he was going to file bankruptcy later. She started asking me about my bankruptcy and I told her that I thought fed and state taxes were not dischargeable. She said that she heard that some of it would be dischargeable.

Anyone know who's right? I just don't want to give her false information.

[Bandit]

They can if certain requirements have been met. If he never filed then it does not sound promising. I think, I could be wrong, but it would be better if he had filed a few years ago to get the clock running.

Here is some info that I researched:

http://www.bkforum.com/showthread.php?t=16537

Check out the FAQ section for the requirements:

http://www.bkforum.com/showthread.php?t=65

I am still working on understanding some of this myself as I am also curious. Consulting an attorney for complicated tax questions is a definate and I can easily see why.

If you are talking strictly business taxes, I have no idea. Sorry.

[Lindsay]

I thought I read that they have to be over 3 years old. But I think he's going to have to file his returns.

I was browsing a few people on PACER and I found a person we knew who filed and there was many tax authorities listed as creditors (federal, state, sales, property tax). This person went Chapter 13 though so I don't know if they handle it differently in a Chapter 7.

[lrprn]

Here's a few good sites that explain how your IRS taxes are treated in bankruptcy -

http://taxes.about.com/od/bankruptcy/qt/bankruptcy_tax.htm

http://www.wwwebtax.com/audits/bankruptcy_code.htm

Bottom line for federal taxes to be discharged in Ch 7 and Ch 13:
- The due date for filing a tax return is at least three years ago.
- The tax return was filed at least two years ago.
- The tax assessment is at least 240 days old.
- The tax return was not fraudulent.
- The taxpayer is not guilty of tax evasion.