What is the IRS up to??

[Asconde]

I filed Ch. 7 in late May. I listed the IRS as a creditor in regard to unpaid tax debts for 2000 and 2001. I have not yet filed my 2004 taxes. (I filed for an extension in April.) A few days ago, I received a letter from the IRS stating that I must file my 2004 return immediately or they may file a motion to have the bankruptcy "converted or dismissed."

What is the IRS up to? What does my 2004 return have to do with the bankruptcy??

Thank you for your assistance.

[marko56]

I thought that back taxes owed can't be listed on a chapter 7 petition. At least that's what my attorney said when I filed.

[johnjenkins]

Sounds like you pissed them off. IRS debts are not dischargable through bankruptcy.

[HHM]

Some IRS taxes can be discharged, others can't. Generally, if the tax owed is more than 3 years old AND you filed a return, that tax debt can be discharged if its hasn't gone to a tax levy.

As for your specific issue, I think it has to do with the fact that the IRS needs to be able to assess their rights relative your 2004 tax return, if you are entitled to a refund, the IRS would probably get it, or at least a portion of it, and that all needs to be worked out in the bankruptcy. Also, the trustee is going to want a copy of your 2004 tax return so they can administer your case.

Long and short of it, if you want your bankruptcy to go through, GET THAT TAX RETURN DONE AND FILED.

[lolasugarbunnie]

That's not true

IRS DEBT can be discharged in Chapter 7 bankruptcy, because mine has was just discharged. The reason that they want you to file your 2004 taxes is because if the debt is discharged before you file you they will not be able to apply your refund to the debt. Also at my meeting of creditors I was asked if I had filed my taxes for the current year. My attorney advised that if I had not that they would not be able to discharge my bankruptcy. We purposely waited until after April 15th so that I could include 2003-1996 in my bankruptcy. My bankruptcy discharges on 07-18-05 and have had no problems.

[marko56]

I was thinking about discharging 2004 owed taxes and was told NO by my atttorney which jives with what HHM is saying.

[HHM]

Correct, you won't be able to discharge 2004 taxes. As for lolasugarbunnie, I am fairly certain your 2003 tax liability would not be discharged in a Chapter 7. Simply listing a tax liability in your Bankruptcy doesn't mean it will be discharged (you have to list all debts whether they are dischareable or not). In fact 11 USC 523(a)(1)(A) specifically exempts from discharge taxes that were assessed within 3 years before filing your bankruptcy. Moreover, the IRS doesn't even have to file a claim or appear in your bankruptcy to protects its right of non--dischargability. You may want to get clarification from your attorney on which tax debts will and will not be discharged.

[cpginvegas]

I work for the IRS and the tax that can be discharged are taxes that have been filed 36 months prior to the filing. All returns must be filed prior to discharge and all refunds due applied to the back years considered for discharge. Hope this helps. This is very basic and your BK attorney should have told you this prior to your filing.