Chapter 7 and Federal Taxes

[despritfreya]

so what about if you are about to file for chapter 7 and expect to owe for the prior year? and no other back taxes?

Since the tax will not be discharged you will have to make arrangements with the taxing agency to pay the amount due. See the following link for more info as it relates to installment agreements for federal taxes:

https://www.irs.gov/individuals/payment-plans-installment-agreements

Des.

[fernbuz]

so what about if you are about to file for chapter 7 and expect to owe for the prior year? and no other back taxes?

[butterfly57]

Does anyone successfully filed for Chapter 7?

Yes, I have. Just received my Final Decree about 2 weeks ago. I'm not sure what exactly my credit report will look like with two tax liens on it. I'm giving it alittle bit of time before I start working on that.

[Lindahill]

Does anyone successfully filed for Chapter 7?

[moorman]

The more I read on this site, the more I become upset with our former bankruptcy attorney. My husband owes income taxes from 2009. According to the bk rules, it is dischargeable. The lawyer insisted it was not.

I have the transcript which we had printed last month and it says nothing about a lien. I do recall two years ago receiving a letter from them saying they were going to do something to an old bank account we never used (which was actually overdrawn so I was surprised they thought it was open). Would we still need to file a Motion to Value Lien ? We have no property.

interesting.

[justbroke]

frodosdojo whether a particular tax year is dischargeable is an issue of fact. There are several reasons that it may be non-dischargeable. Regardless of whether you "believe" they are dischargeable is first for the IRS to make that determination. The IRS is "usually" very good at discharging taxes that meet the criteria below. SO, even if you didn't do anything, like file a Complaint to Determine Dischargeability (of those taxes), the IRS typically gets it right. If you wanted to challenge the IRS, you'd need to file a Complaint (read $$$$) and fight your case.

What ValleYum wrote (above) is worth repeating... (with a caveat that simply filing a return "late" may not make the tax dischargeable since the rule is that you must file on time (including any extension))...

From: http://www.nolo.com/legal-encycloped...ing-29550.html

When You Can Discharge a Tax Debt

You can discharge (wipe out) debts for federal income taxes in Chapter 7 bankruptcy only if all of the following conditions are true:

• The taxes are income taxes. Taxes other than income, such as payroll taxes or fraud penalties, can never be eliminated in bankruptcy.
• You did not commit fraud or willful evasion. If you filed a fraudulent tax return or otherwise willfully attempted to evade paying taxes, such as using a false Social Security number on your tax return, bankruptcy can't help.
• The debt is at least three years old. To eliminate a tax debt, the tax return must have been originally due at least three years before you filed for bankruptcy.
• You filed a tax return. You must have filed a tax return for the debt you wish to discharge at least two years before filing for bankruptcy.
• You pass the "240-day rule." The income tax debt must have been assessed by the IRS at least 240 days before you file your bankruptcy petition, or must not have been assessed yet. (This time limit may be extended if the IRS suspended collection activity because of an offer in compromise or a previous bankruptcy filing.)

[frodosdojo]

The more I read on this site, the more I become upset with our former bankruptcy attorney. My husband owes income taxes from 2009. According to the bk rules, it is dischargeable. The lawyer insisted it was not.

I have the transcript which we had printed last month and it says nothing about a lien. I do recall two years ago receiving a letter from them saying they were going to do something to an old bank account we never used (which was actually overdrawn so I was surprised they thought it was open). Would we still need to file a Motion to Value Lien ? We have no property.

[AngelinaCat]

This lovely poster just got himself banned--after being warned about posting advertising links for his law service....

[despritfreya]

Oh and the assessment date is like 210 days prior to filing bk.

Just gotta say it. . .

The assessment date is not "like 210 days prior to filing". It is "240 days. . ." as referenced in 11 USC 507(a)(8).

Des.

[patrickmead]

Oh and the assessment date is like 210 days prior to filing bk.

[patrickmead]

The tax rule is due more than 3 years ago. Filed at least 2 years prior to he bk filing.

[NewStart2012]

Double drats ;) Thanks again tho!

[ValleYum]

Thank you so much for the info ValleYum! It was for 2010; so, guess not Bummer! Thanks again.

Awww - drats! I am glad the info helped!!

[NewStart2012]

Thank you so much for the info ValleYum! It was for 2010; so, guess not Bummer! Thanks again.

[ValleYum]

We just filed taxes earlier this year. I read on here that taxes are incl in discharge if filed over 3 years ago. Does that mean since we just filed this year and the penalties were issued this year, they can't be included in the bk?

What tax year were they for? If they are 2011 income taxes - no.

From: http://www.nolo.com/legal-encycloped...ing-29550.html

When You Can Discharge a Tax Debt

You can discharge (wipe out) debts for federal income taxes in Chapter 7 bankruptcy only if all of the following conditions are true:

• The taxes are income taxes. Taxes other than income, such as payroll taxes or fraud penalties, can never be eliminated in bankruptcy.
• You did not commit fraud or willful evasion. If you filed a fraudulent tax return or otherwise willfully attempted to evade paying taxes, such as using a false Social Security number on your tax return, bankruptcy can't help.
• The debt is at least three years old. To eliminate a tax debt, the tax return must have been originally due at least three years before you filed for bankruptcy.
• You filed a tax return. You must have filed a tax return for the debt you wish to discharge at least two years before filing for bankruptcy.
• You pass the "240-day rule." The income tax debt must have been assessed by the IRS at least 240 days before you file your bankruptcy petition, or must not have been assessed yet. (This time limit may be extended if the IRS suspended collection activity because of an offer in compromise or a previous bankruptcy filing.)