top Ad Widget

Collapse

Announcement

Collapse
No announcement yet.

Chapter 7 and Federal Taxes

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    #61
    Originally posted by cinderella View Post
    This is very helpful! I did not know there was an IRS agent assigned to my case. I have not received any correspondense from the IRS. (I filed on 10/30/2009).

    Do you know know how I can find out who this person is?
    Should I wait to call them after the BK? or should I call them now to find out about my 401K?
    Should I just wait to file the motion to value or release the lien after I get some information for the IRS or consult with an attorney now?
    Hey cinderella,

    I'm in a similar situation. I just filed a few weeks ago. I went down to the Federal Building where the IRS was and the IRS Taxpayer Advocates were there. I went in and talked to a lady there to ask her if there was a lien filed against my house (and apparently there isn't!). She was really nice. I was kinda paranoid going in there though. She showed me all the years that I filed for and walked through all the activity on my account through the years and said that it looks like it's flagged because I filed bankruptcy. I felt a lot more relieved after talking to her.

    Comment


      #62
      Skimmed this thread, but didn't see the answer I was looking for.

      Can someone clarify the rules for audits? In a nutshell - my federal return for tax year 2005 was audited in 2008 and I owe an additional $1200 (peanuts, I know). I'm more than willing to pay it back if required but if I'm NOT, so much the better. Thx!

      Comment


        #63
        Thanks I will try that.

        Comment


          #64
          Originally posted by Vibrant View Post
          Skimmed this thread, but didn't see the answer I was looking for.

          Can someone clarify the rules for audits? In a nutshell - my federal return for tax year 2005 was audited in 2008 and I owe an additional $1200 (peanuts, I know). I'm more than willing to pay it back if required but if I'm NOT, so much the better. Thx!
          Audits are subject to the 8 month rule. To discharge a recently assessed tax (where the tax return was due more than 3 years ago and you filed the tax return more than 2 years ago), you must wait 8 months from the date of the subsequent assessment.

          Comment


            #65
            HHM,
            George42 wrote:
            Does that mean that since the debts are "discharged" that I won't get any 1099-C from my creditors?

            I would be interested in the answer to this question...
            Will I be liable for federal taxes on the "forgiven debt" / discharged debt from a Chapter 7 bk? Will it be considered income?

            Thanks. Really learned a lot from this thread.

            Comment


              #66
              When a debt is discharged in BK, it is NOT taxable income. Discharged debt IS NOT Forgiven debt.

              The bank still might issue a 1099-C, but on IRS Form 982, you simply check the box for "debt was discharged in bankruptcy"

              Comment


                #67
                Where would I find information regarding how Discharged debts in a Chapter 7 affect filing my upcoming taxes? Like: Do I pay taxes on the discharged amounts (Consumer debt and a vehichle)?

                Comment


                  #68
                  Originally posted by tlcabk View Post
                  Where would I find information regarding how Discharged debts in a Chapter 7 affect filing my upcoming taxes? Like: Do I pay taxes on the discharged amounts (Consumer debt and a vehichle)?
                  There is nothing you need to do, FILING CHAPTER 7 IN NO WAY affects how you file your taxes. You DO NOT PAY TAXES on the discharged debt.

                  Go to www.irs.gov, in the search box search for Form 982 and also read the associated publication. 9 times out of 10, a person who files BK does NOT need to file any additional tax forms after the BK.

                  Comment


                    #69
                    Thank you for the quick answer! Much relieved.

                    What would be considered forgiven debt?

                    Comment


                      #70
                      hi all.

                      I have not filed taxes the past couple years because of lack of work as a sole proprietorship. I've had no other income. I have no assets other than a truck w/ fair condition trade-in value of $6000.

                      I'm hoping to apply the NY $2400 auto, $600 tools of trade, and $0-$2500 no-homestead exemptions on the truck.

                      My tax questions are:

                      Presuming I must file my past 2+ years very soon for a BK in the coming months, would it be problematic to do the 1040 long form with the Schedule C reflecting a loss, to highlight the car and truck expenses? I'm eyeing the NY $600 business BK exemption to be used exclusively on the truck.

                      Would this information be superfluous to a trustee and should I be concerned with an objection to the tools exemption, having not worked? In the future, business use of the truck is very likely.

                      For what it's worth, even though I've not been gainfully employed, I have used the truck to provide estimates, as well as attend frequent workshops to hone my skills and to expand my base in my area of expertise.

                      Could the deduction get flagged by the IRS and delayed?
                      See http://www.irs.gov/taxtopics/tc511.html "If you are unemployed and there is a substantial break between the time of your past work and you're looking for new work, you may not deduct these expenses, even if the new work is in the same trade or business as your previous work."
                      .
                      thanks
                      .

                      Comment


                        #71
                        I've thought it out and answered my own question. The simplest solution will work just as well, and perhaps avoid flags from either the trustee or IRS.

                        In my case I originally planned on using the whole "tools of trade" exemption on the truck. If I avoid it altogether, the $600 not claimed makes the "non-homestead" exemption, which is sorta like a wildcard, $600 sweeter.

                        Hmm..
                        If the math comes out the same, the trustee shouldn't care if I call the truck my "tool of trade". Question is does it tell something about who I am?

                        So I guess I haven't answered my question.

                        Comment


                          #72
                          I think I've used credit cards a few times over the past couple of years to pay on a payment plan with the IRS. Do I need to subtract these amounts from my dischargeable debt and add it to my tax debt? Also hoe does the money get paid to the CC companies in this situation?

                          Comment


                            #73
                            I found this little piece of information...I wish I could remember where.
                            Does anyone know where to locate this in the tax code. It would be very much appreciated
                            the IRS will take into consideration are: drug and alcohol abuse; a death in the family; a life threatening disease or medical condition, embezzlement or theft for businesses.
                            I am a recovering alcoholic (sober over 6 years now) but the non filed years were a direct resulr od me haveing my head not stuck in the sand but a bottle of vodka.

                            If this is true I need a lawyer that is familiar with this. Hopefully my wife can file without me. I can resolve my tax problem to a manageable amount, and I wont have to file BK, saving my credit.
                            Get the tax paid, attempt a quasi tax lien strip, and life will be sooooo much better

                            Comment


                              #74
                              That is true.

                              1. You cannot abate (or remove) accrued interest.
                              2. In certain circumstances, you can have the penalties abated (removed).
                              However, before you can request removal of the penalties you must either pay the tax (all of it, including the penalties) or enter into a payment plan with the IRS. Once you have a formal installment agreement, you can then request an abatement of penalties. If you pay the tax, then you request a refund of the penalties.
                              3. To qualify to have the penalties abated, you must show reasonable cause. That is you, need a good explanation as to why the penalty should be abated. Thus, it depends on what the penalty is. If it is a failure to file penalty (i.e. you didn't file your tax return on time), your explanation must explain why you didn't file.

                              Comment


                                #75
                                Hello. Is a "review of unreported income" with "additional tax assessed" considered an audit?

                                This is the background. I had a credit card account that I settled and as a result had the difference considered income by the IRS about a year and a half later. Tax year was 2006, filed on April 15th 2007, IRS adjustment made on September 2008. I still owe tax for this year mostly due for that adjustment of almost 4k.

                                When is the earliest I could dream of putting this amount on a bankruptcy filing? On April 16th 2010 it will be 3 years since the filing. The 8 month rule for audits would have passed in June 2009. Is my thinking correct?

                                How likely is the IRS to challenge my attempt to include this tax year under some broad interpretation of fraud?

                                Thanks for any clarification offered.

                                Comment

                                bottom Ad Widget

                                Collapse
                                Working...
                                X