Marshal's Notice of Execution

[AngelinaCat]

Angelina, what confuses me is what you are calling the four year rule. As far as I know there is no 4 year rule, only a 3 year rule (for when the taxes were supposed to be filed), a 2 year rule (for when you actually filed if you were late) and a 240 day rule for if th IRS assessed the amount you owed more recently.

All our tax returns were dutifully filed, but mostly in November of each year, not April 15.

Because our tax return for the 2004 taxes was filed November 2005, and we filed 12/28/2007, that is not a FULL to-the-day Four Year gap between our filing of the taxes and filing of the BK.

HHM has an article somewhere on here about that, because he responded to our questions about this very question with his information.

[backtoschool]

I am sorry that I was not clear--I was posting after Midnight, after all. LOL.

We filed BK7 12/28/2007. We had hoped to be able to discharge some of our back IRS taxes. There is a 4-year rule out there that knocked out the 2005 taxes (filed 2006), and anything younger than that.

We thought that perhaps we could discharge the 2004 taxes (filed 2005). It would have worked if we had filed our return on April 15, 2005. Instead, our CPA filed an Extension which required our tax return to be filed by November 15, 2005, which it was. So that knocked the 2004 taxes out because of the filing dates.

I understand that this is clear as 'mud'. I don't understand it either. But this is what we got from our *@##!*&% attorney.

The people at the IRS WILL work with you about payments, otherwise 'Hub was about to have his SS check garnished.

At least the beauty of our case is that as an asset case, most of the assets 'recovered' went to pay the IRS.

I think your 2004 taxes would have met all the deadlines and been able to be discharged since you filed for bankruptcy 12/18/07 and filed your taxes 11/15/2005. You met the guidelines for tax discharge as far as I can see. I think your attorney cost you some money.

[NSH]

Angelina, what confuses me is what you are calling the four year rule. As far as I know there is no 4 year rule, only a 3 year rule (for when the taxes were supposed to be filed), a 2 year rule (for when you actually filed if you were late) and a 240 day rule for if th IRS assessed the amount you owed more recently.

[AngelinaCat]

Angelina, I am not sure I follow. The taxes I wish to get discharged are from 2005 and earlier. The 2005 year I filed in 2006. I filed a few months late, if I remember right it was Oct of 2006. That means I should be within the three year rule for the tax year filed as well as the two year rule meaning I filed them at least two years ago.

Am I missing something?

I am sorry that I was not clear--I was posting after Midnight, after all. LOL.

We filed BK7 12/28/2007. We had hoped to be able to discharge some of our back IRS taxes. There is a 4-year rule out there that knocked out the 2005 taxes (filed 2006), and anything younger than that.

We thought that perhaps we could discharge the 2004 taxes (filed 2005). It would have worked if we had filed our return on April 15, 2005. Instead, our CPA filed an Extension which required our tax return to be filed by November 15, 2005, which it was. So that knocked the 2004 taxes out because of the filing dates.

I understand that this is clear as 'mud'. I don't understand it either. But this is what we got from our *@##!*&% attorney.

The people at the IRS WILL work with you about payments, otherwise 'Hub was about to have his SS check garnished.

At least the beauty of our case is that as an asset case, most of the assets 'recovered' went to pay the IRS.

[JGT]

Whoa thanks that is some relief 10%...The IRS I might have a problem with. I know I can still declare BK but does having a job make it harder for a Judge to approve it? If I get this job (driving a truck) I`m probaby going to be making around $25k - $28K a year (before taxes). I just don`t want to be stuck in a situation where I`ll be having my paychecks garnished for the next 1000 years.

[backtoschool]

Ah ok. Can they garnish your wages for back taxes higher than 10%? Maybe that is what I was thinking of.

Yes. Taxes would fall under the "debt owed to a government entity" category and would be at a maximum of 25%

[NSH]

Ah ok. Can they garnish your wages for back taxes higher than 10%? Maybe that is what I was thinking of.

[backtoschool]

I didn't know that, backtoschool. I always thought that the IRS and other creditors could take up to 1/3. What am I thinking of, maybe child support?

Child support is a different sort of wage garnishment than credit card judgements. The combined total for child support garnishments and debt that is owed to a governmental entity (ie taxes) is 25% in new york.

[NSH]

I didn't know that, backtoschool. I always thought that the IRS and other creditors could take up to 1/3. What am I thinking of, maybe child support?

[backtoschool]

Wow that is great about the taxes, I didn`t know that. You guys ain`t going to believe this but the past 2 days I`ve been talking to a company that I think is going to hire me for a job, in fact I`m pretty 99% sure they are. Now I am really freaking out because I`m stuck bewteen a rock and a hard place here because I know the second I take this job just about every creditor/collection agency on earth is going to come down on me like a pack of wolves to garnish my paycheck and I know there`s no way I can declare BK in that time befoe I get this job (I may start this job in a few days) It`s not a high paying job, very entry level $15 an hour but will this now kill all chances I have at filing BK? I have to take this job as I`m so broke I`ve been eating frozen vegetables the past few weeks but on the other hand I don`t want to be taking home 2 buck paychecks after the wolves are through with it. I owe everybody, I mean just name it. Even the IRS I owe about $6000. I know if I hire a lawyer he can stop them temporarily but does having a job now just about kill my chances that a Judge will grant me BK? There is no way I can ever repay back what I owe even if they took every cent from my paycheck it would take infinity plus a million years.

The maximum that they can take in total from your paycheck for standard unsecured debt in new york is 10%. So that means that all your creditors have to line up and a maximum of 10% of your paycheck at any time can be used to pay creditors.

[JGT]

Wow that is great about the taxes, I didn`t know that. You guys ain`t going to believe this but the past 2 days I`ve been talking to a company that I think is going to hire me for a job, in fact I`m pretty 99% sure they are. Now I am really freaking out because I`m stuck bewteen a rock and a hard place here because I know the second I take this job just about every creditor/collection agency on earth is going to come down on me like a pack of wolves to garnish my paycheck and I know there`s no way I can declare BK in that time befoe I get this job (I may start this job in a few days) It`s not a high paying job, very entry level $15 an hour but will this now kill all chances I have at filing BK? I have to take this job as I`m so broke I`ve been eating frozen vegetables the past few weeks but on the other hand I don`t want to be taking home 2 buck paychecks after the wolves are through with it. I owe everybody, I mean just name it. Even the IRS I owe about $6000. I know if I hire a lawyer he can stop them temporarily but does having a job now just about kill my chances that a Judge will grant me BK? There is no way I can ever repay back what I owe even if they took every cent from my paycheck it would take infinity plus a million years.

[NSH]

Tax years 06, 07, and 08 I am not even remotely worried about because I didn't make enough money AND my business was open and losing money, meaning I would probably end up with close to zero liability. 05 is my nightmare year and the years before that because I made money those years.

I tried to make sense of AngelinaCat's post, but I cannot, which is why I asked her the question. She said something about four years?

[backtoschool]

Angelina, I am not sure I follow. The taxes I wish to get discharged are from 2005 and earlier. The 2005 year I filed in 2006. I filed a few months late, if I remember right it was Oct of 2006. That means I should be within the three year rule for the tax year filed as well as the two year rule meaning I filed them at least two years ago.

Am I missing something?

The two year rule means that you need to file your taxes and then can discharge them in bankruptcy two years after filing, provided that you meet the three year rule and all other rules.

So if you already filed your returns for 2005 and earlier, you can discharge those taxes.

Since you have not filed your return for 2006 you will not be able to discharge those taxes.

2007 and 2008 would not have qualified for discharge yet even if you had filed your returns.

[NSH]

Angelina, I am not sure I follow. The taxes I wish to get discharged are from 2005 and earlier. The 2005 year I filed in 2006. I filed a few months late, if I remember right it was Oct of 2006. That means I should be within the three year rule for the tax year filed as well as the two year rule meaning I filed them at least two years ago.

Am I missing something?

[AngelinaCat]

NHS, I can tell you right now that you will not be able to discharge any Federal Income taxes, unless you filed 4 years AFTER the latest date of the tax filing you wish to discharge.

In other words: if you filed your taxes 4/15/2004, and you file BK 12/28/2007, you should be okay, right?

You *might* be. But in our case, our filing was delayed until 11/2004. *Tsk* At that point, the November filing fell within the 'lookback' period for the IRS.

So, there we were/are, and you may be.

In our case we were not trying to bypass the IRS, we were just trying to get a 'new start' and get out from under some onerous debts that medical bills and lawsuits had put us.

Good luck.