Question from the FAQ section.

[Bandit]

I have read through the FAQ section many times and has been very informative. Thank You all for that part of this forum. I believe I understand everything in the FAQ section except for this one part in blue. I keep reading it and I have no idea what all that means.

Can someone explain in a simple way what all that means?
What does subsitute or return mean in this case?
What is the part about two years for this, three years for that, and 240 days for something else?

Thank you in advance

6. Recent income tax debts and all other tax debts. This is a complicated area of the bankruptcy law and an attorney should be consulted. You can discharge (wipe out) debts for federal income taxes in Chapter 7 bankruptcy only if all of these five conditions are met:
The IRS has not recorded a tax lien against your property. (If all other conditions are met, the taxes may be discharged, but even after your bankruptcy, the lien remains against all property you own, effectively giving the IRS a way to collect.)
You didn't file a fraudulent return or try to evade paying taxes.

[HHM]

The liability is for a tax return (not a Substitute or Return) actually filed at least two years before you file for bankruptcy.

The original tax return (the paperwork you fill out)

The tax return was due at least three years ago.

This is best explained by example, the current year is 2007. The most recent tax you could discharge under this rule would be income tax you owe for 2004.

The IRS actually determined the amount that you owe in taxes. I.e you filed a tax return, the IRS said, you owe $XX.XX.

[SinkingFast]

This is best explained by example, the current year is 2007. The most recent tax you could discharge under this rule would be income tax you owe for 2004.

The IRS and BK Code go by the last date your taxes are due to be filed in a year too. Typically, April 15th is tax day each year. But sometimes, such as this year, the final day to file taxes is postponed due to a Holiday.

Taxes due this year were to be filed on or before April 17th. When future Filers consider whether or not the 2006 filing year's taxes are Dischargeable, the IRS and the Court will use April 17th as the date.

[Bandit]

I want to read this back and tell me please if I have it correct
I do not have any tax to be discharged and maybe that is why I am being dense. I still want to understand it though.

The original tax return (the paperwork you fill out)

The substitue would be for someone if they lost the original and then they would not qualify?

This is best explained by example, the current year is 2007. The most recent tax you could discharge under this rule would be income tax you owe for 2004.

Does this mean the person could get all the tax discharged from 2004 back to, for example the year 1999? But they would still owe for 2005 to the present. Correct?

The IRS actually determined the amount that you owe in taxes. I.e you filed a tax return, the IRS said, you owe $XX.XX.

Is this for someone who is trying to pay back in payments but have not been able to pay it all back yet. (?)

It appears this part of a BK and these three rules, they are trying to make provisions for people covering all the years, but each year has a different rule that must be applied in order to get discharged. Right or wrong?
*scratching my head*

[Bandit]

Taxes due this year were to be filed on or before April 17th. When future Filers consider whether or not the 2006 filing year's taxes are Dischargeable, the IRS and the Court will use April 17th as the date.

For example if someone filed after the 17, then it would not get discharged for 2006. (?)
Am I getting that right?

[Bandit]

The liability is for a tax return (not a Substitute or Return)

I did some extra research and found this here. They call it a SFR (F stands for, for) instead of substitue OR return:

http://www.taxincorporated.com/unfiledtax.htm

I do not know if all that is accurate but that part of it makes sense to me now