January 18, 2006: Federal income tax liability came within discharge exception for tax debt that debtor willfully attempted to evade or defeat.
A Chapter 7 debtor's federal income tax liability came within the discharge exception for tax liability that the debtor willfully attempted to evade or defeat, and thus was not dischargeable. The debtor acted "willfully" in his attempts to avoid his tax liability. The debtor delayed for years in submitting tax returns covering 11 tax years, despite his awareness of his duty to file and pay taxes, his status as an educated businessman, and his discussions with his pastor regarding his tax problems and guilt over his failure to file and pay taxes. Furthermore, the debtor sought to evade or defeat his federal income tax liability. In addition to not paying taxes, the debtor knowingly failed to file tax returns for more than 14 years, failed to keep accurate records of his income and his corporations' financial dealings, concealed income from the Internal Revenue Service through nominee accounts, and failed to disclose on his bankruptcy schedules corporate bank accounts from which he paid his personal expenses.
A Chapter 7 debtor's federal income tax liability came within the discharge exception for tax liability that the debtor willfully attempted to evade or defeat, and thus was not dischargeable. The debtor acted "willfully" in his attempts to avoid his tax liability. The debtor delayed for years in submitting tax returns covering 11 tax years, despite his awareness of his duty to file and pay taxes, his status as an educated businessman, and his discussions with his pastor regarding his tax problems and guilt over his failure to file and pay taxes. Furthermore, the debtor sought to evade or defeat his federal income tax liability. In addition to not paying taxes, the debtor knowingly failed to file tax returns for more than 14 years, failed to keep accurate records of his income and his corporations' financial dealings, concealed income from the Internal Revenue Service through nominee accounts, and failed to disclose on his bankruptcy schedules corporate bank accounts from which he paid his personal expenses.
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