Announcement

Collapse
No announcement yet.

2010 Tax Lien (Never Filed) Removed from my Credit Report after Chapter 7 Discharge?

Collapse

Unconfigured Ad Widget

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

    2010 Tax Lien (Never Filed) Removed from my Credit Report after Chapter 7 Discharge?

    Hi,

    Thank you in advance for all your help!

    Proceeding my Chapter 7 Bankruptcy Discharge on Sept 2017 my Tax Lien/Judgement for 2010 Taxes Never Filed was Removed from my credit report.

    In 2010 I collected unemployment and neglected to file my taxes. I was audited in 2014 for not filing. The debt went from collections to a judgement/warrant on my credit report.

    My bankruptcy documents include my tax judgement of $842.00 on my list of debts discharged. And as mentioned, removed from my credit report immediately after my discharge.

    I wrote the IRS and sent them documents and proof of. Their response was insufficient evidence to reassess the debt of $842.00. They Will continue to threaten to garnish my income and tax refund to offset the debt. They want me to file the taxes and they will take another look? What? How can I actually get a fair assessment of my debt by filing my 2010 income tax. The statue of limitations for tax credit runs out after 3 years of the due date? Also at the time I lived in NY and I currently live in NJ which I don't think makes a difference.

    How confusing! So it no longer can blemish my credit score but it is still a lien on property? And also a monetary lien which makes no sense. And I completely understand that the lien precedes bankruptcy and remains a liability on property. But I don't own a home or other assets.

    Also, to clarify a question from a previous thread, stating Chapter 7 will discharge all the penalties and interest from past income tax debt; filed or not. Are these all the penalties or just a portion of?


    Thanks again for your time and help! Greatly appreciated!




    #2
    I'm brand new to this forum, still learning (haven't filed, yet), but... from basic google searches... I do know that you can't discharge a tax debt if you didn't file a return on it.

    The basic rules, AFAIK, based on every single thing I've read, for a tax debt to be dischargeable:
    - the tax has to have been due at least 3 years before your bankruptcy

    - you have to have filed the return, at least 2 years before your bankruptcy

    - the IRS has to have assessed the tax amount, at least 240 days before your bankruptcy.


    Debt from a year you didn't file, can't be discharged, AFAIK.


    The 3-year statute of limitations is for you to claim a credit; the IRS has 10 years to collect.


    Not sure what bankruptcy document you have that lists specific debts? I'd heard / read that they just say something like "all dischargeable debts" or something like that.

    Comment


      #3
      Originally posted by conniek View Post
      I wrote the IRS and sent them documents and proof of. Their response was insufficient evidence to reassess the debt of $842.00. They Will continue to threaten to garnish my income and tax refund to offset the debt. They want me to file the taxes and they will take another look? What? How can I actually get a fair assessment of my debt by filing my 2010 income tax. The statue of limitations for tax credit runs out after 3 years of the due date? Also at the time I lived in NY and I currently live in NJ which I don't think makes a difference.
      For U.S. Federal debt, collected by the IRS, your tax debt must meet one of 3 conditions in order to be dischargeable in a bankruptcy. First, you must have filed a return in a year in which it was last due without penalty (or an extension), it was last due (without penalty) more than 3 years prior to filing, and it must not be for a tax assessed (adjustment) within 240 days of filing. If you meet those conditions the tax is "dischargeable" in a bankruptcy.

      Originally posted by conniek View Post
      How confusing! So it no longer can blemish my credit score but it is still a lien on property? And also a monetary lien which makes no sense. And I completely understand that the lien precedes bankruptcy and remains a liability on property. But I don't own a home or other assets.
      In your case, the Chapter 7 did not discharge your taxes because you did not file a return. Even if you had filed a return in 2014, for those taxes that were last due without penalty in 2010 (or even 2011), that debt would not be dischargeable because you didn't meet the first condition. Even though those taxes met the other two conditions, more than 3 years old and more than 240 days since "assessed," the taxes didn't meet that first condition. All three conditions are required.

      This means that the $842 will never be dischargeable and were not discharged. The IRS is actually relatively pretty good at doing the right thing and I've found them to be (otherwise) reasonable when it comes to dischargeable debt. The IRS has ten (10) years to collect a tax debt. As you may be aware, they can use various means to collect this debt including a levy or garnishment action.

      I would take the IRS' advice and file the late tax return. You may be able to get them to reassess the amount due, but you won't avoid the penalties and interest on the amount that was due. The IRS likely based their "substitute" filing based on the information they received (W-2s, 1099s, etc) from those that paid you during that tax year.

      I don't know why you were allowed to get a Chapter 7 discharge when you didn't have all of your tax returns, for which one was due prior to filing, completed at the time of filing.

      Originally posted by conniek View Post
      Also, to clarify a question from a previous thread, stating Chapter 7 will discharge all the penalties and interest from past income tax debt; filed or not. Are these all the penalties or just a portion of?
      I refer you to the conditions on which debt is tax debt is discharged, in the first paragraph. Also, an "asset" Chapter 7 will not discharge any debt which was not scheduled, is otherwise non-dischargeable, or is a consensual lien (most liens survive bankruptcy).
      Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13, discharged 5/10)
      Chapter 13 Filed (Pro Se) 5/14 (discharged 8/19)

      Visit My BKForum Blog: justbroke's Blog

      I am not an attorney. Any advice provided is not legal advice.

      Comment

      Unconfigured Ad Widget

      Collapse
      Working...
      X