Debt And Taxes
Posted on July 4, 2009 at 1:00 am
Is it true that tax debts can never be discharged in bankruptcy?
Posted on July 4, 2009 at 1:15 am
Generally speaking debt taxes are not dischargeable in bankruptcy, together with student loans, and child support.
However, there are conditions in which debts under the rules of those conditions can be discharged--but you may have to file a complaint in the bankruptcy court first to get the judge to order the IRS to honor the discharge.
Posted on July 4, 2009 at 1:22 am
I agree with Order Chiroptera, but if a lien was placed on your property (by the IRS) it would survive bankruptcy. Meaning, you have to first pay off the lien before you can sell that property or else the title would be problematic. It won't be cleared.
Posted on July 4, 2009 at 1:23 am
would the penalties on the taxes be discharged too?
Posted on July 4, 2009 at 1:26 am
I think for taxes that are dischargeable--the penalties are dischargeable too..but for taxes that are not discheargeable..I'm not sure if the penalties for those are dischargeable..I think that it depends on the court or the judge..perhaps a bankruptcy lawyer can better answer this.
Posted on July 9, 2009 at 4:44 pm
Concerning debt and taxes- one thing is true- the taxes must be income taxes in order to qualify for a discharge. The following must also be true:
1) The tax return in question must have been filed at least 2 years prior to the filing of the bankruptcy petition.
2) The IRS must have assessed the tax liability at least 240 days prior to the filing of the bankruptcy petition.
3) The tax debt in question must be older than 3 years from the date of the bankruptcy petition filing.
4) The person in question must not be under investigation by the IRS for tax fraud or cunder investigation for any criminal activity.
Posted on July 10, 2009 at 12:29 am
That's very informative, thank you everyone! What other issues should I watch out for with regards to debt, taxes, and bankruptcy?
Posted on July 10, 2009 at 12:33 am
With regards to taxes and bankruptcy: Under the new bankruptcy law (11 U.S.C 521 (e)(2) ) you are required to submit your most recent IRS tax return within 7 days, before the meeting with the creditors--to the trustee and also the creditors, if they ask for it.
Posted on July 10, 2009 at 12:37 am
What if I'm not comfortable giving out my Social Security to those creditors??? Or my date of birth for that matter, it's personal--it has nothing to do with my debt. Also what if lost my recent tax return copy? What then?
Posted on July 10, 2009 at 12:54 am
Okay if you don't provide your tax return on time your case is going to be dismissed---you don't want your debts haunting you just because of tax return issues.
-If you're not comfortable disclosing your SS number or date of birth, you can redact or black them out.
-If you can't find your latest tax return, you can ask the IRS to at least give you a transcript of the basic information on your return--the court knows that it may take some time for you to receive the full transcript (the IRS will say, 2 weeks but it's longer than that sometimes).
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