Are IRS taxes dischargeable in bankruptcy?

Darrin, your video does a nice job explaining the basics of the discharge of taxes in bankruptcy. Two points I would like to add. First, if there has been a tax lien filed, you can discharge the underlying tax liability, but the lien survives the bankruptcy. The IRS may or may not be willing to compromise the lien. I recently filed a bankruptcy and beat the lien filing by 2 days and my clients avoided a $100,000 tax burden. Secondly, you can also discharge taxes in a Chapter 13, although as you say, Chapter 7 is a more complete remedy. Under the BAPCPA laws, however, it is difficult to qualify for Chapter 7 so more cases are being filed as Chapter 13.
Jonathan Ginsberg
Atlanta, GA

When is the best time to file the chapter 7? The IRS has just made there verbal charge and said it would be three months before we get it in writing. If timing is critical can you advise me?

Dave

Stage: We have just completed the audit and the amount of taxes has been verbally assed the assessment is more than we can afford to pay.
How can the timing destroy the discharge possibilities?
If having three months before the assessment comes in writing when should we file?
Can you explain "tax dischargeability analysis".

Question:
There is a tax lien on a property that I don't own now. I am in bankruptcy proceeding due to unpaid taxes. Now, Since I don't own any property now, Would the tax lien on a property I don't own be removed after the discharge?.

Hello Mr. Mish,

The comment left by Mr. Ginsburg on 7/8/2007 indicates that "you can discharge the underlying tax liability, but the lien survives the bankruptcy” How does the SOL work with this scenario? My tax liability was discharged in 2005, however the lien remains. The lien was filed in 1999, however the latest tax year was 1994 and I have not received a notice of the lien being refiled by the latest deadline of 5/1/2006. Is it possible to get the lien released officially and removed from the credit reports?

Thanks

J. Fournier

Question: Client has a notice of federal tax lien filed in 2002; in 2002 client doesn't own any real property; in 2004 client marries wife and together they buy a house; client files bankruptcy in 2005 and gets a discharge in 2006; client and wife file for divorce in 2007. Is the tax lien a lien on the marital home?
The home was acquired after the lien but before the bankruptcy.
Many thanks,
Amy Grass-Gilmore, Esq.

Filed chapter7 and have not recieved the decision yet, 8 weeks today.
I do have 4 federal tax liens, 90% of owed money was taxes.
It will be impossible to aquire financung for a home or even a mbile home.If I was able , thru friemds to get a loan
Will those understanding folks at the IRS obtain my new property from me. I owned nothing when I filed, that was only because I becme disabled. So with this way of thinking
I will forever live in an apartment,which slowly move to become a ghetto or a barrio, What happened to the frefh start that was an IRS slogan. Thaks for the hard work you do for people like me that just don't understand IRS BR

I have a question. I filed a chapter 13 in april of 2007. I had to file three years worth of taxes for the year 2004-2006.. I filed them. I had older years that were filed that were also included in my chapter 13. MY chapter 13 plan did not get confirmed untill august because the irs had to make their claim and come upon an agreement on their secured amount and unsecured amounts for the other years. They finally filed their amended claim and came up with the amounts for the three years i filed and the other old years. So every thing was set in stone then . Then just three days ago after the plan got confirmed they wanta audit my years last three years of taxes after the fact they already had agreed upon an amount. Can they do this or do i need to call my attorney. Please help

i am flat broke. been under doctors care and have very little for assests. im also currently unemployed. i would like to file bankruptcy on my 100000 debt.

We filed chapter 13 bankruptcy 1.5 years ago, In our plan is the back taxes we have been paying on…along with other
bills we had to file on. Our bankruptcy is to be paid back at 100%. My question is, since the new bankruptcy laws the courts are now saying the interest and penalties are still a curring and that once our chapter 13 is done with we will still owe the irs for all this and the amount might be the
same as what we originally started out with, and then at this time the irs could garnish our wages, and we will never be
granted a discharge. Is this true? and if so, I thought the interest and penalties stopped once you filed bankruptcy?

Thank you for your help in this matter.

What do you know about back property taxes owed on a home that was foreclosed by the bank and if they are dischargeable in a Chapter 7?
I have read that recent property taxes are not dischargeable.
I also read the bankruptcy rule that says a property tax assessed before the commencement of the case and last payable without penalty after one year before the
date of the filing of the petition are priority. So does this mean that if you file bankruptcy on April 1st, 2008 and your property taxes were last payable without penalty anytime from April 2nd of 2007-present are priority and thus nondischargeable? And that if you file bankruptcy on April 1st 2008 and your property taxes were last payable without penalty on April 1st 2007 or anytime before that they are not priority and thus are dischargeable or put another way the taxes became payable but only with a penalty on or before April 1st 2007? Am I reading this correctly? There must have been an easier way to write that.

I have about $200k in total debt over 50% of it is non-consumer, so the atty. I spoke with says I qualify for a business chapter 7. Since I owe over $85k to the IRS alone, I want to file Chapter 13, but only have about $1100 in disposable income at the end of the month. I suggested getting another job or taking on a roommate to get the extra disposable income needed to fund the Chapter 13, because I want to be done with the IRS in 5 years. The atty. said he couldn't get the 13 confirmed and wants to file the chapter 7, then try a non-dischargeable chapter 13 to be used as an OIC so that I would offer my disposable income to fund the chapter 13. I've never heard of this before. Why can't I just file the 13 now and just convert if it comes to that later.

I'm on the eve of the IRS filing a tax lien, and want to stay ahead of one, so I might be forced to file bankruptcy soon, but I'm confused about which chapter to file. I was VERY fortunate to borrow the money to pay the atty, but if I wait any longer, I will have to call the IRS to attempt to set up an Installment Agreement.

Any thoughts??? NEED HELP ASAP!!! Thanks.

Filed for Bankrupcy in 4/2005

Had several tax years from 1993 up 2001 which were elegible for discharge (according to the five major rules). Had tax liens filed in 1996 and 1997, they have since self released 10 years later. IRS agent told me none of the years is dischargeable because of the liens, which doesn't seem to be true according to the rules. No real assets at the time of bankrupcy. My IRS account is still in Bankrupcy status. How do I get them to follow the rules and discharge my taxes?

I am in Chap. 13 due to back taxes. Are the payments made to the IRS on these taxes deductible on my tax return? If not, how are they treated?

My husband & I filed Chapter 13 bankruptcy in late February due to back taxes. My mother died in March and left me 1/4 interest in her house. The IRS filed a tax lein years ago and refiled for 1997 on April 6.

If my sisters and I want to sell my mother's house, do I have to pay off the lien first?

Currently I owe the IRS 62k and have recently filed for 2007. I will owe another 30k for 2007. My property is worth less than what I owed so I haven't paid property taxes for about 8k. The property is about to foreclose. What should I do? I am moving out of the property, do I still owe the taxes. Will a chapter 7 or 13 help with the IRS.

A few questions:
1) If I filed my 05 taxes in 07 and received a bill, went to local office and received a statement of my account, does this mean they have been assessed?

2) Does the IRS automatically assess your taxes or is this something special that you must request them to do?

3)If you have filed a previous bancrupcty there is something called "tolling." If I filed a bancrupcy in 2000, does this mean that I have to increase the 2 year rule to three years and the 3 year rule to four years or am I not properly interpreting the rule?

4)Are the rules for discharging state (Ohio) and local city income taxes in bancruptcy the same as for getting IRS taxes discharged or are they different?

Hello,
I wanted to ask you a question concerning the IRS if you wouldn't mind. I filed for bankruptcy on 1/03/2002 and my case was discharged in 4/17/02. I included (in my bankruptcy filing) the back IRS taxes that I owed, specifically for tax years, 1999, 2000, and 2001. I believe this amounted to about $4000 dolloars. In January of 2007, I received a letter in the mail from the IRS concerning back taxes I owed from the 1999, 2000 and 2001 tax periods. They stated that with penalites and interest, I now owed $15,000. I recently found my bankruptcy documents and to my suprise, they were included on my bankruptcy forms, My question is, am I now liable to pay ?

I filed for chapter 13 reorganazation in 5/2004. I will be discharged in 11/2009. This filing was not for back taxes. Just credit cards and other debts. I was recently audited by the IRS for all personal and business deductions for 2005 and 2006. Although I keep decent records I expect I will have to pay a large sum when the audit is done. I will also owe them for 2007 taxes just filed. My question is can this. I realize they can not collect on any determined back tax amount until I am discharged in 2009. However I have been getting misinformation about them accuring penalites and interest over the next year while I am still in bankruptcy. Can they access me, and if so for how much? Also can my Chapter 13 be ammended to add back taxes?
I also was charged interest of $2300 on 2007 back property taxes. Is that legal?

I am in real estate and developement and over the past year have lost almost $250k. I previously had the money to pay 2006&07 taxes but have lost all of that and $50k in retirement just to keep our house and business. I am on a payment plan for 06 & just finished filing 07. The combined I owe on the 2 years is 65k without 08(which I will owe all the penalties from my retirement). I am not sure how I am going to pay these off considering how much I have lost and without any forseable income.
Question: If I negotiate a payment plan for all due taxes, will I give up my right to someday file bankrupcy? Or would I be better trying for an O&C?
Thanks

Question: I know you can put your owed taxes on a credit card. But, at a later date, if you were to go bankrupt, can you discharge all of your credit card debt, including the taxes that were charged? I know my brother did this quite some time ago, but I didn't know if the laws changed or not.

guess mine is pretty bad compared to everyone else, owed taxes from 1989- lets say 1994, didn't file got an installment agreement paid for i think 6 years stopped paying after 6 years i owed twice as much, after 6 years of paying ,did not file, 2000-2007 tax returns, now irs came to my door yesterday, 11/19/2008,and wants 2003-2007? don't get what happened to 2000-2002, anyway by 12/18/2008, to be in complience, so am i getting this right, 3 years from, 12/18/2008, which will be 12/18/11 i will be able to file bankrupcy on my taxes, also have a tax lien from the taxes i owed, do not own property but, lien filed with the county, will this all go away..even if i am sure i will have to sign another installment agreement.

I have a question about the three-year period to determine if taxes are dischargeable; does the time period run from the end of the tax year (i.e.: Dec 31/Jan 1), OR from the April 15th date when the taxes are actually due? I have gotten conflicting answers from attorneys, as well as from the IRS. Thanks.

I am considering filing a chapter 7 bankruptcy for taxes owed for 2002, 2003, and 2004. The taxes meet the requirements for discharge. I have a Federal Tax Lien recorded against me. Assuming that the tax liabilities are discharged through the bankruptcy what will happen to the lien? I own a property that has no equity that I want to reaffirm and keep. I would eventually like to sell the home in 5-10 years when value increases.

Thank You!

I am awaiting confirmation of a chapter 13 plan just recently filed. I owe no back taxes but will owe $22,000 for 2009. I know i can get an installment agreement as the Ch. 13 plan does not include back taxes (there are none) but can I do anything about 2009 taxes due?

i haven't filed taxed from 02-07(was collecting my grandfathers pension) and i owe state(ca) 9000. i also have other small debt that could be included in bankruptcy but i am mainly concerned with the tax debt with is making me have for state liens on my credit. ***can i file bankruptcy and have this included?, when is the right time or am i way past that?, do i have to file those return first and then file for bankruptcy?*** so confused, i have no idea where to begin. thanks in advance for your advice.

I filed chapter 7 in May of 2009, added into BK tax liability, from 2004, assessed in May of 2007, IRS says its not discharged, I say it is, am I right?. they say the three year rule is for the tax year as well as the assessment year. I have never seen this, Need to resolve! This was filed in Calif

With my research I knew they could be wrong, however, with the people I have talked to at the IRS, they ALL have different opinions, and wrong ones. thank you

if i have a tax liability and am considering bankruptcy, should i go ahead and set up a payment plan with the IRS to get them off my back temporarily? and if i do this, can i include the tax liability if i choose to file?

I did not file a return for 2006. The IRS filed a substitute return for the 2006 tax year. Does the 2yr filed rule start with the substitute filing date of nov 2008 or does it start when I file my actual return which is this month.

My husband died in 1998. He had taken his pension earlier due to losing his job. I filed in 1998 and 1999 and 2000. He owed the IRS . 12,000

They took some money from my social security payments. I did not work due to small children which 1 is disabled. I was not required to file. Through the years, I have paid the IRS some money. i filed bankruptcy in 2002. My lawyer said I could not include the IRS.
At this time I owe them 35,000 I just got a job a year ago and worked part time. The IRS now wants to garnish my pay. What can I do.?
Can I file for bankruptcy?

I paid over $25,00 in penalties for tax years 2005-2008. I was a defendent in a civil suit and the plaintiff (a state agency) improperly slowed down and then stopped payments to my company for work we had performed. This created a huge cash flow problem, and ultimately a bankruptcy. I did ultimately pay all taxes, penalties, and interest on payment plans. Will IRS consider this reasonable cause to refund the penalties?

Darrin,
I like the video and comments previously posted. I would like for you to do a \"timing analysis\" for my tax audit. I am filing for a Chapter 7 bankruptcy, and my Attorney is one of those that say: \"Let\'s include it and see what they will say\" So, after reading some of the comments and getting out my running shoes, what should I do next?
here is my scenario: (California) I recently had a tax audit from 2008 and it was determined I owe $14,000, also the State wants 3,200 back. Can I include both (Federal and State taxes) in my Chapter 7 bankrupcy this year?

My current attorney said my taxes have to be assessed for 3 years, and she said it counts from the day I was \"IRS Audited\"
I said: \"That\'s funny, then why does it appear like the IRS \"assessed\" my taxes back to 2008 and charged me interest and penalties until NOW!

Am I right to conclude that my taxes were \"assessed in 2008 and can be included in my bankrupcy? Do I have to meet all 3 rules as you explained, or just the three year rule?

I would like your official analysis services, but want to know if it\'s worth fighting for, if I only met the three year rule, but 240 days have not passed since the IRS Audit.

Thank-you for your help

My mother and late husband filed bankruptcy a year ago. She is now getting notices from IRS for taxes on income not claimed. (my father failed to claim income reported on 1099s). These notices are for periods before filing for bankruptcy (chapter 12). Can these taxes and penalties be included in her bankruptcy or will she be fully liable for these back taxes?

I just received the cp2000 for 2010. I filed jointy with my then husband, we are since divorced and no longer speak. I am in the midst of filing bankruptcy due to debt in general, have not moved forward with it as of yet since recieving this paperwork from the irs. I would like to include the back taxes in my bankruptcy if at all possible, as there is no way I can afford this, even 1/2 of it. When is the earliest I can file bankruptcy and have these taxes included? What would need to be done since it was a joint return? Can I even include it since it was a joint return? I have no way of contacting my ex husband. I've seen the 3 rules reference to timing but don't really understand them.