If I’m considering filing Chapter 7 to eliminate some income tax debt, can my debt be discharged?

Get Legal Help Today

 Secured with SHA-256 Encryption

If I’m considering filing Chapter 7 to eliminate some income tax debt, can my debt be discharged?

I pass the means test and all criteria except for possibly the willful evasion clause. I didn’t file or pay taxes for a small business for 6 years. I was young and dumb and had bad luck in the winters so by the time tax season rolled around I had spent all my savings and couldn’t pay taxes. During this time in my life I was labeled an alcoholic by the state and had other addictions. I didn’t file because I thought it would buy me some time to hopefully get some money together. I finally filed everything in 2009 so I’m current on all filing all returns and in a hardship status for 2000-06

Asked on January 1, 2012 under Bankruptcy Law, California

Answers:

Mark J. Markus / Mark J. Markus, Law Offices of

Answered 9 years ago | Contributor

Failure to file returns is not a willful evasion of paying the tax.  Besides, you DID eventually file the returns, and it has been more than 2 years since you did, so it is possible they could be discharged at this time.  The bigger issue you face is if the IRS or FTB filed a "substitute return" during that period, because if they did, it most likely will not be dischargeable.

Tax dischargeability analysis is very complex and requires a thorough review of the literal tax transcripts from the taxing agencies.  I have expertise in that area. 

 

Mark J. Markus, Attorney at Law

Handling exclusively bankruptcy law cases in California since 1991.

http://www.bklaw.com/

bankruptcy blog: http://bklaw.com/bankruptcy-blog/

Follow Me on Twitter:  @bklawr


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption