| Start with the idea that all your debts will be discharged. Then read section 523(a)(1) of the Bankruptcy Code, which is an exception for discharge pertaining to back taxes. If the tax is a priority debt, or if you never filed a return, or if you filed the return late and within the last two years, or if you willfully tried to evade the tax, it can't be discharged. Priority taxes include income taxes for which a return was last due less than three years before the petition or which were assessed within the last 240 days. The 240 days is tolled (i.e., extended) for the time an offer in compromise was outstanding plus 30 days.
The thing that trips most people up is the "return was not filed" clause in 523(a)(1)(B)(i). When the IRS assesses a tax and creates a so-called "substitute for return", the majority rule is that the taxpayer cannot thereafter file a return that would count for dischargeability purposes. Your own attorney can tell you what the rule is in your judicial district.
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Walter Oney, Attorney at Law (Massachusetts)
Nothing in this message should be construed as legal advice or as establishing an attorney-client relationship.
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01-13-2005, 08:52 PM
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