Bankruptcy and Back Taxes

[freshstart48]

What is the name of your state? GA

I'm filing my own bankruptcy this week and have several questions as it relates to taxes. I had not filed any returns since 1991 and have just had ALL of them prepared so that I can submit the last 2 years of returns with the bankruptcy filing as required. I plan to file all the returns the same day I file the bankruptcy.

The person who prepared all of my returns has calculated that I have refunds coming BEFORE any penalities and interest are assessed/deducted, primarily because I didn't have full-time employment from mid-1992 through 1996, nor from October 2002 until the first week of August, 2005.

The first question is whether I need to include the refunds on Schedule B-Personal Property?

If so, do I list the refunds under #17-Other liquidated debts owing debtor including tax refunds or under #20-Other contingent and unliquidated claims of every nature, including tax refunds, etc.?

Wouldn't the refunds be considered an unliquidated debt since I'm pretty certain that the penalities and interest will probably reduce the refunds substantially?

The next question has to do with my recent discovery of a Notice of Federal Tax Lien that was filed July 2001 for 1040 taxes for 1991, assessed on 10/24/94 for $3775.75, and for 1040 taxes for 1994, assessed on 6/29/98 for $1980.85. I never received this notice since it was sent to an address that I lived at in the early '90s. I only found out about it when I requested my credit reports last month. I picked up a copy of the Notice of Federal Tax Lien two days ago and wonder whether this information needs to be listed on Schedule E-Creditors Holding Unsecured Priority Claims, #7-Taxes and Certain Other Debts Owed to Governmental Units?

I also wonder what the "Important Release Information" paragraph means on the Notice:

"For each assessment listed, unless notice of the lien is refiled by the date given in column (e), this notice shall, on the day following such date, operate as a certificate of release as defined in IRC 6325(a)."

The dates in column (e) are: 11/23/04 for the 1994 assessment and 7/29/08 for the 1998 assessment.

Does that paragraph mean that the 1994 assessment is no longer valid (due or collectible) since there appears to have been no refiling? If so, do I need to list that assessment on Schedule E?

Also, will either of these 2 assessments be discharged in the bankruptcy since they are so old?

I truly appreciate whatever information is given since I am basically insolvent and cannot afford the services of an attorney. The temporary job I just started isn't paying much, but at least it's income after 3 years of not working.

Looking forward to clarifying responses not judgments, please.

P.S. This was cross-posted in the Bankruptcy forum as well.

 

[rezguy]

You have a lot going on here.. although you say you can't afford attorney..it's more like you can't afford not to get one..I referring mainly to the BK as far as you taxes go .. seeking the help of an Enrolled Agent to help with the back tax issues is the best advice.. maybe you can find one near you who will work with installment payments www.naea.org..
A couple of points
Not all back taxes are dischargeable. must meet certain criteria , check this link: http://www.taxhelpers.com/tax-collections-1.html.. remember taxes determined and assessed are not filed until you file them... some are better left dead. no benefit to filing if you don't owe...refunds due beyond 3 yrs are gone/lost...filing starts the clock and brings to life some old ones. Hopefully someone wil come along with more suggestions..Good Luck

 

[freshstart48]

Thanks rezguy.

Yes, I know I have a lot going on and I believe it was you that gave me the link http://www.taxhelpers.com/tax-collections-1.html about a month ago. I met ALL the criteria EXCEPT the fact that I hadn't filed any of the returns.

The person that did my taxes suggested that since I had to supply the last 2 years for the BK that I go ahead and file all of the years at the same time as the past 2. I know that refunds beyond 3 years are lost to me, but I think whatever taxes are due could be offset by the lost refunds that would have been due.

My real concern is what about the Notice of Federal Lien and that "Important Release Information". Any thoughts?

Oh, I checked www.naea.org and there are no Enrolled Agents in my area; and while I agree having an attorney would be best, I simply don't have the funds nor can I make installment payments on the income I'm making at the present.

Thanks again for your response.

 

[Snipes5]

Your local H&R Block office will have an EA on staff. Not all EA's are members of the NAEA. I for one, am not; just haven't gotten around to joining.

As for your prior unfiled returns, the previous poster is incorrect. Old FILED returns (past three years) are dead, but old UNFILED returns never die. There is no statute of limitations on unfiled tax returns.

The advice you were given by your preparer was correct. Once the IRS has processed all the returns, that might be a good time to submit an Offer in Compromise.

As for the BK issues, and how they interact with the tax issues, you will want to get that sort of info from someone who specializes in BK.

Also, since those refunds are considered "lost" to you, they would not be considered an asset, and in fact, the IRS may not allow you to use "lost" refunds to offset tax due.

Snipes

 

[freshstart48]

Thank you Snipes5 for the clarification. Still waiting for some type of response from the BK forum.