Marshal's Notice of Execution

[NSH]

I'd be filing BK ASAP. Taxes filed or not, and let the process of BK take care of it all.

All the lawyers I spoke to so far said they wll not even begin the paperwork of filng or set up any court appointments until I am current. But then I actually had an income, as pitiful as it was the last three years.

[outsidetool]

I get it now, you want to file your taxes so you can have them discharged. My understanding is that you'll be waiting to file then for a couple of years, at least. I believe that taxes are not dischargable until 2 years after they're filed. I guess if you can keep everyone at bay that long, then super. Still, myself, I'd just file and stop all the BS. Then contact the IRS about an Offer in Compromise after filing. I've actually been down that road, when I filed a Ch 13 back in 1999 mainly due to tax issues. A few of my tax years were dischargable, but of course the years I owed big for were not (some had not been filed).

[backtoschool]

JGT, who says you can't have your taxes discharged? I used to think so too, but that is an urban legend and you absolutely can have them wiped away as long as they meet a certain set of conditio9ns for income taxes. There are plenty of threads in this forum talking about that. ;-)

Yeah and what you say about breaking in versus seizing parked cars makes perfect sense, dude. Thanks!

Here are the conditions you need to meet to discharge your income taxes in bankruptcy:

Each of the following requirements must be met in order for a Chapter 7 bankruptcy to discharge tax debts:

No fraud or willful evasion of taxes. You cannot obtain a discharge if you file a fraudulent tax return or otherwise willfully attempt to evade paying taxes. The IRS typically applies this rule only in cases where a fraud penalty has been assessed.


Only income taxes. Only income taxes may be discharged in bankruptcy. Other taxes, such as excise taxes or estate and gift taxes are not dischargeable. Trust fund penalties and fraud penalties are never dischargeable.

The taxpayer must be an individual. Corporations and other entities liable for income taxes cannot discharge income tax debts in a Chapter 7 bankruptcy.

The three-year rule. The due date for the return, including the due date after filed extensions, must be more than three years prior to the bankruptcy petition. Do not forget that due dates falling on Saturday or Sundays are actually extended to the following Monday.

The two-year rule. You must have filed the tax return more than two years prior to the bankruptcy petition. Returns filed by the IRS on your behalf do not qualify. There is one “gotcha” relating to the two-year-rule. The IRS has three years to audit and correct a return after the return has been filed. Thus, it is possible to discharge taxes on a return only to have the IRS assess additional taxes on account of corrections the IRS makes to the return.

The 240-day rule. The assessment date for the taxes must be greater than 240 days prior to the date the bankruptcy petition is filed.

So quite a bit of your tax liability will not be dischargeable in your bankruptcy and filing now will negate the potential to discharge some of your taxes.

[AngelinaCat]

NHS, I can tell you right now that you will not be able to discharge any Federal Income taxes, unless you filed 4 years AFTER the latest date of the tax filing you wish to discharge.

In other words: if you filed your taxes 4/15/2004, and you file BK 12/28/2007, you should be okay, right?

You *might* be. But in our case, our filing was delayed until 11/2004. *Tsk* At that point, the November filing fell within the 'lookback' period for the IRS.

So, there we were/are, and you may be.

In our case we were not trying to bypass the IRS, we were just trying to get a 'new start' and get out from under some onerous debts that medical bills and lawsuits had put us.

Good luck.

[NSH]

Angelina, I am not sure I follow. The taxes I wish to get discharged are from 2005 and earlier. The 2005 year I filed in 2006. I filed a few months late, if I remember right it was Oct of 2006. That means I should be within the three year rule for the tax year filed as well as the two year rule meaning I filed them at least two years ago.

Am I missing something?

[backtoschool]

Angelina, I am not sure I follow. The taxes I wish to get discharged are from 2005 and earlier. The 2005 year I filed in 2006. I filed a few months late, if I remember right it was Oct of 2006. That means I should be within the three year rule for the tax year filed as well as the two year rule meaning I filed them at least two years ago.

Am I missing something?

The two year rule means that you need to file your taxes and then can discharge them in bankruptcy two years after filing, provided that you meet the three year rule and all other rules.

So if you already filed your returns for 2005 and earlier, you can discharge those taxes.

Since you have not filed your return for 2006 you will not be able to discharge those taxes.

2007 and 2008 would not have qualified for discharge yet even if you had filed your returns.

[NSH]

Tax years 06, 07, and 08 I am not even remotely worried about because I didn't make enough money AND my business was open and losing money, meaning I would probably end up with close to zero liability. 05 is my nightmare year and the years before that because I made money those years.

I tried to make sense of AngelinaCat's post, but I cannot, which is why I asked her the question. She said something about four years?

[JGT]

Wow that is great about the taxes, I didn`t know that. You guys ain`t going to believe this but the past 2 days I`ve been talking to a company that I think is going to hire me for a job, in fact I`m pretty 99% sure they are. Now I am really freaking out because I`m stuck bewteen a rock and a hard place here because I know the second I take this job just about every creditor/collection agency on earth is going to come down on me like a pack of wolves to garnish my paycheck and I know there`s no way I can declare BK in that time befoe I get this job (I may start this job in a few days) It`s not a high paying job, very entry level $15 an hour but will this now kill all chances I have at filing BK? I have to take this job as I`m so broke I`ve been eating frozen vegetables the past few weeks but on the other hand I don`t want to be taking home 2 buck paychecks after the wolves are through with it. I owe everybody, I mean just name it. Even the IRS I owe about $6000. I know if I hire a lawyer he can stop them temporarily but does having a job now just about kill my chances that a Judge will grant me BK? There is no way I can ever repay back what I owe even if they took every cent from my paycheck it would take infinity plus a million years.

[backtoschool]

Wow that is great about the taxes, I didn`t know that. You guys ain`t going to believe this but the past 2 days I`ve been talking to a company that I think is going to hire me for a job, in fact I`m pretty 99% sure they are. Now I am really freaking out because I`m stuck bewteen a rock and a hard place here because I know the second I take this job just about every creditor/collection agency on earth is going to come down on me like a pack of wolves to garnish my paycheck and I know there`s no way I can declare BK in that time befoe I get this job (I may start this job in a few days) It`s not a high paying job, very entry level $15 an hour but will this now kill all chances I have at filing BK? I have to take this job as I`m so broke I`ve been eating frozen vegetables the past few weeks but on the other hand I don`t want to be taking home 2 buck paychecks after the wolves are through with it. I owe everybody, I mean just name it. Even the IRS I owe about $6000. I know if I hire a lawyer he can stop them temporarily but does having a job now just about kill my chances that a Judge will grant me BK? There is no way I can ever repay back what I owe even if they took every cent from my paycheck it would take infinity plus a million years.

The maximum that they can take in total from your paycheck for standard unsecured debt in new york is 10%. So that means that all your creditors have to line up and a maximum of 10% of your paycheck at any time can be used to pay creditors.

[NSH]

I didn't know that, backtoschool. I always thought that the IRS and other creditors could take up to 1/3. What am I thinking of, maybe child support?

[backtoschool]

I didn't know that, backtoschool. I always thought that the IRS and other creditors could take up to 1/3. What am I thinking of, maybe child support?

Child support is a different sort of wage garnishment than credit card judgements. The combined total for child support garnishments and debt that is owed to a governmental entity (ie taxes) is 25% in new york.

[NSH]

Ah ok. Can they garnish your wages for back taxes higher than 10%? Maybe that is what I was thinking of.

[backtoschool]

Ah ok. Can they garnish your wages for back taxes higher than 10%? Maybe that is what I was thinking of.

Yes. Taxes would fall under the "debt owed to a government entity" category and would be at a maximum of 25%

[JGT]

Whoa thanks that is some relief 10%...The IRS I might have a problem with. I know I can still declare BK but does having a job make it harder for a Judge to approve it? If I get this job (driving a truck) I`m probaby going to be making around $25k - $28K a year (before taxes). I just don`t want to be stuck in a situation where I`ll be having my paychecks garnished for the next 1000 years.

[AngelinaCat]

Angelina, I am not sure I follow. The taxes I wish to get discharged are from 2005 and earlier. The 2005 year I filed in 2006. I filed a few months late, if I remember right it was Oct of 2006. That means I should be within the three year rule for the tax year filed as well as the two year rule meaning I filed them at least two years ago.

Am I missing something?

I am sorry that I was not clear--I was posting after Midnight, after all. LOL.

We filed BK7 12/28/2007. We had hoped to be able to discharge some of our back IRS taxes. There is a 4-year rule out there that knocked out the 2005 taxes (filed 2006), and anything younger than that.

We thought that perhaps we could discharge the 2004 taxes (filed 2005). It would have worked if we had filed our return on April 15, 2005. Instead, our CPA filed an Extension which required our tax return to be filed by November 15, 2005, which it was. So that knocked the 2004 taxes out because of the filing dates.

I understand that this is clear as 'mud'. I don't understand it either. But this is what we got from our *@##!*&% attorney.

The people at the IRS WILL work with you about payments, otherwise 'Hub was about to have his SS check garnished.

At least the beauty of our case is that as an asset case, most of the assets 'recovered' went to pay the IRS.