Ignorance by financial professionals or some kind of conspiracy?

[NSH]

Okay, I am new here, so excuse the cryptic and paranoid title. But why is it that everyone you talk to, including more than HALF the BK lawyers and accountants believe that Federal Income Taxes are not discharged in bankruptcy? It is a little scary to be honest!

Because I am not a financial professional, and to hear these highly trained and educated lawyers and CPA's tell me, unequivocally, that back income taxes and penalties will have to be repaid (even if I file BK) gives me pause.

I have tried to educate them, but how do I know that I am right, and that all you folks are right, maing all of them wrong? I mean no offense by this, but it is more than a little unnerving to know that my ONLY source of information telling me that you can discharge taxes in bankruptcy comes from the Internet! lol Does that make any sense?

[keepmine]

Only under certain conditions are back taxes discharged.

http://doney.net/bkcode/11usc0507.htm

8) Eighth, allowed unsecured claims of governmental units, only to the extent that such claims are for--

(A) a tax on or measured by income or gross receipts for a taxable year ending on or before the date of the filing of the petition--

(i) for which a return, if required, is last due, including extensions, after three years before the date of the filing of the petition;

(ii) assessed within 240 days before the date of the filing of the petition, exclusive of--

(I) any time during which an offer in compromise with respect to that tax was pending or in effect during that 240-day period, plus 30 days; and

(II) any time during which a stay of proceedings against collections was in effect in a prior case under this title during that 240-day period, plus 90 days.

[NSH]

Thanks for the response, Keepmine, but I am not legally saavy. I don't really understand how this applies to having back taxes (Federal I am talking about) discharged. Not that your post was not clear, but because of my ignorance of the context of your post and the wording on the site the link was posted, I truly don't understand what that all means. Sorry.

[DebtEnder]

8) Eighth, allowed unsecured claims of governmental units, only to the extent that such claims are for--

(A) a tax on or measured by income or gross receipts for a taxable year ending on or before the date of the filing of the petition--

(i) for which a return, if required, is last due, including extensions, after three years before the date of the filing of the petition; This means if the tax was due more then 3 years ago it does not have to be paid

(ii) assessed within 240 days before the date of the filing of the petition, exclusive of-- You filed the return for these back taxes at least 240days before you filed

(I) any time during which an offer in compromise with respect to that tax was pending or in effect during that 240-day period, plus 30 days; and

(II) any time during which a stay of proceedings against collections was in effect in a prior case under this title during that 240-day period, plus 90 days.

Many people are scared stiff of the IRS but if you call and ask them the IRS themselves will tell you the truth.

[biotechsolution]

Thanks for the response, Keepmine, but I am not legally saavy. I don't really understand how this applies to having back taxes (Federal I am talking about) discharged. Not that your post was not clear, but because of my ignorance of the context of your post and the wording on the site the link was posted, I truly don't understand what that all means. Sorry.

the easiest way to know if they would be discharged is what year are you looking to discharge??

when did you file the taxes??

did you get a letter from the IRS adjusting the amount you owe within the last 240-days??

If you post that we can tell if you if they would be discharged.

One more thing. Have you had an offer-in-compromise within the last 270 days?

They can be discharged. I did a substantial amount pro-se.

[JSFleischman]

There are a ton of bankruptcy lawyers out there, and very few touch tax-related issues. In order to be SURE that a tax debt can be discharged you should get an official tax transcript for each year. Only in doing this will you be able to check the dates and be 100% sure.

[NSH]

Thanks for the answers, guys. The tax years I want to get discharged are 2005 (filed in October of 2006) and before. The only thing I have to find out is about exsensions. I am hoping that when I filed in 2006 for 2005 that my accountant did not get a full year extension! If she only got 6 months extention (assuming I am reading the law correctly) then the 3 years of when the taxes were due to be filed would be April 15th plus 6 months, making the three years expire around now? If she got a one year extension, back in April of 2006, would that mean the three years expires in April of 2010?

I know there is a 2 year law for actual filing, but I am certain I remember reading somewhere that extensions are added on to when the taxes were due to be filed. Of course, this doesn't mean I am right.

The other thing I have to make sure is that they did not, as Jay S. Fleischman said, adjust my balance. I know they sent me a bill several months back, but I am pretty sure that was not an adjustment of any kind. I believe it was just a bill and reminder of all I owe them in back taxes, but I have to dig it up just to make sure. It would REALLY SUCK if I get caught up in that snafoo and it turns out that really was an adsjutment, thus starting the clock somewhere in July, in which case I assme I would have to count down 240 days?

Oh and, Jay S. Fleischman, how do I get a Tax Transcript? I assume that would tell me about any adjutments, extensions filed back in 2006, and that I would just call the IRS for it?

Thank you again, folks!!