Ch 7 Sch E old unfiled tax returns

[Goldfish]

I have a couple of old unfiled federal tax returns (2005-6) for which -- last I calculated-- I owe some non-sizable amounts (Or at least they were without penalty and interest). [I hoped to refigure them to come to nothing due; not sure that I can-- might need a tax person to do it, if it can be done] Not even sure what their status is. Don't recall any IRS communication on them.

I know that because I didn't file the returns, whatever I might owe is non-dischargeable now. (I have some unfiled CA state returns too).

In order not to waste time reviewing these matters at this time,and because I see no point in it for BK purposes, I planned to check the box "debtor has no creditors holding unsecured priority claims to report on this Sch E".

[How is that not true? The IRS does not "hold" anything here.]

A lawyer at the self-help BK desk said I might check instead the taxes box, and list them (by year) saying "liability undetermined".

It would take time to try to determine exactly which years of State were unfiled (but certainly 2005-6).

Why bother to do this now? I filed 2007, 2008, 2009. Why not keep it simple: "nothing to report" on Sch E?

Again, technically, what is it to "hold a claim"? If I don't know that I owe (for sure) isn't it false to say they do hold a claim?

Related matter, lawsuits. The State years ago once levied--garnished my wages for an excessive amount because of unfiled taxes (I never got around to disputing). I have been told in the past that the State will never refund this money. But yesterday was told to put it as a potential lawsuit. If anything, the State owes me money.

gf. thanks,

[Goldfish]

Sorry, should add, I'm a 'no asset' case. If we're not talking about a distribution, then priority of distribution is beside the point.

[tigergem]

My first guess would be that if you didn't hear from the IRS that they might have owed you money. I think if you owed them money and they would be tacking on interest and penalties that they would have probably let you know in no uncertain terms.

I believe one advantage of including them on there is the penalties and interest, if any are accruing, will stop. Also I think there is something about taxes over three years old... might be able to be discharged? I'm not positive about that, mind you, so you should find out for sure.

I would also worry that if you leave them off, but then it could be argued that you treated them preferentially and could jeopardize your case. And some day future down the road, do you really want the hassle of having to reopen your case to include them?

Personally, I would do the legwork and homework to find out the status of that liability and the treatment of it from that far back.