Bankrupting Taxes

Today TaxMama hears from Lisa from the Tax Parlor who tells us, “I filed Chapter 7 bankruptcy in September 2003. I owed the IRS for 1996, 1997 and 2002 taxes. This was listed in my bankruptcy but the IRS has no record of it. They also say IRS debt is not dismissed. I would like to get this resolved because they are wanting payment.”

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Dear Lisa,

If the 1996 and 1997 IRS tax returns were filed a couple of years before the bankruptcy, they should be dismissed. They are dischargeable. You can read more about the details here:
https://www.taxmama.com/AskTaxMama/308/article2.html

The 2002 return would only have been filed in 2003, so you’d still owe that.
So make arrangements to pay that debt or to get an offer in compromise, if you’re still broke.

As to the other two years, call IRS and ask for their Special Procedures Unit. IRS has been very good about going back and removing assessments that should have been included in bankruptcy – even if they weren’t listed.

However, if the IRS debts were included in the list of creditors – and they were sent a notice by your attorney, the court would have discharged that debt.

And remember, you’ll find answers to lots of questions about tax bankruptcies and other tax information, free. Where? At TaxMama.com

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