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Where do I list taxes that are more than 3 years old in my chapter 7 bankruptcy?
Anonymous4 views4 answers
I have taxes that are owed for 2007 and 2008. It's my understanding that these taxes can be discharged because of their age. Schedule E has a spot for the claim amount and the priority amount. Do I put the entire amount I owe as the claim amount and indicate the priority amount as $0 here, because the taxes can be discharged by being more than 3 years old. Or, does it become unsecured because it's more than 3 years old and I should be listing this on Schedule F?
First, you must list ALL your debt on the schedules. Often people assume they can leave out debt they do not want to discharge. That is incorrect.
Second, taxes in bankruptcy can be complicated. There are actually three important dates:
1. The taxes must have come due more than 3 years ago. Usually April 15th (but not always) of the year following the tax year. For example - your 2008 taxes were due April 2009 (without an extension). So, three years would be April 2012.
2. The taxes must have been filed at least 2 years ago.
3. Taxes must have been assessed more than 240 days ago.
All three of these requirements must be met before a tax can be discharged in chapter 7.
Finally, make sure the debt is listed - the location of the debt is not as important as the fact that it is listed. For example, if you list it on schedule F - and it is priority that should be listed on schedule E - it is still a priority debt. And the reverse is true. If you list it as Priority on Schedule E and it is not a priority debt - where you list it will not be the determining factor on the nature of the debt.
If you have taxes you are trying to discharge. I STRONGLY encourage you to get an experienced attorney to help you. IT IS THAT IMPORTANT.
I hope this helps.
Respectfully,
Steven A. Leahy
www.chicagotaxteam.com
Your 2008 tax return would have been due on April 15, 2009 unless you asked for an extension, in which case it would be October 15, 2009. That tax year is not dischargeable in a case filed today and would therefore be listed on Sch E. Since you misunderstood the 3-year rule, it's likely that you also misunderstand the 2-year rule and the 240-day rule, as well as the exceptions to those rules. If you were to spend less than the amount of the 2008 debt you're trying to discharge on expert legal advice, you'd be ahead of the game, n'est-ce pas?
Schedule E has two entries: priority and non-priority part, I would never put taxes on Schedule F. Heed other counsel's warning, the rule isn't just 3 years old, it's much more specific than that. You can obtain accounting from IRS to provide you with the information: assessment dates, tax due, interest & penalties broken out. Get it in writing, talking to IRS over the phone and getting wrong dates won't be a saving grace later.
