Matthew A: What taxes go away with pre 2006 legal changes to the bankruptcy laws?
My father had back taxes and files for bankruptcy in early 2006 now the federal government is comming after the back taxes. Does the bankruptcy take care of those taxes or is he still liable for them? (Lives in Kansas if this matters)
Answers and Views:
Answer by wartz
Income taxes on returns that the taxpayer filed that became due and owing over three years ago–for the most part 2003 and before–would be discharged except to the extent the attached to exempt or abandoned property. Withheld taxes are not discharged. What exactly did your father owe that he is now getting bills for?
In general, back taxes over 3 years old may be included in a bankruptcy discharge but there are a number of special qualifications to that. The 3 year clock starts ticking once the returns are filed by the taxpayer (as opposed to a levy without a return being filed by the taxpayer) and public trust fund taxes (payroll withholdings withheld from employees wages) are never included. Of course, the tax debt itself must be listed on the bankruptcy along with the other discharged debts.
Leave a Reply