Bankruptcy Tax Archives (2024)

There is a large segment of our population that owe back taxes to the IRS. Whether you know of their situation, chances are good that you know someone who owes back taxes. Chances are good that you have unwittingly transacted business with an individual or business that owes back taxes. You may have even worked…

When times are good, we don’t need to worry about the tax loss rules, the net operating loss (“NOL”) rules, or even the bankruptcy tax rules. But these rules are front and center in most tax planning and advice during and after an economic downturn. We saw this with the 2001 dot com bust, the…

The IRS only has to mail a notice of deficiency to a taxpayer’s last known address in order to assess or record a tax liability for the taxpayer. This “last known address” rule is often the subject of disputes. The Sadek v. Commissioner, T.C. Memo. 2018-174, case provides an example where information available to the…

The In re Porter, No. 16-11831-BFK (E.D. Va. 2017) case serves as a timely reminder that taxpayers who have unpaid tax debts and who are expecting sizable tax refunds may benefit from timing the filing of their bankruptcy cases. Facts & Procedural History The taxpayer filed her 2014 tax return on April 4, 2016. The…

The U.S. Bankruptcy Court recently considered whether amounts withheld from wages in excess of the amount of the income tax liability owed is a refund of tax or a refund of wages. The case is In re Crutch, No. 15-44523-cec. (E.D.N.Y. 2017). The case is a reminder to those taxpayers who are considering bankruptcy that…

The bankruptcy-tax rules can present a number of opportunities. In Martin v. United States, Case No. 3:13-CV-03130 (C.D. Ill 2017), the court concludes that the taxpayers retained the right to sue the IRS for substantial tax refunds for taxes that were overpaid prior to their bankruptcy, despite having discharged their debts in bankruptcy. Bankruptcy &…

Bankruptcy can be a great way to get rid of older tax debts. The bankruptcy process is supposed to provide a fresh start. The In re Christensen, 15-29773, 15-29783 (2016 Bankr. D. Utah), case is an example where the IRS attempted to use the bankruptcy process not to provide a fresh start, but to collect…

When a private party violates the law, there are often consequences. This is especially true for the automatic stay that protects individuals in bankruptcy from collections actions during the bankruptcy proceeding. In Hunsaker v. United States, Case No. 6:16-cv-00386-MC, the Ninth Circuit Court of Appeals concluded that the IRS’s repeated violations of these laws does…

How do you prove that you mailed a tax return to the IRS? This may sound like a simple question to answer. It isn’t. The have been and continue to be disputes involving this very issue. The recentIn Re McGrew, No. 13-00149 (Bank. N.D. IA 2016) provides an example. Facts & Procedural History McGrew filed…

Bankruptcy can be one of the best methods for resolving tax debts. This is particularly true if the taxpayer’s primary assets only consist of retirement accounts and equity in a personal residence. The recent In re Moore, No. 15-42046 (Bankr. E.D. Tex. Jul. 7, 2016), case presents an opportunity to consider the results if the…