Archive for the 'Taxes' Category

Open season for shooting down old tax debts

With April 15th of 2014 in the rear view mirror, it is now open season on discharging 2010 income tax debts (both state and federal) in bankruptcy court. Income taxes may not be usually dischargeable in bankruptcy, but the rules change once the debts get old. Debtors who filed a return on time, but who […]

Big tax bills for short sellers? Bankruptcy could come to the rescue

It’s the middle of January 2014, and there still has been no movement by Congress in Washington to re-enact the Mortgage Forgiveness Debt Act, which expired at the end of 2013. That’s bad news for people looking to get out of real estate by a short sale (and for people being forced out of it […]

Would the IRS be happy if you filed for bankruptcy in December?

As the tail end of the year rolls around, perennial questions spook bankruptcy lawyers about the advisability of filing a year-end bankruptcy case for a client who owes taxes to the IRS or Mass. DOR, or both. Northern California consumer bankruptcy maven Cathy Moran has posted some the essentials on her site, which gives inquiring […]

Window of opporunity opens for bankruptcy debtors with tax debts

With April 15, 2013 in the rear view mirror, a new window of opportunity has opened up for people who owe back taxes for the year 2009. That’s because the required three year period from the 2009 due date (April 15, 2010) has now expired. Starting now, 2009 income taxes (both Massachusetts and federal) are […]

Dionne Warwick filing highlights effectiveness of bankruptcy against taxes

Dionne Warwick has filed for bankruptcy. The 72 year old pop diva’s case was filed pretty far from San Jose — in the bankruptcy court in northern New Jersey. Big numbers always make big headlines in the financial pages, and Warwick’s has a whopper — $10 million dollars due for back taxes. Of this, $7 […]

Aggressive moves by Mass. DOR shot down in bankruptcy court

People behind on their Massachusetts state income taxes have an aggressive foe out there — the Massachusetts Department of Revenue. Mass. DOR has been taking some pretty far-out positions in court on bankruptcy cases filed by Massachusetts residents looking to discharge back taxes. Just recently, they argued in Judge Hoffman’s courtroom that all tax returns […]

Forgotten but powerful bankruptcy code section helps with tax debts

Recently I was doing some research on the bankruptcy code and it’s controversial section 506, which deals with the deceptively simple concept of an “allowed secured claim,” but has in fact been the source of much bitter litigation in the consumer bankruptcy wars between debtors and creditors over the last twenty years. My eye caught […]

If you owe back taxes, today could be the worst day to file a bankruptcy case

Lets say you owe back income taxes for a number of years, and are interested in whether filing for bankruptcy will cure (or at least alleviate) the problem. Fair enough, but before you rush off to bankruptcy court, or even to a bankruptcy lawyer, slow down a minute! Income taxes are dischargeable only if a […]

Form 1099-A, foreclosure, and bankruptcy cases

Recently the IRS has been sending out a blizzard of forms 1099-A to homeowners who lost their house to a foreclosure or short sale in 2011. Since so many homes have been lost this way in the Merrimack Valley and southern New Hampshire recently, a lot of folks have been getting them. The 1099-A Form […]

Getting a tax refund? How it impacts a Chapter 7 bankruptcy case

This is the season for tax refunds, and don’t think that the bankruptcy trustees don’t know it! Like sharks around a bucket of chum, there is little that can get a trustee into an excited frenzy like a debtor coming in to bankruptcy court with a sizable tax refund. But with a little knowledge and […]