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 [...]
With tax break for short sales set to expire, bankruptcy cases offer a way out
Home values in the Lawrence, Methuen and Haverhill areas have been hit hard. Even Andover and North Andover homeowners have seen big drops in value and lots of negative equity. Many have turned to short sales and deeds-in-lieu of foreclosure to get out of their “problem house” when they need to move. Soon many more [...]
How to avoid a tax bill following a foreclosure
What could be worse than the foreclosure of your home? How about a whopper tax bill resulting from the “forgiveness” of the unpaid debt! Following a foreclosure that does not recoup the value of the property being seized — pretty typical, in today’s housing market — the foreclosure will generate a 1099 for the difference [...]
Everything you ever wanted to know about the tax consequenses of debt forgiveness in bankruptcy
Forgiving debt is basically good, right? I mean its a big part of the Lord’s prayer, just for starters. But wait until lawyers get a hold of the idea. This time it is tax attorneys that get to twirl their moustaches in the manner of Snidely Whiplash, and play the bad guy. In the twisted [...]
