As I previously wrote, there are four general requirements for discharging income taxes in bankruptcy. The first is the three-year rule. The second, which I’ll discuss here, is the 240-day rule.
For an income tax to be dischargeable, it must not have been assessed with 240 days of the filing of the bankruptcy. [...]

There are four general requirements for discharging an income tax in bankruptcy. In this post, I will discuss the first: The tax must be one for which the return was not last due within three years of the filing of the bankruptcy. Therefore, if a 2005 income tax return was last due on [...]

The BAPCPA amendments to the Bankruptcy Code allow creditors to request a tax return directly from a debtor. Section 521(e)(2) provides that:
(A) The debtor shall provide-
(i) not later than 7 days before the date first set for the first meeting of creditors, to the trustee a copy of the Federal income tax return required [...]

The Means Test reduces income by actual tax expenses, among other permitted reductions.  Problems arise when calculating an actual tax expense where there was a refund in the previous year.
A refund occurs when someone over-withholds from their income to pay their taxes.  No one has a crystal ball, of course, so no one can ever [...]

The IRS requires banks and financial institutions to report the cancellation of debts.  This can happen when there is foreclosure, if there is a settlement on a consumer debt, or if the bank is simply unable to collect the debt within the time allowed by law.  Bankruptcy can prevent tax liability but some creditors will report [...]

Borrowing against your retirement to pay off credit cards and other unsecured debts may be a big mistake. South Carolina attorney Dana Wilkinson wrote an article on a new 401k debit card that is being offered that makes it easy to access and spend 401k funds. For anyone who is thinking about taking money from [...]

The IRS considers debt that is cancelled, in full or in part, to be taxable income to the debtor to the extent the financial position of the taxpayer has been improved by the debt cancellation.  This means that a credit card company settlement can result in an income tax bill from the Internal Revenue Service.  It [...]

Twenty years ago, Tampa resident Rhonda Toth and her husband won $13 million from the Florida lottery.  In August, 2008, Mrs. Toth found herself in jail – sick, broke, and alone.  Despite the multimillion dollar windfall, the Toth’s case demonstrates that bad luck and bad decisions can lead anyone into financial ruin.
According to the report [...]

Tax articles are again highlighted by Kay Bell in her eclectic 39th Carnival of Taxes.  This online magazine contains a collection of tax articles published on the web, including Two Tax Years For The Price Of One, my article on the split year tax election available in certain bankruptcy cases.  This edition of the carnival [...]

Kansas City, Missouri Bankruptcy Law Attorney Rachel Lynn Foley her article on this site, Do Not Lie To The Bankruptcy Court speaks about the potential criminal results of lying in a bankruptcy.
Delay of the discharge of your debts is a less, but also important, potential result.
One way to delay your discharge (and to cost you money) is falsify the information [...]