Tax Issues In Bankruptcy

15 Aug 11th Circuit: Debtor’s Tax Refund Exempt as Tenants by the Entireties Property

In a recent opinion (In re Uttermohlen), the Eleventh Circuit Court of Appeals ruled that a bankruptcy debtor’s tax refund can be claimed as exempt as “tenants by the entireties” property if the debtor’s spouse does not also file bankruptcy and if they have no joint unsecured debt.

On his Bankruptcy Schedule C, Mr. Uttermohlen listed as exempt his 2010 Tax Refund, in an amount to be determined, under Florida law. He later amended his Schedule C to claim that the amount was $10,668.00, and by definition was exempt as tenancy-by-the-entireties property (known as TBE exemption) under 11 U.S.C. § 522(b)(3)(B), as well as Florida law.

Read More

17 Jan What Can I Do When Bankruptcy Doesn’t Get Rid Of The Tax?

Bankruptcy can stop collection and eliminate tax debt in many situations. For more details on tax discharge see the article I wrote about Bankruptcy Tax Dischargeon my personalsite. While bankruptcy can be a very useful tool in dealing with the Internal Revenue Service and state collectors,it will not solve all problems.In many cases, a tax debt that would qualify for bankruptcy discharge is rendered non-dischargeable when the taxpayer fails to file a tax return and the IRS or state collection authority uses their statutory authority to assess. Some types of tax, such as employment tax, are not subject to discharge. Fortunately, there are other ways to stopor managecollection problems. Some types of tax can not be discharged and can be collected by the IRS after the bankruptcy case is closed. Bankruptcy may not be available or appropriate for some delinquent taxpayers.
Read More