Legal Question in Bankruptcy in Arizona

Chapter 7 bankrupty and discharge of federal income taxes

I would like some help of where I can find a statute, law or some other legal definition (that is understandable) that defines when a federal income tax obligation can be discharged. The Westlaw description is extremely difficult to interpret. My understanding is that the tax year for which you owe taxes ended more than three years before the date you plan to file. ex - petition filed today (2/23/98) would allow you to discharge income taxes due for tax year 1994. The IRS is interpreting it to mean you have to file after 4/15/98 to discharge debt for 1994 because you in effect have until 4/15/95 to pay the debt. That doesn't make sense. Can someone point me to a law statute that I can take to the IRS to prove my point.


Asked on 2/25/98, 4:58 pm

1 Answer from Attorneys

Patrick A. T. West Ohio Ticket Defense Patrick A. T. West, Attorney at Law

Understandable Federal Tax dischargeability

Look at Williamson, The Attorney's Handbook onConsumer Bankruptcy and Chapter 13 (ArgylePublishing), Section 2.17. The statute isbroken down into easier-to-understand sections.The bad news is that the IRS is right and youaren't. Of course, you could always file anadversary action in the bankruptcy courtseeking a declaration that the taxes are dis-charged. If you get a bankruptcy judge who isa little foggy on the law, (s)he may grant youa discharge from the tax liability.

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Answered on 2/28/98, 3:23 pm


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