Legal Question in Bankruptcy in California

Re: Bankruptcy and IRS

The Bankruptcy Court, the U.S. Trustee's office and the Trustee assgined to a bankruptcy case all have the authority to pass along information from bankruptcy filings (all pleadings filed) to appropriate law enforcement officials for prosecution. This generally arises in the context of fraudulent or abusive bankruptcy filings, or perjury. I would have to say that it is unlikely that a judge would refer something like you describe to the IRS, as first, there is no evidence of a crime - he might be a sloppy business owner, but from the facts you provide, it is pure speculation that he is evading income taxes. I'm a bit unclear how the plaintiff in the adversarial action's income is relevant to his claim, unless he is also the debtor, in which case the entire bankruptcy might be dismissed. The judge will not, unless on motion of the defendant in the adversary, simply dismiss the adversarial on his own - it would have to be an eggregious situation for the judge to do so, and what you described doesn't appear to rise to that level.

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