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Collecting on debts after a BK has been completed.

San Diego, CA |

I filed bankruptcy a year ago. The attorney who filed my BK said that the taxes from the irs and FTB could be discharged. The BK was granted in July of last year. Now I have the irs trying to collect on taxes that were included in the BK and the FTB has garnished the IRA that my dad left me when he passed. Do I not have any recourse? Can they come back a year later and collect on debts that were discharged through the BK?

Attorney Answers 6

  1. Taxes are dischargeable under certain criteria - however, its not an automatic discharge. You should contact your bankruptcy attorney to see what happened, then maybe consult with a tax attorney as well to see if you can work out some form of offer in compromise if the taxes were not discharged.

  2. You should call your bankruptcy attorney to see what happened. It is possible the taxes were not old enough to be discharged. There is not enough information in your question to know that. It is also possible that the appropriate IRS office was not notified. You need to call your attorney.

  3. The general rule is that debts owed to the government (IRS) are NOT dischargeable. If you lawyer said otherwise, he/she needed to take steps by having the BK court make a determination that the IRS debt was dischargeable. That usually means filing an adversary complaint in your BK case, serving it on the IRS and requesting the judge to render a decision. Sounds like none of that happened, thus the IRS is still trying to collect. If all the circumstances for discharge of government debt are there, you might be able to reopen your case and take the necessary steps outlined above. Good luck.

    You are not my client and I am not your attorney. This advice is given in the spirit of the AVVO platform and is based on general legal principles. You become a client when you enter into a formal retainer agreement with me.

  4. For tax debts to be dischargeable, you must have filed for that tax year. Additionally, the only tax debts which are dischargeable are those outside the last three tax years.

    So, for example, if I have filed for every tax year, and I filed a BK and received a discharge, I could discharge tax debts for TY 2010 and beyond. TY 2013, 2011, and 2010 would not be dischargeable because they fall within the 3 year window.

    I would re engage with your BK attorney.

    Best of luck.

  5. Respectfully, Asker, this is a question only your BK attorney or a newly retained attorney can help you with. I strongly suspect your taxes were not discharged, for any one of several reasons. You need to step up to the plate and pay counsel to review your matter and take action, if appropriate.

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  6. If the income tax satisfies any of the following conditions it is nondischargeable.
    i. If tax the tax became due less than three years prior to filing bankruptcy.
    ii. If tax returns were not timely filed.
    iii. If tax was assessed less than 240 days prior to filing bankruptcy.
    iv. If there was a finding of fraud or willful evasion.

    If the conditions above don't apply the income tax is typically discharged in the ordinary course of the bankruptcy case. But note that some events can toll the running of the times referenced above. For example, the time periods toll during an offer in compromise.

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