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Old state taxes in chapter 13

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I have some New York State taxes from 2008. I filed my returns on time that year, but did not pay. Can they be discharged in a chapter 13 plan, or do I have to pay them through the plan? I have gotten contradictory answers from two different attorneys on this. I need an experienced bankruptcy attorney who knows what he or she is talking about. thanks.

Attorney Answers 4


This must be tax day on Avvo. Discharge of Taxes in Bankruptcy requires a very complicated analysis and is not something that can be done without obtaining copies of the actual transcripts from the taxing agency, and a strong knowledge of all the exceptions to the many rules.

The concept of a discharge of taxes in Chapter 13 is misleading, since you have to make some payments in a Chapter 13 case, so the issue is whether you have to pay the taxes 100% during the course of your Chapter 13 plan, or some lower percentage.

If you filed your 2008 taxes PRIOR to April 15, 2009, (and actually, even if they were filed on extension) and they were assessed back in 2009 and there have been no subsequent offers in compromise filed or willful evasion of paying the tax, then most likely you can treat them as "nonpriority" unsecured debts in your Chapter 13. That means you can pay them less than 100% in your Chapter 13. How much less depends on your budget, the value of your assets, what exemptions are available to protect your assets in your case, and other factors.

If they have a lien against property, that's an entirely different issue that needs to be analyzed.

This is pretty basic stuff for a bankruptcy attorney, so I would choose the one who gave you the above answer. If neither did, keep looking.

Mark Markus has been practicing exclusively bankruptcy law in California since 1991. He is a Certified Specialist in Bankruptcy Law by the State Bar of California Board of Legal Specialization, AV-Rated by, and A+ rated by the Better Business Bureau.

Legal disclaimer: Mark J. Markus practices law in California only. The information is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. Answering this question does not in any way constitute legal representation.

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You have not provided enough facts to answer your question. You can discharge 1040 taxes in either a Chapter 7 (best) or Chapter 13 if and only if:
1) the most recent due date for filing the taxes is over three years old;
2) you filed your 2008 tax return more than two years ago;
3) the tax that you owe was assessed by the state more than 240 days ago;
4) your tax return was not fraudulent;
5) you are not willfully attempting to evade the paying of taxes.

As you can see this is not a simple analysis. I would recommend that you contact an attorney in your area with specific experience in this field. If you don't know one, go the following website: and search for an attorney in your area.

Good luck,

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Not ALL bankruptcy attorneys understand taxes in bankruptcy - so be careful. It appears from what you have said that your 2008 taxes MAY be dischargeable (taxes must be due at least 3 years from the date of filing - 2008 taxes came due in April 2009 -absent an extension). Again, be careful who you hire and do a complete analysis BEFORE you file IF POSSIBLE.

I hope this helps.
Steven A. Leahy

Please note that the above is not intended as legal advice, it is for educational purposes only. No attorney-client relationship is created or is intended to be created hereby. You should contact a local attorney to discuss and to obtain legal advice.

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Everyone who has responded to your question has set out the proper analysis. You indicate that you filed your tax return for 2008 on time, meaning that you filed it by April 15, 2009. If that is the case, you can discharge the taxes in your Chapter 13 plan. The Trustee may or may not confirm a discharge of the taxes and it really depends, in part, on how good your Chapter 13 plan is otherwise, what your ability to pay the various debts you owe is, and whether New York State is concerned enough about this debt to challenge discharge.

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