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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?

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Attorney answers 6

Posted

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.

Asker

Posted

Hi Mr. Liu, I have contacted her and she has told me to contact them irs and FTB and work it out. I have sent them letters regarding the bk and the irs is at least looking into the issue. The FTB has taken money from the IRA my dad left me for taxes that were owed in 1998. Is that not past the time when they can collect?

Posted

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.

Asker

Posted

Hello, I have contacted her on many occasions. He response is for me to call or send the BK information to the irs and FTB. The FTB is trying to collect in taxes from 1998 and the irs is trying to collect on taxes from 2006. My attorney at the time assured me that these were discharge able and that both the irs and FTB owed me money for my returns they had kept and the money they had garnished. I am very confused and neither agency is willing to help.

Sandra A Kuhn Esq.

Sandra A Kuhn Esq.

Posted

There is more to it than that. When did you file the taxes? Were there any issues with fraud/misrepresentation?

Asker

Posted

I didn't file the state taxes. Most we're discharged but the FTB is still trying to collect for 1998. The taxes for the irs were filed by the irs back in 2009. When I asked if I should file the irs told me I didn't need to file again as they were already filed.

Sandra A Kuhn Esq.

Sandra A Kuhn Esq.

Posted

Generally you cannot discharge taxes that were never filed. Again, check with your attorney.

Michael Raymond Daymude

Michael Raymond Daymude

Posted

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.

Posted

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.

Asker

Posted

Thank you. I thought since the irs and FTB had been listed as creditors and didn't show for the creditors hearing that the judges decision to discharge all my debt was final. My attorney keeps telling me to call both agencies and tell them the taxes were discharged. She said she has to have POA to call on my behalf but I signed a POA back when we were going through the process. I am very confused as to what to do now as I don't have money to pay for another attorney. Had I known I would not have destroyed my credit to be in the same boat a year later.

Stuart Gregory Steingraber

Stuart Gregory Steingraber

Posted

Sorry to be the bearer of bad news. Perhaps you should talk with your BK atty about the chances of getting your taxes discharged and if good, reopen your case and give it a shot. I think the atty should do it without charge or give you a healthy discount. However, it just may be possible your atty is not sufficiently experienced in this area and another would be a better choice. Depending on how much the taxes are and your honest chances of getting them discharged, it may be worth it to pay an expert who knows what to do. Good luck. Don't forget to select a "best answer".

Posted

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.

Harris Justin Brumer

Harris Justin Brumer

Posted

I meant TYs 2013, 2012, and 2011 would NOT be dischargeable.

Posted

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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Posted

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.