.jpg)
Discharging Taxes---Write the motion or wait for the IRS to object or neither?
I *think* know discharging income taxes requires:
(1) 3 year rule--tax return due more than 3 years prior to the filing (11 USC 523(a)(1)(A) and 507(a)(8)(A)(i)
(2) 2 year rule--Debtor's income tax return actually filed mor ethan 2 years prior to the debt debtor files BK (11 USC 523(a)(1)(B)
(3)240 day rule--Income taxes were asses by IRS more than 240 days before BK filing (11 USC 523(a)(1)(A) and 507(a)(8)(A)(ii)
and
(4) Debtor did not file a fraudulent return or willfully attempt to evade paying taxes.
I think client meets 1-3 (taxes are from returns filed in 2004 to 2006 and audit occurred in 2006) . After audit, client signs an 870 Waiver of Restrictions on Assessment and Collection of Deficiency. the 870 has language from IRC 6662(a) which seems to run afoul of #4.
The language IRC 6662(a) incorporated into the 870 reads, in part, "underpayment of tax is attributable to one or more of the following: (1)negligence or disregard of rules or regulations (2) substantial understatement of income tax or (3) any substantial valuation overstatement. "
So, my speculation is that this language runs afoul of the NO FRAUD rule.
Should I file a motion to determine the dischargeability or should I just list the debt and wait for the IRS to object? Or is there some other critical information needed to make the determination?
The post was migrated from Yahoo.