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Dischargeable Taxes
Jon:
Why make an offer in compromise under these circumstances? It doesn't make sense if he really has no assets.
My advice to debtors is: if there is no offer in compromise pending do not file an OIC before the bankruptcy petition is filed.
The IRS has 3 years in which to assess additional taxes for any given tax year from the date the tax return is filed. What is to stop the IRS from assessing addtional tax after the offer in compromise is withdrawn or rejected even if the taxes owing at the time the return was filed are discharged?
In addition, the sage advice is to obtain a copy of the debtor's 23-C record of assessments to ascertain when the outstanding taxes were assessed on the original return. It has been held that the date of assessment is when the summary record maintained by the IRS is signed by the assessement officer. This could be when the return was filed and could be some time later. Obviously you don't want to find after the fact that the assessment was made within 240 days of the date the bankruptcy was filed.
As with all tax matters, if there is any question in your mind regarding dischargeability after reviewing all of the IRS transcripts, have the debtor (especially an attorney) pay for an expert's opinion as to whether the tax is dischargeable.
(And I don't mean me).
Casey
C. Casey White
Attorney at Law
16830 Ventura Blvd., Suite 347
Encino, CA 91436
Tel: (818)380-1734 or (805)584-6190
Fax: (818)906-8828 or (805)520-7851
Cell:(805)501-3314
e-mail: ckcwhite@aol.com
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There is no audit - no 240 day issue. My client (an attorney with
no assets) owes $60k for 2000 PIT. It will be discharged after
10/15/04 since he got an extension. He has not filed an OIC. He is
willing to wait until 10/15/04. If he files an OIC, does that set
back the 10/15/04 date? Jon
> Jon:
>
> I will be giving a program on discharging taxes next meeting. In
> the meantime, there is the 30 day rule, the 240 day rule, the 2
year
> rule and the 3 year rule, all of which need to be taken into
> consideration.
>
> Assumpton #1: the Debtor timely filed a tax return for 2000 on or
> before April 15, 2001 and the Debtor owed taxes on the filed
> return. Then without a offer in compromise, the taxes would be
> dischargeable after April 15, 2004.
>
> Assumption #2: the Debtor didn't owe any additional taxes until
they
> were assessed after an audit and at least 240 days have passed and
> there has not been an offer in compromise. Dischargeable 240 days
> after assessment and after April 15, 2004.
>
> Assumption #3: the Debtor was audited, taxes assessed, more than
> 240 days passed before an offer in compromise was made, and it is
> after April 15, 2004. Then taxes would be dischargeble as long as
> the offer in compromise has either been withdrawn or rejected
(must
> show on the IRS transcript) and at least 30 days have elapsed
after
> the OIC was withdrawn or rejected. ie: in all events the IRS must
> have 240 days to collect without an offer in compromise pending
plus
> IRS must have 30 days after the offer in compromise shows on the
IRS
> transcript as either having been rejected or withdrawn.
>
> And so and so on. Very fact intensive. Based upon your
scenario,
> the simple answer is probably not but you have not really given
> enough facts.
>
> C. Casey White
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Jon:
I will be giving a program on discharging taxes next meeting. In
the meantime, there is the 30 day rule, the 240 day rule, the 2 year
rule and the 3 year rule, all of which need to be taken into
consideration.
Assumpton #1: the Debtor timely filed a tax return for 2000 on or
before April 15, 2001 and the Debtor owed taxes on the filed
return. Then without a offer in compromise, the taxes would be
dischargeable after April 15, 2004.
Assumption #2: the Debtor didn't owe any additional taxes until they
were assessed after an audit and at least 240 days have passed and
there has not been an offer in compromise. Dischargeable 240 days
after assessment and after April 15, 2004.
Assumption #3: the Debtor was audited, taxes assessed, more than
240 days passed before an offer in compromise was made, and it is
after April 15, 2004. Then taxes would be dischargeble as long as
the offer in compromise has either been withdrawn or rejected (must
show on the IRS transcript) and at least 30 days have elapsed after
the OIC was withdrawn or rejected. ie: in all events the IRS must
have 240 days to collect without an offer in compromise pending plus
IRS must have 30 days after the offer in compromise shows on the IRS
transcript as either having been rejected or withdrawn.
And so and so on. Very fact intensive. Based upon your scenario,
the simple answer is probably not but you have not really given
enough facts.
C. Casey White
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Question, is the three year statute tolled by an Offer?
No
The 240 day rule is tolled by an offer. When there is an assessment
and you are waiting out the 240 days don't file an offer, the 240
day rule is 240 + offer + 30 days.
I've never seen it written down, but it seems the rule is the IRS
gets three years to collect. If the IRS can't work an offer and do
the collection in 3 years, too bad.
Since the collection statute is so short after an assessment (240
days), an offer tolls the 240 days.
Casey is pretty expert here. Casey are you going to chime in, or
wait till the 22nd when it is your mcle?
The complicated cases deal with chapter 13 during the 3 years, the
stay tolls the 3 years.
dennis
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Jon:
I will be giving a program on discharging taxes next meeting. In the meantime, there is the 30 day rule, the 240 day rule, the 2 year rule and the 3 year rule, all of which need to be taken into consideration.
Assumpton #1: the Debtor timely filed a tax return for 2000 on or before April 15, 2001 and the Debtor owed taxes on the filed return. Then without a offer in compromise, the taxes would be dischargeable after April 15, 2004.
Assumption #2: the Debtor didn't owe any additional taxes until they were assessed after an audit and at least 240 days have passed and there has not been an offer in compromise. Dischargeable 240 days after assessment and after April 15, 2004.
Assumption #3: the Debtor was audited, taxes assessed, more than 240 days passed before an offer in compromise was made, and it is after April 15, 2004. Then taxes would be dischargeble as long as the offer in compromise has either been withdrawn or rejected (must show on the IRS transcript) and at least 30 days have elapsed after the OIC was withdrawn or rejected.
And so and so on. Very fact intensive. Based upon your scenario, the simple answer is probably not but you have not really given enough facts.
C. Casey White
C. Casey White
Attorney at Law
16830 Ventura Blvd., Suite 347
Encino, CA 91436
Tel: (818)380-1734 or (805)584-6190
Fax: (818)906-8828 or (805)520-7851
Cell:(805)501-3314
e-mail: ckcwhite@aol.com
The post was migrated from Yahoo.
Does filing an offer in compromise toll the three years in Section
523(a)(1). I believe it does but I am wondering if anyone knows for
sure. I.e taxes for 2000 are dischargeable if the bk is filed after
April 15, 2004 (if no extensions were requested). If an OIC was
filed in 2003 and languished for 6 months, does that add six months
to the 3 years? Thanks. Jon
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