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Tax Question Second Post Where are my Chapter 11 GURU=
OK, short answer appears to be nofor discharge ofinterest and yes fordischarge ofpenalty in Ch13 and no to bothin individualCh11.
Now for the mental gymnastics:
1328 discharge excepts debts falling under 507(a)(8)(C) [trust fund type2 years of petition], (1)(C) [fraud based tax]. This arguably covers the tax and the interest [with I believe is inextriably tied to the tax].
However, 1328 dischargedoes NOT except 507(a)(8)(G) [penalty related to a claim of a kind specified in this paragraph and in compensation for actual pecuniary loss]. Therefore, if "this paragraph" modifies 507(a)(8) [allowed claims against governmental units...], then arguably all penalties related to taxes are discharged under 1328 [if not paid during the plan].
1141(d)(2) discharge for an individual excepts all debts falling under 523 which pulling in 523(a)(1)(A) which in turn pulls in 507(a)(8) with all subsections including 507(a)(8)(G) which coverspenalties related to taxes.
Note, the 1141(d)(1) non-individual Ch11 discharge appear broader. One more reason for an individual to form an entity when venturing into a new business that might end up in a future bankrutpcy case.
Peter M. Lively, J.D./M.B.A.
Law Offices of Peter M. Lively
Personal Financial Law Center I
11965 Venice Blvd, Suite 301
Los Angeles, CA 90066-3977
310-899-0630
800-307-DEBT (3328)
Fax: 310-899-0632
A-Bankruptcy-Attorney.com
Personal Financial Law Center II
1706 Newport Boulevard, Suite B
Costa Mesa, California 92627-3073
Telephone: 949-650-DEBT(3328)
THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
________________________________
To: cdcbaa@yahoogroups.com
Sent: Tue, January 26, 2010 6:49:22 PM
Subject: [cdcbaa] Re: Tax Question Second Post Where are my Chapter 11 GURUs?
There's an article here I think. (Go home Jon!)
>
> I posted a question several weeks ago and did not see a single response. I would like to try this one again.
>
> I always understood the general rule was that if taxes are non-dischargeable under any provision of the Code then the penalties and interest associated with those taxes are equally non-dischargeable. However, there is still a nagging question in my mind as to whether or not in Chapters 13 or 11 either or both of the penalties and/or interest on non-dischargeable tax obligations can be discharged. I have PC who has some rather eye popping income tax liabilities and payroll tax liabilities. He has some good income and could probably formulate a Chapter 11 Plan to retire all of the debt within 6 years. The amount of his plan payments would vary drastically, however, based upon whether the pre-petition penalties and interest (or some portion of them) could be discharged. I don't think the debtor qualifies for Chapter 13 based upon debt limitations, but it might be possible for the debtor to pay down some of his debts to get under the Chapter 13 debt
limitation if that would benefit him.
>
> Thank you for your input.
>
> Jeff Smith
>
OK, short answer appears to be no for discharge of interest and yes for discharge of penalty in Ch13 and no to both in individual Ch11.
Now for the mental gymnastics:
1328 discharge excepts debts falling under 507(a)(8)(C) [trust fund type tax], 523(a)(1)(B) [tax from return not filed or filed within 2 years of petition], (1)(C) [fraud based tax]. This arguably covers the tax and the interest [with I believe is inextriably tied to the tax].
However, 1328 discharge does NOT except 507(a)(8)(G) [penalty related to a claim of a kind specified in this paragraph and in compensation for actual pecuniary loss]. Therefore, if "this paragraph" modifies 507(a)(8) [allowed claims against governmental units...], then arguably all penalties related to taxes are discharged under 1328 [if not paid during the plan].
1141(d)(2) discharge for an individual excepts all debts falling under 523 which pulling in 523(a)(1)(A) which in turn pulls in 507(a)(8) with all subsections including 507(a)(8)(G) which covers penalties related to taxes.
Note, the 1141(d)(1) non-individual Ch11 discharge appear broader. One more reason for an individual to form an entity when venturing into a new business that might end up in a future bankrutpcy case.
Peter M. Lively, J.D./M.B.A.Law Offices of Peter M. Lively Personal Financial Law Center I11965 Venice Blvd, Suite 301 Los Angeles, CA 90066-3977 310-899-0630 800-307-DEBT (3328)Fax: 310-899-0632 A-Bankruptcy-Attorney.com
Personal Financial Law Center II1706 Newport Boulevard, Suite BCosta Mesa, California 92627-3073Telephone: 949-650-DEBT(3328)
THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
From: jonhayes6666 <Jhayes@polarisnet.net>To: cdcbaa@yahoogroups.comSent: Tue, January 26, 2010 6:49:22 PMSubject: [cdcbaa] Re: Tax Question Second Post Where are my Chapter 11 GURUs?
There's an article here I think. (Go home Jon!)--- In cdcbaa@yahoogroups. com, "jbsesq1965" <jsmith@...> wrote:>> I posted a question several weeks ago and did not see a single response. I would like to try this one again.> > I always understood the general rule was that if taxes are non-dischargeable under any provision of the Code then the penalties and interest associated with those taxes are equally non-dischargeable. However, there is still a nagging question in my mind as to whether or not in Chapters 13 or 11 either or both of the penalties and/or interest on non-dischargeable tax obligations can be discharged. I have PC who has some rather eye popping income tax liabilities and payroll tax liabilities. He has some good income and could probably formulate a Chapter 11 Plan to retire all of
the debt within 6 years. The amount of his plan payments would vary drastically, however, based upon whether the pre-petition penalties and interest (or some portion of them) could be discharged. I don't think the debtor qualifies for Chapter 13 based upon debt limitations, but it might be possible for the debtor to pay down some of his debts to get under the Chapter 13 debt limitation if that would benefit him.> > Thank you for your input.> > Jeff Smith>
The post was migrated from Yahoo.