Discharging Taxes---Write the motion or wait for the IRS
Posted: Tue Aug 17, 2010 2:52 pm
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Hello Robert -
IRC 6662 is a 20 percent penalty for negligence or underpayment. The
taxpayer has the burden of proving the IRS is wrong.
Fraud is a 75 percent penalty, and the IRS must prove it. Its a far
different animal from the 6662 penalty.
Your client is fine. - John D. Faucher
On 8/17/10 2:38 PM, "Robert" wrote:
>
>
>
>
>
> 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?
>
>
>
>
>
>>> - John D. Faucher
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Re: [cdcbaa] Discharging Taxes---Write the motion or wait for the IRS to object or neither?
Hello Robert -
IRC 6662 is a 20 percent penalty for negligence or underpayment. The taxpayer has the burden of proving the IRS is wrong.
Fraud is a 75 percent penalty, and the IRS must prove it. It’s a far different animal from the 6662 penalty.
Your client is fine. - John D. Faucher
On 8/17/10 2:38 PM, "Robert" <robertvitt@vittlawfirm.com> wrote:
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?
- John D. Faucher
The post was migrated from Yahoo.