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Tax Return Filed Late Deemed Not Dischargeable In Bankruptcy

Posted By admin || 16-Oct-2009

In the bankruptcy case ofMcCoy, Linda T.; In re (McCoy v. Missis­sippi State Tax Commission), the bankruptcy court deemed a Chapter 7 bankruptcy debtor's income taxes for 1998 and 1999 nondischargeable in bankruptcy.

The bankruptcy case said:

"The debtor received a Chapter 7 discharge on Jan. 23, 2008. On Dec. 3, 2008, she filed an adversary proceeding against the Mississippi State Tax Commission seeking a declaration that her income taxes due for 1998 and 1999 were discharged. In her complaint she stated that she filed returns for both years in 2002."


The bankruptcy judge said:

"Because the debtor's returns were filed late, they did not satisfy the filing requirements and did not qualify as returns. "The definition of 'return' in amended § 523(a) apparently means that a late filed income tax return, unless it was filed pursuant to § 6020(a) of the Internal Revenue Code, can never qualify as a return for dischargeability purposes because it does not comply with the 'applicable filing requirements' set forth in the Internal Revenue Code."


Income tax returns that are filed late may be treated differently in bankruptcy, if they do not comply with the IRS rules. For example, if you filed a late return and did not request an extension, discharging those income taxes may present a challenge during bankruptcy.  If you are hoping to discharge old income taxes that were filed late during bankruptcy please discuss them with your bankruptcy attorney.

Categories: Bankruptcy
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