Harlan Lunsford <hlunsford[at]bellsouth.net> writes:

- quote -

Yes, but it's a 240 day clock. 11 USC 507(a)(8)(A)(ii)

Phil Marti
Clarksburg, MD

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Linda Dorfmont wrote:

- quote -

To follow up on Dave Wood's reply regarding the three year
requirement of which we all know of course, what we dont
know in this case is when the original 2000 year return was
filed. IF filed by due date in 2001, and nothing else
(like IRS adjustment), then it is available to be
discharged.

Question is: does the later adjustment in the account by
IRS re start the three years? IOW, is the adjustment an
assessment that starts the clock a ticking again?

ChEAr$,
Harlan Lunsford, EA n LA

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Back taxes can be discharged in bankruptcy. The taxes have
to have been assessed at least two years prior to the filing
(bankruptcy petition). State taxes also can be discharged.
Most bankruptcy attorneys are not familiar with this
situation and the good ones will contact a former IRS agent
who worked in this field to check out IRS records. The
assessment date is critical and this is indicated in the
files by a special code. Given that the lady owes aditional
debt of $20K, filing Chapter 7 to discharge it all sounds
like a good idea. There is life after bankruptcy. Many of my
clients have found that they can get good jobs and credit
cards (oh, the deluge of credit card offers to bankrupts)
after discharge. This may be the best solution given the
lady's health.

Linda Dorfmont EA, CFP, CSA

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"Harlan Lunsford" <hlunsford[at]bellsouth.net> wrote:
- quote -

Well for one thing, if the return generating the tax is not
at least 3 years old, its not dischargeable.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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- quote -

I believe taxes attributable to unfiled returns are
dischargable through Chapter 13. Do not file the unfiled
returns until after the commencement of bankruptcy
proceedings. The debtor must pay the most recent three years
to get the plan approved, however. See below.

http://www.moranlaw.net/noreturns.htm

Jim Wells

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BMS wrote:
- quote -

(snipped a bunch here.)

- quote -

Not an option? Why, pray tell. IMWTK.

ChEAr$,
Harlan Lunsford, EA n LA

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Charlie48K wrote:
- quote -

WE don't know that she never filed a return. OP said that
the IRS "adjusted her account" to increase tax. This
certainly suggests that there was an account (thus a return
filed) to adjust. Or am I missing something?

ChEAr$,
Harlan Lunsford, EA n LA

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Sailor_Jim2002[at]Yahoo.Com (Jim Johnston) wrote:

- quote -

My understanding is that bankruptcy won't discharge the tax
debt because she never filed a return. Read this page:

http://www.bankruptcyaction.com/chapter13.htm

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"Jim Johnston" <Sailor_Jim2002[at]Yahoo.Com> wrote:

- quote -

Bankruptcy is not an option, go get the records and
professional help.

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"Jim Johnston" <Sailor_Jim2002[at]Yahoo.Com> wrote:

- quote -

The best advice is to hire someone local familiar with these
issues. There are too many possibilities regarding too many
facts not given to give you a clear picture, and certainly
not on the web.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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"Jim Johnston" <Sailor_Jim2002[at]Yahoo.Com> wrote

- quote -

Probably an OIC, with "Doubt as to Collectability" as the
reason. Faster and cheaper, it is, for all purposes, filing
a tax bankruptcy. If there are other financial problems
though, consider bankruptcy, but be absolutely sure that the
taxes will be covered by the bankruptcy.

--
Paul A. Thomas, CPA
taxman at negia.net

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Jim Johnston wrote:

- quote -

Taxes are difficult if not impossible to discharge in
bankruptcy. As a result the best first step is an offer in
compromise.

Look into bankruptcy if you can't make a deal. But I don't
think she'd want to go through that if not necessary.

Good luck.

Stu

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- quote -

First of all, are you sure the IRS is correct? Perhaps she
just needs to do a simple amended return.

Helen, EA in PA
This is the week!
50 miles, 3 days, 1 cause - Multiple Sclerosis Challenge Walk for the Cure
October 1 to October 3, 2004

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- quote -

Chances are she owes no tax for those years but, somehow, a
reconstruction will have to be done (assuming it was IRS
which prepared her return). It should be easy enough to
recover records from her broker, former employer, and/or
whoever had her stock options. She probably had basis in
those things.

In the meantime, she can petition IRS since, in realty, for
uncollectible status. I wouldn't go for an offer without
being able to agree that anything is owed. Bankruptcy might
eliminate the debt but for all we know, IRS may owe her.
It's a problem which should be referred to a professional
who might be able to guide you through the steps of getting
to the bottom of this nightmare and filing a proper return.
If it turns out that the IRS owes her money, she'll lose it
unless a proper claim is made.

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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Greetings all.

I have an interesting problem, one that I was hoping someone
here could give me some solid advice on.

My step-daughter recently received a letter from the IRS
stating that they'd adjusted her account for the year 2000
to reflect $46,000 dollars in additional taxes owed (not
income, taxes). They credited her with around $4,700
federal tax withhelding, then added enough interest and
penalties to make it all come to just over $72,000.

My step-daughter suffered a nervious breakdown after years
of working in the computer industry and quit back in 1998.
She lost her house and most of her personal possessions, and
is still fighting to pull herself together, living with me
and my wife. She has no idea whatsoever what the $42k is in
reference to ... although, her best guess is that it's from
sales of stock options, which she was surviving on for
several years. (Her personal records are in a storage
locker on the other side of the country, unfortunately.)

At present, she is unemployed and on several meds, while her
existing bills and expensives are being covered by the wife
and I, and we're giving her a couple of hundred a month so
she can buy necessaries.

So, my question is what would be a better solution to this
situation; An Offer of Compromise or a simple bankruptcy?
The only personal possesions she still has are a broken down
vechicle, some furniture in that previously mentioned
storage locker, and around a dozen musical instruments. The
chances of her holding down any sort of gainful employment
in the near to mid-future is very slim and her existing
bills (all from her earlier days) come to around $20k.

Thanks for any advice that y'all can give.

SJ

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