Bankruptcy Date

[rfk]

A question regarding bankruptcy filing for taxes:

Client has 4 years of taxes owed, 2006 - 2009. I believe that potentially 2006 & 2007 are dischargeable in bankruptcy because they meet the tests, but not sure whether 2008 does. I believe that 2009 is too "new" to meet the tests.

Please help comment about the 3 year old test as it relates to 2008; it passes the filing date test and the 240 day rule. But not sure about the 3 year old rule. Need second opinions.

Thanks for your help in advance.

rfk

[JON]

I thought

if they had requested payments in that time period those years are open. The bankruptcy trustee usually has the call on those. My most recent ended up a reorg, the trustee basically told the IRS and the State to take part in the settlement, they did and it ended up with everyone getting .20 on the dollar on a five year payout. The biggest creditor was the buyer of their house who subsquently sued for something built wrong, before my client owned it, it was a huge award, forced into bankruptcy and they have a tight five year payback.

[rfk]

Trying to discern...

JON,

I am trying to discern whether the clients, husband and wife, can and should file BK for the years in question. 2008 is just skeptical on my part. And as I said before, 2009 is undoubtedly out of the question.

Right now they do not qualify for an OIC, do not qualify for CNC, so I am trying to look at BK for last resort. But 2008 is pinching me about its possibility.

Thanks.

rfk