Filing Tax Returns
It is that time of year…tax time? Most people who will owe the IRS money wait until the last minute to file their taxes or after the deadline to file has passed. However, if you are in a Chapter 13 bankruptcy there are certain laws pertaining to the filing of taxes before and after filing bankruptcy.
Under the current bankruptcy law, if a Debtor has not filed all of his tax returns for the previous four years, the IRS has file a motion objecting to confirmation of the Chapter 13 plan. The objection cannot be resolved until the taxes are filed or the case is dismissed. Therefore, if you plan on filing a Chapter 13 bankruptcy, it is important that you have filed your last four years of taxes or get them filed immediately or else your case will end up being dismissed.
Another provision of the law pertaining to tax returns allows the IRS to file a motion to have your case dismissed if you do not continue to file taxes while in the bankruptcy. So, don’t think as long as you have tax returns for the four years before you file the case you don’t have to file and your case is no longer in jeopardy. Once the deadline to file your taxes has passed and no extension has been requested, the IRS can file a motion with the court to have the case dismissed because you haven’t filed taxes while in a bankruptcy.
Chapter 13 bankruptcy can help you in many different ways, but you are still required to file your taxes for the last four years and continue to file.
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