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can i file banruptcy without filing taxes

Date: Sat, 03/17/2007 - 14:36
Submitted by on Sat, 03/17/2007 - 14:36
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my gf has not paid her taxes for the last 2 years because she is going to have to owe money. i understand what she is doing is wrong, but what can i do or say... she wont listen.

anyway, she is looking to file bankruptcy to get rid of all her debts. the problem is the court requires w4 (w2? ) forms, right?

If she has not filed her taxes can she still complete a chapter 7 bankruptcy?


i know she will eventually be audited by th IRS and have made her very aware of that as well. her premise is that she will then negotiate a deal with the IRS to pay off the money in payments, or something.... i dont know. i really dont want to get into that whole issue.

so, she needs to file taxes before she can declare bankruptcy. and she obviously cannot included the owing taxes in the bankruptcy as well. right?

so basically, she is in a bad situation. wow, that sucks for me. eventually i see myself supporting her and her debt.

perhaps its time to rethink my relationship. lol


Submitted by on Sat, 03/17/2007 - 15:09

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My friend works for the IRS and from what I have seen..they aren't too agreeable on the whole negotiating payments on people who haven't been paying their taxes...depends on the agent she works with...but they will pretty much tell her what she is going to pay and what day of the month and if she misses a payment they will demand all the money up front or they will prosecute her...Just remember her debts are not your problem


Submitted by Leah on Sat, 03/17/2007 - 16:25

Leah

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This is not a good situation for your girlfriend to be in. The IRS is not like your average Joe Blow Collection Agent. They are darn serious when it comes to collecting their money. I do understand your girlfriend's situation, and wanting to avoid filing because she knew she would owe money, but by not filing at all, she pretty much shot herself in the foot when it comes to any payment arrangments with them. They may still work with her to some extent, but it's not going to be easy. They definitely frown on not filing the returns at all. She would have been much better off if she had filed for an extension of time to file, in order to allow herself some extra time to gather the money she knew she would owe.

As for the bankruptcy filing, she will need to prove her income by providing tax returns - as mentioned in a couple of other posts above. The new laws require it. I'm sorry to add another confirmation to what has already been said, but I do hope you and your girlfriend are able to find a way through this situation, so she is able to get back on her feet financially. Please come back and post again to update us on your circumstances.


Submitted by SUEBEEHONEY70 on Sat, 03/17/2007 - 18:15

SUEBEEHONEY70

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Here's what I found on that question, Morningstar:

From the Washington LawHelp website:

[quote]Proof of Income: Chapter 7 and Chapter 13 debtors must give the Trustee, at least 7 days before the creditors???????? meeting, a copy or transcript of their most recent tax returns and all pay stubs [or other proof of income] received by the debtor in the sixty (60) days before filing the bankruptcy. Otherwise, the case will be dismissed.[/quote]


From the BBB Alerts & News website:

Quote:

Starting October 17, individuals filing for bankruptcy will be required to:

Meet a means test that will be used to measure their ability to repay their debts;

Obtain financial counseling from an approved non-profit credit counseling agency within six months prior to filing;

Complete an approved "debtor education" class to learn about personal financial management, prior to receiving discharge of their debts; and

Submit more extensive records regarding proof of income; listing of debts; proof of expenses; tax returns; bank, credit card and loan statements; and a comprehensive listing of personal property.

Pay higher court filing fees and at least reasonable fees for the counseling and education class.

The following was found on a couple of websites regarding filing Chapter 7 bankruptcy, though they were not legal websites (meaning, not written by legal professionals):

Quote:
Debtors filing Chapter 7 or Chapter 13 bankruptcy must present a copy of a tax return or transcription of a tax return of the period for which the return was most recently due to the trustee, at least seven days before the 341 meeting

Please note this does NOT mean that this is proof of this point - please consult with a bankruptcy attorney prior to assuming this to be correct. I only post this because this is what I have found in researching this topic. I'm not trying to prove or disprove anything, just showing what I've found through researching this on the web.

The statement "most recent tax returns" could possibly mean just that - the most recent returns - even if nothing has been filed for 2 years. Again, this should be confirmed with a bankruptcy attorney - which I'm not, and I'm definitely not an expert on bankruptcy.

The reason the most recent tax returns are requested are to perform the "means test" to see which chapter of bankruptcy you qualify for. I don't know what a bankruptcy attorney will say in regards to filing bankruptcy without having filed taxes for the past two years. Perhaps all this information will be blown out of the water. I do hope you'll come back and let us know.

NOTE: I had to edit this post, as I just found something else of interest. I've found a couple of references to tax debt being discharged during Chapter 7 Bankruptcy, and it definitely requires consultation with an attorney, because it looks like there are several criteria the tax debt (and the debtor) have to meet before a tax debt can be discharged. One of them was that the taxpayer (debtor) not be involved in "willful tax evasion".


Submitted by SUEBEEHONEY70 on Sat, 03/17/2007 - 19:07

SUEBEEHONEY70

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