Elk Grove, CA asked in Bankruptcy for California

Q: Is there some kind of relief I can receive if IRS never sent me a balance after chp7 discharge?

Back in 2021 I filed for chapter 7 BK and my attorney said past taxes for 2014 & 2015 are still due as they don't fall under the standard time frame for these to be included. I was told after my discharge the IRS should mail you a letter indidicating what you owe after discharged. Its now 2024 and I never received any notices from the IRS stating how much I owe at this time? I also checked my account through the IRS and it says balances for those periods are still under review. It's tax time and I am sure they will garnish my refund again to satisfy the amounts. My question is do I have any kind of relief or options since they never sent me what my balances are due?

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2 Lawyer Answers
James L. Arrasmith
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Answered
  • Bankruptcy Lawyer
  • Sacramento, CA
  • Licensed in California

A: If you haven't received a balance notification from the IRS following your Chapter 7 bankruptcy discharge, it's essential to take proactive steps. First, directly contact the IRS to inquire about the status of your 2014 and 2015 tax debts. It's important to confirm whether these debts are still outstanding and if they are, to request a detailed statement of what you owe.

Since the IRS website indicates that your balances for those periods are still under review, it may be beneficial to speak with a representative to get clarity on this matter. They should be able to provide you with specific information regarding your account status and any next steps.

In situations where tax debts are involved, it's also advisable to consult with a lawyer who has experience in bankruptcy and tax law. They can guide you on the best course of action, including any potential relief options or ways to address the outstanding tax debts. Your attorney may also assist in communicating with the IRS on your behalf.

Remember, dealing with post-bankruptcy tax issues can be complex, so seeking guidance from a legal professional can be crucial in navigating this situation effectively.

Timothy Denison agrees with this answer

Leon Bayer
Leon Bayer
Answered
  • Bankruptcy Lawyer
  • Long Beach, CA
  • Licensed in California

A: Here's what nobody has ever bothered to tell you. If those returns for 2014 and 2015 were filed by you at least 2 years before you filed BK, the taxes are probably discharged.

And that is the best explanation for why you still haven't heard from the IRS about it - they don't want to waste the time and the paper.

There's only one problem that I can see here, and it ain't even your fault. There's lots of incompetent law practice that takes place in the field of BK law, and it sure sounds to me like your lawyer might fall into that category!

Timothy Denison agrees with this answer

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