Chapter 7

Section 727 of the U.S. Bankruptcy Code requires a court to grant a debtor a discharge from his debts in a Chapter 7 bankruptcy proceeding.  11 U.S. C. Section 727.  This rule is subject to several exceptions.  In particular, 11 U.S.C. Section 523(a)(1) controls whether unpaid taxes are dischargeable in bankruptcy.  In provides, an exception to the discharge granted a taxpayer when the taxes relate to any of the following:

  1. Taxes relating to trust fund taxes and excise taxes;
  2. Taxes due within three years of the bankruptcy filing date;
  3. Tax returns not filed or filed within two years of the bankruptcy filing date;
  4. Taxes not assessed by the taxing authority or assessed within 240 days of the bankruptcy filing date;
  5. Taxes relating to a fraudulent return or willful attempt to evade paying the tax.

 

 

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