[CLBS] No Tax Discharge for Non-Filer

[Tim Tarter]

Ninth Circuit ruled in 2016 that income taxes assessed before a return was voluntarily filed (i.e., IRS made a "substitute for return" assessment) made the tax debt non-dischargeable under current Bkr code:  In Re Smith 828 F.3d 1094 (2016).  

Tim A. Tarter, Esq.
Woolston & Tarter P.C.
Suite B-218
2525 E. Arizona Biltmore Circle
Phoenix, AZ  85016
Desk   602.532.9197
General 602.532.9199
Fax.    602.532.9193
email:  tim at woolston-tarter.com 
Practice Limited to Tax Controversy




>>> Paul Ross <paul at idbankruptcylaw.com> 5/21/2019 11:02 AM >>>
Assuming you are referencing personal tax returns, not a trust or other
tax.  523(a)(1) is where you will research.  Make sure you review the
paragraph at the end of 523(a) which defines return.

There is a split of circuits.  If I recall 5th Circuit says never
discharged, I don't recall where our 9th falls, I think it permits
discharge if you meet the test.

But you will have to review your facts more closely regarding 523(a)(1) and
whether there is claimed evasion, false or fraud returns, etc.

On Tue, May 21, 2019 at 11:34 AM Shawn Miller <shawngmillerlaw at gmail.com>
wrote:

> quick question regarding the dischargeability of tax debt.  Client has old
> Idaho state tax debt from 2008‑2010.  I was told that because she never
> filed the returns for those years they are not dischargeable even though
> Idaho assessed 10,000 in tax liability over 8 years ago and have been
> garnishing tax refunds.  I can't find any authority to support that
> conclusion.  Does anyone have any statute or case law that clarifies when
> state taxes are assessed for discharge purposes?
>
> ‑‑
> Miller Law PLLC
> 6901 W. Emerald St. Ste 203
> Boise, ID 83704
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> Email:  shawngmillerlaw at gmail.com 
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