As a bankruptcy attorney in Mount Vernon, IL for over 25 years, I read through and analyze court rulings throughout the country, as they may be a harbinger of things to come in districts in which I practice and can be used to help Debtors get the financial relief they need.
Here is a case involving the dischargeability of tax cases … not as much of a windmill tilt as student loans, but close …
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In Re: Martin Smith, Appeal to the 9th District from the Northern District of California, Case # 14-15857
Plaintiff failed to timely file his 2001 tax forms and filed a Form 1040 seven years after it was due, and three years after the IRS assessed a deficiency against him. Plaintiff later filed for bankruptcy and sought to discharge his 2001 tax liability. The bankruptcy court permitted the discharge, but the district court reversed. In In re Hatton, the court adopted the Tax Court’s widely-accepted definition of “return.” The Debtor’s late-filed Form 1040 did not represent an honest and reasonable attempt to satisfy the requirements of the tax law, and he therefore did not file a “return” within the meaning of §523(a)(1)(B)(i). Agreeing with other circuits, the panel held that In re Hatton, 220 F.3d 1070 (9th Cir. 2000), which adopted the Tax Court’s widely-accepted definition of “return,” applied to the bankruptcy code as since amended.
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Bankruptcy attorneys walk a tightrope when it comes to tax issues. For the most part, bankruptcy attorneys are not tax attorneys and are not accountants. If a client comes in with a tax issue, the attorney should have a tax attorney on his or her rolodex and refer the potential client to take care of the tax issue before considering filing a bankruptcy. Perhaps if the Debtor filed the returns and worked with the IRS over several months (or a year or more), the court would consider his actions a more honest and reasonable attempt to comply with the tax code.
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About the blogger:
Michael Curry of Curry Law Office in Mount Vernon, Illinois (http://michaelcurrylawoffice.com/) has helped thousands of individuals, family and small businesses in southern Illinois find protection under the Bankruptcy Code for almost twenty-five years. He is also available to help individuals and families with their estate planning (wills, power-of-attorney) and real estate and other sales transactions.
He is also the author of books on finance and bankruptcy available on Kindle through Amazon!
Whether you live in Mount Vernon, Salem, Centralia, McLeansboro or anywhere in Southern Illinois call Curry Law Office today at (618) 246-0993 and Finally Be Financially Free!
You can also access my website at http://www.mtvernonbankruptcylawyer.com
Curry Law Office 