Lawyer Monthly - August 2024

Part I Basics Categories of Tax Debt: All of Gaul is divided into three parts and so are personal income taxes. Although personal income tax divisions are called Categories or Statuses. The categories of a client’s tax debt are important because only one of the three categories is dischargeable, without payment, in a Chapter 7. The Categories are: 1. Priority 2. Secured 3. Unsecured Unsecured Tax Debt: Tax debt is Unsecured if it adheres to certain rules. And those rules are: 1. THE THREE-YEAR RULE. 11 U.S.C. § 507(a)(8)(A)(i). The tax year in question is over three years preceding the filing date of the bankruptcy. The three-year period is computed from most recent date the tax return is due for the tax year. For instance, the due date for the tax year ending on December 31, 2020 is April 15, 2021. Unless an extension to October 15, 2021 is requested. 2. THE TWO-YEAR RULE. 11 U.S.C. § 523(a)(1)(B); 11 U.S.C. §1328(a)(2). A tax return has been filed by the taxpayer for the tax year(s) in question at least more than two years preceding the filing date of the bankruptcy. 3. THE 240-DAY RULE. 11 U.S.C. § 507(a) (8)(A)(ii). The tax claim was assessed at 24 LAWYER MONTHLY AUGUST 2024 Tax Resolution Commando Style Written by Carl N Cottone Attorney at Law The generally accepted definition of a Commando is that of a highly trained soldier who is focused, single mindedly, on a specific mission. And, per the title, that’s the mentality of this article. No fluff. However, I am compelled to honor one soldier, although he was not a commando. And that soldier is Audie Murphy. If you know about him, you know why I mention him. If you don’t know about him and you do an online search, you won’t be disappointed. A common misconception about federal and state personal income taxes is that they cannot be discharged in a Chapter 7 or a Chapter 13 bankruptcy. Not true. In the Best Case Scenario, federal and state income taxes, including penalties and interest, can be completely eliminated in a Chapter 7. Here’s how. Contact Carl N Cottone Attorney at Law, Licensed in New York and Ohio Tel: 614-401 9873

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