lovely1954 Posted March 19, 2004 Report Share Posted March 19, 2004 This question is not for me but is for someone very close to me so I can anwer any questions that my help you help me.First off, Hello to everyone on this site. This is my first time posting.A good freind of mine is contemplating filing bankruptcy Chapt 7. She had a job in which she was paid up front in 99 & 2000. She did fill out the applicable tax forms prior to employment, but never saved money to pay back to IRS. Needless to say to date she owes about $90,000 to the IRS. Correct me if I'm wrong, but I was told that debt owed to IRS can be included in bankruptcy if it's 3 years old. My question is: Does that mean 3years after it's filed? Or 3 years after it was owed.I ask becase 99 taxes was filled in '02 but 2000 was never filled. Can she include both or none at this point?She has no house or car & her current salary is about $27,000/year. and she owes about $3000 in unpaid debt. Link to comment Share on other sites More sharing options...
mwh19991 Posted March 19, 2004 Report Share Posted March 19, 2004 Perhaps this is going out on a limb on my part and showing some ignorance, however, I HAVE to ask: How in the ham and eggs can a person that makes only $27,000 per year rack up a $ 90,000 tax bill over just four years? Link to comment Share on other sites More sharing options...
lovely1954 Posted March 19, 2004 Author Report Share Posted March 19, 2004 That is her "current" salary. The pay in 99 & 2000 ranged from $75,000- 90,000Yes, she went from riches to rags, LOL! Never the less, any advice would help! Link to comment Share on other sites More sharing options...
willingtocope Posted March 19, 2004 Report Share Posted March 19, 2004 From what I just read in Nolo's "How to file for Chapter 7 Bankruptcy" there are some complicated issues here. If your friend had file returns but failed to pay, maybe the debt could be discharged. But...this is mixed up enough that you really ought to consult an attorney that specializes in this kind of thing. Link to comment Share on other sites More sharing options...
scrapwench Posted March 20, 2004 Report Share Posted March 20, 2004 I'm pretty sure you can't discharge tax debt for years that were never filed. And I thought it was 5 years from the time the taxes were due, but I could be wrong. Link to comment Share on other sites More sharing options...
LadynRed Posted March 20, 2004 Report Share Posted March 20, 2004 IF a tax return was FILED but the tax debt never paid, THEN that debt IS dischargable if its at least 3 years old.However, a tax debt for a tax return that was NOT filed is NOT dischargable, sorry When you fail to file a tax return, the IRS essentially files one FOR you. Since the IRS has nothing to show any deductions - like federal taxes paid, etc on a normal W-2, then the calculation of what you owe is HUGE compared to what it WOULD have been had your friend filed was required. Add to that they start piling on penalties and interest on that huge amount of tax, and the amount mushrooms almost exponentially.Your friend needs to see a tax attorney ASAP and if she cannot afford one, then she should at least seek out a Taxpayer Advocate. They are there to help, often at no charge. Once the required back returns are FILED, then she should see the tax debt decrease considerably. That won't remove the penalties for not filing though.I've investigated this for someone else. He never filed tax returns for 90 or 91- the IRS says he owes them 18 THOUSAND ! However, when you look at his income on his SS statement of earnings for those years, all he MADE was about 1/2 that. Link to comment Share on other sites More sharing options...
lovely1954 Posted March 22, 2004 Author Report Share Posted March 22, 2004 Thanks for your responses! Link to comment Share on other sites More sharing options...
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