Tax Traps 1095 Days Out

discharge 2019 taxes

When it comes time to discharge 2019 taxes in bankruptcy, the IRS has laid a trap. The trap snaps shut three years (or 1095 days) from now. At that point, the familiar three year rule for tax dischargeability won't be so simple. Between Covid, wildfires, and hurricanes, the IRS has unilaterally extended tax filing deadlines. Instead of tax returns becoming due in April, the deadline for everyone was extended for everyone til July. Where I live, the October due-date-with-extension was moved out to December because of wildfires. Other localities got extensions by reason of hurricanes. Three years from now, when those taxes are on the brink of dischargeability, you need to know with certainty, when were 2019 tax returns "last due without penalty" for your debtor. Tax discharge rules We all know the three rules for tax dischargeability in bankruptcy: the 3 year rulethe 2 year rulethe 240 day rule We also know that tax returns are due on April 15th....or … [Continue reading...]