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Experience:  Attorney in the practice of Bankruptcy Law since 1996
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Hello I was a a 1oo% owner of a corp. in 2001 I filed

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Hello   I was a a 1oo% owner of a corp. in 2001 I filed personal bankruptcy in 2002 and was discharged of all debt. NJ is now billing me for tax and interest for the 2001 tax yearfor the corp. Does my bankruptcy cover the corp tax debt ??? .....the corp went out of business in 2002 and has been inactive since then
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  JoeLawyer replied 6 years ago.

HiCustomer

That is a really tough question and I hate to be the bearer of bad news, but under those facts, tax liability is generally not discharged in bankruptcy.

Income taxes are not discharged in bankruptcy except in certain circumstances (such as if the taxes are more than three years old when the bankruptcy case is filed, if tax returns were timely and accurately filed, etc) (see 11 USC 523(a)(1), here).

Also, corporate taxes which go unpaid generally become the responsibility of the principal officer(s) of the corporation, since they were the ones responsible to ensure the corporate taxes were paid.

So, if a corporation owes taxes, those taxes usually fall back on the corporate officers if the corporaton faisl to pay them, and if those corporate officers file bankruptcy within three years of the year that the taxes were incurred, those taxes are generally not discharged in the bankruptcy case and remain the responsibility of the corporate officer(s).

That being said, tax liability in bankruptcy is very complicated and to a certain extent dependent on state law and a host of other minutia, so I encourage you to contact your bankruptcy attorney to see what the status of your tax liability is. But, I would not get your hopes up.

I am sorry to have to give you this potentially bad news, but I thought you would appreciate an honest assessment rather than getting your hopes up.

Good luck.

Joe

LEGAL NOTICE: I am only licensed to practice law in certain state(s) and I cannot give legal advice to someone who does not reside in a state in which I am licensed, nor shall anything I say in the above answer or elsewhere on this site be deemed legal advice, even to someone who resides in a state in which I am licensed. Fees I receive for answering questions are paid for information, not for legal advice. This forum is designed to provide general information only, and information herein is not warranted to be correct or applicable in any way since laws may have been misinterpreted herein, since laws change from time to time, and since the impact of those laws on any particular situation varies. The information presented in this site shall not be construed to be formal legal advice nor the formation of an attorney-client relationship. Persons accessing this response are encouraged to seek independent legal counsel in their jurisdiction for guidance regarding their individual circumstances. Do not take any action or inaction based on information presented herein since it is informational and may not be accurate or applicable to you; it merely attempts to give you a basis of knowledge to help you formulate questions to ask a legal or other professional in a face-to-face meeting in your jurisdiction. Joseph Ross does not hold himself out to be a specialist or expert in any area, regardless of assertions made by any third party, and any implication of being an expert or specialist herein is made in error. I hope the information presented above is useful to you. Answer above is (c) Joseph Ross. All rights reserved.

JoeLawyer, Attorney
Category: Bankruptcy Law
Satisfied Customers: 767
Experience: Attorney in the practice of Bankruptcy Law since 1996
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