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JoeLawyer, Attorney
Category: Bankruptcy Law
Satisfied Customers: 767
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: 8 years ago.
Category: Bankruptcy Law
Expert:  JoeLawyer replied 8 years ago.


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.


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