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cfortunato, Attorney
Category: Bankruptcy Law
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Experience:  Bankruptcy professor.
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Can a person file bankruptcy if they have not filed state or

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Can a person file bankruptcy if they have not filed state or federal taxes for over 5 years, but can produce bank records, receipts and profit and loss statements from a small business as proof of income? Person has very few assets.
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.

Hi digi,

For filing a Bankruptcy, income tax returns have to be submitted if, and only if, those income taxes returns had to be filed. If the debtor's income is below a certain level, it is not necessary to file the tax returns, and the Bankruptcy court will not want them. (If the debtor did not have to file income tax returns, he or she would submit - to the Bankruptcy court - a notarized statement explaining this fact.)

However, if the income taxes did have to be filed for 2 years prior to filing the Bankruptcy, those returns would have to be filed, or the case can be dismissed. Submitting anything else - such as bank statements - would not satisfy this requirement.

In summary, if the tax returns were supposed to be filed - per IRS - they must be filed with the Bankruptcy court, and if the tax returns did not have to be filed - per IRS - they also do not have to be filed with the Bankruptcy court.

Edited by cfortunato on 11/8/2010 at 7:11 PM EST
Customer: replied 5 years ago.
This person believed he had a constitutional right not to pay taxes, a controversial position to be sure. he now regrets he took that position However he now finds himself, due to the great recession in a unmanageable situation financially and needs to file bankruptcy. the last two years he would have no income minus operating expenses however he still should have filed an IRS tax return so it seems he could not use the no income clause you are talking about above. am I correct?
Expert:  cfortunato replied 5 years ago.
If he was supposed to file those income taxes- regardless of his income - then he must do so before filing a Bankruptcy. (And it is not too late for him to file the income taxes.)

Edited by cfortunato on 11/8/2010 at 7:40 PM EST
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