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socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
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Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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in nyc, ny; I declared chapter 7 bankruptcy in 1990 due small

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in nyc, ny; I declared chapter 7 bankruptcy in 1990 due small business and personal indebtedness.
I always filed city, state and federal returns but made no payments 1989 and 1990. in 1997, I found employment in GA and successfully completed an "offer in compromise" with irs. I retired in in 1997 and have been living on pension and SS in GA ever since.
last week, I received a tax bill from NYS assessment receivables threatening "collection action". it is my understanding that tax does not survive bankruptcy after 23 years.
what is my best option?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 1 year ago.
Hello,

For which tax year or years is the collection notice applicable?
Customer: replied 1 year ago.

glad you asked!


they state: " tax period ended- 12/31/90" (no other years mentioned), and (curiously): tax amount assessed- 0.00 (???)


they go on to say: "interest amount assessed- $1,972.15" and "penalty amount $389.78" (???)


 


I was prepared to dismiss this as some sort of internet scam, but the forms look very official

Expert:  socrateaser replied 1 year ago.
Okay, thanks. Sorry for the delay. I was looking for the NY statute of limitations on tax assessments.

Generally, a bankruptcy will not relieve an individual from a tax liability unless the return was filed and unpaid at least three years before the petition for bankruptcy is filed (or 240 days before if the tax is assessed outside of the debtor's tax return). Given your date of bankruptcy and the fact that it appears the state has only just now assessed you with interest and penalties (though I am equally confused about the fact that no underlying tax is assessed on the form).

Assuming that the demand is valid and not a scam, then the bankruptcy would not protect you, because the assessment is being made after you filed bankruptcy.

However, the statute of limitations on tax assessments for returns which have been filed is three years (NY Tax law 683(a): "Except as otherwise provided in this section [n.b., nothing applicable to your stated facts), any tax under this article shall be assessed within three years after the return was filed (whether or not such return was filed on or after the date prescribed).").

All of this suggests to me that this may indeed be a scam, but even if not, then you have no liability for the tax. Naturally this is a complex issue, and there are may various legal arguments that could potentially "toll" (suspend) the statute of limitations.

You may want to contact the state tax authority and ask if this is an authentic demand notice. Unfortunately, that could result in your giving away your location, but the alternative of doing nothing could result in the state filing a lawsuit for collection in GA. At that point you could assert the statute of limitations as a defense -- but, it would be a major inconvenience, even if you win.

Frankly, this is a "crap shoot" at this point. I can see reasons to ignore the notice, and reasons to follow up. Each has advantages and disadvantages. You will have to make the initial choice and then hope it's the right one.

Hope this helps.
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 33472
Experience: Attorney and Real Estate Broker -- Retired (mostly)
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