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Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2897
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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If you have filed Chapter 7 and the IRS is listed as one of

Customer Question

If you have filed Chapter 7 and the IRS is listed as one of your creditors, should the IRS still be able to go after the tax years listed?
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 7 years ago.
The IRS can take any tax refunds for the upcoming year according to the code.
Absent that, if the tax is dischargeable in chapter 7 it will be discharged on the conversion discharge in chapter 7. If the tax is not dischargeable, then the IRS can collect on the debt.

11 USC 362 b 26 allows the IRS to keep tax refunds.
(26) under subsection (a), of the setoff under applicable nonbankruptcy law of an income tax refund, by a governmental unit, with respect to a taxable period that ended before the date of the order for relief against an income tax liability for a taxable period that also ended before the date of the order for relief, except that in any case in which the setoff of an income tax refund is not permitted under applicable nonbankruptcy law because of a pending action to determine the amount or legality of a tax liability, the governmental unit may hold the refund pending the resolution of the action, unless the court, on the motion of the trustee and after notice and a hearing, grants the taxing authority adequate protection (within the meaning of section 361) for the secured claim of such authority in the setoff under section 506(a);

Edited by Terry L. on 4/1/2010 at 5:30 PM EST