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Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 31770
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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I filed chapter seven in California on a C Corporation in August

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I filed chapter seven in California on a C Corporation in August 2010. I know have State Board of Equalization coming after me personally. If I file Chapter 7 Personally can that debt be discharged?
Hi - my name is XXXXX XXXXX I'm a Bankruptcy litigation attorney. Thanks for your question.

Under California law, sales tax is imposed on the merchant, not the customer. Consequently, the tax doesn't fit the bankruptcy code definition of a "sales tax" and can possibly be discharged.

Also, the tax must meet the 3-Year, 2-Year Rules.. The 3-Year Rule is that the tax return on which the tax debt arises must have been due at least three years before you file for bankruptcy. The 2-Year Rule is that the tax return was filed at least two years before the bankruptcy.

You should definitely consider speaking with an attorney in your area about filing and getting these taxes discharged.
Customer: replied 4 years ago.

Thank you. I don't understand the 3-Year, and 2-years rules. I'm confused about the words tax return. It's not income tax it's sales tax?

Hi - -

You must have your tax returns (federal and state) filed - - your sales tax and use taxes are included on your tax returns. The rules mean that the taxes you're dealing with should have been paid at least 3 years before filing bankruptcy and that your tax return that involves these taxes was filed at least 2 years before you file bankruptcy.
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