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DrakeLAW, Attorney
Category: Bankruptcy Law
Satisfied Customers: 745
Experience:  Attorney at Drake Law Firm PLC
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Please do not answer this unless you are a bankruptcy

Customer Question

Please do not answer this unless you are a bankruptcy attorney. There is a three year rule for taxes. So I have filed two bankruptcies. So let's say that in the first one I filed a past due tax return. Then my plan was approved and then 2 months later my atty filed an order closing the case. When does the three year rule start ticking on the taxes. On the date my plan was approved or on the date the motion to dismiss was filed.
Submitted: 10 months ago.
Category: Bankruptcy Law
Expert:  Law Tutor, Esq. replied 10 months ago.

Hello. I am an attorney with over 20 years of experience and I look forward to assisting you today. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms. I am a bankruptcy attorney.

So you are basically asking when your taxes would be come dischargeable - correct?

Expert:  Law Tutor, Esq. replied 10 months ago.

The three year rule for dischargeability of taxes is calculated using the dates of when your income taxes were filed and when your bankruptcy was filed. Understand that the taxes are not dischargeable if your bankruptcy was dismissed. So for the three year rule - say hypothetically we are dealing with your 2008 taxes. Those tax returns would be due to be filed on April 15, 2009. So then you calculate 3 years from April 15, 2009 which would be April 15, 2012. So if you file your bankruptcy after April 15, 2012, the taxes would be dischargeable. If the taxes were filed late, you calculate 2 years from the date the tax return was filed to determine if the debt is dischargeable. So it doesn't go by the date the plan was approved or the date the motion to dismiss was filed - but it goes by the date the bankruptcy is filed. Is that what you were asking? Please let me know if this answers your question.

Please let me know if you have any additional related questions. If not, can you please press a five star positive rating so that I will be paid for my time assisting you tonight. I am paid nothing unless you press at least three stars in the rating section above so I do appreciate a positive rating before you leave the website. THANK YOU VERY MUCH

Customer: replied 10 months ago.
Taxes should have been filed between 2002 and 2007. Bankruptcy was filed in 2007. Tax returns were filed in 2007. The three year rule was tolled during the bankruptcy. The plan was approved in March of 2011. My atty filed an order to dismiss in May of 2011. I then filed another bankruptcy in April of 2014. The question is when did the tolling on the three year rule stop. March of 2011 or May of 2011.
Expert:  Law Tutor, Esq. replied 10 months ago.

Since I am not sure what you are asking, I will opt out and let another attorney have the opportunity to help you.

Expert:  DrakeLAW replied 10 months ago.

Hello my name is ***** ***** I am a bankruptcy attorney and I can help you with this.

The three year rule relevant to tax dischargeability has only to do with when the return was due, not when it was actually filed. That 3 year rule never tolls.

Actually, what you need to be concerned with is the two year rule for filing a late return. It is non-dischargeable if the returns are filed within 2 years prior to the bankruptcy filing. That period would be tolled during the pendency of your prior bankruptcy and would resume upon the date of the order dismissing the case. Or in the facts you provided, May 2011.

Please let me know if that answers your question or if you would like more information or statute citations.

Customer: replied 10 months ago.
Let's try to simplify this. I didn't file a tax return in 2005. I filed an 11 in 2007 and filed the return in 2007. The plan for the Chapter 11 was approved in 20010. Between 2007 and 2010, the three year rule that allows me to discharge taxes, penalties and interest for the 2005 taxes was tolled. The Order Closing the Case for the Chapter 11 was filed in 2011. My question is when did the tolling stop. In 2010 when my plan was approved or in 2011 when the Order Closing the Case was filed.
Expert:  DrakeLAW replied 10 months ago.

I can tell you the tolling of any and all periods stopped when the order closing the case was filed.

But to say again, the 3 year rule doesn't toll. The 2 year and 240 day rules would toll however.