Procedurally Taxing: General Discharge Denial in Chapter 7 Based on Taxes (March 21, 2022)

Keith Fogg, Clinical Professor of Law at Harvard Law School, has made available for download his article, “General Discharge Denial in Chapter 7 Based on Taxes” published on the Procedurally Taxing blog. The article begins as follows:

I have written before on many occasions about taxpayers who sought a discharge of their tax debts through chapter 7 bankruptcy.  For individuals filing chapter 7, the basic discharge provisions exist in BC 727, but I have always previously discussed the exceptions to discharge in BC 523(a)(1) and (7).  In the case of Kresock v. United States, 128 AFTR 2d 2021-6995 (BAP 9th Cir.)(unpublished), the bankruptcy appellate panel sustains the decision of the bankruptcy court denying Mr. Kresock a discharge based on BC 727.  To get a discharge of taxes based on BC 727 the individual’s behavior must rise to the level that the court feels no need to get to exceptions to discharge because the general provisions denying discharge prevent the debtor from writing off the debt.  Maybe this happens more often than I think but I don’t ever remember seeing a BC 727 discharge denial where the focus of the denial was on tax debt.

To see the full article, click here: “General Discharge Denial in Chapter 7 Based on Taxes”

Posted by Anthony Tran, Associate Editor, Wealth Strategies Journal

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