§ 31.6 — Taxes

Revised: April 1, 2009

[1]

Taxes take many forms, including federal income taxes, state income taxes, payroll taxes, social security taxes, school taxes and real estate taxes. Some tax information—social security and income tax withholding—can be gathered from the debtor’s payroll records or check stubs. Irregular and once-a-year taxes like real estate taxes are not within the debtor’s focus and must be pursued by counsel. Some information about these other taxes is available from the debtor’s federal tax returns. If the debtor has a home mortgage, counsel must determine whether there is an escrow for taxes and insurance. This can usually be determined by examining the coupon book from the mortgage company.

[2]

After the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA),1 all Chapter 13 debtors have extensive filing and providing responsibilities with respect to tax returns.2 Counsel has to focus on the debtors’ tax situation—both what they owe and what returns must be prepared and filed—even before filing the Chapter 13 petition.


 

1  Pub. L. No. 109-8, 119 Stat. 23 (2005).

 

2  See §§ 390.1 [ Tax Return Duties Seven Days before First Scheduled Meeting of Creditors ] § 42.5  Tax Return Duties Seven Days before First Scheduled Meeting of Creditors394.1 [ Tax Return Confidentiality Issues ] § 42.9  Tax Return Confidentiality Issues.