REMEMBER THE INTEREST CHARGES
When your Chapter 13 plan proposes to pay delinquent income taxes, be mindful that some income taxes may not be non-dischargeable debts under 11 U.S.C. 507(a)(8)(C) and if the income tax debt is non-dischargeable, then the interest on the income taxes is also non-dischargeable. The First Circuit Bankruptcy Appellate Panel, in a recent decision, serves as a reminder that when your plan proposes to pay delinquent income taxes, it’s usually a best practice to pay interest on a tax claim that is paid through a Chapter 13 plan, otherwise, any unpaid interest on the tax bill, may survive the final bankruptcy discharge and may still be there, waiting for you. For more information on this case, please see: USA vs. Monahan, United States Bankruptcy Appellate Panel for the First Circuit, No. MB 12084 (Sept. 19, 2013). http://volo.abi.org/united-states-of-america-v-monahan
Income taxes are a source of anxiety for many consumers and businesses. Tax debts can quickly get out of hand. It’s not surprising that debts owed for past income taxes are often a major reason why consumers and businesses seek the assistance of a debt relief attorney. The attorneys at Resnick & Moss, P.C. can provide the legal advice and recommendations you may need. Please do not hesitate to call or contact via email, Resnick & Moss, P.C., at (248) 642-5400, for a free telephone consultation.