Tax Issues in Consumer Bankruptcies

Navigating Discharge of Tax Liability, Impact of Tax Obligations on Means Testing, and Debt-Related Tax Consequences

Recording of a 90-minute CLE webinar with Q&A


Conducted on Tuesday, January 15, 2013

Recorded event now available

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Program Materials

This CLE webinar will provide bankruptcy counsel a review of key tax issues in consumer bankruptcy, including discharge rules for different tax obligations, how income tax liabilities impact applicability of the means test, and tax consequences of debt-related obligations like cancellation of debt and home foreclosure.

Description

The treatment of tax liability raises many complex issues in consumer bankruptcies. Whether a bankruptcy filing relieves tax debt depends on the nature of tax liability and the type of bankruptcy filing. While it is difficult to eliminate many tax liabilities, there are avenues of relief for many debtors.

Another critical issue with income tax liability is how to categorize the liabilities for the applicability of the means test. Counsel must determine whether these obligations are deemed “consumer debt,” which may impact the applicability  of the means test.

Another issue concerning tax liability is COD income  which may arise from the short sale of a debtor’s property due to any forgiven debt.   Practitioners should understand how bankruptcy may be a better solution than a short sale or how at times bankruptcy can work in unison with a subsequent short sale to facilitate the transaction and eliminate COD income risk.

Listen as our authoritative panel provides guidance through key tax issues in consumer bankruptcy proceedings, including discharge of tax liabilities, categorization of tax debt for purposes of means testing, and tax consequences of consumer debt.

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Outline

  1. Discharge of tax liabilities
  2. Categorizing tax liabilities for applicability of the means test
  3. Tax consequences of consumer debt

Benefits

The panel will review these and other key questions:

  • What are the differences between discharge of tax obligations under Chapter 7 and Chapter 13?
  • How have courts addressed the issue of whether income tax obligations are consumer debts for means test purposes?
  • • What are the tax consequences of debt-related obligations like cancellation of debt income?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

Richard S. Gendler
Richard S. Gendler

Principal
Law Offices of Richard S. Gendler

He primarily handles consumer bankruptcy filed under Chapters 7, 11 and 13 of the Bankruptcy Code.  In 1998, he...  |  Read More

Burton J. Haynes
Burton J. Haynes

Principal
Law Office of Burton J. Haynes

He specializes in tax controversy work, including civil and criminal tax matters, civil penalties, tax litigation,...  |  Read More

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