Bankruptcy Taxation

This session will present an in-depth analysis of the interplay among tax law, liquidation and bankruptcy. The panelists will examine some of the tax traps that exist for an individual when business obligations remain unpaid in a closure or bankruptcy, as well as how to use an insolvency defense to defeat phantom K-1 and 1099 income.

A panel of judges, academics and Supreme Court practitioners will lead a discussion regarding the 2016-17 Supreme Court decisions of note for insolvency practitioners, as well as the high court’s most impactful, interesting or problematic decisions on bankruptcy practice to date. Amendments to Rule 37(e) (in effect since December 2015), as well as courts’ and litigants’ experiences with amended Rule 37(e), will also be discussed.

Presented by the Bankruptcy Taxation and Labor & Employment Committees

Presented by the Mediation and Secured Credit Committees

Payment of property taxes remains a recurring problem for many homeowners. Frequently, they do not understand what taxes are required to be paid, what interest rates are being charged, and what the consequences of nonpayment are. What is the process for property tax foreclosure? How long is the redemption period? Is there a point when a chapter 13 case can no longer be effective in dealing with property taxes? What if the taxing authority enters into repayment plans during or after the redemption period? What is the effect of these plans when an individual files for bankruptcy in the midst of a repayment program? What property interest, if any, does the debtor retain after foreclosure, or after redemption? How does a debtor address delinquent property taxes in his or her schedules?

When is a tax return not a tax return? Bankruptcy can be very useful when seeking to discharge personal income tax obligations, but if the return has not been filed on time, dischargeability may be in jeopardy. Many courts have addressed this issue and have issued widely divergent views, including the First Circuit’s strict interpretation of what constitutes a tax return as announced by the majority in In re Fahey. This panel will focus on the development of the case law in the First Circuit, the information you must obtain from the taxing authority to determine when a tax return has been filed, what constitutes a return, and strategies to employ in the event that the tax return your client filed is defective and the taxes reported on that return are nondischargeable.

The impact of a bankruptcy filing on a consumer debtor’s tax liabilities requires a reconciling of hazy IRC provisions with Title 11. Topics will include the impact on the debtor’s discharge for late-filed income tax returns, 1099s ((A) and (C)), 26 U.S.C. § 108, tax liens and their treatment under the Code (§ 724), and the pros and cons of filing a “stub” year tax return.

Hospitality and the Tax Man: Historical Hospitality Tax Issues in Distress