Bankruptcy and Tax in Evans, Georgia

Bankruptcy and Tax in Evans, Georgia

If you are an individual debtor in Evans, Georgia who files for bankruptcy under chapter 7 or 11 of the Federal Bankruptcy Code in , an independent ‘‘estate’’ is created consisting of assets that belonged to you prior to the filing date. The bankruptcy estate is a new taxable entity, totally separate from you as an individual taxpayer.

A penalty for failure to pay tax, including failure to pay estimated tax, will not be imposed for any period during which a title 11 bankruptcy case is pending if:
1. The tax was incurred before the earlier of the order for relief or (in an involuntary case) the appointment of a trustee, and
2. The bankruptcy petition was filed before the due date for the tax return (including extensions) or the date for imposing the penalty occurs on or after the day the bankruptcy case was filed.

The relief from the failure-to-pay penalty does not apply to any penalty for failure to pay or deposit tax withheld or collected from others and required to be paid over to the US government. Nor does it apply to any penalty for failure to timely file a return.

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