Are back taxes dischargeable in bankruptcy?
Sometimes, YES.
If so, can IRS still try to collect after the tax was discharged in bankruptcy?
An employee of IRS had knowledge of the taxes being discharged in bankruptcy, and still try to collect the back taxes by issuing levies in an attempt to collect back taxes.
The debtor entered into a settlement agreement whereby IRS acknowledge they violated the discharge. Of course, IRS didn’t agree with their agreement, so they appealed to the First Circuit. The Court held that “IRS’s reasonable and good faith belief did not apply to them.” The Court said NO, their good faith was not relevant to determining whether it willfully violated the discharged order. IRS lost.
Internal Revenue Service v. Murphy, No. 17-1601 (1st Cir. 2018)
Marvin
Law Office of Marvin Mann
