Bankruptcy BK Flashcards
Definition of Bankruptcy: What is bankruptcy?
A legal procedure for dealing with debt problems of individuals and businesses. (Title 11 of the United States Code)
Types of Bankruptcy: What are the main types of bankruptcy?
Chapter 7 (liquidation), Chapter 11 (reorganization), Chapter 13 (wage earner’s plan). (Title 11)
Tax Debts in Bankruptcy: Are tax debts dischargeable in bankruptcy?
Some tax debts may be discharged, but others, such as trust fund taxes, may not. (11 U.S.C. §§ 523(a)(1), 507(a)(8); IRC § 6334)
Filing Tax Returns in Bankruptcy: What are the requirements for filing tax returns during bankruptcy?
Required to file or obtain an extension for all applicable federal tax returns during the bankruptcy proceedings. (11 U.S.C. § 1308; Bankruptcy Rule 4002)
Federal Tax Liens in Bankruptcy: What happens to federal tax liens in bankruptcy?
Generally, federal tax liens survive bankruptcy and continue to attach to property owned by the debtor. (11 U.S.C. § 522(c)(2); IRC § 6321)
Bankruptcy Estate and Taxes: How is the bankruptcy estate treated for tax purposes?
The bankruptcy estate is a separate taxable entity in Chapter 7 and Chapter 11 cases. (IRC §§ 1398, 1399)
Tax Attributes and Bankruptcy: How do tax attributes such as NOLs and credits carry over after bankruptcy?
Certain tax attributes may be reduced following the discharge of indebtedness in bankruptcy. (IRC § 108)
Priority of Tax Claims in Bankruptcy: What is the priority of tax claims in bankruptcy?
Certain unsecured federal tax claims may have priority over other unsecured claims. (11 U.S.C. § 507(a)(8))
Automatic Stay in Bankruptcy: What is the automatic stay, and how does it affect IRS collection actions?
Prevents collection activities during bankruptcy proceedings. IRS must cease most collection actions. (11 U.S.C. § 362; IRC § 362(a))
