<h2>New Jersey Attorney Details How Tax Returns Are Handled In A Chapter 13</h2>
All tax returns must be filed to proceed with a chapter 13 bankruptcy case. If any return is not filed, the trustee may possibly dismiss the case at the Confirmation Hearing. A case dismissal means that the case is thrown out. It may be possible to reinstate and continue with the same case.
In New Jersey, each creditor files a Proof of Claim (claim) with the court that indicates the details of the debt. All taxing entities, such as the Internal Revenue Service and the State of New Jersey, Division of Taxation, will file a Proof of Claim. The claim indicates whether all of the debtors returns are filed. Sometimes the tax claim will reflect that return for specific years were not filed even though the return was actually filed. In this situation, the taxing entity must file a modified proof of claim reflecting that all tax returns have been filed.
In addition to the non filing of a tax return, there may be many other more complicated tax issues related to the proofs of claim and tax debt. Typically, the State of New Jersey and the IRS are very easy to deal with and will amicably resolve various issues. For simple issues, the matter may possibly be resolved by forwarding the taxing authority the appropriate tax return. However, in a number of circumstances, it may be necessary to file a motion with the court objecting to the taxing entity’s claim. If the matter cannot be resolved, the issues may be argued before the judge, who will make a decision regarding the tax debt.
The NJ. bankruptcy practitioner, Robert Manchel, may be contacted at 866 503 5644.