Always order an account record or tax transcript from the IRS for a client filing a bankruptcy. You may want to obtain transcripts for the last 15 years to make sure all needed returns have been filed. The client may not be sure of the amount of liability or the years owed. This information will help you to determine what taxes are owed and whether they are dischargeable. Without accurate information on the assessment dates and tax return filing dates, you may file a bankruptcy before a tax becomes dischargeable and saddle the debtor with tax debt that could have been discharged. Also, a tax transcript or account record will enable you to verify that your client has filed all required tax returns.

At least 7 days before the first date set for the creditors meeting, the debtor must provide the trustee with a copy of the federal income tax return (or tax transcript) for the most recent year ending before the commencement of the case, if a return was required for that year.1 A copy of this return must be given to any creditors who request one at least 14 days before the first date set for the creditors meeting.2 The bankruptcy court may dismiss the petition of a debtor who fails to file a required return or transcript.3 If an interested party has filed a motion to dismiss of these grounds, the debtor must show that the failure to file was due to circumstances beyond the debtor’s control.

Because most low-income taxpayers use professional tax preparation services, a copy of a lost return can usually be obtained from the tax preparer. Attorneys who work for Low-Income Taxpayer Clinics also have immediate electronic access to IRS tax transcripts provided the client signs a Form 2848 authorizing the low-income tax clinic attorney to represent the client in tax matters for the relevant years. If these options are not available, you should immediately file an IRS Form 4506-T to obtain the client transcripts for the tax year in question. 

• 111 U.S.C § 521(e)(2)(A).
• 211 U.S.C. § 521(e)(2)(A)(ii); Fed. R. Bankr. P. 4002(b)(4).
• 311 U.S.C. § 521(e)(2)(B).

Chapter 13 debtors must file all required tax returns for tax periods ending within 4 years of the debtor’s bankruptcy filing. These must be filed before the first meeting of the creditors. A debtor may request that a trustee hold the creditors meeting open for an additional 120 days to enable the debtor to file the required returns. The failure to file the required returns will prevent confirmation of a Chapter 13 bankruptcy plan and will result in the dismissal of the Chapter 13 case or conversion to case under Chapter 7.

For all bankruptcies, a debtor must file any tax return that becomes due after the commencement of the bankruptcy case or obtain an extension for filing the return before the due date. If the debtor fails to timely file required returns or extensions, a taxing authority may request that the court dismiss the bankruptcy or convert it to another chapter of the Bankruptcy Code. If the debtor does not file the required return or obtain an extension within 90 days after the taxing authority’s request, the court must dismiss or convert the case. You should advise bankruptcy clients of their duties to file tax returns and ensure that they comply.