The following is provided for informational purposes only and not as legal advice. For legal advice, please consult your attorney.
Pursuant to the Bankruptcy Code, debtors in bankruptcy are required to file all tax returns for the four years prior to their bankruptcy. In addition, taxes which were last due within three years of the petition date are given “priority” treatment and must be paid in full through the bankruptcy for the debtors to receive a discharge. The Department files motions to dismiss when debtors have failed to file returns for any of the “priority” tax years. The Department will usually withdraw if the debtor files all missing returns or an affidavit stating why filing is not required. Click here to obtain Missouri Individual Income Tax Returns.
If you were not required to file a Missouri individual income tax return, either because you were not a resident of Missouri or you had insufficient income to be required to file, you can provide the Department an affidavit, signed and notarized, indicating why you were not required to file. For assistance with this process, you may contact the Bankruptcy Unit of the General Counsel’s office at 573-751-5531.
That will depend on several factors, such as your “home of record” and whether your spouse had any earned income. Click here for detailed information.
The IRS does not share federal extension information with the Department. You will need to send us a copy of the federal extension form. Click here for more information regarding an extension of time to file.
You will not have to pay any sales tax due on a vehicle purchased before your petition date while you are in bankruptcy. Take a copy of your bankruptcy petition and schedules along with you to the licensing office. You will also need to have your personal property tax receipt or a waiver from the county collector’s office. You will need to pay the licensing fee but not any sales tax due.
Governmental units are allowed to conduct an audit to determine tax liability, issue notices of tax deficiency, demand tax returns and even issue an assessment with a demand for payment. These activities are permitted under bankruptcy law. Taxing authorities are not allowed to file liens on pre-petition periods while taxpayers are in bankruptcy.
The Department may be able to offset your income tax refund. If both the overpay and the underpay periods are pre-petition, (before the date the bankruptcy was filed,) we can offset. If you filed in 2012, refunds for 2011 are pre-petition and can be offset to any other pre-petition liability. If both the refund and the liability were post-petition, we can also offset.
Once the Department is notified of your discharge we will automatically review your case and abate any discharged taxes and penalties. The analysis of what is and is not discharged is complicated and depends on many factors. Talk to your attorney.
If you still have questions, please check out other Individual Income Tax FAQs.