IRS Fraud is Likely Reason to Vacate Bankruptcy Order
- April 23, 2013
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IRS debt is a reason for many bankruptcy filings. Although bankruptcy can permit debtors to escape massive tax debt, if the IRS discovers the debtor willfully failed to pay the debt, misrepresented income or expenses or otherwise attempted to defraud the Internal Revenue Service, it is highly likely that the debt will not be avoided. Additionally, if IRS debt is expunged, reduced or modified and the IRS learns of fraud relating to the debt there will likely be a dispute as to the dischargeability of the debt and any reduction or modification. In the recent matter of In re Clemente, the United States filed a motion for reconsideration of the order permitting the Chapter 7 trustee to expunge, reduce and modify 2 proofs of claims. The court found that the debtor did willfully refuse to pay taxes due and also levied penalties and interest. The order to expunge and reduce the claim of the IRS was vacated as the priority claim was nondischargeable. If you have been carrying the burden of IRS or other substantial debt, you can also obtain relief through bankruptcy. If you are considering bankruptcy you should consult with an experienced bankruptcy attorney immediately in order to protect your rights. For more information regarding foreclosure, bankruptcy or other consumer debt matters in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for information purposes only and in no way is intended to replace the advice of an attorney regarding your specific matter. Our law firm is a debt relief agency and helps people file for bankruptcy relief.