Notify State Of IRS Audit Or Jeopardize Tax Dischargeability
Many states have their own personal income tax. Generally these states also have laws that require a taxpayer to submit a copy of the IRS audit report if the federal liability is adjusted due to a reallocation of income or deductions on a previously filed return. The failure to do so may cause bankruptcy discharge problems . Changes to federal law contained in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 may render any undisclosed increase in liability a non-dischargeable debt for bankruptcy purposes. (more…)