Debtor With Late-Filed Form 1040 Can’t Discharge Taxes

A debtor couldn’t discharge a federal income tax debt in his bankruptcy case because he filed his Form 1040 more than three years after the IRS assessed a deficiency against him, the Ninth Circuit ruled (In re Smith, 2016 BL 224521, 9th Cir., 14-15857, 7/13/16).

Judge Morgan Christen of the U.S. Court of Appeals for the Ninth Circuit concluded July 13 that the late-filed Form 1040 wasn’t a “return” for the purposes of considering a Bankruptcy Code section prescribing when tax debts can’t be discharged, because the late filing didn’t represent an “honest and reasonable attempt to ...