July 12, 2022 - Douglas Myser

Tax debt is held to be discharged. In our ongoing coverage of Tax Court cases, this case is of Nicole Golden and her husband, Stephen Alter, who timely filed an extension until Oct. 15th, 2009, for the 2008 tax return but did not file the return by the extended date. They experienced financial and marital difficulties and separated in 2010, after also experiencing problems in their sole proprietorship real estate rental business that included foreclosure on the rental property. Tax debt is held to be discharged.

In March 2011, Golden had a paid preparer complete the couple's 2008 and 2009 returns. A few days later, the IRS sent Golden a notice of deficiency of $276,506, which with penalties and interest eventually grew to approximately $417,000. Golden filed the 2009 return but not the 2008 return because, she testified, she was unable to pay the taxes and was attempting to understand the reason for the deficiency's amount. Her prepared 2008 return showed a balance due of $23,040. In August 2011, Golden did file the 2008 return.

In April 2014, Golden and Alter filed a Chapter 13 bankruptcy petition. The IRS filed a claim for $88,516, of which nearly $8,000 was identified as secured, nearly $50,000 as priority, and the balance of more than $30,000 shown as a general unsecured claim. The couple obtained a general discharge in February 2020 after paying more than $51,000 to the IRS. In June 2020, the IRS issued the taxpayers a notice of lien for the remaining taxes owed. Eventually the bankruptcy court held that Golden and Alter's tax debt could be discharged in bankruptcy, despite the late filing of the tax return.

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