The old rule was that any Income tax more than three years old could be discharged. If it was not filed on time, then two years after filing the return.

     The 11^th Circuit Court of Appeals has ruled that taxes are not dischargeable, if they are filed even one day late. Even if paid through the bankruptcy, the Internal Revenue Service can collect on the penalties and interest owed during the bankruptcy, after the discharge is granted.

     It is important that all tax payers understand the importance to file their returns on time or apply for extensions.

     For more information on taxes in bankruptcy, call Custer, Custer & Clark, LLC.