The treatment of unsecured
tax penalties in bankruptcy is linked to the dischargeability of the tax to
which they are related.
Chapter 7
Penalties associated with priority
(nondischargeable) taxes are not dischargeable;
Penalties related to dischargeable taxes are dischargeable, too.
Penalties associated with taxes arising more than three years before the
bankruptcy are dischargeable, even if the tax to which it is linked
isn't dischargeable.
Chapter 13
All unsecured
penalties are dischargeable. Penalties can be paid at the same
rate as non tax claims, usually a fraction on the dollar.
No new penalties accrue on prepetition
taxes during the Chapter 13 payment plan.
If a tax lien attaches to actual equity in assets, under the current law, the
penalties are secured as well as the tax, even if they would be dischargeable if
not secured.
The Polk Law Firm
Dallas
Bankruptcy Lawyers
Attorneys and Counselors
(Tel) 214-742-9805; (Fax)
214-742-7212
