New bankruptcy law.

• Author: Laffie, Lesli S.
• Position: FROM THE IRS

The Service has issued a fact sheet (FS-2005-18) reminding debtors of their new responsibilities under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (P.L. 109-8), which generally went into effect for bankruptcy petitions filed after Oct. 17, 2005. The new law requires debtors to comply with certain tax-filing responsibilities, as well as provide copies of previously filed returns to creditors in some circumstances.

Filing returns: Under the new law, the IRS may request the bankruptcy court to order a dismissal or a conversion of a bankruptcy petition if the debtor fails to file a tax return (or fails to file for an extension) that becomes due after the date the petition is filed. A dismissal or conversion may also be ordered if a Chapter 11 debtor fails to pay any Federal tax obligations owed after the date the bankruptcy petition is filed. Chapter 13 debtors must also file all Federal tax returns for the four-year period before the bankruptcy petition, to have their bankruptcy plan confirmed.

Copies of returns: Generally, the new law requires that debtors must provide a copy of...