Sec. 316-36-016 - BANKRUPTCY CLAIMS

§ 316-36-016. BANKRUPTCY CLAIMS

016.01 If a bankruptcy petition is filed concerning any taxpayer, an automatic stay is usually operative and the Department may not act against the property of the bankruptcy estate, property of the debtor, or against a debtor personally to collect a debt; exercise control over, or take possession of property of a bankruptcy estate; or create or enforce a state tax lien. In cases of consecutive bankruptcy filings, the automatic stay may not be operative. During the pendency of a bankruptcy, the Department may:

016.01A Enter the premises or a location where the books are maintained to do an audit or examination after notifying the management, the trustee, and the debtor's bankruptcy attorney that the Department may be auditing or examining records;

016.01B Issue a notice of proposed deficiency determination for any filed or non-filed periods;

016.01C Require tax returns;

016.01D Assess any tax or issue a demand for payment regarding this assessment;

016.01E Continue a notice of state tax lien that was recorded prior to the filing of the bankruptcy petition;

016.01F Issue a demand for payment to a responsible corporate officer or employee as provided in Reg-36-013.01 who is a debtor, subject to exceptions in the demand for payment;

016.01G Set off a pre-bankruptcy petition income tax refund against a pre-bankruptcy petition income tax liability.

016.02 If a bankruptcy petition is filed with regard to any taxpayer, Nebraska Rules of Bankruptcy Procedure require the taxpayer to file any delinquent tax returns that were due prior to the filing of the bankruptcy petition within 30 days after the bankruptcy petition was filed, unless an extension is granted by the Bankruptcy Court.

016.03 The Department must file a claim with the Bankruptcy Court for any taxes reported, but not paid; any taxes that have been assessed and not paid; any taxes currently due; and any interest, penalties, and costs assessed prior to the filing of the petition to share in any dividend from the bankruptcy estate.

016.03A If a notice of state tax lien has been recorded under Reg-36-006 prior to the filing of the bankruptcy petition, the taxes which are the subject of the lien may be a secured obligation with priority as against other creditors based on seniority of the lien.

016.03B If a notice of state tax lien has not been recorded prior to the filing of the bankruptcy petition, taxes are an unsecured debt and may be granted priority as provided in 11 U.S.C. § 507(a)(8).

016.03C A tax obligation that covers a period ending prior to the filing of the bankruptcy petition that becomes due after the bankruptcy petition was filed, is considered to have arisen before the petition was filed.

016.03D The Bankruptcy Court may determine the amount or legality of any tax, interest, penalty, or costs owed by the taxpayer at the time the bankruptcy petition was filed, whether previously assessed or not, or any refund claim asserted by the debtor/taxpayer, unless the tax or refund amount or legality was contested before and determined under Chapter 33 of this Title or by a court of this state on appeal prior to the filing of the bankruptcy petition.

016.04 When the debtor is an individual, liquidation under Chapter 7, or liquidation or confirmation and completion of a plan of reorganization under Chapters 11 or 13, may result in a general discharge of debts. However, this discharge does not discharge any tax obligation or its associated interest, penalties, or costs, or prevent the Department from assessing taxes that became due during the pendency of the bankruptcy if:

016.04A The return is for individual income tax for a taxable year that was last due, including extensions, after the date that is three years prior to the date the bankruptcy petition was filed;

016.04B The tax is for individual income tax that was assessed, and the assessment was final less than 240 days before the date the bankruptcy petition was filed, not counting;

016.04B(1) Any time during which an offer in compromise was pending, plus 30 days, or

016.04B(2) Any time during which a stay against collection was in effect in a prior bankruptcy petition, plus 90 days;

016.04C The tax is a trust fund tax;

016.04D The tax is an excise tax on a transaction occurring before the date of the petition, for which a return, if required, is last due, under applicable law or any extension, after three years before the date of the petition;

016.04E The tax was assessed as a result of a fraudulent return or a willful attempt to evade tax even if the taxes, interest, penalties, or costs arose more than three years prior to the date the bankruptcy petition was filed;

016.04F The tax is a tax for which no return, or equivalent report or notice, was filed; or

016.04G The tax is a tax for which a return was filed within two years before the date the bankruptcy petition was filed.

016.05 If the debtor is not an individual, no claims for taxes, interest, penalties, or costs are discharged under liquidation or confirmation of a plan of reorganization under Chapter 7 or Chapter 11. Only individuals may file under Chapter 13.

016.06 Debtors under Chapter 12 (farm reorganizations) are not discharged of any tax claims listed in subsections 016.04A or 016.04B except for income taxes resulting from capital gains generated from sales of property used to fund and complete a plan of reorganization.

016.07 Property exempted in a bankruptcy remains encumbered to the extent of the value of a state tax lien that was properly filed before the filing of the bankruptcy petition.

Neb. Rev. Stat. § 77-27,112, R.R.S., and sections 11 U.S.C 362(b)(9), 11 U.S.C. 502, 11 U.S.C. 506, 11 U.S.C. 507(a)(8)(A)(i),(ii),(iii),(C),&(E), 11 U.S.C. 522(c)(2)(B), and 11 U.S.C. 523(a)(1). July 3, 2013.

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