Filing a tax return after the assessment by the IRS will not be considered a “proper tax return” under Beard standard and would not make the tax debt dischargeable.

Filing a tax return after the assessment by the IRS will not be considered a “proper tax return” under Beard standard and would not make the tax debt dischargeable.

The 3^rd Circuit court has just decided a case regarding the dischargability of the tax debt, when a taxpayer files his “tax return” after the Service assesses the tax deficiency. The court held that under the long standing Beard v. Commissioned of Internal Revenue case, the tax payer failed the fourth requirement of the test to make “. . . a  honest and reasonable attempt to satisfy the requirements of the tax law.”  The court rejected the approach adopted by the Eighth Circuit in In re Colsen that the “reasonable attempt . . . focuses of the content of the form, not on the circumstances of its filing.” Therefore, the court concluded that the tax payer’s forms 1040 were not a return for 11 U.S.C. 523(a)(1)(B) purposes and could not be discharged. Following the same reasoning, the failed attempt to file a “return” would not start a Statue of Limitation for collections’ purposes of the tax debt and the Service could try to collect any time. IRC 6502.

Thomas Giacchi v. U.S. Department of the Treasury Internal Revenue Service.