ZACHARY MONTGOMERY- FREEMAN LAW

Around this time of year, taxpayers (and CPAs) may be scrambling to file federal income tax returns or, at the very least, extensions. For many, seeing the current year’s tax return in the rear-view mirror provides a serious feeling of relief. However, taxpayers should pause before quickly hitting the “file” button. The information and representations provided on a federal tax return can later be used as evidence against the taxpayer. Here, a taxpayer sought bankruptcy relief related to a loan incurred for education. However, the bankruptcy court ultimately used the taxpayer’s representations and treatment of the loan (specifically, the interest) on her tax returns as an admission against her.

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