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Willful Evasion – Widow's Tax Liabilities Excepted From Bankruptcy Discharge

The widow of a personal injury lawyer is responsible for $2.7 million in liabilities for the years 1996 through 2001, as the couple filed joint income tax returns but did not pay the balance of their tax liabilities when filing the returns, the U.S. Court of Appeals for the Fifth Circuit held July 24 (United States v.Coney, 5th Cir., No. 11-30387, 7/24/12).
Judge Emilio Garza said the district court did not err when it concluded that the tax liabilities of Barbara Susan Coney and Curtis John Coney Jr. for the years at issue were excepted from the bankruptcy court's discharge order under Bankruptcy Code Section 523(a)(1)(C) - Willful Evasion.

Garza said that although the Fifth Circuit had not previously explicitly addressed the issue of willfully attempting to evade or defeat the payment or collection of taxes, he agreed with other circuits that the exception in Section 523(a)(1)(C) contains both a conduct requirement and a mental state requirement and both Barbara and Curtis “willfully attempted” to evade or defeat the payment or collection of taxes for the relevant tax years.

If you have Tax and/or Tax Audit Problems, contact the Tax Lawyers at Marini & Associates, P.A. for a FREE Tax Consultation at or or Toll Free at 888-8TaxAid (888 882-9243).

Read more at: Tax Times blog

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