Congress recently took steps to deal with the rise of bankruptcy declarations in the United States with the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Part of that legislation is aimed at helping states get priority treatment in bankruptcy proceedings when debtors owe state taxes. The new rules are generally considered to favor tax authorities over debtors, according to Randall K. Hanson and James K. Smith in a recent issue of CCH’s Journal of State Taxation. These authors, professors at the University of North Carolina Wilmington and the University of San Diego, respectively, walk through the changes made by the new law and how it will affect attempts to avoid taxes in bankruptcy.
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This story is from the CCH’s monthly Focus on Tax newsletter, which provides advise and guidance on federal and state tax issues for tax and accounting professionals.
Read this article from CCH’s Journal of Taxation of Financial Products.