Kentucky Bankruptcy Courts (KY)

The Kentucky Bankruptcy Court procedure for dealing with ITS tax claims

Dealing with claims involving the IRS create challenges for all debtors because of the non-dischargeable attribute of most income tax claims. The IRS is considered a super-authority because of their pervasive power and apparent immunity from criminal standards of proof when seeking to impose fines, penalties and even incarceration for tax evasion. The procedure for dealing with IRS tax claims is set forth in the federal Code, and permits limited exception for discharge for past taxes that were declared, payable and unpaid for an extended period of years. Many debtors attempt to bolster and buttress tax disputes with claims of fairness, yet only strict proof of compliance with narrowly defined exception will prevail.

State of Kentucky Bankruptcy Court Information:

The Kentucky Eastern Bankruptcy Court Divisions: Ashland, Corbin, Covington, Frankfurt, Lexington, and Pikeville.

The Kentucky Western Bankruptcy Court Divisions: Bowling Green, Louisville, Owensboro, and Paducah.

To successfully discharge IRS tax claims, debtors must sustain the burden of proof showing entitlement by law, and factual consistency. In most cases, the IRS will either levy or seize assets long before claims become dischargeable, or alternatively, restore claims to sustain their cause of action. However, when disputed claims are simply to expensive to collect through legal means, the IRS does occasionally abandon collectable claims that may be later discharged through the Kentucky courts.