Tolling Events and the Bankruptcy of Taxes

      There are various events that can stop the clock on the prerequisites for the filing of a bankruptcy against taxes.  The three year period is tolled during any time that an extension to file was in effect. (In re Gidley, 138 B.R. 298 (M.D. Fla. 1992), (11 U.S.C. Section 507(a)(8)(A)(i).  The three-year period is also tolled during the time that another bankruptcy is pending or during the time that a taxpayer assistance order is in effect.  See In re Brickley, 70 B.R. 113 (9th Cir.BAP 1986); In re Molina 99 B.R. 792 (Ohio, 1988)); In re Florence, 115 B.R. 109 (Ohio, 1990); In re Bryant, 120 B.R. 983 (E.D. Ark 1990); Solito v. United States 172 .R. 837 (W.D.La 1994).  Some courts also hold that the statute is tolled during the time the debtor was in bankruptcy pus six months.  See Matter of Ross, 130 B.R. 312 (Neb 1991); In re Worthen, 137 B.R. 1016 (DC Ore. 1992); In re West 137 B.R. 1012 (D.Or. 1992); In re Wise, 127 B.R. 20 (E.D.Ark. 1991). 

      The two year period for the filing of returns has also been held tolled during the time the debtor was in bankruptcy.  See Matter of Stoll, 132 B.R. 782 (N.D.Ga. 1990).

      The 240-day period doesn't start during the time that the debtor is in tax court.  The 240-day rule is also stayed during the time a prior bankruptcy is filed plus six months.  If an offer in compromise is filed, the 240- day rule is extended during the time the offer is considered plus six months. 

APPOINTED COUNSEL AND CIVIL CONTEMPT

It is a clearly established fact that the government cannot hold an individual in prison without counsel in a criminal case.  The situation arises, however, when an individual is jailed for civil contempt; is the court required to appoint counsel for him?

In the Tenth Circuit case of Walker v. McLain, 768 F.2d 1181 (10th Cir. 1985; the court ruled that an individual is entitled to appointed counsel in a civil contempt proceeding that could result in his incarceration:

The government asserts that petitioner was not entitled to appointed counsel because the contempt proceeding that resulted in his incarceration was a civil rather than a criminal proceeding.  We cannot accept such a proposition.

It is the defendant's interest in personal freedom, and not simply the special sixth and fourteenth amendment right to counsel in criminal cases, which trigger the right to appointed counsel." It would be absurd to distinguish criminal and civil incarceration the right to counsel, as an aspect of due process, turns not on whether a proceeding may be characterized as "criminal" or  "civil," but on whether the proceeding may result in a deprivation of liberty.

The risk of erroneous deprivation of liberty created by refusing to appoint counsel for the indigent petitioner is high.  The courts have long recognized the importance of a lawyer in protecting the right to liberty. Due process does require, at a minimum, that an indigent defendant threatened with incarceration for civil contempt, who can establish indigence under the normal standards for appointment of counsel in a criminal case, be appointed counsel to assist him in his defense.

Id. at 1184-1185.

If you have been classified as an illegal tax protestor, of course, a financial affidavit from you could be used against you in a criminal tax case.  It is going to be difficult for the judge to force you to fill out a financial affidavit without an attorney once you show your IMF and the IRS 6209 Manual and other memoranda from the IRS explaining the illegal tax protestor code to the court.  It will be evident to the court that the affidavit can be used against you.  So explain your fears and your position and then tell the judge that you need an attorney before you can fill out the affidavit.  If the court is threatening you with jail-time for civil contempt, don't waive your right to counsel, demand counsel, quote the Walker case and explain why you have a reason to worry about giving the government financial information.  Good luck; and if you play your cards right, you will probably never have a court threaten you with civil contempt.  There are many ways to skin a cat.