[Firemarshal77]

I was the president of a company where the payroll taxes were imbesseled by the accountant. The state and federal government harnessed me with the tax liability. The taxes were incurred during 1992 and 1993. I did file bankruptcy in 2004 and we did list the Indiana Department of Revenue and the IRS on the chapter 7 bankruptcy. We started getting our tax check back the next tax season. The problem is the Indiana Department of Revenue has turned me over to their collection agency and they are now garnisheeing my wages. The way I found out was my check was 25% short. I never got anyghing else not even from my employer letting me know they were even trying to collect. Can they collect on me when I filed bankruptcy in 2004. I know the debt dosen't go away but dosen't bankruptcy make it where they cannot collect during term of so many years. We are really trying to get our feet under us and they just knocked them out. Please help.

[AtlantaTaxExpert]

This is acutally a legal question best posted in the LAW Forum under Bankruptcy.

That said, it is my understanding of the law that old tax liabilities (both federal and state) CAN be discharged by federal bankruptcy proceedings.

Contact your bankruptcy lawyer so that he/she can properly notify the Indiana Department of Revenue about the bankruptcy discharge of your state tax liability.

If the Indiana Department of Revenue fails to comply, they should be held in contempt by the federal bankruptcy judge and be subject to some rather nasty punitive fines, because, like it or not, the state of Indiana has to obey the law, just like everyone else.