IRS Tips for Bankruptcy Trustees
Here are some helpful tips for bankruptcy trustees who receive IRS Collection notices:
- If the IRS is a creditor in a bankruptcy case, and you determine that IRS was not originally listed as a creditor, notification of the filing should be sent to IRS to prevent violations of the automatic stay. Send notification to:
Internal Revenue Service
Centralized Insolvency Operation
P. O. Box 7346
Philadelphia, PA 19101-7346
IRS notices are sent to the last known address. This address is determined by the most recently filed tax return, Form 8822, Change of Address, or change of address information obtained from the United States Postal Service. As an official National Change of Address licensee of the USPS, the IRS receives weekly updates of change of address information.
Bankruptcy does not prohibit issuance of all IRS notices, and not all IRS notices violate the automatic stay. Some notices, for example inquiries concerning unfiled returns, will continue to be sent to the debtor’s last known address.
For individual debtors, the last known address should always remain the debtor’s address. Returns should not be filed “in care of” the trustee. Doing so will change the debtor’s address to that of the trustee and all IRS correspondence relating to that taxpayer will be sent to the trustee.
In cases not involving an individual debtor, the debtor’s IRS address of record will be changed to the trustee’s address if the trustee:
- Files a debtor’s tax return in care of the trustee at the trustee’s address, or
- Files a change of address for the debtor with the USPS, or
- Files a Form 8822, Change of Address, with the IRS.
Any of the above will result in all future IRS correspondence being sent to the trustee.
Treas. Reg. §301.6212-2 and Rev. Proc. 2010-16, provide guidance on the procedures for making a change of address and explain the requirements for giving the IRS “clear and concise notification” of a change of address.
IRS notices concerning taxes incurred by bankruptcy estates of individuals in chapter 7 and 11 cases, which file separate Form 1041 returns, are properly sent to the bankruptcy trustee. Notices will continue to be sent until the liability is satisfied or the statute of limitations for collection expires.
- Use EFTPS, the Electronic Federal Tax Payment System, to submit debtor payments. EFTPS® allows you to make payments electronically via the Internet or by phone using the EFTPS® Voice Response System. It is a free service offered by the U.S. Department of Treasury. Bankruptcy trustees wishing to enroll in EFTPS must complete Form 14781, Electronic Federal Tax Payment System (EFTPS) – Insolvency Registration and mail or fax it to 1-888-201-0517. For other assistance visit our Help & Resources page. Visit EFTPS® or call EFTPS® Customer Service at 1-800-555-4477 for more information.
Certain penalties may apply to returns filed by the trustee for taxes owed by the bankruptcy estate. The penalties may be waived if the Bankruptcy Court finds there are insufficient funds to pay administrative expenses. Contact the Centralized Insolvency Operation at the phone number below if you believe any of the penalties should be waived.
If you have questions regarding a case where IRS is listed as a creditor, contact the Centralized Insolvency Operation. Be prepared to provide the debtor's bankruptcy case number or taxpayer identification number. The IRS may only disclose the information permitted by I.R.C. section 6103.
Call (800) 973-0424 to reach the Centralized Insolvency Operation. Hours are 7 a.m. to 10 p.m. eastern time.