Singer Dionne Warwick filed for Chapter 7 bankruptcy last month in New Jersey, listing debts that include nearly $10 million in back taxes. According to the Associated Press, Warwick owes nearly $7 million to the Internal Revenue Service (IRS) for taxes from 1991 to 1999. She also owes more than $3 million in taxes to the state of California.
According to court documents, Warwick said she has only $1,000 in cash and $25,000 worth of assets in the form of clothing, jewelry, art and furniture. The singer’s annual income was listed at $20,950. Warwick’s publicist Kevin Sasaki told Yahoo News that “negligent and gross financial mismanagement” were behind the singer’s financial problems.
“In light of the magnitude of her tax liabilities, Warwick has repeatedly attempted to offer re-payment plans and proposals to the IRS and the California Franchise Tax Board for taxes owed,” Sasaki said. “These plans were not accepted, resulting in escalating interest and penalties.”
An individual filing for Chapter 7 bankruptcy may be able to discharge back taxes if they meet certain requirements, which include:
- The tax debt is for income tax and not other forms of taxes like payroll or sales tax
- The IRS or state you live in assessed the tax at least 240 days prior to your bankruptcy filing
- Your tax return for the debt was filed at least two years prior to the bankruptcy filing
- Your tax return for the debt was due at least three years prior to the bankruptcy filing
If you have concerns over back taxes and are thinking about filing for bankruptcy, contact our Washington DC and Maryland bankruptcy lawyer to learn more about whether you should file bankruptcy to deal with your student loans.
Law Firm of Kevin D. Judd
