Table of Contents
Bankruptcy Tax Guide1
| Introduction | 1 |
| The United States Bankruptcy Code | 1 |
| Types of Bankruptcy | 2 |
| Chapter 7 | 2 |
| Chapter 11 | 2 |
| Chapter 13 | 2 |
| The Involuntary Bankruptcy Petition | 3 |
| Tax Collections Under an Automatic Stay | 3 |
| Court Jurisdiction | 4 |
| Tax Returns Due Following Bankruptcy Filing | 4 |
| Trust Fund Withholdings | 4 |
| Tax Payment Allocations | 5 |
| The Validity of Tax Claims | 5 |
| Federal Tax Liens | 5 |
| Prioritization of Tax Claims | 5 |
| Taxes Not Discharged in Bankruptcy | 6 |
| Relief from Penalties | 6 |
| The Individual Bankruptcy Estate | 7 |
| Payroll Issues Relating to the Bankruptcy Estate | 8 |
| Tax Reporting of the Estate | 8 |
| Accelerated Determination of Tax Liability | 9 |
| Tax Reporting of the Debtor | 9 |
| Tax Returns Disclosure | 9 |
| The Individual Debtor | 9 |
| Partnership Bankruptcy | 10 |
| Corporate Bankruptcy | 10 |
| Tax Effects of Debt Cancellation | 11 |
| Summary | 11 |
| Review Questions | 12 |
Answers to Review Questions13
Glossary14
Index15
Course Details
Author: Steven M. Bragg, CPA
Steven Bragg, CPA, has been the chief financial officer or controller of four companies, as well as a consulting manager at Ernst & Young. He received a master’s degree in finance from Bentley College, an MBA from Babson College, and a Bachelor’s degree in Economics from the University of Maine. He has been a two-time president of the Colorado Mountain Club, and is an avid alpine skier, mountain biker, and certified master diver. Mr. Bragg resides in Centennial, Colorado. He has written more than 300 books and courses, including New Controller Guidebook, GAAP Guidebook, and Payroll Management.
Publication/Revision Date: 2/10/2026
Course Exam Questions (online): 5 (multiple-choice)
Program Delivery Method: Self-Study (NASBA QAS Self-Study)
Available Formats of Course Text: PDF or PDF plus printed copy sent in the mail
Course Level, Prerequisites, and Advance Preparation Requirements
| License | Course Level | Prerequisites | Advance Preparation Requirements |
|---|
| CPA | Overview | None | None |
| EA/OTRP | Overview | None | None |
* This program is appropriate for professionals at all organizational levels.
Sponsor ID Numbers
National Registry of CPE Sponsors ID: 107615
IRS Qualified Sponsor ID: FWWKO — Course ID: FWKKO-T-00746-26-S
State CPA Board Sponsor ID Numbers (where applicable)
Florida Division of Certified Public Accounting: 0004761
Hawaii Board of Public Accountancy: 14003
New York State Board for Public Accountancy: 002146
Ohio Accountancy Board: CPE .51 PSR
Pennsylvania State Board of Accountancy: PX178025
Texas State Board of Public Accountancy: 009349
Learning Objectives
As a result of studying the course material, you should be able to meet the objectives listed below:
- Recognize when an automatic stay is triggered in a bankruptcy case.
- Specify the correct tax reporting for a bankruptcy estate.
- Identify when a bankruptcy filer should report two short tax years.
- State how debts are settled in the bankruptcy of a partnership.
