Should I include under the table pay in my bankruptcy? 3 Answers as of August 22, 2010If I have been paid under the table for a long time, do I have to report this income on my bankruptcy? I am scared that the IRS is going to come after me if I do put it on there. I do not want to have to go to jail for it and will not file for the bankruptcy.
Law Offices of Michael J. Berger | Michael J. Berger
All income should be listed in your bankruptcy schedules. This includes, but is not limited to, what you refer to as under the table pay. Failure to list all of your income in your bankruptcy schedules is a federal crime, for which you could be sent to jail for up to 5 years and have to pay a large fine. In addition, your discharge could be denied. This means that your debts would not be wiped out and you would not get a fresh start. It would be best if you would file an accurate tax return with the IRS or amend your return to now provide an accurate tax return to the IRS before you proceed with your bankruptcy filing. If you are not willing to accurately report your income on your bankruptcy schedules, it would be best for you not to file bankruptcy. For specific advice about your matter, please call me.
Answer Applies to: California