DEFINITION of 'IRS Publication 908'
A document published by the Internal Revenue Service (IRS) that provides information on how federal income tax should be treated in the case of bankruptcy. When an individual files for bankruptcy all assets are placed in a bankruptcy estate, which is assigned its own Employer Identification Number (EIN). In the case that chapter 7 or chapter 11 is filed by an individual, the bankruptcy estate is treated as a separate entity. A separate entity is not created for partnerships or corporations filing for bankruptcy.
BREAKING DOWN 'IRS Publication 908'
If an entity declares bankruptcy before filing a tax return or obtains an extension before bankruptcy proceedings begin, the IRS can ask the court to either dismiss the case or change the chapter filed. If the entity does not file a return or obtain an extension after 90 days, the court is required to dismiss the case or change the chapter filed.
IRS Publication 908 does not cover bankruptcy laws in detail, and is designed to give basic information.