Discharging taxes in bankruptcy is possible under very specific guidelines. There are several factors that are taken into account by the bankruptcy court, including the time lapse since the due date for the returns and whether your intent was to evade taxes. The chapter under which the bankruptcy is filed will have an impact. You may also be able to discharge some of the taxes, leaving the rest to be cleared under an easier repayment plan outside of bankruptcy.
Would you like to learn more about discharging taxes in bankruptcy? Are you currently facing any problems regarding your tax filing or tax return? Our taxation lawyers are here to help you during your crisis. Contact a taxation law attorney in your area as soon as possible for more information about taxation and bankruptcy laws.
There are several ways to clear you tax debt in a favorable manner, as detailed below:
There are five basic rules or eligibility criteria for being able to discharge taxes in bankruptcy. First, the tax return filing due date must be more than 3 years. Secondly, the tax return must have been filed at least two years prior. There must appear to be no intent to evade taxes. The assessment must be at least 240 days prior to the bankruptcy filing.
It is sometimes beneficial to go for Chapter 7 and Chapter 13 bankruptcy in serial order. For example, tax debt associated with fraud or tax evasion case will not be eligible for discharge of taxes in a Chapter 7 bankruptcy filing. However, the bankruptcy filing often stops the clock and the collection process. The IRS will then be more agreeable to offers in compromise, which can help reduce the burden.
Do you have additional legal questions regarding discharging taxes in bankruptcy? Our taxation law attorneys are here to help. Contact a taxation lawyer near you today to get the answers and information that you are seeking regarding discharging taxes in a bankruptcy.
Did you know?
A Chapter 13 bankruptcy can help discharge taxes even under tax evasion charges.
Unlike Chapter 7, the bad conduct charges do not apply under Chapter 13. The two year filing rule also does not apply and the return can be filed just before or after the bankruptcy filing.