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Tax Debt

Do you owe back income taxes? Generally, taxes are not dischargeable in bankruptcy. In other words, you must pay them. However, under certain circumstances, "income" taxes are dischargeable (extinguished) under either Chapter 7 or Chapter 13. Depending on your financial situation, owed back taxes can play a large role in determining whether to file for bankruptcy. We can help you determine which, if any, income taxes can be eliminated or discharged by filing bankruptcy.

Essentially, there are three criteria we analyze in order to determine if income taxes are dischargeable.

First, the due date for filing the tax return for the taxes that are owed, must have been filed at least three years ago. So, if you owe taxes from 2007, and that obligation became due for payment on April 15, 2008 (assuming no extensions were filed), you now meet this criteria.

Second, the tax return for the taxes you owe must be on file with the IRS for at least two years. If you did not file a tax return for the taxes you owe, or if you filed it less than two years ago, you don't meet this criteria.

Third, the taxes you owe must be assessed by the IRS no less than 240 days before you file for bankruptcy.

Even if you meet these three criteria, your taxes will not be dischargeable in bankruptcy if you committed or attempted tax fraud, or if the tax return you filed was fraudulent.

If you owe back income taxes and they are a consideration in deciding whether you should file for bankruptcy, you should contact us for a free consultation to find out if you can get your tax discharged. Even if owed back income taxes are not a large part of your debt, determining if they can be discharged may play a role in whether you file for bankruptcy under Chapter 7 or Chapter 13. Consulting with one of our attorneys is the first step toward making that very important decision. Please call us now to schedule your free consultation.