Detroit Bankruptcy Lawyer: Can I Get Rid Of Income Taxes in Bankruptcy?

4030701_s

     One of the many questions this Detroit Bankruptcy Lawyer gets asked is, “can I get rid of income taxes in bankruptcy?” The short answer is, it depends. There are requirements that first must be met before your tax debt can be discharged in a Chapter 7 or a Chapter 13. So let’s take a look at the requirements:

Requirement 1: The income tax return must have last been due more than three years before the bankruptcy

   The income tax return must have last been due more than three years before the bankruptcy, including all extensions. That means if your tax return was due 12/31/2012, then your income tax debt cannot be discharged until 1/1/2015. This three year rule also includes any extensions filed.

Requirement 2: You need to have filed your tax return more than two years before filing your bankruptcy petition

     You need to have filed your tax return more than two years before filing your bankruptcy petition. This means if you filed your tax return for 12/31/2012 yesterday, then file your bankruptcy petition today, the tax debt will not be discharged. The return must have been filed more than two years before the filing of your bankruptcy petition.

Requirement 3: The IRS must have assessed your tax due more than 240 days before filing your bankruptcy petition

     The IRS must have assessed your tax due more than 240 days before your petition is filed. The IRS assessment is simply an internal bookkeeping entry made by the IRS, acknowledging your overdue taxes. You can easily find out if the taxes has been assessed by ordering a tax transcript from the IRS, but in most cases you would have received a notice of tax due by the IRS. There are additional requirements if an offer in compromise is pending.

Requirement 4: The tax return must not have been fraudulent

     The tax return must not have been made fraudulently. This means if you intentionally filed a fraudulent return, then the tax debt cannot be discharged.

Requirement 5: You must not have intentionally evaded paying the tax

     You must not have intentionally evaded paying the tax. You must be able to show you genuinely could not afford to pay the tax, and just aren’t skipping out on paying.

 

     These five requirements are must be met before your income tax debt can be discharged in a Chapter 7 or a Chapter 13. If you meet them, then your personal income tax debt can be discharged. For more information, call this Detroit Bankruptcy Lawyer and ask for a free consultation. In Macomb County, call (586) 439-4297, extension 0, and in Oakland County, call (248) 581-0598, extension 0. I will analyze your financial situation and give you my advice on your financial situation. If bankruptcy is not an option for you, or bankruptcy is not right for you, I will tell you. It is a my policy to never put anyone in bankruptcy unless it is absolutely necessary for them to be there. Be sure to bring all your IRS notices to your free consultation to make sure we have the dates correct.

 

 

One Response to Detroit Bankruptcy Lawyer: Can I Get Rid Of Income Taxes in Bankruptcy?
  1. […] There are requirements that first must be met before your tax debt can be … … More: Detroit Bankruptcy Lawyers: Can I Discharge Income Taxes in … ← Answers to Common Bankruptcy Questions | Consumer Legal … Bring Pertinent […]

Leave a Reply

You must be logged in to post a comment. Click here to log in.

Trackback URL http://johnsonwilk.net/2015/02/19/detroit-bankruptcy-lawyers-can-i-get-rid-of-income-taxes-bankruptcy/trackback/