If you are one of the many Americans who couldn’t pay their income taxes in April you might be wondering if bankruptcy is an option for solving your tax debt problem.
Typically, tax debt is not dischargeable in bankruptcy, but it is possible to eliminate your tax debt through bankruptcy in certain circumstances.
Your tax debt may be dischargeable through bankruptcy if you meet all of the following conditions:
- Your unpaid taxes are related to a tax return that is at least three years old
- The tax debt in is related to a return that your filed at least two years ago
- You have not been charged with or conviction of tax evasion
- You did not acquire the tax debt when filing a fraudulent tax return
- The IRS assessed your tax debt at least 240 days before you file for bankruptcy
Therefore, it is unlikely that bankruptcy can do anything to eliminate the tax debt you incurred this year. However, it would still be wise to meet with a bankruptcy attorney in your area to discuss your options.
It is often possible to work with the IRS on a payment plan so that you avoid the significant fines and fees associated with unpaid tax debt.
At [nap_names id=”FIRM-NAME-1″], we understand how easy it is start drowning in debt, especially after a job loss, decrease in business or another one of life’s unforeseen changes. We would be more than happy to meet with you and help you find your way back to dry ground.
Whether you qualify for bankruptcy or not, we can work with you to reduce or eliminate any penalties associated with unfiled or unpaid taxes.
