IRS Tax Debt

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Taxes can be complicated. Under certain parameters, income tax debt may be eligible for discharge under a Chapter 7 or Chapter 13 bankruptcy filing. Alternatively, it may be possible to reduce the amount owed.

In order for a tax debt to be eligible for discharge consideration, the petitioner must meet the following criteria:

  1. Taxes must be income based. Other forms of taxes cannot be erased in bankruptcy including by not limited to payroll tax or penalties links to tax fraud
  2. The due date for eligible tax years being considered were within the three years prior to filing the bankruptcy petition
  3. The tax return for the debt you wish to erase was filed at least two years prior to filing the bankruptcy petition
  4. The Internal Revenue Service (IRS) must have assessed the income tax debt at least 240 days prior to filing the bankruptcy petition
  5. You have not committed fraud or willful tax evasion

If you feel that you meet all requirements above, please be sure to include the information during your consultation.  Please note that tax liens recorded against assets cannot be erased in Chapter 7 bankruptcy.