Are income taxes dischargeable? 26 Answers as of July 30, 2011

I want to file chapter 7, can I discharge my income tax?

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Cartwright Law Firm
Cartwright Law Firm | Andrea Cartwight
Chapter 7 Bankruptcy will eliminate all income taxes except the following tax liability: Chapter 7 can wipe out certain tax debts. For taxes to be discharged through a chapter 7 bankruptcy, the following must be met: a. Taxes for which a tax return was due to be filed over three years (plus extensions) prior to the date of filing bankruptcy. For example, the tax return for 2007 income taxes was due to be filed on April 15, 2008 (plus any extensions), and therefore, these income taxes cannot be discharged by filing bankruptcy on or before April 15, 2011 (plus the time of extensions); b. Taxes assessed by the IRS over 240 days before the filing of bankruptcy. c. Taxes that have been assessed; d. Taxes for which a tax return was filed late but filed over two years prior to filing bankruptcy; OR e. No Fraudulent tax returns or willfully attempting to evade payment of taxes. * *However, if you do have taxes that do not meet the above criteria then a Chapter 13 may be an option. A chapter 13 is another form of bankruptcy whereby you reorganize and pay the taxes over a 3-5 year plan. There are some advantages to file a chapter 13 for "priority" taxes because it stops all the interest for accurring.
Answer Applies to: Michigan
Replied: 7/27/2011
Theodore N. Stapleton, PC
Theodore N. Stapleton, PC | Theodore N. Stapleton
Generally income taxes that last became due over 3 years ago are dischargeable, sometimes after 2 years.
Answer Applies to: Georgia
Replied: 7/25/2011
Dearbonn Law Offices
Dearbonn Law Offices | Ajibola Oluyemisi Oladapo
No, they are not.
Answer Applies to: Washington
Replied: 7/24/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
Some are dischargeable. Get a plain English transcript to make sure you have the dates right. Generally they have to be 3 years old and assessed for 240 days, but if there is a tax lien that could be an issue.
Answer Applies to: California
Replied: 7/22/2011
Law Offices of Alexzander C. J. Adams, P.C.
Law Offices of Alexzander C. J. Adams, P.C. | Alexzander Adams
Taxes older than three years are potentially dischargeable. There are a bunch of tricky rules that you have to apply to be sure of the dates, but it is possible (so long as there is no fraud involved with your filing).
Answer Applies to: Oregon
Replied: 7/22/2011
    Mauritz Van Niekerk, Attorneys at Law
    Mauritz Van Niekerk, Attorneys at Law | Christiaan van Niekerk
    In very rare cases some personal income taxes can be included in a Chapter 7 but you should think NO. Remember if you get rid of other debt in a bankruptcy you have more money left over to pay the outstanding taxes
    Answer Applies to: New York
    Replied: 7/22/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    If 1) the tax returns were in fact filed 2) the tax years was more than 3 years ago (2006 or earlier) and if filed late, was done more than two years ago and if audited, the audit was completed more than 8 months ago, yes. If ANY of the above is not a yes, then the taxes are not dischargeable.
    Answer Applies to: California
    Replied: 7/22/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    There are restrictions on what income taxes can be dischargable and a lot of factors have to be considered. There is definitely a lot of detail needed to answer your question any further.
    Answer Applies to: Indiana
    Replied: 7/22/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    Yes, but there are basic rules. 1. Must be taxes for a year more than 3 years ago; 2. You must have filed a tax return at least 2 years ago; 3. You did not file a fraudulent return. There is more to it but those are the basic rules. If all that applies then there are other things that need to be reviewed before anyone can give you an opinion about it.
    Answer Applies to: California
    Replied: 7/22/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    Income taxes can be discharged if they meet certain requirements. One, the taxes must be for more than three years ago. Second, the return must have been filed more than two years ago. Third, the taxes cannot have been assessed less than 240 days prior to filing. Consult with a bankruptcy attorney for the specifics in your situation.
    Answer Applies to: California
    Replied: 7/22/2011
    Rosenberg & Press, LLC
    Rosenberg & Press, LLC | Christopher D. Hite
    In almost all instances, no. However, there are a couple very complex and narrow exceptions.
    Answer Applies to: Connecticut
    Replied: 7/22/2011
    Melinda Murphy Dionne, PC
    Melinda Murphy Dionne, PC | Melinda Murphy Dionne
    Income taxes that are more than 3 years old can be discharged in bankruptcy. However, the return for those taxes must have been filed on time. The three year period does not begin to run until the return is filed.
    Answer Applies to: Alabama
    Replied: 7/22/2011
    Breckenridge and Walton
    Breckenridge and Walton | Alan D. Walton
    Yes and no. Depends on LOTS of factors which you did not provide.
    Answer Applies to: Michigan
    Replied: 7/22/2011
    Florio Law Firm, PLLC
    Florio Law Firm, PLLC | Amber Morgan Florio, Attorney at Law
    This is a complicated question with a complicated answer. The true answer is, it depends. The general rule of thumb is, no, you cannot discharge IRS debt. However, depending on the circumstances, there MAY be some of the debt or a substantial part of the debt that you can discharge, IF you meet certain requirements. I highly advise that you seek the advice of an experienced Bankruptcy attorney to review the years for which you owe taxes for, and advise you regarding possible discharge.
    Answer Applies to: Texas
    Replied: 7/22/2011
    Dan Shay Law
    Dan Shay Law | Daniel Shay
    No, unless; 1. Taxes were due over 3 years ago 2. Filed on time & 3. Not re-assessed
    Answer Applies to: California
    Replied: 7/22/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Most income taxes I see are nondischargeable. You can discharge (wipe out) debts for federal income taxes in Chapter 7 bankruptcy only if all of the following conditions are true: 1. The taxes are income taxes. Taxes other than income, such as payroll taxes or fraud penalties, can never be eliminated in bankruptcy. 2. You did not commit fraud or willful evasion. If you filed a fraudulent tax return or otherwise willfully attempted to evade paying taxes, such as using a false Social Security number on your tax return, bankruptcy can't help. 3. The debt is at least three years old. To eliminate a tax debt, the tax return must have been originally due at least three years before you filed for bankruptcy. 4. You filed a tax return. You must have filed a tax return for the debt you wish to discharge at least two years before filing for bankruptcy. 5. You pass the "240-day rule." The income tax debt must have been assessed by the IRS at least 240 days before you file your bankruptcy petition, or must not have been assessed yet. (This time limit may be extended if the IRS suspended collection activity because of an offer in compromise or a previous bankruptcy filing.) Now the bad news. If your taxes qualify for discharge in a Chapter 7 bankruptcy case, bankruptcy will not wipe out prior recorded tax liens. A Chapter 7 bankruptcy will wipe out your personal obligation to pay the debt, and prevent the IRS from going after your bank account or wages, but if the IRS recorded a tax lien on your property before you file for bankruptcy, the lien will remain on the property. In effect, this means you'll have to pay off the tax lien in order to sell the property.
    Answer Applies to: Georgia
    Replied: 7/22/2011
    Mercado & Hartung, PLLC
    Mercado & Hartung, PLLC | Christopher J. Mercado
    Tax liability over 3yrs old is dischargeable
    Answer Applies to: Washington
    Replied: 7/22/2011
    Eric J. Benzer, Attorney at Law
    Eric J. Benzer, Attorney at Law | Eric Benzer
    No
    Answer Applies to: Maryland
    Replied: 7/22/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    Under limited circumstances income taxes can be discharged. This is one of the most difficult areas of bk law. Do yourself a favor and hire a competent attorney.
    Answer Applies to: California
    Replied: 7/22/2011
    The Law Offices of Steven Grace
    The Law Offices of Steven Grace | Steven Grace
    Yes if they're more than 3 years old and they were filed on time, with certain other limitations. You should consult an attorney.
    Answer Applies to: Illinois
    Replied: 7/22/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Possible.
    Answer Applies to: California
    Replied: 7/22/2011
    Financial Relief Law Center
    Financial Relief Law Center | Mark Alonso
    In order for income tax debt to be discharged in bankruptcy the following criterion must be met: 1-you filed a tax return for the tax years in question - substitutions for returns don't count 2- the liability or debt that you wish to discharge is for a return that you actually filed at least two years before your bankruptcy filing 3-the tax return for the debt you wish to discharge was first due at least 3 years before you filed for bankruptcy 4-the IRS has not assessed your liability for the taxes within 240 days before you file for bankruptcy. Assuming you can meet these elements, your tax debt may be dischargeable.
    Answer Applies to: California
    Replied: 7/22/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    If they were due at least 3 years ago and they were filed on time.
    Answer Applies to: Virginia
    Replied: 7/22/2011
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