Can I discharge income taxes by filing for bankruptcy? How? 17 Answers as of May 07, 2015

I am filing for chapter 7 bankruptcy. Will my personal income taxes be discharged?

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Ronald K. Nims LLC | Ronald K. Nims
Taxes older than 3 years will be discharged
Answer Applies to: Ohio
Replied: 5/7/2015
Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
Most income taxes cannot be discharged in bankruptcy. If you owe old taxes some of them might be dischargeable, but only a careful analysis of the tax records and tax returns would tell you that information.
Answer Applies to: Colorado
Replied: 5/7/2015
GARCIA & GONZALES, P.C.
GARCIA & GONZALES, P.C. | Richard N. Gonzales
This tax stuff is a bit tricky. I would suggest you meet with an experienced BK lawyer to get your questions answered. The timing can also be tricky. You don't want to make a mistake here. It can be the difference between discharging the taxes, or being stuck with the tax liability plus interest & penalties. Any lawyer worth their weight in salt is going to charge you for the consultation. But it is money well spent!
Answer Applies to: Colorado
Replied: 5/6/2015
Eranthe Law Firm
Eranthe Law Firm | Cate Eranthe
In my opinion you should seek help from a knowledgeable local attorney. They can evaluate your individual situation. Here are the rules in simple terms: Generally, unsecured income taxes that were first due more than three years before the bankruptcy is filed can be discharged in full in any chapter of bankruptcy if a timely and non-fraudulent return was filed. *Priority taxes * Taxes first due within three years of the bankruptcy and taxes assessed within 240 days of the bankruptcy, or which are unassessed but assessable when the case is filed, are priority claims which are not subject to discharge. Priority taxes will survive a Chapter 7 discharge to the extent that the trustee does not have money in the estate to pay them. In Chapter 13, such taxes must be paid in full through the plan; penalties associated with those taxes, however, can be treated as a non-priority claim and paid a fraction along with other unsecured claims. In Chapter 13, the tax does not continue to incur interest during the case; if the plan is completed, no post filing interest is due. Taxes for which no return has been filed are not dischargeable in bankruptcy. If a return was filed late, for a year outside of the priority tax period, the return must have been on file for two years for the tax to be discharged in bankruptcy. *Five Rules to Discharge Tax Debts* If the income tax debt meets all five of these rules, then the tax debt is dischargeable in Chapter 7 and Chapter 13 bankruptcy petitions. 1. The due date for filing a tax return is at least three years ago. 2. The tax return was filed at least two years ago. 3. The tax assessment is at least 240 days old. 4. The tax return was not fraudulent. 5. The taxpayer is not guilty of tax evasion. *Return Due At Least Three Years Ago* The tax debt must be related to a tax return that was due at least three years before the taxpayer files for bankruptcy. The due date includes any extensions. *Return Filed At Least Two Years Ago* The tax debt must be related to a tax return that was filed at least two years before the taxpayer files for bankruptcy. The time is measured from the date the taxpayer actually filed the return. *Tax Assessment At Least 240 Days Old* The IRS must assess the tax at least 240 days before the taxpayer files for bankruptcy. The IRS assessment may arise from a self-reported balance due, an IRS final determination in an audit, or an IRS proposed assessment which has become final. *Tax Return was Not Fraudulent* The tax return cannot be fraudulent or frivolous. *Taxpayer Not Guilty of Tax Evasion* The taxpayer cannot be guilty of any intentional act of evading the tax laws. *Some Tax Debts Not Dischargeable* Tax debts that arise from unfiled tax returns are not dischargeable. The IRS routinely assesses tax on unfiled returns. These tax liabilities cannot be discharged unless the taxpayer files a tax return for the year in question. *Other Tax Issues in Bankruptcy* Before a Chapter 7 or Chapter 13 bankruptcy can be granted, the bankruptcy petitioner is required to prove that the four previous tax returns have been filed with the IRS. The four previous tax returns must be filed no later than the date of the first creditors' meeting in a bankruptcy case. Additionally, bankruptcy petitioners are required to provide a copy of their most recent tax return to the bankruptcy court. Creditors can also request a copy of the tax return, and petitioners must provide a copy to them.
Answer Applies to: California
Replied: 5/6/2015
Law Offices of Joseph A. Mannis
Law Offices of Joseph A. Mannis | Todd Mannis
Depends on a number of factors. Basically those are, in their simplest form: a) they must be three years old from the time they became due b) the return must have been filed at least two years prior to the date of bankruptcy filing c) the tax cannot have been assessed within the last 240 days. Mind you, those are basic rules, and there are exceptions and caveats to them, so by no means should you take them and run. You want and need to contact competent legal counsel on this, such as myself or someone else, with the specific facts of YOUR situation. The above is merely a quick summary.
Answer Applies to: California
Replied: 5/6/2015
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    If they are income taxes for tax years within the past three years, the answer is no. If you never filed the tax return, the answer is no. If the tax year was four years ago or more and the return was filed, then it is possible that income taxes can be discharged. However, there are still other requirements which depend on certain facts related to your particular circumstances which may still not make them dischargeable. A bankruptcy attorney well experienced in dealing with discharge of taxes (a small percentage of bankruptcy attorneys are) can give you answers after understanding your particular circumstances.
    Answer Applies to: California
    Replied: 5/6/2015
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    There are quite a few rules involved in this. Yes "some" taxes are dischargable. You need a competent lawyer to guide you on this. You may find one at NACBA.ORG. See the attachment
    Answer Applies to: California
    Replied: 5/6/2015
    Goldsmith & Guymon
    Goldsmith & Guymon | Marjorie Guymon
    You cannot discharge income taxes. However, if you timely filed a return but simply did not pay the tax when due, and if the tax is more than three years old then you may be able to discharge the taxes.
    Answer Applies to: Nevada
    Replied: 5/5/2015
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    Yeah, it depends. Tell me what tax years were involved and whether the taxes were filed on time, so I can give you my best guess. No guarantees in Chapter 7. However, if you have tax that will not be eliminated in Chapter 7, you could pay it off without additional interest or penalties in a Chapter 13. When tax debt is over $20,000, I feel that can be an excellent choice.
    Answer Applies to: Nevada
    Replied: 5/5/2015
    Novakov & Associates, PLLC
    Novakov & Associates, PLLC | LINDA S. NOVAKOV
    Generally, the answer is no - income tax liability is not dischargeable with some very limited exception.
    Answer Applies to: Kentucky
    Replied: 5/5/2015
    Danville Law Group | Scott Jordan
    The answer is that it depends on a number of factors. For instance, what years are the taxes for? The tax year must be at least 3 years old. There are additional factors and I would be happy to help you make the assessment.
    Answer Applies to: California
    Replied: 5/5/2015
    Patrick W. Currin, Attorney at Law | Patrick Currin
    You can discharge some taxes. They must be over three years from the filing date of current year, so 2011 or older and have to have been filed for at least two years.
    Answer Applies to: California
    Replied: 5/5/2015
    Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
    Income taxes may be discharged IF: they are for a year or years greater than 3 years before the past 15th April. That means if you filed today, you could not discharge the claim for income taxes for 2014, 2013 or 2012. You could discharge income tax claims for 2011 and earlier IF the claims are unsecured (i.e. no notice of tax lien has been filed), and you filed a good-faith tax return on time, or within any extension granted. It's best to have a lawyer advise and represent you in almost any court matter. Good Luck.
    Answer Applies to: Wisconsin
    Replied: 5/5/2015
    Law Offices of Daniel J Winter
    Law Offices of Daniel J Winter | Daniel J Winter
    The answer is a definite "it depends". Some taxes can be eliminated in bankruptcy and some cannot. There are complicated rules to review with an experienced bankruptcy attorney.
    Answer Applies to: Illinois
    Replied: 5/5/2015
    Musilli Brennan Associates PLLC
    Musilli Brennan Associates PLLC | John F Brennan
    Usually not, which is not surprising as the government makes all the rules.
    Answer Applies to: Michigan
    Replied: 5/5/2015
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    If they are older then 3 years then they should be but discuss with your attorney.
    Answer Applies to: New York
    Replied: 5/5/2015
    Wink & Wink
    Wink & Wink | Gigi Wink
    Whether or not income taxes can be discharged in bankruptcy is a complicated analysis best performed by an attorney. It is a five-part test. This is what free consultations are for. Find an attorney in your area and let them give you some free advice.
    Answer Applies to: Colorado
    Replied: 5/5/2015
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