Can my EDD and IRS Debts be discharged in bankruptcy? 14 Answers as of June 10, 2013

I owe the EDD a significant amount and the IRS also. It has been more than 5 years that I owe the IRS but I have been making payments through an installment plan, I owe the EDD about two years now, is there any way some of this debt can be discharged in a Chapter 7 Bankruptcy?

Ask a Local Attorney. 100% Anonymous. Free Answers.

Free Case Evaluation by a Local Lawyer: Click here
Financial Relief Law Center
Financial Relief Law Center | Mark Alonso
Debts owed to EDD will not be discharged in bankruptcy. In certain, rare cases some IRS debts can be discharged, but based on the fact that you have been making payments to them through an installment arrangement, those debts are unlikely dischargeable as well.
Answer Applies to: California
Replied: 6/28/2011
Mercado & Hartung, PLLC
Mercado & Hartung, PLLC | Christopher J. Mercado
If the Tax liens were filed within the last 2 years, and you haven't been assessed in the last 240 days, then its a non-priority debt.
Answer Applies to: Washington
Replied: 5/24/2011
The Law Offices of Alan M. Laskin
The Law Offices of Alan M. Laskin | Jared B. Gaynor
You need to speak to a qualified BKJ attorney to determine this, but what I generally tell people is that "most" debts to government agencies will end up being non-dischargeable. However, the specifics of each case determine the dischargeability of these debts, so you need to get a consult.
Answer Applies to: California
Replied: 5/24/2011
David Hoines Law
David Hoines Law | David Hoines
IRS yes, EDD probably not.
Answer Applies to: Florida
Replied: 5/23/2011
Carballo Law Offices
Carballo Law Offices | Tony E. Carballo
EDD overpayment of unemployment can be discharged in bankruptcy. IRS back income taxes can be discharged but it has to be at least three years after the date you filed the tax return for the year you owe the taxes. Other requirements for discharge of taxes may apply so you need to obtain and account transcript for the tax year you owe taxes and have a consultation with a bankruptcy attorney. If your debt to the EDD and/or IRS has to do with employment taxes then those are generally not dischargeable because you were supposed to collect those funds and hold them in trust for the benefit of your employees. Again, you need a consultation with an attorney for specific advice.
Answer Applies to: California
Replied: 5/23/2011
    Greifendorff Law Offices, PC
    Greifendorff Law Offices, PC | Christine Wilton
    You need to consult with a bankruptcy attorney. Your IRS debts MAY be dischargeable. Your EDD debts are not likely dischargeable.
    Answer Applies to: California
    Replied: 5/23/2011
    Diana K. Zilko, Attorney at Law
    Diana K. Zilko, Attorney at Law | Diana K. Zilko
    There is a 5-prong test to determine what, if any, of those debts can be discharged. You'll want to speak with a bankruptcy attorney to go over the test to see what debts may qualify for discharge. If you have any further questions, please let me know.
    Answer Applies to: California
    Replied: 5/23/2011
    The Orantes Law Firm
    The Orantes Law Firm | Giovanni Orantes
    It depends. If the debt to the EDD or IRS is for trust fund taxes, such as payroll or sales taxes, bankruptcy may not discharge them. Otherwise, if the tax return for the debts was due and filed timely more than 3 years ago and the taxes were not assessed in the last 240 days, it likely is dischargeable. Find our contact information at my website and give us a call to set up an in-person free initial consultation.
    Answer Applies to: California
    Replied: 5/20/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    The EDD, probably not as that is probably a trust fund tax. The IRS rule is that the tax has to be at least 3 years old and assessed for at least 240 days, (meaning no audits in the last 240 days), BUT there might be a tax lien which would survive bankruptcy to the extent you have assets equal to the tax. If you have tax issues you should see a lawyer. Go to the local IRS office and get a "plain English transcript" for the years in question. This will give the lawyer the information he or she needs to advise you properly. Make sure you can read understand the documents given to you by the IRS. If you can't read it, the lawyer can't either.
    Answer Applies to: California
    Replied: 5/20/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    The previous three years before filing are not discharged. IRS taxes appear to be old enough to discharge. Your EDD debt is owed.
    Answer Applies to: California
    Replied: 5/20/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Some yes.
    Answer Applies to: California
    Replied: 6/10/2013
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    Generally, if the returns were filed on time, or in the case of the IRS if late but filed more than two years before filing, and are for a tax year more than 3 years ago, then yes they can. This is a tricky area, so before proceeding, I would consult with or use an attorney who is familiar with this provision of the bankruptcy code - and many of not most bankruptcy attorneys are not.
    Answer Applies to: California
    Replied: 5/20/2011
    Law Office of Harry L Styron
    Law Office of Harry L Styron | Harry L Styron
    No. Debt for taxes is non-dischargeable in a Chapter 7.
    Answer Applies to: California
    Replied: 5/20/2011
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    Income taxes are dischargeable if all of the following prerequisites are met as of the date your bankruptcy case was filed: (1) it has been more than 3 years since the returns were last DUE (including extensions) to be filed, (2) the returns were timely filed or it has been at least 2 years since the returns were filed, (3) there was no fraud involved or attempts to evade the tax, AND, (4) the taxes were not assessed within the last 240 days. So, assuming your debt to the IRS is for income taxes, the above formula will give you a guideline to determine dischargeability in most cases (there are exceptions, which is one of the reasons you need an attorney) The EDD is somewhat different, but you don't state what the basis of the debt is that you owe to them, so I can't opine further.
    Answer Applies to: California
    Replied: 5/20/2011
Click to View More Answers:
12 3 Free Legal QuestionsConnect with a local attorney