Will the money I owe for income taxes be erased through bankruptcy? 5 Answers as of October 25, 2010

Can the debt I owe due to unpaid income taxes be discharged during the bankruptcy process? I do not understand how it works. Is filing for bankruptcy a good way to handle my overwhelming IRS debts?

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Diana K. Zilko, Attorney at Law
Diana K. Zilko, Attorney at Law | Diana K. Zilko
There are several debts that Bankruptcy cannot erase and IRS/tax debts are one of them. There are ways to negotiate, and make payments...but they cannot be eliminated.
Answer Applies to: California
Replied: 10/25/2010
Greifendorff Law Offices, PC
Greifendorff Law Offices, PC | Christine Wilton
The answer is "it depends." Consult with an attorney to determine if your past income taxes are eligible to be discharged.
Answer Applies to: California
Replied: 10/23/2010
The Law Office of Mark J. Markus
The Law Office of Mark J. Markus | Mark Markus
Certain taxes may be discharged in a bankruptcy case. This is an extremely complex area of law, but the basic parameters are:

(all of the following must be met): (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.

However, even if you cannot get rid of your tax debt fully in a Chapter 7 bankruptcy case, you may be able to discharge some of it, and enter into a more favorable repayment plan for the taxes than you otherwise could outside of bankruptcy in a Chapter 13 or Chapter 11 case.
Answer Applies to: California
Replied: 10/22/2010
Diefer Law Group, P.C.
Diefer Law Group, P.C. | Abel Fernandez
IRS is real hard to discharge in a bankruptcy. You need to seek the advice of a tax expert.
Answer Applies to: California
Replied: 10/22/2010
Sussman & Associates
Sussman & Associates | Mitchell Sussman
Depends on the type and age of the taxes.
Answer Applies to: California
Replied: 10/22/2010
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