In order to file for personal bankruptcy, you must be current on your tax filings. Meaning, if you have not filed a tax return in the last five years you need to file those tax returns prior to filing the bankruptcy.
However, even if you owe the IRS $100,000 but have filed all required tax returns then you are permitted to file for bankruptcy. And while the general rule is that tax debts are not discharge in bankruptcy you may qualify for the exception and your tax debt may actually be discharged. Usually, you can discharge income tax obligations where a return was due at least three years ago, you actually filed the return over two years ago, and the IRS assessed the tax at least 240 days ago. But even if your tax debts are not dischargeable you are still permitted to file bankruptcy. Schedule a free consultation with one of our attorneys today to see if your tax debt can be discharged.
There are many benefits to filing bankruptcy if you have tax debt. For instance, all penalties and interest subside during the bankruptcy. Additionally, if you file a Chapter 13 bankruptcy you will be able to pay on your tax debt through one single payment sent to a trustee each month. Taxes and how they are affected by bankruptcy can be a very complex issue. So if you are struggling with debt and owe the IRS money, speak to an experienced bankruptcy attorney at the Dunaway Law Group who can answer your tough questions. Call us at 480-389-6529 or contact us HERE.