If back taxes owed to the IRS or to a state or local government are part of your debt load, it is important that you choose an attorney who understands the options available to resolve this challenging type of debt.
When Tax Debt Can Be Discharged
Generally, tax debt is not dischargeable in bankruptcy. The exception to this rule is if the due date for filing the return for the tax year in question is more than 3 years prior to the date of filing the bankruptcy petition, if the tax return was filed more than 2 years prior to the date of filing the petition and if the taxes owed were assessed more than 240 days prior to the date of filing the petition. Even then, there are hurdles that will need to be overcome.
Even if your tax debt is not dischargeable in bankruptcy, if you file Chapter 13 you will be able to include the back taxes in your plan and pay them back over time.
Bankruptcy Can Help
When offering guidance, we always look at the complete picture. What percentage of your debt load is made up of tax debt? If it is only a small percentage, and the remainder of your debts will be discharged through bankruptcy, you may find that paying the back taxes becomes substantially less challenging. Furthermore, when you file bankruptcy, even if your tax debt is not going to be discharged, it may stop collecting interest.
To Learn About The Treatment Of Tax Debt In Bankruptcy, Contact Us For A Free Initial Consultation
To learn about taxes and bankruptcy in a free initial consultation, call 203-286-4121 or email us.
Balbus Law Firm is a debt relief agency. We help people and businesses in New York and Connecticut file for bankruptcy relief under the Bankruptcy Code.