Tax Debt

Under certain circumstances, state and federal income tax liabilities can be discharged by filing for bankruptcy. There are a complex set of rules and regulations that are used to determine if this particular tax debt qualifies for discharge.Typically, an individual will have to sign and acknowledgment form that advises them of the rules and regulations necessary for eliminating and discharging any income tax debt, including:

  1. The tax is a tax for income
  2. Such tax is at least three years from the due date of the return which means that if money was due for 2002 and the return was filed on April 15, 2003 it is only a dischargeable debt if the bankruptcy is filed after April 15, 2006
  3. It has been assessed for 240 days
  4. The return was filed on time
  5. If the return was not filed on time, then it is two years from the date of filing and must have been assessed for a period of 240 days.

There are more restrictions and finer distinctions to be made. This page serves as a brief overview. Do not hesitate to contact us to schedule a more in-depth consultation regarding your specific situation.