IRS Tax Discharge


It may be possible to eliminate delinquent taxes through bankruptcy. Two different types of bankruptcy are available: Chapter 7 and Chapter 13. With each type, there are specific rules regarding how and whether delinquent taxes can be discharged through a bankruptcy. Though the rules may change from one year to the next, the most basic criteria are:

Tax returns must have been filed on time for the two years prior to filing bankruptcy.

Tax was unsecured.

Tax liability was calculated more than 240 days prior to bankruptcy filing.

The taxpayer is not guilty of any type of fraud and has not attempted to evade the tax liability by filing a fraudulent return.

Tax amount was not calculable when the bankruptcy petition was filed.

The obligation is not due on Trust Fund Tax.

At least 3 years has passed since tax returns were due to be filed (including extensions).

The returns were filed in a timely manner or it has been at least 2 years since the returns were filed.

If you think you may qualify for an IRS Tax Discharge through bankruptcy or would like to find out, please contact The Tax Resolvers. We can assess your situation and let you know if you qualify. We can also help with many other IRS problems. Please call us to learn more.

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Don’t try to fight the IRS alone, our tax professionals can help!