Do you owe back income taxes? They may be eligible for discharge under both Chapter 7 and Chapter 13 bankruptcy. Although not all tax debts can be discharged, in Georgia many tax debts can be eliminated with bankruptcy.
Hiram Bankruptcy Attorneys
If you are considering bankruptcy to wipe out tax debts, be sure to discuss all of your options with an experienced Marietta bankruptcy attorney.
If you have income tax debt, it will be associated with a particular tax return and tax year. In Georgia, tax law lays out specific criteria for how old tax debt can be. There are five rules to follow when discharging tax debts—if income tax debt meets all of the requirements it may be eliminated in both Chapter 7 and Chapter 13 bankruptcy.
- Taxes must be income taxes. If you owe any other taxes, like payroll taxes or fraud penalties, these cannot be discharged in bankruptcy.
- You did not commit willful evasion or tax fraud. Bankruptcy cannot help if you filed a fraudulent return or attempted to evade taxes by using a fake Social Security number.
- The tax debt must be at least 3 years old. To wipe out your tax debt, the tax return must have been due at least three years before you file for bankruptcy.
- A tax return was filed. If you want to discharge income tax debt with bankruptcy, you must have filed a tax return for the debt you wish to eliminate at least two years before you file for bankruptcy.
- Tax assessment must be 240 days old. The income tax debt you are looking to discharge must have been assessed by the IRS 240 days or more before you file for bankruptcy.
The IRS does frequently assess tax on unfilled returns. This tax debt cannot be discharged until a taxpayer has filed a return for that year. Additionally, before your first creditors’ meeting you must make sure that the last four years of tax returns have been filed with the IRS.
Call 0ur Metro Atlanta Bankruptcy Attorneys Today
If you are considering bankruptcy and would like to talk to a Hiram bankruptcy attorney regarding the details of your pending bankruptcy situation, call the dedicated bankruptcy attorneys at Cohen Law Office, LLC to find out how they can help you navigate the bankruptcy process.