When Can I Discharge My Tax Debt?

If you’re thinking about filing bankruptcy, you may wonder if your tax debts are dischargeable. Some income tax debts are in fact dischargeable, but they must meet the five criteria listed below:

  1. The tax debt must be from a tax return that was due at least three years before you filed bankruptcy. The due date includes any extensions you may have received.
  2. You must have actually filed a tax return for the debt at least two years before you filed for bankruptcy. This time period is calculated from the date you actually filed the return. (If you have a tax debt that is at least three years old, but you didn’t file a return within the two years before you filed bankruptcy, it will not be dischargeable.) It is also important to note than any debts arising from an unfiled tax return are not dischargeable.
  3. The tax return filed cannot be fraudulent or frivolous.
  4. As the tax payer, you cannot be guilty of any act of intentionally evading tax laws.
  5. The tax debt must have been assessed by the IRS at least 240 days before you filed for bankruptcy.

While it may be good news that some of your taxes are dischargeable in bankruptcy, it is important to note that tax liens filed by the IRS are not dischargeable. For instance, if your tax debt is discharged, you are not personally obligated to pay the debt and the IRS cannot go after your bank accounts or wages. However, if they recorded a tax lien on your property before you filed for bankruptcy, that lien will remain. This means that before you sell the property, you will have to pay off the tax lien.

If you have any questions about whether or not your tax debt is dischargeable, contact
Dailey Law Offices today for a free consultation and speak with one of our experienced Columbus Bankruptcy Attorneys.


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