While most tax debts cannot be discharged in either a Chapter 7 or a Chapter 13 bankruptcy, it is possible to discharge some IRS tax debts. We offer our clients a Tax Dischargeability Analysis, in which we can look at the specifics of your case to determine whether or not your debts do qualify to be discharged.
There are several rules with tax dischargeabaility:
(1) 3 year rule: the tax return must have been originally due at least 3 years before filing Extensions and Amendments change this time frame.
(2) 240 day rule: Also, tax debts cannot be discharged if they’ve been assessed within 240 days of filing for bankruptcy. The 240 day period is extended in several circumstances.
(3) 2 year rule: The tax returns must have also been filed on time or at least 2 years before the bankruptcy has been filed.
(4) No Fraud or evasion rule: There must also not have been any willful attempt to evade or defraud in payment of taxes.
Federal tax liens cannot be discharged.
