Tax Bankruptcy

One of the most often used procedures to ridding IRS debts is through Bankruptcy. While most bankruptcy attorneys don’t realize that you can get rid of taxes, it is possible. The IRS doesn’t like to talk about the use of Bankruptcy to reduce tax liabilities, but the reality is that many IRS taxes, penalties and interest do qualify for complete discharge in Bankruptcy.

There are very intricate and time sensitive calculations that must be made before determining whether or not it is a complete solution for an IRS problem or not. We can get a copy of your tax transcripts and make these intricate calculations for you. Remember that most attorneys don’t know about this or have experience doing this.

In short there are three timing factors which enter into play when considering a Chapter 7 bankruptcy.

• The first of the timing factors is that the returns most have been due, including extensions, for at least three years.

• The second factor is the returns, if filed late, must have been filed for at least two years.

• And the last factor is that the tax liability must have been assessed for at least 240 days.

There are variety of factors which enter into play, that can alter or change these time limitations periods.
The most common types of taxes eligible for discharge in bankruptcy are old individual income taxes. Taxes. You cannot get rid of Civil Penalties for payroll taxes.