Discharging Taxes in Bankruptcy

While bankruptcy is a bitter pill to swallow, its negative impact is not as great as it used to be. Our purpose in discussing bankruptcy is to inform you that personal income taxes and most penalties are, in fact, dischargeable. In many instances taxpayers need to consider this option very seriously. If the tax returns were filed by the Taxpayer (at least two years ago) and they were originally due at least three years ago, then the tax debt may be dischargeable when you file a Chapter 7 Bankruptcy. Chapter 13 Bankruptcy is a reorganization plan which allows for the discharge of eligible taxes. Also,some tax that is not eligible to be discharged in a Chapter 7, may be discharged in a Chapter 13 (unfiled returns that were assessed by the IRS, for instance). We can help plan for Bankruptcy: 1. Tax returns are prepared and filed. 2. We determine the optimum date when the bankruptcy filing would be most effective in discharging taxes. 3. An interim installment agreement is set up so the IRS leaves you alone while you wait for the ideal time to file bankruptcy. I have seen too many instances where taxpayers come to us after a bankruptcy has already been filed and discharged and is already to late otherwise tax debt could have been discharged. Costly mistake!