IRS Penalties

For those filing bankruptcy taxes can in some limited cases be filed with your other debts so that you do not have to repay them. Yet, it is very important for you to understand what the rules and regulations on this are before you assume that you can simply file for bankruptcy and forget all about the taxes that you owe. The best case scenario here is to work closely with your bankruptcy attorney so that any and all situations are put into action correctly.

Taxes And Filing For Bankruptcy

In bankruptcy, taxes can be discharged through Chapter 7 bankruptcy or restructured in Chapter 13 bankruptcy. If you need to file for bankruptcy, it is important to have exhausted any and all other means of repaying the debt first, before you actually go through with the bankruptcy itself or even quality for it. What's more, in order to file your taxes like this, you must qualify under some very specific situations. The first requirements include having tax debts that are associated with one specific tax return and tax year. What's more, you will need to be sure that the tax debt is within the required age limits of qualified debts to be filed.

There are also additional qualifications for those that are considering filing bankruptcy for their taxes. For example, the debt must be at least three years old to qualify for bankruptcy. In addition, you must have filed the tax return at least two years ago. You can not file a return this year for three or more years ago and expect for the debt to be cleared through bankruptcy. You will need to wait a full two years for this to be allowable. In addition, you can not be guilty of tax evasion as defined by the tax laws in place nor can you be found to be fraudulent on the tax return that you have filed. The tax assessment of your situation must be at least 240 days old.

What's more, you should work closely with your bankruptcy attorney because bankruptcy laws have recently changed. This could mean that you will need to go through consumer credit counseling, repayment methods and various other educational courses before you can qualify for bankruptcy in any regard. Unfortunately, you may have to try and work through all other means of repaying your tax debt before filing.

When it comes to bankruptcy, taxes are something to carefully consider. There are specific laws governing them, all of which should be carefully followed.

IRS Penalties |