Can I Discharge Income Taxes in Bankruptcy?


If you are struggling with overwhelming and unmanageable debts, you are likely considering bankruptcy as an option for relief. Not all debts can be discharged in a Chapter 7 bankruptcy, but if you can meet the requirements you can discharge taxes you owe in a Chapter 7 proceeding.

What Types of Tax Debt Can I Discharge?

It is possible to federal income taxes when filing for a Chapter 7 bankruptcy if all the following is applicable:

  • The taxes you wish to have discharged are income taxes.
  • You were not attempting to commit fraud or willful evasion.
  • The tax debts you owe were originally due three years prior to filing for bankruptcy. For example, 2017 taxes were due in April of 2018 or October of 2018 if an extension was granted.
  • The tax returns for the debt you want to discharge was filed at least two years prior to filing for bankruptcy.
  • The income taxes you owe were¬†assessed by the IRS¬†240 days before your bankruptcy filing. In other words, any audit was completed eight months ago.
  • The returns for the taxes you want discharged were filed on time.

Keep in mind that, while your taxes might qualify for discharge in a Chapter 7 bankruptcy, this will not wipe out prior recorded tax liens. It will only erase your personal obligation to pay your debt and prevent the IRS from garnishing your wages or going after your bank account.

Bankruptcy Law Firm in Bedford, Texas

At The Law Office of Mark. B. French in Bedford, our bankruptcy legal team is dedicated to helping individuals who are struggling with insurmountable amounts of debt work toward a better and brighter financial future. If you are considering filing for bankruptcy to achieve some much-needed relief, reach out to our law firm for the sound legal advice you need to ensure you are on the appropriate path. This process is often quite complex, so it is crucial that you ensure your fresh start begins on the right note.

Contact The Law Office of Mark. B. French today at (817) 381-9855 to schedule a consultation and learn more about how we can help you during this difficult time.

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