As a Fort Worth bankruptcy attorney, my clients are often surprised to find out that some taxes are dischargeable (eliminated) in bankruptcy. Generally income taxes are dischargeable if they meet certain requirements.
- They must be for a tax year for which the return was due more than 3 years prior to filing bankruptcy. Example: Today is November 30, 2016. Taxes for the year 2012 were last due on April 15 or October 15 (extension date), 2013. Therefore they meet this timeline.
- The tax return must have been actually filed by the debtor and have been on file with the IRS for at least 2 years.
- Any assessment the IRS makes must be at least 240 days old plus any time an offer in compromise was outstanding.
- These times may be extended for any period in which the debtor was previously in bankruptcy.
- An IRS tax lien has not been filed.
- No fraud can be involved.
Some taxes are not dischargeable. For example, taxes assessed against you for money you withheld from your employees, but didn’t pay to the IRS. In addition, the 5th Circuit Court of Appeals has held that if you filed the tax return after the extension date, the tax is not dischargeable, although there may be an exception in some cases.
Be sure to talk to a Fort Worth bankruptcy attorney about taxes. If you would like a FREE consultation with an experienced and dedicated Fort Worth bankruptcy attorney call Michael P. O’Donnell at 817-732-7590 or 972-819-3861. You can also send me an E-mail or complete the Free Case Evaluation. I can answer your tax questions.