Bankruptcy And Tax Debt
Everyone has heard of the two certainties in life: death and taxes. However, owing taxes to the government isn’t a death sentence. Under the right circumstances, the government is just like any other creditor. Both federal and state income taxes may be dischargeable in bankruptcy.
Bankruptcy can eliminate both federal and state income taxes. Contact Wisconsin bankruptcy attorney Timothy J. Helbing online or by calling 920-659-5606 to discuss if the circumstances allow for a discharge of your federal and state income taxes.
Conditions Necessary For Discharge Of Income Taxes
Not all income tax debt is dischargeable. Certain conditions must be met before your income taxes will be dischargeable:
- The age of the taxes: The income tax debt must be related to a return that was due at least three years prior to the bankruptcy filing. This includes all tax extensions.
- The tax return must have been filed: For the income taxes to be dischargeable, the tax return must have been filed with the appropriate agency at least two years before the debtor files for bankruptcy. This period is based upon the actual date of the tax filing.
- Assessment: The taxing agency must assess the tax a minimum of 240 days prior to the debtor filing for bankruptcy. An assessment takes various forms, such as a proposed assessment becoming final, a final determination from and audit, or even a self-reported balance due.
- No fraud involved: The tax return cannot be fraudulent or frivolous.
- No tax evasion found: The debtor cannot have been found guilty of tax evasion.
Are Other Types Of Taxes Dischargeable?
Taxes take many different forms, such as property taxes, excise taxes, sales taxes, and “trust fund” taxes. In certain situations, other types of taxes may be dealt with in the bankruptcy. Since the analysis of tax debt is so complicated, it is highly advisable to have an experienced bankruptcy attorney analyze your situation.
For more information or to schedule an appointment with an experienced bankruptcy attorney to determine if your tax debt is dischargeable in bankruptcy, please contact us online or by calling 920-659-5606. Our clients come from Green Bay, Oshkosh, Appleton and the surrounding areas. We are here for you.