Tax-Debt Options
Gardena, California, Bankruptcy Attorney
You Can Discharge Income Tax Debt Through Bankruptcy
Depending on the specifics of your case, you may be able to discharge income tax debt, payroll tax debt, or sales tax debt through the filing of a Chapter 7 or Chapter 13 bankruptcy. Whether or not your tax debt is eligible for discharge will depend on a number of factors including the type and age of your tax debt and the value of any held assets. At the Law Office of Cynthia Gibson, we can evaluate your financial situation to determine if your tax debt can be discharged through bankruptcy.
If you owe the Internal Revenue Service (IRS) or state agencies money on tax debts, contact bankruptcy lawyer Cynthia Gibson today to schedule a free consultation and learn how we can help you.
When is Tax Debt Eligible for Discharge Through Bankruptcy?
In general, tax debt can be discharged through Chapter 7 or Chapter 13 bankruptcy provided that the following conditions are met:
- You are not guilty of tax evasion.
- Your tax debt must be related to a tax return that was due at least three years prior to your filing for bankruptcy. In other words, the tax debt must be at least three years old.
- Your tax debt must be related to a return filed at least two years prior to your filing for bankruptcy.
- The tax debt owed must be assessed by the IRS at least 240 days prior to your filing for bankruptcy. This essentially means that there must be an acknowledgment of the debt on the part of the IRS itself. Typically, if you owe the IRS, they will send you a notification letter. If, however, you are unsure whether the IRS has assessed your debt, you can contact them and order a transcript. If an offer in compromise is pending during the 240 day assessment period, this time, plus an additional 30 days, must be added to the original 240 day assessment period.
- Your tax debt cannot be related in any way to a fraudulent tax return.
Additional Issues in Discharging Tax Debt through Bankruptcy
If your tax debt is eligible for discharge, you must also prove that you have lawfully filed tax returns in each of the last four years. The bankruptcy court will also need a copy of your most recent tax return. If, when your creditors meet to discuss your bankruptcy petition, some or all of them decide they also want a copy of your tax return, you must provide that information.
Contact Bankruptcy Attorney Cynthia Gibson Today
Discharging tax debt through bankruptcy can be a complicated process, especially in Chapter 7 bankruptcies for small businesses. We relieve our clients of the stress and confusion involved by preparing and filing the required paperwork. If necessary, Ms. Gibson will consult CPAs or tax experts in order to ensure that you receive the benefit of their expertise and knowledge for your particular financial situation.
To schedule a free consultation and learn how we can help you, contact bankruptcy attorney Cynthia Gibson today.
