Free Consultation | El Abogado Habla Español 239.970.6844
Can I Discharge IRS Taxes if I file for Chapter 7 Bankruptcy?

Can I Discharge IRS Taxes if I file for Chapter 7 Bankruptcy?

It is possible to discharge or eliminate many debts by filing Chapter 7 bankruptcy. While it is possible to discharge taxes under Chapter 7 bankruptcy, there are limitations on the types of taxes that may be discharged.

Withholding taxes, such as payroll taxes, can never be discharged in bankruptcy. The filing of a Chapter 7 bankruptcy will stay any collection actions against you, including the collecting of withholding taxes, but the collection of those taxes cannot be avoided in bankruptcy. Additionally, you cannot discharge taxes or tax penalties in bankruptcy if they are the product of tax fraud or willful tax evasion.

Regardless of the above, personal taxes can be discharged in bankruptcy under the following conditions:

Condition #1

The taxes that you are seeking to have discharged must have been due three (3) years prior to the bankruptcy filing. When making this calculation, you must take into consideration any extensions that were due. Therefore, if you sought an extension for taxes due, that would lengthen this time period by the term of the extension.

Condition #2

In addition to the above stipulation, in order for a tax to be discharged in bankruptcy, a tax return must have been filed at least two (2) years prior to your bankruptcy filing. If you have not filed a tax return for a tax debt, it cannot be discharged in bankruptcy and two years has not passed since the filing, you will not be able to discharge the debt.

Condition #3

Finally, the taxes that you are attempting to discharge must have been assessed at least 240 days before your bankruptcy filing. If you were the subject of an audit and your taxes were assessed after tax day, you will have to wait 240 days before these taxes can be discharged.

Our Bankruptcy Lawyers Can Assist You Today

The experienced legal team at Powell, Jackman, Stevens & Ricciardi, P.A. is committed to serving clients throughout Fort Myers and the surrounding areas. Filing Chapter 7 bankruptcy when you have IRS tax debt can be tricky, which is why we are here to provide you with the top-notch legal counsel you deserve.

To schedule your free case consultationwith a member of our law firm, give us a call today at (239) 970-6844.

Contact Our Firm

Request your free consultation today and let our experienced attorneys help you.

We do not represent tenants.

    • Please enter your name.
    • This isn't a valid phone number.
    • Please enter your email address.
      This isn't a valid email address.
    • Please make a selection.
    • Please enter a message.