Taxes In A Chapter 7 Bankruptcy

In order for a liability due to the IRS to be considered for a bankruptcy discharge in a Chapter 7 bankruptcy, the tax liability needs to meet the following bankruptcy code requirements:

1. The liability is due a minimum of three years prior to the bankruptcy filing.

Example: The taxes filed for the year 1999 become due April 15, 2000. They are then eligible for discharge on April 16, 2003.

Note: Be aware that there can be no extension requests to file a return whether this return was completed by a representative or by the individual themselves. However, if the request for extension had been made, then the three years will be extended to the actual date the extension came due.

2 .The returns must be filed a minimum of two years prior to the filing for bankruptcy.

A. A return needed to have been actually filed.

B. If the IRS had filed a Substitute for Return (SFR) that return will not qualify for having filed a return for bankruptcy purposes. The taxpayer is the one who actually has to file a return.

3. The liability assessment must be made a minimum of 240 days before filing. The return cannot be fraudulent.

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Call us at 818-224-7935 or toll free at 888-408-9486 to schedule a free consultation with attorney Rob Leonard and discuss bankruptcy and all other tax relief options available to you.