Can I get rid of my tax debt in a Chapter 7 bankruptcy?

 Posted on August 02, 2019 in Uncategorized

Maybe.

Tax debt can be very crippling. The IRS is often aggressive about collecting their debt, employing the use of liens and bank account garnishments to take what they believe is owed to them.

Some tax debt, luckily, is dischargeable in a Chapter 7 Bankruptcy.

First and foremost, your tax return MUST have been filed timely in order for it to be dischargeable. If you filed your return late, the debt is not dischargeable. If you timely filed for an extension, and then timely filed your return within the time allotted pursuant to that extension, your return is considered timely filed.

Secondly, to discharge the tax debt, the tax return must have been originally due at least three years prior to your bankruptcy filing date. For example, if you owe taxes for tax year 2015, that return would have been originally due April of 2016. Thus, you must file after April of 2019 in order to discharge your 2015 tax debt.

These are the two main obstacles to discharging your tax debt. There are a few other nuances, but your bankruptcy attorney can guide you through those to make sure your tax debt is dischargeable.