It is commonly assumed that tax debts are not dischargable under bankruptcy laws, and generally speaking, this is true. However, there are some circumstances in which a tax debt may be discharged under a bankruptcy filing if certain criteria are met. Here’s what you need to know.
How to Discharge Income Tax Debt in a Florida Bankruptcy
If you owe income taxes, some of this debt may be discharged in a bankruptcy if you meet the following criteria:
- The tax returns which you are seeking debt relief for must have been due three years prior to the bankruptcy petition
- The money you owe in taxes must have been assessed against you by the federal government for at least 240 days before the bankruptcy petition is filed
- Your tax returns must not have not been fraudulent in any way, shape, or form
- All tax returns must have been filed more than two years before the bankruptcy petition was filed
- You must not have been willfully or intentionally attempting to evade the tax when you did not pay the tax
Although there are some cases where complications can result in a more difficult scenario, usually if the above criteria are met, an income tax debt may be able to be discharged under a Chapter 7 bankruptcy.
When Will Tax Debts Not Be Discharged?
Anytime the above criteria are not met, a tax debt may not be discharged in a bankruptcy filing. Additionally, if a federal tax lien has been attached to your assets, this will also not clear during a bankruptcy filing. The trouble with a tax lien is that as long as it is in effect, it attaches to any new assets you acquire during this time, until the collection limit expires or the tax debt is paid.
When to Contact a Bankruptcy Attorney
If you have significant tax debts and are unable to pay them, you may be eligible to have them discharged. However, since each case is unique, it is impossible to know for sure whether you qualify for your tax debt to be discharged without speaking to an experienced bankruptcy attorney. At Lehn Law, P.A., we have worked with many families who have been burdened by excessive tax debt. We are able to provide you with the skills and resources needed to help you get on better financial footing in the face of steep tax debts. Call today for a consultation to discuss your unique needs at (941) 255-5346