Boston Bankruptcy Attorney

Taxes and Bankruptcy

Many people that declare bankruptcy also owe income taxes either to the state or to the federal government. In these cases, there are a variety of taxes that can be owed and various circumstances that may affect the ability to discharge a debt.

Under Chapter 7, a person’s tax debts can be discharged if:

• The IRS had not or has not filed a tax lien on the assets owned by the bankrupt individual
• The person who filed for bankruptcy did not file his or her taxes fraudulently or try to get out of paying taxes in general
• The taxes owed are at least three years old

The tax deficiencies that were assessed on the prior tax returns were assessed a minimum of 240 days prior to filing for bankruptcy.

If the IRS has placed a Notice of Tax Lien on property before bankruptcy has been filed, it is highly recommended that an individual seek the assistance of a bankruptcy attorney. This is because discharging taxes becomes much more complicated once a lien has been placed on property.

Because Chapter 13 discharges fewer debts in general and is a court-approved repayment plan, a debtor will pay the IRS part of owed taxes as part of the overall repayment plan. If the individual doesn’t stay up to date and current on taxes due after the bankruptcy petition is filed, his or her bankruptcy plan will be in jeopardy.

Contact a Boston Bankruptcy Attorney

If you are considering filing for bankruptcy and are at all confused about what debts are dischargeable and which are not, contact the Boston bankruptcy attorneys of Joshua Spirn & Associates at 1-800-975-5346 to have all of your questions answered and to determine which form of bankruptcy is best for you.