False. While not all tax liabilities can be discharged (forgiven or wiped-out) in bankruptcy, some can.
If you owe income taxes to the Internal Revenue Service (IRS), the Oklahoma Tax Commission (OTC) or another state, those tax liabilities can be discharged by filing either a Chapter 7 bankruptcy or a Chapter 13 bankruptcy as long as the following 5 rules are met:
- The due date for filing the tax return was at least three years prior to the date you file bankruptcy,
- The tax return was filed at least two years prior to the date you file bankruptcy,
- The tax assessment date was at least 240 days prior to the date you file bankruptcy,
- The tax return was not fraudulent, and
- You are not guilty of tax evasion.
Determining whether or not the taxes you owe can be discharged in bankruptcy is not an easy task. You should seek the advice of a knowledgeable bankruptcy attorney regarding your specific situation.
If you owe back taxes and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.
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My husband is self-employed and I should have paid his taxes quarterly each year (since he started in 2005), but I never have done that. We have always owed about $6000 each year and end up having to play catch up and have never caught up. In 2006, our taxes at first showed that we owed $20,000 and our accountant went back and amended that return after finding some things we missed for deductions (the amended return ended up being around $6000–the usual amount). However, the IRS will not accept her amended return! She says she has never heard of this; that there is no good reason for them not to. She is in the process of trying to intercede on our behalf and is asking advice from an organization she belongs to in order to get this figured out. We ARE on a payment plan with them at this point, but the taxes are now over $25,000 total (and as I am sure you know, at this point, we are not “allowed” to be on a payment plan–but we do not have a lump sum of money to pay off a large amount at one time). So, until that 2006 year gets figured out, we are just continuing to pay on our plan and are trying to find the money each month from now on to start paying quarterly taxes like we should have been doing. Any suggestions? We also have $17000 in credit card debt ($750 a month in minimum payments that get us nowhere) and are wondering whether or not to do a debt settlement or CCCS–any advice on that?
Shellie,
Yes there are options available to help you but I will need to know more information about your income, expenses, and assets in order to advise you. I have emailed you to discuss your situation privately.