Chapter 7 or 13
If you file for Chapter 7 bankruptcy, you may be able to eliminate your back taxes. If, however, you decide to file for Chapter 13 bankruptcy, and your debt doesn’t meet the qualification requirements, you will be given the chance to repay the back taxes based on your income.
Things You Should Know
It is highly recommended that you consult a qualified bankruptcy attorney to assess your case. They will analyze your case and tell you whether it is possible for you to eliminate or create a repayment schedule for your back taxes. There are a few things you will need to know.
1) For complete elimination with Chapter 7 bankruptcy, the back taxes need to be at least three years old. This period doesn’t include any extensions that you have been granted by the IRS (Internal Revenue Service).
2) You must have filed at least two years of past due tax returns before you file for bankruptcy.
3) Before you can file for bankruptcy to deal with back taxes, you will need to have the IRS analyze the debt at least 240 days before. This period may change based on any financial events that occurred.
4) If the IRS determines that any of your previous tax returns were fraudulent, your request may be denied. If you have any history of tax evasion, it may also cause your case to be dismissed.
5) Unless you ensure that your back taxes have been filed, you may be denied bankruptcy. This may happen even if back taxes meet bankruptcy code requirements.
6) In order to assess your back tax elimination options under Chapter 7 and 13 bankruptcy, you will need to consult a qualified tax attorney who has experience with this type of case.