Chapter 7 Federal Income Tax Answers
The fact that you’re looking for chapter 7 federal income tax answers tells me you’re not buying into the myth that your tax liabilities can’t be discharged by filing for bankruptcy.
That’s good thing.
It’s a myth I hear repeated by my clients all the time when they meet with me the first time.
It’s been a problem gated by the IRS and Congress and bankruptcy attorneys for a real long time. But there are actually some ways you can discharge income taxes and bankruptcy. So there is a chance that the chapter 7 federal income tax answers you find will be music to your ears.
Notice I mentioned income taxes and not payroll taxes?
Payroll taxes cannot be discharged during a bankruptcy.
Note: I only have space on this page to discuss Chapter 7 Bankruptcy. If you want information on Chapters 11, 12, and 13 you can reach me toll-free at (888) 438-6474.
DISCOVER SEVEN SECRETS THE IRS DOESN'T WANT YOU TO KNOW
What is Chapter Seven Bankruptcy?
Chapter Seven liquidates your liabilities. Which means you have no liability remaining if all goes well in the proceedings.
So, there’s also a chapter 13 repayment plan type of bankruptcy which is for consumers. Usually, you end up in a repayment plan which encompasses somewhere between a 36 – 60 month pay up time frame.
So, you want to avoid being in chapter 13 in regards to your tax liabilities if you can. Why? Because you’ll end up paying a large sum of the back taxes you owe.
It is quite common for bankruptcy lawyers to push their clients into a chapter 13. They make more money on them than they do Chapter Sevens.
In my opinion, 90% of the bankruptcy lawyers in the United States don’t know that taxes can be discharged in bankruptcy.
I find that rather disturbing but they, in fact, can, as I indicated.
The Three Timing Rules for Discharging Tax Liabilities Via a Chapter Seven Bankruptcy
- Returns will have to be due including extensions for at least three years .
- Returns will have to have been filed if they were filed late for at least two years.
- The taxes must have been assessed for at least 240 days.
So, those are the three timing rules for your bankruptcy.
If you’re one day early, and you file a Chapter Seven to try and discharge your tax liabilities, you lose.
It’s important for you to know exactly when your taxes were assessed. Also, it’s important for an experienced tax attorney to analyze the situation for you.
There are a lot of tricks and traps to determine what the timing of the bankruptcy are applicable in your case.
There are several telling factors that can screw you up in whether the time limits have elapsed or not.
This is not the time to guess if you’re eligible for a discharge or not. It’s something you want to be certain of before you go ahead and attempt it.
If you have any questions, feel free to contact me at toll free at (888) 438-6474 and we can set up a time to chat.
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