DISCHARGE IT: BANKRUPTCY FACTS

Facts regarding discharging taxes in bankruptcy:

• Federal income tax debts except payroll related taxes as an employer, may be eligible for discharge under Chapter 7 Bankruptcy or Chapter 13 Bankruptcy.
• Only if you meet all of the conditions required to discharge taxes in bankruptcy will you be relieved of the tax liability.
• Always file and if full pay your taxes once you go into a Chapter 7 Bankruptcy.  Filing income taxes while in a Chapter 13 bankruptcy is required to have your plan confirmed by the Court.
• All past tax returns must be filed before you can complete a bankruptcy.
• A tax lien that has attached to property you have title too will survive the bankruptcy in most cases.  For further information read tax lien properties.
• None of the taxes discharge in a bankruptcy can be from returns that were fraudulently filed.
• Tax debts from unfiled returns with assessments from substitute for returns are not dischargeable in a bankruptcy.
• Please read: Tax aspects of bankruptcy before making your decision to file to discharge taxes in a bankruptcy.