If your income taxes can be discharged, you must file a written waiver of any future tax refund with the IRS. Also, you must file your income taxes.
When will my tax debt not be discharged?
Your tax debt will not be discharged in bankruptcy if any of the following conditions apply:
- You did not file the required income tax returns or filed fraudulent returns
- You did not pay or underpaid your taxes
- You did not pay your taxes
- You received certain tax credits
- You were not a resident of the U.S. during the tax year when your tax liability arose
- You are not a citizen of the U.S. or are a nonresident alien
- You do not qualify for a hardship discharge
Can my taxes be discharged in Chapter 7 bankruptcy?
In some cases, your tax debt can be discharged in a Chapter 7 bankruptcy. However, there are a few requirements that must be met in order to discharge your tax debt.
The first requirement is that your tax debt must be less than $250,000. If you owe more money than that, you must file a Chapter 13 bankruptcy to have your tax debt discharged.
In addition, your tax debt must be at least three years old. Your tax debts must also have been assessed at least 240 days before you file for bankruptcy.
What should I do if I am in default on my taxes?
If you are in default on your taxes, you should contact the IRS as soon as possible. In many instances, the IRS will work with you to help you pay back your debt. However, if you do not contact the IRS, they will work to collect your debt. The IRS will do everything possible to collect your debt, including garnishing your wages and taking your tax refund.
If you are in default on your taxes, you should contact an experienced Houston bankruptcy attorney right away. You may be able to discharge your tax debt in bankruptcy.