Are Income Taxes Discharged in Bankruptcy?
When people file for bankruptcy, they often do not realize that income taxes can be included as dischargeable debt as long as certain requirements are met. The bankruptcy attorneys at the law firm of William C Babut PC, help clients determine if they meet these requirements and can discharge their income tax obligations.
Requirements to Discharge Income Taxes
The party filing for bankruptcy must meet both of the following requirements to gain relief from income tax debt:
- The income tax debt must be greater than three tax years old: Tax years run from April 15th. For bankruptcies filed:
- Before April 15, 2015, you can discharge income tax debt from year 2011 or before
- After April 15, 2015, you can discharge income tax debt from year 2012 or before
- The tax must have been assessed for a period of more than two years: In other words, the Internal Revenue Service (IRS) has to have told you that you owe it back taxes for the past two years or more. It isn’t enough that you owed the tax. The IRS must have acknowledged that you owed it.
At our law firm, we meet with clients and determine if these requirements were legally met. If they were met, some tax liability can be eliminated and any tax liens on your property can be removed.
We contact and negotiate with the IRS on our clients’ behalf to get property liens removed. This can give the client an opportunity to refinance their home and have a more affordable mortgage. In the past, we have helped clients eliminate hundreds of thousands of dollars in tax liability.
How We Can Help
One of the best ways to obtain income tax relief is to file for bankruptcy and include the taxes as part of your bankruptcy estate. At our firm, we help clients file Chapter 7 or Chapter 13 bankruptcies.
Contact us for Custom Debt Relief Solutions
If you are experiencing financial hardship and need the legal advice and representation of an experienced Michigan bankruptcy and tax lawyer, please call William C Babut PC, at (734) 485-7000. You may also contact our firm online.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.