When declaring bankruptcy, sometimes it is helpful include tax debt in your bankruptcy petition. In order to be able to discharge your taxes however, it is essential that these criteria are met.
1. The IRS has not recorded a tax lien against your property. (If all other conditions are met, the taxes may be discharged, but even after your bankruptcy, the lien remains against all property you own, effectively giving the IRS a way to collect.)
2. You didn’t file a fraudulent return or try to evade paying taxes.
3.The liability is for a tax return (not a Substitute) actually filed at least two years before you file for bankruptcy.
4. The tax return was due at least three years ago.
5. The taxes were assessed (you received a notice of assessment of federal taxes from the IRS) at least 240 days (eight months) before you file for bankruptcy.
(11 U.S.C. §§ 523(a)(1) and (7).)
After all avenues have been explored, discharging your taxes into your bankruptcy may be the best option for you. If you have any questions, contact an attorney that specializes in bankruptcy law.
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