Tax time! Can taxes be discharged in bankruptcy? Find out here!

The answer is… sometimes.  If you own a business and owe sales tax, that is not dischargeable.  However, taxes on income may be dischargeable under certain circumstances:  1) there was no fraud or willful evasion of the tax; 2) the tax debt is at least three (3) years old – in other words, the return was due at least three years before you file bankruptcy; 3) you filed a return for that tax debt at least two (2) years before filing bankruptcy; 4) you pass the “240-day” rule, which requires that the IRS assess the tax debt at least 240 days before you file bankruptcy.

If you have tax debt that you think may be dischargeable, please act sooner rather than later – if the IRS files a tax lien, that lien on your real property is not affected by a bankruptcy filing, although you will be personally discharged of the debt.  To find out more, contact us to schedule your free consultation today!

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