Evergreen Bankruptcy Lawyers Offer Advise on Tax Debt

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Evergreen Park bankruptcy lawyers have the experience and expertise to advise you on tax debt and bankruptcy. Most tax debt cannot be discharged with a bankruptcy, either Chapter 7 or Chapter 13, despite the tantalizing advertisements to such an end filling television and radio today. In a Chapter 13 filing, you will continue to owe these debts at the end of your bankruptcy and the payments will be part of your repayment plan. Only Chapter 7 can wipe out tax debt and only then if the debts meet certain criteria:

A tax return was filed on the debt – The tax debt you wish to discharge must have had the proper returns filed at least two years before filing a bankruptcy petition.

The taxes owed are income taxes – trustee taxes (payroll taxes), penalties and other types of taxes are not eligible to be discharged.

The tax debt is at least three years old – the debt you wish to discharge must have been owed for at least three years before the bankruptcy was filed.

No fraud or intentional evasion – if you filed a fraudulent income tax return or other wise committed fraud, such as willfully evading paying income taxes, bankruptcy will not discharge any debt related to this.

The 240 day rule – the IRS must have assessed this income tax debt at least 240 days before the bankruptcy package is filed or the debt must not have been already assessed by the IRS. If the IRS stopped the collection of this debt because of an offer in compromise or a previous bankruptcy filing, this deadline may be extended. bBankruptcy lawyers from Evergreen Park can help you validate all IRS debt before filing.

Unfortunately, any recorded federal tax liens will stay on your record even if the taxes themselves are discharged and your obligation to pay them absolved. The bankruptcy does prevent the IRS from collections procedures on the discharged taxes; however, if you intend to sell the property on which the lien is recorded, you will still have to pay off the lien. Bankruptcy lawyers from Evergreen Park are prepared to assist you with any IRS tax debt problems associated with bankruptcy.

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