Chapter 7 Cannot Discharge Tax Debt

: Chris Lee Law Firm

  Filed under: Taxes

TaxesIf you are faced with a significant amount of IRS tax debt, you may be at your wit’s end searching for an answer. Sadly, most tax debt cannot be discharged in Chapter 7 bankruptcy; and even those debts that can be discharged have strings attached. Here are some guidelines for determining whether your tax debt is dischargeable in Dallas bankruptcy.

Bankruptcy and Tax Debt

To get your tax debt discharged in bankruptcy is no walk in the park. The debt must meet all of the following criteria:

  • Tax debt must be from income taxes only.
  • There must be no evidence of fraud in your tax history.
  • Tax debt must be over three years old.
  • A tax return must have been properly filed for the tax debt.
  • The tax debt assessment must be at least 240 days old.

If you pass these stringent requirements, your debt will be eligible for discharge in. However, even if this debt is successfully discharged, you are still liable for any federal liens against your property as a result of the debt. This means that even a successful discharge will not prevent you from having to pay off any liens against your home or other property. Chapter 13 bankruptcy gives even less leeway for tax debt sufferers, who must pay tax debt in full before their remaining debts can be discharged.

In point of fact, the IRS is a tough customer and getting out from under your tax debt is no mean feat.


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