There are various types of tax debt that may be eligible for dismissal under Chapter 7 or Chapter 13 bankruptcy.  Rules and conditions are used to help distinguish which types of tax debt are dischargeable. Bankruptcy law outlines fixed criteria for tax debt eligibility and tax debt that can be eliminated if it meets the following requirements:

  1. The taxes stem from your income.
  2. Taxes that were accumulated fraudulently and/or there was not an attempt to evade the payment.
  3. There was a tax return that was filed for debt that was seeking to be discharged.
  4. Debt should be at least three years old from the time of filing with an Atlanta bankruptcy attorney.
  5. Income tax debt should have been analyzed by the IRS 240 days prior to filing for bankruptcy.

Payroll taxes, penalties for fraud, or tax debts that arise from unfiled tax returns cannot be eliminated in bankruptcy.

Filing with Tax and Bankruptcy Lawyer

Debtors are required by law to file a tax return regardless of their attempt to file for bankruptcy. During the court hearing, the debtor must provide a copy of their most recent tax return. After you have filed a bankruptcy petition, the trustee is in charge of filing your income tax returns for the bankruptcy estate. Once the bankruptcy case has been closed, any remaining assets in the estate will be returned to the debtor without any tax repercussions.