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Hanson & Hanson Tulsa Tax Lawyers Can Advise You on Bankruptcy Tax Relief
You may be able to discharge your tax debts in bankruptcy.
A popular misconception is that taxes are not dischargeable in bankruptcy, and even some bankruptcy attorneys do not understand how this works. At Hanson & Hanson, we are familiar with both tax and bankruptcy law and the complicated rules governing this area. Most of the rules that apply to individuals also apply to businesses. In many cases, Chapter 13 allows interest to be frozen and penalties to be abated. Priority taxes (those less than three years old) may be paid through Chapter 13 without interest. Payroll withholding taxes cannot be discharged but you can pay them through a Chapter 11 or Chapter 13 plan.
For IRS debt is dischargeable in a Tulsa chapter 7 bankruptcy case if it meets the following criteria:
- The liability must have become due at least three years before filing bankruptcy. For example, taxes for the year 2008 became due on April 15, 2009.They become dischargeable on April 16, 2012. This is assuming that the individual or the individual’s representative did not request an extension for filing the return. The three-year period is extended if a request for an extension was made.
- The individual filed the return at least two years before filing for bankruptcy. A Substitute for Return filed by the IRS does not qualify as a return for purposes of this section.
- The person must have actually filed a return.
- The liability must have been assessed at least 240 days prior to filing.
- The return must not have been fraudulent.