Can I Get Rid of My Income Tax Debt in Bankruptcy?
It can be very difficult to manage your finances, not only in Miami Lakes but all over the country as well as make ends meet when you owe the Internal Revenue Service or other taxing authority. Finding a way out of tax debt may seem impossible, but there is hope. A Chapter 13 or Chapter 7 bankruptcy might give you the tax debt relief you need to get back on your feet.
In addition to getting rid of tax debt, filing a Chapter 7 or Chapter 13 bankruptcy case can eliminate your other unsecured debts to give you a fresh start to recover and rebuild after a financial crisis. Our Miami Lakes and South Florida bankruptcy lawyers offer free evaluations, so you can learn about your bankruptcy options without worrying about how you will pay a lawyer for advice.
What is the “3-2-240” Rule in Bankruptcy Cases?
When we examine your personal income taxes to determine if all or part of the tax you owe is dischargeable in bankruptcy, we apply the 3-2-240 Rule. For personal income taxes to be eligible for discharge in your Chapter 7 or Chapter 13 bankruptcy case, all three of the following criteria must be met:
- Three Years — The due date for the income taxes you owe must be at least three years before the filing of your bankruptcy petition. In many cases, we use April 15 to calculate the date the taxes were owed. However, in some years, the filing date for tax returns was not April 15. In addition, extensions to file tax returns and other situations can change the date your taxes were due in certain years. Therefore, calculating this date might not be as simple as counting back three years from April 15.
- Two Years — You must have filed the income tax return that resulted in taxes being owed at least two years before the date you file your bankruptcy petition. In some cases, you may be able to discharge personal income taxes when a tax return was filed late, but it still satisfies this rule. However, some circumstances could complicate the issue. Our bankruptcy lawyers closely examine all factors to determine if your late-filed tax return would still qualify.
- 240 Days — The last rule examines when the taxing authority assessed the tax debt. To discharge income taxes in bankruptcy, the taxes must have been assessed a minimum of 240 days before the bankruptcy filing. For most individuals, taxes are assessed with days or weeks of the tax return being filed. Again, late filed tax returns, amended tax returns, extensions, audits, and corrected tax returns can change the assessed date for tax debt.
Calculating the dates for each of the above rules can be complex. You must examine all factors that can impact each rule., Therefore, it is best to consult an experienced Miami Lakes bankruptcy attorney who understands all circumstances and factors that can impact the calculation of the due date for your income taxes.
Do You Owe Income Taxes? Would You Like to Get Rid of Your Tax Debt?
You might be able to eliminate your tax debt or get rid of the tax debt for pennies on the dollar through a Chapter 7 or Chapter 13 bankruptcy case. Your first step is to take advantage of a free consultation with an experienced South Florida bankruptcy lawyer.
The bankruptcy attorneys of Adams Law, P.A. want to help you find an affordable solution to your debt problem. Contact our office by calling (305) 615-2905 or by using the contact form on our website to schedule your free consultation today.
