We Are Open! Miller & Miller Law is keeping our clients and staff safe from COVID-19. We are open for free phone and video consults during these difficult times.

Our 3 Step Process

Step 1:
Get Out Of Debt

Step 2:
Clean Up Your Credit

Step 3:
Build Your Score

  1. Home
  2.  » 
  3. Personal Bankruptcy
  4.  » Can IRS debts be discharged in Bankruptcy? P.2

Can IRS debts be discharged in Bankruptcy? P.2

| Sep 5, 2016 | Personal Bankruptcy |

In our last post, we began looking at the issue of whether tax debt may be discharged in bankruptcy. The issue is an important one for debtors who bring significant tax debts to the bankruptcy process, whether in Chapter 7 or Chapter 13 bankruptcy.

As we noted, there are various tests bankruptcy courts apply to a bankruptcy case to determine whether tax debt may be discharged. The date of the tax assessment, timely notification of the taxing authority, and lack of fraud or evasion attempts are all important requirements. In addition to these requirements, there are certain categories of tax debt that simply may not be discharged in bankruptcy. 

Tax debt which may not be discharged includes:

  • Taxes the debtor was responsible for collecting and paying to a taxing authority, including FICA tax, Medicare tax, and employee income tax
  • Certain excise taxes
  • Tax arising between the filing of the petition and the appointment of the trustee or the order for relief, whichever is earlier. This applies only to cases of involuntary bankruptcy.
  • Tax debts not included on the debtor’s schedules with enough time for the taxing authority to file a proof of claim, except in cases where the taxing authority had actual knowledge of the bankruptcy case.

Debtors should, of course, always work with an experienced local bankruptcy attorney when seeking bankruptcy protection, not only to navigate the requirements for discharge of debts, but also to address any procedural issues that arise in the case which could prevent the discharge of these debts. 

Archives

Watch Attorney James Miller on the Morning Blend as he discusses his new book, The Secrets About Bankruptcy They Don't Want You To Know.

Click here to order your free copy today!
-Or-
Click here to schedule an appointment at any of our convenient locations.

Morning Blend will re-run on Labor Day.

FindLaw Network