Yes you can discharge taxes owed to the Internal Revenue Service and Franchise Tax Board when filing a Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. It all depends upon a few requirements such as how old the taxes owed are, when your tax returns were filed, how long ago the taxes were assessed and if there is any fraud involved. If some or all of the taxes cannot be discharged the good news is the taxes can be paid back without penalties or interest in a Chapter 13 bankruptcy. Schedule a Free Consultations with only attorneys and find out is bankruptcy can help you get rid of taxes. A typical free consultation will last between thirty minutes and an hour. Call us toll free at 1-877-9NEW-LIFE and find out if bankruptcy is right for you and whether you can discharge or payoff taxes without penalties or interest.
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When filing a Chapter 7 Bankruptcy it is possible to completely discharge all of your taxes owed to the Internal Revenue Service and Franchise Tax Board including the penalties and interest. The most common problem is that the taxes are not old enough to be discharged. The taxes need to be at least three years old at the time the case is filed. Taxes owed, for example, for 2008 are not due until April of 2009. If you asked for an extension, then the taxes are not due for an even longer period. It is important to communicate to your bankruptcy attorney, or obtain a tax transcript, to make sure when the taxes were due. Another problem is when were the taxes assessed? Sometimes the assessment of the taxes is delayed while an investigation takes place. If the taxes are not dischargeable you will owe the tax debt after receiving the order of discharge from the bankruptcy court.
When filing a Chapter 13 Bankruptcy same requirements exist for taxes to be discharged as well. In a Chapter 13 though you may have an obligation to your unsecured creditors, so even if the taxes are dischargeable you may have to pay back some of the taxes. Taxes that are not dischargeable will either be a priority debt or possibly a secured debt if a tax lien exists. The priority tax debt and depending upon the circumstances all or part of the secured taxes will need to me paid back in the Chapter 13 plan of reorganization.