Learn how to tell if bankruptcy might be the answer to your IRS Tax Problem. It's a little known fact that bankruptcy can discharge taxes under certain circumstances. The key is that the timing must be right.

Video Transcription

Bankruptcy for tax problems. It is a common myth that taxes or tax liabilities cannot be discharged in bankruptcy. There is almost never a week that goes by without a tax payer sitting in my office and indicating to me but hey I was told that taxes cannot be discharged in bankruptcy and that is a bit of a myth. It's been sort of promulgated by the IRS and Congress and Bankruptcy attorneys for a long, long time. But there are actually some ways that you can discharge income taxes and bankruptcy. You notice that I said income taxes, I didn't say payroll taxes. Payroll taxes or the trust fund recovery penalty which is a wastage of the payroll tax cannot to be discharged in the bankruptcy and for the most in this little video I have only time to talk about Chapter 7 bankruptcies, you want to go into a Chapter 7 if you can because at Chapter 7 liquidates your liabilities. It means that you have no liability remaining if all goes well in your Chapter 7. So there is also a Chapter 13 repayment plan type bankruptcy which is for consumer and sometime there is a limitations to a Chapter 13 but essentially you end up in a repayment plan which normally encompasses somewhere between a 36 to 60 month payout time frame. So you want to avoid been in Chapter 13 with regard to your tax liabilities if you can because you will end up paying some large part of the taxes back in the Chapter 13 if you end up in that situation and it's very common for bankruptcy lawyers to push your clients into a Chapter 13 because frankly bankruptcy lawyers make more money for Chapter 13 than they do for Chapter 7. In my opinion about 90% of the bankruptcy lawyers in the United States don't even know that taxes can be discharged in bankruptcy and I find that rather disturbing but they in fact can as I indicated. So for a Chapter 7 there are three rules, there is a three year rule which stands for the proposition that the returns have to have been in due including extensions for at least three years before they can be dischargeable. The two year rule stands for the proposition that the returns have to have been filed if they were filed late for at least two years and the 240 day rule is simply that the taxes must have been assessed for at least 240 days. So those are the three timing rules for your bankruptcy. It's important to know exactly when your taxes where assessed and it's really important that a seasoned, experienced tax professional does the analysis to determine whether or not your taxes can be discharged in a bankruptcy. If you are one early or a month early or something like that and you file a Chapter 7 to try to discharge your tax liabilities you lose. So it's really important that the timing be analyzed correctly. Also you are going to want to choose a bankruptcy attorney who is well seasoned and well experienced in the discharge of taxes of bankruptcy. So if they tell you something like well let's see what happen I would suggest that you might want to try to find someone else. If you want a bankruptcy analysis in terms of timing done for your case, for your tax case then you might want to give us a call. You can reach us toll free at 888-4386-474 and our website is getirshelp.com. There are a lot of trips and traps in terms of determining whether or not the time frames for bankruptcy are applicable in your case or not. There are a number of tolling factors that can really screw you up in terms of whether or not the time limits have a lapse or not. This is not a time to guess whether or not you are eligible for a discharge or not. It's something that you want to be certain of before you go ahead and do it. If you have any questions feel free to contact us at contactus@getirshelp.com or again visit the website getirshelp.com. Thanks for dropping by.