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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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Can back taxes and penalties be negotiated with the state and

Customer Question

Can back taxes and penalties be negotiated with the state and federal government as part of a Chapter 13 Bankruptcy? I realize they are not debt that can be discharged. But can payment arrangements be negotiated as part of the restructuring?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.
Hi JACustomer,
Some taxes - with their corresponding penalties and interest - are dischargeable in a Bankrutpcy, and some are not. It your IRS and/or state tax debts are dischargeable in a Bankruptcy, they will be paid along with your other unsecured creditors, and upon completion of your Chapter 13, the balance owed will be discharged.
If your taxes are in the non-dischargeable category, they will still be paid along with your other unsecured creditors, but at the end of your Chapter 13, you will still owe the balance.
Filing a Bankruptcy does not improve your ability to negotiate your tax debt.
Customer: replied 5 years ago.
I am reading and digesting the answer and considering if I have follow up questions.
Expert:  cfortunato replied 5 years ago.
Okay - thank you for letting me know.

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