Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.
Question: I owe $92,000.00 federal tax. I seek information if I can file bankruptcy and said debt. Tax has been filed for over one year. Response: Unfortunaltey, filing for bankruptcy would not wipe out your tax. Your tax debt would not be dischargeable in your bankruptcy. Generally, taxes are not dischargeable in bankruptcy. However, in certain situations, taxes may be dischargeable. Taxes are dischargeable if all of the following conditions are met:
(1) The tax return was not fraudulent and filed on time or, if the return was filed late, it was filed more than two years before the bankruptcy; (2) The tax is not a priority claim; and (3) You did not willfully evade taxes. A tax debt is a priority claim if the tax return was filed less than three years before the date of the bankruptcy petition. The due date of the return is normally April 15th, but this date can vary: it can be April 16th, or 17th if the 15th falls on a weekend. However, if the debtor obtained an extension, the due date would be the extended deadline. A tax debt also is a priority debt if it was assessed within 240 days before the bankruptcy petition, or is assessable after the commencement of the case. Federal income tax is assessed on the date the IRS notifies the taxpayer of a tax claim or perhaps, on the earlier date that an assessment officer signs a summary record of assessment (Form 23-C).
Based on the foregoing, your tax would not be dischargeable if you file for bankruptcy protection at this time because you filed the tax return less than three years before the bankruptcy filing. See 11 U.S.C. Sections 523(a)(1) and 1328(a)(2)