Income taxes can be legally written off in bankruptcy under the right conditions. With careful planning, you can meet those conditions.
Would your small business thrive if you could just get rid of, or at least get better payment terms on, your overdue taxes?
Bankruptcy gives you power over the IRS in getting rid of a tax lien. Chapter 13 in particular empowers you to value and pay off a lien.
Your ex-spouse’s bankruptcy filing seldom helps you, even if it writes off a joint tax. But your own Chapter 7 or 13 can help you directly.
You’re usually completely liable on jointly filed taxes, regardless of a divorce decree saying youâre not. But the IRS may give you relief.
Bankruptcy can be a surprising good way to solve your tax problems. But first, got to prepare your returns to get good advice about options.
Chapter 13 is not as cut-and-dried in protecting your refund. But generally you can use it for an urgent expense or for an urgent creditor.
You can’t keep your refund if you owe for another tax year. But if you discharge (write off) that tax debt, you can keep future refunds.
Keep your refund if it’s small (enough) or by not filing bankruptcy until spending that refund (wisely).
You can usually keep your tax refund(s), although doing so may take some maneuvering.
If you can afford your monthly installment agreement with the IRS/state, it may be an appealing solution. But often not the best one.
With very few limited exceptions the IRS/state must stop all collection activity, from the beginning to the end of your bankruptcy case.
Chapter 13 “adjustment of debts” gives you many tools that Chapter 7 “straight bankruptcy” does not.
Chapter 7 “straight bankruptcy” may be worthwhile if it gets rid of your other debts and leaves you able to manage your taxes.