BANKRUPTCY AND TAXES
In these economic times many people are in serious debt and the debt can also include taxes. Everyone knows that bankruptcy can relieve most debt but they may not realize that it may also relieve some federal back taxes. First it must be only income taxes, other taxes will not be eliminated. Second, there is no tax fraud or willful evasion involved. Third you must have filed a tax return to create the debt. If you have not filed your return after a certain number of years IRS will file a substitute tax return and estimate the tax and charge you that amount until you file an actual return. Fourth you have to discharge at least two tax years. The 3 year, 2 year, and 240 Day Rules. The bankruptcy code sets out specific time periods that determine if you can discharge your taxes. These rules can be complicated and often misunderstood so you should consult with someone who is fa...