You can wipe out or discharge tax debt by filing Chapter 7 bankruptcy only if all of the following conditions are met:
- The debt is federal or state income tax debt. early taxes, such as fraud penalties or payroll taxes, can not be eliminated through bankruptcy. In early words, the debt needs to be a unconstipated tax requital that you owed either the State of Wisconsin or the federal government .
- You did not willfully evade paying your taxes or file a deceitful tax return. Bankruptcy will not help in these circumstances. Your actions need to have been lawful .
- Your tax debt is at least three years previous. The original tax render must have been due at least three years prior in holy order to effectively file for bankruptcy. so if you were to file for bankruptcy in April 2020, for example, this would apply to your 2017 taxes that were due April 15, 2018.
- You filed a tax return at least two years before filing for bankruptcy. To eliminate a tax debt, a render for that debt must have been filed. by and large, if your extensions expired and you filed late, you have not filed a true refund and will not be able to eliminate the tax debt .
- The tax debt must have been assessed by the IRS 240 or more days before you file for bankruptcy, or must not have been assessed even. This is called the “ 240 day rule. ” If the IRS suspended collection efforts due to a compromise or previous filing, this deadline may be extended.
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Tax Liens & Bankruptcy
Tax debt and tax liens are different things. Tax debt is just money that you owe either the State of Wisconsin or the IRS. A tax lien is a legal judgment secured against your property to satisfy a tax debt instrument that you owe the country or federal government. Should you qualify for chapter 7 bankruptcy, and meet all of the above criteria, unfortunately bankruptcy will not eliminate anterior tax liens .
Your obligation to pay off the debt will be discharged, but not eliminated. however, the IRS will nobelium long be able to go after your income or bank account.
however if a tax lien was filed before you filed for bankruptcy, the spleen will remain on the property. If you always want to sell your place, you will have to pay off the spleen before you can do therefore .
Do you have other tax related, or bankruptcy questions ? Let us know. We ’ re happy to help .
The have attorneys of Burr Law Office are here to answer your bankruptcy questions. Give us a call at ( 262 ) 827-0375 today .