@Shann0n_marie wrote:
I don’t have the answer to your question but I’m curious in regards to your comment about Ch 7 would leave you with a rather large tax bill? The IRS code 108 exclude the discharge of debt from its definition of taxable income...
Not sure i understand your question as well....
If you owe taxes and file Ch. 13, it is my understanding that the taxes owed will be calculated into the repayment plain.
In a Ch. 7, i thought unpaid taxes were not discharged and you would still owe any unpaid taxes after a Ch. 7 discharge?
You can have back taxes wiped out in a 7. Not in a 13. Its the only reason why I filed BK. 13 yrs caught up with me and had no other choice. I was no assest so the lein was released. And it was so old. It fell off my reports soon after.
You can discharge (wipe out) debts for federal income taxes in Chapter 7 bankruptcy only if all of the following conditions are true:
- The taxes are income taxes. Taxes other than income, such as payroll taxes or fraud penalties, can never be eliminated in bankruptcy.
- You did not commit fraud or willful evasion. If you filed a fraudulent tax return or otherwise willfully attempted to evade paying taxes, such as using a false Social Security number on your tax return, bankruptcy can't help.
- The debt is at least three years old. To eliminate a tax debt, the tax return must have been originally due at least three years before you filed for bankruptcy.
- You filed a tax return. You must have filed a tax return for the debt you wish to discharge at least two years before filing for bankruptcy. (In most courts, if you file a late return (meaning your extensions have expired and the IRS filed a substitute return on your behalf), you have not filed a "return" and cannot discharge the tax. In some courts, you can discharge tax debt that is the subject of a late return as long as you meet the other criteria.)
- You pass the "240-day rule." The income tax debt must have been assessed by the IRS at least 240 days before you file your bankruptcy petition, or must not have been assessed yet. (This time limit may be extended if the IRS suspended collection activity because of an offer in compromise or a previous bankruptcy filing.)
