Tax debt is usually non dischargeable, meaning the debt cannot be eliminated. However, there are exceptions to this general rule. The following are the 5 steps to eliminate tax debt through bankruptcy.
1. Due date more than 3 years ago, according to 11 U.S.C. Section (507(a)(8)(A)(i))
2. Assessed more than 240 days ago according to 11 U.S.C. Section (507(a)(8)(A)(ii))
3. Return filed more than 2 years ago according to 11 U.S.C. Section ( 523(a)(1)(B))
4.Tax return not fraudulent according to 11 U.S.C. Section(523(a)(1)(C))
5. Taxpayer not guilty of attemptedtaxevasion according to 11 U.S.C. Section(523(a)(1)(C))
If all those factors are met, the tax is considered a general unsecured debt as opposed to a priority debt.
For more information on discharging tax debt in bankruptcy, contact a Houston bankruptcy attorney at the Rashid Law Firm for a free consultation at 832-209-8833.
