Back Taxes

If you have a bunch of back taxes owed (State or Federal), bankruptcy may be able to help you out.

First off, if the taxes owed are more than 10 years old, the IRS will, on its own, stop trying to collect on the back taxes. If the taxes are less than 3 years old, they can’t be discharged in bankruptcy, but you can use bankruptcy to create a 3-5 year repayment schedule. Lastly, the portion of the 940/941 taxes that were withheld from an employee’s paycheck is never dischargable (if you don’t know what 940/941 taxes are, don’t worry, it’s probably not applicable to you).

If the taxes are between 3 and 10 years old, we need to look at it more closely. Generally speaking, if you filed your taxes and they were due more than 3 years ago, the taxes are discharagable. Different factors can effect when the taxes are dischargable, including liens, audits, OICs, etc…

If you want to see if your taxes are dischargable, you need to request your tax transcript from the IRS (there are 2 kinds of transcripts from the IRS, the wage transcript and the account transcript. We need the account one but you can ask for both just to be safe). The account transcript will have various codes and dates used to determine when taxes are dischargable.

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