Income Taxes Can Be Discharged in Bankruptcy

In our bankruptcy law practice, we see many people in Augusta, Evans, Martinez and the surrounding cities who believe that income taxes cannot be discharged in a bankruptcy case. The lawyers at the Law Firm of Seymour & Associates want to spread the word that this is simply not true. If you owe back income taxes you may qualify to have these taxes eliminated. Federal and state taxes that meet certain requirements can, in fact, be discharged in a Chapter 7 and/or Chapter 13 bankruptcy. Trying to determine which taxes are dischargeable can be very complicated and requires complete disclosure and cooperation with your bankruptcy attorney.

With certain exceptions, the rules for discharge of taxes are generally broken down into three time periods: the 3- Year, 2- Year and 240-Day rules. Under these rules, a bankruptcy attorney can help you eliminate the taxes you owe. Many times simply pre-planning your bankruptcy filing will allow you to take advantage of these rules. If you file your bankruptcy too early you may still owe taxes. Therefore, you need an experienced Augusta, Georgia bankruptcy attorney to help you determine if your taxes can be discharged and when you should file your bankruptcy.

Simply put, the rules are:

3-Year Rule: Your taxes must become due at least 3 years before you file for bankruptcy;

2-Year Rule: Your income tax returns must have been filed at least 2 years before you file your bankruptcy case;

240-Day Rule: If your taxes have been assessed, this must have occurred at least 240 days before you file your bankruptcy case.

If these rules sound complicated, they are. But if you will provide all of the necessary information to our office, one of our bankruptcy lawyers can help you determine the best time file your case in order to meet the rules.

If you are worried because you owe back taxes and you don’t think any of these rules will apply to you don’t despair! In such a case, your best option may be to file a Chapter 13 bankruptcy case and pay the taxes back at a payment that you can afford.

Our in office we only practice bankruptcy law. If you live in Columbia, Richmond, Burke, McDuffie, Lincoln, Wilkes, Taliaferro, Warren or Jefferson counties and owe back taxes or any other debts, we can help you feel in control again. Please contact us for a free, no obligation consultation today at (706) 872-7117. Or, if you prefer, you can contact me. When you visit Seymour & Associates, you may walk in with problem but you will walk out with a solution.