Under the new bankruptcy laws, tax debt is treated the same way for both Chapter 13 and Chapter 7 bankruptcy.
In order for a tax debt to be discharged under Chapter 13 bankruptcy, five specific criteria must be met:
- The tax return was due at least three years ago: The due date for the return must be at least three years before the bankruptcy petition was filed.
- The tax return was filed at least two years ago: The return must have been filed a minimum of two years before the bankruptcy petition was filed.
- The tax assessment is at least 240 days old: The IRS must have assessed the tax a minimum of 240 days before the bankruptcy petition was filed.
- The tax return was not fraudulent: The return must not be frivolous or fraudulent.
- The tax payer did not commit tax evasion: The bankruptcy petitioner must not be guilty of evading tax laws.
Note also that before a Chapter 13 bankruptcy will be granted, the petitioner must prove that they filed their four previous tax returns with the IRS. The petitioner must also provide the bankruptcy court with a copy of their last tax return.
For free legal advice about Chapter 13 bankruptcy, contact the Texas bankruptcy lawyers of Nachawati Law Group today. Simply email us or phone us toll free at 1.866.705.7584.
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About Nachawati Law Group
Nachawati Law Group represents parties in mass tort litigation, businesses and governmental entities in contingent litigation, and individuals in complex personal injury litigation. For more information, visit contact or call 214-890-0711.
