Bankruptcy Law | Dischargeability of Taxes



A common and prevalent misconception is that tax debt is not dischargeable. The truth is that tax debt can be wiped out by a bankruptcy so long as certain criteria are met. While some taxes, such as payroll taxes, are not dischargeable in a bankruptcy, regular income tax debts are dischargeable. In fact, they are one of the most common types of debts that debtors seek to get wiped out in a bankruptcy. 

Income tax debt is generally dischargeable in a Chapter 7 bankruptcy so long as it meets certain requirements. The tax debt must not be the result of a fraudulent tax return and the taxpayer must not be guilty of tax evasion. The tax must be at least three years old, the tax return must have been filed at least two year prior to bankruptcy, and the tax assessment must be at least 240 days old. 

If you owe tax debt and are considering bankruptcy, the Law Offices of Lucy Zheng can discuss all your options with you, evaluate whether your taxes are eligible for a bankruptcy discharge, and help you file and complete the bankruptcy process. 

As an office that is also experienced in tax law and tax debt relief, we will make sure that bankruptcy is the best option for handling your tax debts before you decide to embark on the bankruptcy route. Contact us today to schedule your initial consultation.