Getting Taxes Discharged in Bankruptcy

Taxes that qualify can be discharged in a Chapter 7 Bankruptcy. To properly handle an issue involving taxes to be discharged it is necessary to order the transcripts of account from the IRS. The transcripts tell when the tax return was filed, whether there were any additional assessments and whether an extension was filed. The basic rule is three years from the date the tax return was due. Two years after the returns were processed. 240 days after any additional assessment. If all there rules are met the taxes can be discharged. Also, in reviewing the record of account it is necessary to see if there was an offer in compromise, collection due process hearing or anything else that can toll the running of the time periods.

In a real time example lets say that we are looking at 2011 taxes where there was an audit in May of 2013 leading to an additional assessment of $10,000. The return was filed without an extension on April 15, 2012. The taxes would be dischargeable on April 15 2015 (three year rule met, two year rule met, and 240 days after additional assessment from the audit met).