Eliminating Tax Debt With Bankruptcy

Tax debts can be an enormous financial burden, compounding an already stressful situation into one that seems insurmountable. Through bankruptcy, you may be able to discharge eligible tax debt or arrange a more manageable repayment plan. At Bryan P. Keenan & Associates, P.C., our founding attorney and staff provide experienced guidance for tax debt relief options.

Tax Debt Eligible For Discharge

To discharge tax debts, the debt must meet certain criteria that differ slightly for Chapter 7 and Chapter 13. Keep in mind, bankruptcy cannot discharge all tax debt, such as tax liens and secured liabilities.

Chapter 7 allows you to discharge federal tax debt if all the following apply:

  • You did not commit tax fraud or evasion.
  • The taxes owed are for income.
  • The tax debt is at least three years old.
  • You filed a tax return at least two years before filing for bankruptcy.
  • The IRS either has not yet assessed your tax debt or the assessment took place at least 240 days before you filed for bankruptcy.

Under Chapter 13, you can discharge or limit repayment for nonpriority tax debt. Taxes meeting all the above criteria qualify as nonpriority debt. Nonpriority taxes fall into the same debt repayment category as unsecured debt, meaning your repayment amount is based on your remaining income after deducting living expenses. In many cases, you will not have to repay the full amount.

You Do Not Have To Fight The IRS Alone

If you are struggling to repay tax debt and constantly staving off the IRS, we can help. Schedule a free consultation with our lawyer to discuss your bankruptcy options. Please email our firm or call 412-923-4941. From our Pittsburgh office, we assist clients throughout western Pennsylvania.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.