You may be wondering exactly what is Tax Dischargeability Analysis (“TDA”)?
Most taxpayers and may professionals do not realize that income taxes may be discharged in a bankruptcy. Treatment of discharging tax liability is one of the more complicated aspects of consumer bankruptcy law. Many professionals including bankruptcy attorneys do not always understand the rules in their entirety.
Hire the Right Person
If your representative does not have a comprehensive understanding of this process, you may miss the opportunity to discharge some or all of your tax liability. For this reason, you want to ensure that you are properly prepared to remove your tax liability prior to “pulling the trigger” on a bankruptcy
Whether or not your bankruptcy filing relieves your tax debt depends on several factors including the nature and the status of tax liability. In addition it depends on the type of bankruptcy being filed.
In order for taxes to be dischargeable, they must have aged according to the following rules…
3 years from the due date of a return including extensions (3-year Rule); and,
2 years from the date of assessment of said tax return (2-year Rule); and
240 days from the date of assessment for audited and/or amended returns (240-day Rule).
We Are Here to Help
The Tax Resolution Institute has 30+ years experience preparing Tax Dischargeability Analyses for our clients that intend to file for bankruptcy. A TDA determines if and when your taxes may be discharged in bankruptcy. This is an invaluable tool for someone filing a bankruptcy with outstanding tax liability.