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Most taxpayers are unaware that bankruptcy may be a viable option to discharge income taxes.  Although bankruptcy may work to relieve IRS tax debt, it also has the ability to cause issues.  Nonetheless, people are declaring bankruptcy in record numbers so that they may wipe away their personal debt.  Faced with financial difficulties, they hope that by filing for bankruptcy they will gain a fresh start.

In fact, bankruptcy is an option that is used to relieve debt obligations not just by everyday people, but also by some of the world’s largest businesses.  Two questions that need to be addressed are (1) Is bankruptcy is a viable option when it comes to discharging your personal income tax debt?  And (2) if it is, do you meet all the necessary conditions?  If filing for bankruptcy does not eliminate your taxes, then you may find yourself still facing a huge tax bill after the bankruptcy is final.

Understanding Discharging Taxes in Bankruptcy

tax relief bankruptcy

Is Bankruptcy an Option to Eliminate Your Taxes?

When it comes to understanding tax relief bankruptcy, you need the help of an experienced tax resolution specialist.  In addition to determining if discharging taxes in bankruptcy is possible, you need to determine when they become dischargeable.

If one of your major creditors is the United States government, then you definitely want to consult with a tax attorney or a tax resolution specialist before moving forward.  A tax resolution specialist can prepare a Tax Dischargeability Analysis (“TDA”) to determine when you may discharge taxes if at all.  They can also help you consider alternative relief options if you are unable to eliminate your taxes in bankruptcy.  These options include an IRS Installment Agreement or placement into Currently Not Collectible status.

The Tax Resolution Institute Can Help

Tax Resolution Institute has assisted countless clients navigate the bankruptcy process.  By carefully analyzing their financial situation we can recommend the best tax relief solution.  If bankruptcy is a viable option, we ensure the do not file too early.  To learn more about how the Tax Resolution Institute can help you with a bankruptcy analysis including a TDA, call us at (818) 704-1443 or email us at info@taxresolutioninstitute.com.