1. Home
  2.  » 
  3. Bankruptcy
  4.  » Tax Debt

Finding Answers For Your Tax Debt

If you are burdened with large amounts of tax debt, it is important to know that you have rights and legal options to discharge some tax debt. The legal team at Janvier Law Firm, PLLC, is committed to helping you through this difficult period. We dedicate our practice to working closely with our clients to help them find a solution that allows them to move beyond their tax debt and gain a fresh start.

Some Income Tax Debt Is Dischargeable

Whether you are filing Chapter 7 or Chapter 13 bankruptcy, it is possible to have unpaid state and federal income taxes discharged in bankruptcy. It is important to note, however, that in Chapter 7 you cannot discharge tax liens placed on property you own prior to filing bankruptcy. This means, in order to sell the property, you will have to pay off the lien if you want to sell the property before the tax lien expires.

In Chapter 7 bankruptcy, you may be able to discharge a significant portion of your income taxes and federal tax debt if:

  • You filed tax returns on time, or at least two years prior to filing for bankruptcy.
  • The tax return was due, including extensions, more than three years prior to filing bankruptcy.
  • The IRS assessed tax debt at least 240 days before you filed bankruptcy.
  • You have not committed tax fraud or willful tax evasion.

Trust fund taxes (payroll taxes and sales taxes) are not dischargeable.

Penalties (tax penalties, early withdrawal penalties, ACA penalty for not having insurance) less than three years old are not dischargeable. If more than three years old, they are dischargeable.

In Chapter 13, the same rules as set out for Chapter 7 apply, except as follows:

  • Penalties (early withdrawal penalties, etc.) are dischargeable, regardless of how old.
  • Taxes that are less than three years old are dischargeable, but the Chapter 13 plan must provide for paying these “priority” taxes in full.
  • Tax liens are discharged in Chapter 13 by paying the amount of the tax lien. The amount of the tax lien is capped by the value of your assets.

Are you a business owner or partner? Corporations that owe taxes and other corporations or LLC’s that owe payroll taxes may restructure the payment of the taxes through a Chapter 11 plan.

Put Our Prowess To The Test

No matter if you file Chapter 7 or Chapter 13 bankruptcy, it is critical to adhere to the IRS’s regulations for a successful outcome to your case.

For more than 30 years, our attorneys have helped individuals in North Carolina recover their financial futures through bankruptcy petitions. Our legal team has a complete understanding of the IRS’s regulations, and we will work closely with you to help move your case forward in a positive manner.

Schedule An Appointment With Our Team

Our extensive bankruptcy experience means we know how best to proceed with your case. Discuss your situation with our skilled lawyers today to learn more about your options and best possible outcomes. Consultations are available at our Raleigh office. Simply call 919-301-0628 or contact us online to get started.

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