My tax debt discharged in bankruptcy?

If I had a nickel for every time I asked this question, I had a lot of nickel. Eliminating tax debt in bankruptcy can be a bit 'difficult, and often I like working with customers to collaborate on documents needed before me to assess whether this debt can do to be freed. However, there are some pieces of information I can share that might clarify the issue for you.

The two most common types of tax that I presented to includeLiens for unpaid property taxes and unpaid taxes.

Mortgages tend to follow the adage "first in time, first in" This means that all mortgages are assigned to a particular piece of property to a place in line. As mortgages are paid on the sale of the property must be paid in this order. For example, a primary mortgage when buying home is probably acquired a lien paid before tax at a later date to be set later rescued.

tax liens in bankruptcyusually only to the extent of the residual value of the asset being protected, after higher-priority liens are paid. As with all mortgages, liens, tax transferred intact, usually by the failure unless special measures are taken to avoid them.

Unpaid income taxes follow a different set of rules that often a bit 'difficult to understand. In general, these taxes can be discharged in Chapter 7 bankruptcy if they meet a certain set of parameters.

First, the tax must be switchedat least three years. This gives the date on which the return was determined. In order to eliminate tax liability, you must obtain a tax originally requested by at least three years before bankruptcy protection. That period containing all the extensions.

Secondly, you must submit a tax return filed for that debt. This return must be submitted at least two years before the record date, which will be released for the debt. This time it is clear from the effective date of yourReturn was filed.

Moreover, the tax debt by the IRS for at least 240 days prior to the application must be assessed for the debts discharged. This assessment may be initiated by determining fiscal control, a proposed IRS-assessment or self-reported balance.

Finally, the tax is not fraudulent or evasive. That is when the taxpayer, you must not intentionally trying to avoid taxes, such as using a false Social Security number did. The return can notare frivolous or fraudulent.

I should also note that certain tax debts can not be discharged, regardless of whether the above parameters are met. So I always recommend that debt with a competent bankruptcy attorney regarding the discharge of income. If you're in the Phoenix area, Arizona please feel free to contact me with a question on bankruptcy and discharging tax in bankruptcy in Arizona.