Discharging Tax Debt

Enfield, Connecticut Bankruptcy Attorney Focuses on Dischargeable Tax Debt

Connecticut Bankruptcy Law Firm: Your Resource for Skilled Bankruptcy Representation

You may be able to discharge old income tax debt in Chapter 7 bankruptcy, but most other types of taxes are not dischargeable. Income tax debt can be erased if it meets specific qualifications and limitations:

  • The taxes must be income based – for federal or state income taxes or taxes on gross receipts
  • The taxes were due at least three years before you filed for bankruptcy
  • You filed a tax return at least two years ago – an IRS substitute for return will not satisfy this requirement
  • The taxes were assessed at least 240 days before you filed for bankruptcy
  • The tax return was not fraudulent or frivolous and you are not guilty of evading tax laws

Non-dischargeable Tax Debt

Most non-income related tax debt is non-dischargeable, including:

  • Tax liens recorded before you filed for bankruptcy will remain attached to your property
  • Property tax incurred before the bankruptcy filing that are payable within one year
  • Trust fund taxes including FICA, Medicare, and other income taxes that an employer is required to withhold, as well as sales tax paid by a debtor's customer
  • Certain employment and excise taxes
  • Non-punitive penalties on non-dischargeable taxes, if the transaction occurred within three years of the bankruptcy filing
  • Erroneous tax refunds or credits

Need advice regarding whether or not a certain tax debt is dischargeable? The attorneys at Susan M. Williams LLC have over 20 years of experience with bankruptcy and dischargeable debt. Contact our firm online, via e-mail, or call 860-265-4928 today – your initial consultation will be free.

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