It is not uncommon for Americans to incur tax debt, both state and federal. Many prospective bankruptcy debtors are dissuaded from filing bankruptcy because they believe that they may not discharge their tax debt. This is a common misconception.
The ability to discharge taxes is one of the useful benefits of filing bankruptcy, although there are certain requirements. Provided that these mandatory requirements are met, some taxes may be dischargeable in bankruptcy.
Analyzing and determining whether unpaid taxes meet the tests for dischargeability in bankruptcy often requires the assistance of a bankruptcy professional. Theron Morrison and the Morrison Law Group may provide such necessary assistance when debts include unpaid, delinquent taxes.
If a debtor’s tax situation meets the federal law requirements, he or she may discharge federal, state, and local income taxes in Chapter 7, 11, and 13 bankruptcy cases. Any penalties and interest attached to dischargeable income taxes may also be discharged.
Whether a tax debt is eligible for discharge requires an informed, expert analysis involving the type of tax, the length of time of the unpaid tax, whether the debtor has filed a return and the chapter under which the debtor files the bankruptcy. An experienced bankruptcy attorney like Theron Morrison may evaluate whether taxes are dischargeable in a bankruptcy case.
Three rules determine whether tax debt may be discharged in a bankruptcy case. These rules only apply to federal, state, and local income taxes. They do not apply to other types of taxes, such as property taxes. More about these three rules in future blogs!
Most debt collectors assume that consumers are unaware of their rights and protections under federal law. However, Theron Morrison cares about protecting your rights. Theron Morrison has the necessary experience to ensure that all consumers receive the full benefit of the protections afforded them by federal law. Call 801.456.9933 today to schedule a FREE consultation. We have locations in Ogden, Logan, Sandy, and St. George to serve the residents of the counties of Weber, Cache, Salt Lake, Utah, Morgan, Davis, Washington, and surrounding areas.