What You Should Know About Delinquent Taxes & Filing Bankruptcy

What You Should Know About Delinquent Taxes & Bankruptcy

If you have delinquent, unpaid taxes and are unable to utilize an IRS payment plan or offer in compromise, bankruptcy may be a viable option. For individuals with unpaid taxes, the most commonly filed type of bankruptcy is a Chapter 13 case. When considering a Chapter 13 bankruptcy case, a seasoned bankruptcy attorney like Theron Morison or any other knowledgeable attorney in the Morrison Law Group can explain your options fully, clearly, and patiently.

While, you may resolve, or even discharge, the tax delinquency through your bankruptcy case’s repayment plan, you must still adhere to certain requirements regarding federal taxes while in bankruptcy.

  • You must file all required tax returns for tax periods ending within four years of your bankruptcy filing.
  • During your bankruptcy, you must continue to file, or get an extension of time to file, all required returns.
  • During your bankruptcy case, you should pay all current taxes as they come due.
  • Failure to file returns and/or pay current taxes during your bankruptcy may result in your case being dismissed.

All such federal tax returns must be filed with the IRS before the date first set for the first meeting of creditors. Failure to file may not only result in dismissal of a case but in a case not being confirmed by the trustee and court.

The debtor may request the trustee to hold the meeting open to enable the debtor to file the returns or until the day the returns are due under an automatic IRS extension, if later. Trustees may require the debtor to submit copies or transcripts of the debtor’s returns as proof of filing.

the Bankruptcy Code provides that if the debtor does not file a tax return that becomes due after the commencement of the bankruptcy case, or obtain an extension for filing the return before the due date, the taxing authority may request that the bankruptcy court either dismiss the case or convert the case to a case under another chapter of the Bankruptcy Code. If the debtor does not file the required return or obtain an extension within 90 days after the request is made, the bankruptcy court must dismiss or convert the case.

A former “National Bankruptcy Attorney of the Year,” Theron Morrison leads the Morrison Law Group, one of Utah’s most respected law firms, in assisting thousands of Utah residents to solve financial problems by filing bankruptcy. We offer debt relief services related to chapter 7 and chapter 13 bankruptcy, workouts, delinquent taxes, loan modifications, short sales, student loans, and defending the residents, consumers, and taxpayers of Utah against illegal collection. Contact the Morrison Law Group today at 801-456-9933 to consult with an experienced bankruptcy and debt solution attorney.

Theron Morrison

Theron Morrison

Utah’s top bankruptcy and consumer protection attorney.