In some cases, when filing for bankruptcy in Arizona, you may be able to eliminate your income tax debt. This depends entirely on circumstances and can be complex, so it’s important to get in touch with a bankruptcy lawyer in Surprise, AZ to assist you in this process.
To have income tax debt discharged by filing for bankruptcy in Arizona, you must meet certain requirements. This means you must only be looking at discharging federal and state income taxes, including some non-trust type tax debts. You must have filed a tax return for the applicable tax years and at least two years before filing for bankruptcy if the return was filed late. The tax liability itself must be at least three years old, and the taxing authority must have assessed the tax debt at least 240 days before you have filed for bankruptcy.
There are two more important circumstances that factor into whether or not you will be able to discharge your debt. You must not have committed willful tax evasion, in any capacity, and you must not have committed tax fraud. Either of these scenarios will make you ineligible for discharging income tax debt.
In some situations you may not be able to eliminate all tax debt. In those situations where some tax debts are subject to discharge and some are more recent, or a taxing authority has filed a lien, a Chapter 13 will help save you money by paying the debt off with no post-filing interest and eliminating penalties. With a lien, the payment can be more complex, but in most cases, by the end of your Chapter 13 you will be debt free and your tax lien and debt will be eliminated.
If you have read through these requirements and think you may be eligible, it is important to talk to a bankruptcy lawyer in Surprise, AZ. Filing for bankruptcy in Arizona is complex as it is, without adding the elimination of income tax debt in. It is important to fully understand all of the rules and regulations around bankruptcy, and it can be quite challenging to do that on your own.
Your bankruptcy lawyer in Surprise, AZ can take a look at your tax history, the debts you owe, and your specific situation and determine if you will be able to eliminate your income tax debt, and any other debts you owe. He or she can assist you in every step of the process and help ensure you get the best results possible, so you can discharge all applicable debts and move on with your life.
This blog is intended as a general discussion of legal issues and not as a statement of fact, legal advice or a legal opinion. No attorney-client relationship is created by this blog. Do not act or rely upon law-related information in this communication without seeking the advice of an attorney licensed to practice in the relevant area.