The Three Rules For Discharging Taxes In A Bankruptcy Case

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Get a sense of relief that your financial problems are solvable. Talk to Denvil Crowe. Talk to an old friend. Get straight answers. Fast. Denvil Crowe has the experience, knowledge, and qualifications to assist anyone who needs to consider filing a bankruptcy case. When filing for bankruptcy, it’s important for all residents of NortheasternMississippi to be aware of some vital information. Denvil Crowe can provide this necessary knowledge. Please schedule a consultation today at our conveniently located office in Tupelo.

Three rules determine whether or not 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.

1.       The 3-Year Rule: Taxes must have become due at least three years before the bankruptcy case is filed. Add three years to the due date to determine the earliest date a bankruptcy case may be filed to effectively discharge past due tax debt.

2.       The 2-year rule: Income tax returns must have been filed at least two years before filing a bankruptcy case. Thus, late-filed taxes may be discharged in bankruptcy as long as the returns were filed at least two years before the case is filed.

3.       The 240-day rule: Taxes must be assessed at least 240 days before the filing of the bankruptcy case or not assessed at all. The date of assessment is usually on or near the date that a tax form is filed.

Bankruptcy is a process and not a simple act. If your financial situation requires the filing of a bankruptcy case under Chapter 7 or 13, an experienced and qualified bankruptcy attorney can help you accurately review and carefully consider your options. An experienced and qualified bankruptcy attorney can help you throughout the entire lifespan of a bankruptcy case. Call 800-429-HELP (4357), email us at or check us out online today!

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