Contrary to some misconceptions, discharging tax debt in Dallas Chapter 7 Bankruptcy is not impossible. Rather, you can discharge certain tax debts and possibly the penalties imposed on account of those debts if you can satisfy specific conditions and rules.
The Chapter 7 bankruptcy attorneys at Allmand Law Firm could help you determine which, if any, of your debts can be relieved with a Chapter 7 bankruptcy filing. We are committed to our philosophy of helping good people through tough times with seasoned advice based on our years of experience in assisting Texas residents to get beyond their financial problems.
What Are the Qualifying Conditions to Discharge Tax Debt?
When you first consult with Allmand Law’s bankruptcy attorneys, they will determine whether your tax debt meets the conditions of the “3-2-240 rule” as a precursor for a Chapter 7 bankruptcy discharge in Dallas. You must satisfy each of these conditions without exception:
- You must have incurred the tax debt at least 3 years before you submit your Chapter 7 bankruptcy filing
- You must have submitted all required tax returns during the two years prior to that filing
- The IRS or other tax authority must have levied those taxes against you at least 240 days before your bankruptcy filing
The lawyer that you consult with could determine the appropriate dates that may be used to establish the applicable filing dates for your compliance with the 3-2-240 rule.
What Conditions Can Preclude a Chapter 7 Tax Debt Discharge?
Your tax debt will not be amenable to discharge in a Chapter 7 Dallas bankruptcy filing if the IRS concludes that you have committed fraud or were otherwise willfully evading your tax payment obligations. An Allmand Law bankruptcy attorney could review your situation to find potential defenses, such as a filing mistake or inadequate record-keeping policies, that may defeat the IRS’s attempt to show by clear and convincing evidence that you may be liable for fraudulent submissions.
Further, if your back taxes relate to a late-filed return that you submitted after the IRS created a substitute return on your behalf, those taxes may survive a Chapter 7 discharge petition. An attorney could verify the basis of your tax debt and the feasibility of imposing a challenge under the laws and procedures followed in the jurisdiction of your Chapter 7 filing.
Are There Any Taxes That Will Not Be Subject to a Chapter 7 Discharge?
If you meet the discharge prerequisites, a Dallas Chapter 7 bankruptcy petition can discharge your personal income tax debt or a business’s taxes that may have been incurred on gross receipts. That petition will not, however, eliminate payroll or sales taxes that your company might owe. Your back property taxes will probably not be discharged either because local taxing municipalities have created detailed tax lien procedures to collect those taxes. The lawyers at Allmand Law can provide a targeted list of which of your specific tax debts can be addressed in Chapter 7.
Call Allmand Law in Dallas for More Information About Discharging Tax Debt in a Chapter 7 Bankruptcy
If you are considering bankruptcy, you will probably hear differing opinions from friends, co-workers, and family members about how to file a bankruptcy petition and what tax debt relief you might be eligible for. Bankruptcy petitions, however, are complex processes, particularly where back taxes are a component of your debt.
For informed advice about discharging debt in Dallas Chapter 7 bankruptcy from attorneys who help good people emerge from potentially crushing tax liabilities, please call Allmand Law Firm. Our attorneys use the bankruptcy process to help you retain your assets, dignity, and composure.
