Can I Discharge Tax Debt in Chapter 7 Bankruptcy?
Many people have questions about taxes and Bankruptcy. For the most part, almost everyone is required to pay taxes so it is no surprise that tax debt affects many people. This is especially true if you own your own business or have non-traditional types of income. What most people do not realize is that many past-due taxes can be discharged in Chapter 7 bankruptcy. While it’s easy to say that many past-due taxes can be discharged, determining which taxes are dischargeable can be more difficult. In Bankruptcy law, there is a well-established set of rules called the “Five Rules” for determining what types of taxes can be discharged.
The “Five Rules” are:
- The Three Year Rule (507(A)(8)(A)(I))
- The Two Year Rule (523(A)(1)(B))
- The 240 Day Rule (507(A)(8)(A)(II))
- The Non-Fraudulent Return Rule (523(A)(1)(C))
- The No Tax Evasion Rule (523(A)(1)(B))
These rules, like many areas of the Bankruptcy Code, are difficult to understand. For this reason, it is important to hire experienced attorneys who have handled many tax discharge cases in the past. Even when some taxes are not dischargeable such as priority claims, our attorneys may be able to discharge all interest and penalties. In many cases, the penalties and interests in a tax discharge case may equal up to thousands, if not tens of thousands of dollars.
Our Montgomery, Berks, and Chester County attorneys have even successfully argued down the amount of taxes owed in Bankruptcy Court, by establishing flaws and miscalculations in the clients’ tax history. There is no substitution for experience, which is why you should contact us.
Contact Our Montgomery, Chester, and Berks County Bankruptcy Lawyers Today
Our attorneys are ready to discuss your concerns and provide answers. Our attorneys represent clients in Pottstown, Norristown, West Chester, Reading, and the surrounding areas. Contact our Pennsylvania debt relief law firm today to learn more about what we can do to help you overcome your legal troubles.