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Understanding Income Taxes and Bankruptcy

Understanding Income Taxes and Bankruptcy

: Richard West Law Office

Understanding Taxes in BankruptcyDealing with the IRS is a stressful experience for any individual. The financial and legal complexities concerning taxes can be difficult to understand, and the IRS isn’t the easiest entity to deal with. However, contrary to popular belief, it is possible to eliminate tax liability with the help of a bankruptcy lawyer. Though back taxes and tax liability are one of the most complicated aspects of the Bankruptcy Code, working with a Dayton bankruptcy lawyer will ensure that you receive the relief from tax debt that you need.

How a Bankruptcy Lawyer Relieves Your Taxes

It is possible to discharge your income taxes with the help of a bankruptcy lawyer, assuming that your income taxes meet the discharge rules. Taxes that you can have discharged with the help of a bankruptcy lawyer include:

· Income taxes
· Trust fund taxes
· Secured tax debts

Keep in mind that excise taxes are not eligible for discharge through bankruptcy. These taxes include estate, gift, sales, or fuel taxes.

In order to have your income taxes discharged with the help of a bankruptcy attorney, those taxes must have been filed late but still be less than two years old at the time you file for bankruptcy. Furthermore, to have the income tax discharged, the tax assessments must have been made within 240 days prior to working with a bankruptcy attorney. As long as your income taxes meet these qualifications, you may be eligible to have your income taxes discharged with the help of a bankruptcy attorney.

However, there are many exceptions to this, such as “priority debts” and dischargeable tax debts. The bankruptcy discharge rules, also known as “negative rules,” are complex, so be sure to discuss your income tax situation with a bankruptcy lawyer to ensure that you can have your tax liability resolved through bankruptcy.