There is no absolute prohibition on a Miami resident’s using a bankruptcy to discharge their back tax debt which they owe to the Internal Revenue Service.
However, in order to take advantage of the opportunity to discharge, a Florida resident will have to meet certain criteria.
First of all, the person’s tax filings will have to have been legally above board. If a person filed a fraudulent tax return or a return that involved tax evasion, then she may not get her taxes discharged in bankruptcy.
Furthermore, there are some time restrictions that keep people from getting relief from tax debts immediately.
Specifically, the tax return that is at issue has to have been due at least 3 years prior and filed no later than 2 years before the bankruptcy filing.
Also, the IRS has formally to assess the tax at least 240 days before the bankruptcy. This means that the IRS states the amount the taxpayer owes the IRS and may start the collection process.
Additionally, the person has to follow all other rules in the bankruptcy process in order to get a discharge. This includes having to file other tax returns if they are due.
Other tax debts may be dischargeable in bankruptcy as well
Federal income tax debt is not the only type of tax debts that can be discharged in bankruptcy.
However, there a lot of restrictions on being able to write off tax debts through a bankruptcy.
While Chapter 13 may offer some more options in this respect than would a Chapter 7, it is also important to remember that the court will likely require the tax debts to be paid in full.
Someone who is interested in exploring their options for getting relief from their tax debts should consider speaking with an experienced bankruptcy attorney.