CAN I DISCHARGE INCOME TAX DEBT IN BANKRUPCY?
Federal and state income tax debts for a given year can be
discharged in bankruptcy if, as of the date of filing of the bankruptcy, three tests are met:
(1) Accurate, signed tax returns for that year were filed by the debtor more than 2 years ago.
(2) The tax returns for that year were due more than 3 years ago.
(3) The taxes were assessed more than 240 days ago.
HOW CAN I FIND OUT IF MY TAX DEBT MEETS THE THREE TESTS?
Contact the IRS and obtain a tax account transcript. Also obtain a similar report from the Oregon Department of Revenue. Your attorney can help you with this and review it for you.
IF MY INCOME TAX DEBT IS NOT DISCHARGEABLE IN BANKRUPCY, WHAT CAN I DO?
You can pay the income taxes over time in a Chapter 13 bankruptcy. This solution also cuts off the interest the would otherwise be charged on the tax debt.