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Mark D. Dunn
Attorney at Law

Center Creek Plaza
629 W. Centerville Rd., Suite 212
Garland, Texas 75041

Civil/Family Law Practice in Dallas County and Collin County (Texas).

DELINQUENT INCOME TAXES
IN CHAPTER 7 BANKRUPTCY

Delinquent personal income taxes ARE dischargeable in Chapter 7 bankruptcy under very limited circumstances (11 USC 523). They must satisfy ALL of these five criteria:

1. The tax return must have been filed more than two years before your bankruptcy petition was filed.

Remember, this cutoff date is based on the date you actually filed the return ... did you apply for any EXTENSIONS that year? It can make a difference.

2. The tax return must have been "honest," that is, (a) complete and (b) non-fraudulent.

3. The due date of the return must be more than three years prior to the date your bankruptcy petition was filed.

4. The tax must have been ASSESSED more than 240 days prior to the date your bankruptcy petition was filed.

Conceivably, you could file Chapter 7, obtain a discharge of your back income tax, and THEN the IRS could conduct an audit and assess additional taxes for previous years. Those additional taxes would NOT be discharged, even though they are attributable to a "dischargeable" time period.

5. You must not have made any willful attempt to evade or defeat the tax.

And to make it even more complicated: If you made an Offer in Compromise during any of the time limitation periods, it "tolls" (extends) the time period.

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Disclaimer (the fine print)
The information on this website is not legal advice, and it may not be applicable to any specific set of facts ... especially your own personal situation. The perusal of this website does not establish an attorney-client relationship. You should consult an attorney for advice regarding your individual situation, and I invite you to contact me; I welcome your calls and emails. Contacting me does not create an attorney-client relationship. Please do not send any confidential information to me. I am an attorney licensed by the Supreme Court of Texas to practice law in all State courts and certain Federal courts, but I'm not board certified by the Texas Board of Legal Specialization.