In bankruptcy cases involving tax liabilities, the IRS asserts a claim. Debtors often owe the IRS back income taxes and other forms of tax debt. Sometimes, the government places a legal claim against the debtor’s property when he fails to pay a tax debt – the notorious “tax lien.” These liens protect the government interest in the debtor’s property, including everything from personal property and financial assets to real estate and retirement accounts. Even if a debtor receives a discharge after a bankruptcy proceeding, his or her tax lien may survive the bankruptcy discharge. Taxes are often non-dischargeable, although there exist a few limited exceptions if the following criteria are met:

• 1)  The taxes are income taxes. (Tax liabilities other than income taxes and tax liens are almost never dischargeable.)
• 2)  The nonpayment was not the product of fraud or willful evasion
• 3)  The debtor has consistently filed tax returns
• 4)  The tax debt is at least 3 years old
• 5)  The debtor passes the “240-day rule,” which means that the income tax debt either must have been assessed by the IRS at least 240 days before the bankruptcy filing, or has not have been assessed yet.

If you are considering debt relief solutions, including filing for bankruptcy, and you have a tax debt, call our Bankruptcy attorneys to help you determine if any of your tax debt can be reduced or discharged completely.  Our expert Dothan bankruptcy and tax attorney at Boles Holmes White are ready to help you get the most protection available under the law, and guide you through the process. Call us at 334-366-6086, or email us for your consultation.