Criteria for Discharging Income Tax Debt Through Bankruptcy

Do you owe the IRS a large sum of money? You may be able to discharge your IRS income tax debt through a Kenosha Bankruptcy filing. Take a look at the criteria below. You must meet all criteria listed below in order to discharge your income tax debt through a Kenosha bankruptcy.
Kenosha Bankruptcy Income Tax Discharge

Criteria for Discharging Income Tax Owed to the IRS by Filing a Kenosha Bankruptcy

1. The income tax debt owed to the IRS must be based upon income, such as federal, state, or gross receipt taxes.

2. The income tax debt due and owing must have occurred from a tax return filed within the last three years. This date includes any extensions to file.

3. If you filed an IRS Substitute Tax Return, it must have been signed; otherwise, the debt is not dischargeable.

4. Your income tax return must have been filed on time and at least two years before filing your Kenosha bankruptcy. The tax return must have been properly signed, mailed, and completed.

5. You must be assessed the IRS income tax debt at least 240 days before filing your Kenosha bankruptcy. State and federal laws on when a tax is “assessed” are different. Contact your Kenosha bankruptcy attorney to discuss what “assessment” means in Wisconsin.

6. There was no willful, knowing intent to evade taxes or fraud the IRS. Note: Not paying your taxes is not tax evasion. Always file your tax return on time, even if you cannot pay the amount owed.
It is also important to note that you can discharge interest owed on your IRS income tax debt if the tax debt meets the criteria for discharge. You can possibly discharge penalties even if the income tax debt does not meet criteria for a Kenosha bankruptcy discharge. Speak with your Kenosha bankruptcy attorney to learn more about interest and penalties owed to the IRS.

You can stop the IRS from garnishing your wages or seizing your bank account due to owed income tax debt by filing a Kenosha bankruptcy and meeting the criteria listed above. There are implications to not filing bankruptcy on time, so time is of the essence. For example, if the IRS places a lien on your home before you file your Kenosha bankruptcy, you are not personally obligated to pay the discharged tax, but the lien will remain on your property. You also must repay any tax credits awarded on the tax return involved in the discharge.


Contact a Kenosha Bankruptcy Attorney

Your income tax debt may be eligible for discharge under a Chapter 7 or a Chapter 13 Kenosha bankruptcy. Remember, you can only discharge your income tax debt if you meet the above criteria. Warning: The above criteria is only a general guideline. You must speak with an experienced Kenosha bankruptcy attorney to learn more about meeting the guidelines to discharge an IRS tax debt in Wisconsin. Contact a Kenosha bankruptcy attorney at Wynn at Law, LLC by phone at 262-725-0175 or by email via our bankruptcy website’s contact page. Wynn at Law offers a free initial consultation and has offices in Delavan, Salem, and Lake Geneva, Wisconsin.


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*The content and material on this web page is for informational purposes only and does not constitute legal advice.

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