Can you discharge tax debt through bankruptcy?

As a bankruptcy lawyer who’s served Tennessee for more than 30 years, I get many questions about how to discharge tax debt during tax season.

Today, I’ll walk you through the basic facts of getting rid of your tax debt through bankruptcy.

Here are some things to consider. Past-due tax can always be paid at 100% through filing a chapter 13 bankruptcy. This works for many people, but in some cases, it can cause the payment to be excessive. The real question is: when can tax debt be completely discharged, or partially paid as unsecured debt?

Here’s how it works.

To get rid of tax debt completely, the debt has to be for simple income tax. Secondly, your tax debt needs to be at least three years old. For example, this is 2021, but we are paying tax from last year’s income in 2020.

Here’s how it works:

  • 2016 taxes are now dischargeable, subject to the above.
  • 2017 tax debt will be dischargeable after April 15th, 2021.
  • 2018 tax debt will be dischargeable after April 15th, 2022.
  • 2019 will be dischargeable after April 15th, 2023.

The good news is that, if you owe past-due tax for several years, more than one of these would apply.

Another factor to get rid of taxes through bankruptcy is that you have to have filed on time. It’s perfectly fine if you’ve filed for an extension in the past, as long as you filed your taxes by that deadline. Keep in mind that the deadline for filing 2020 tax is April 15th.

Don’t give up. Call us today for a FREE consultation.

If this feels confusing, or if you think you don’t meet the rules for discharging your tax debt, don’t give up. My team of compassionate and effective bankruptcy lawyers will look at your situation for FREE.

If you don’t know whether you qualify or which type of bankruptcy you might need, it costs nothing to find out. There are many options that could work for you and change your life for the better, depending on your situation.

Furthermore, we will work on your behalf to get you the best possible rate so that you can get rid of your tax debt and start fresh. Contact us online today or call us at 901-327-2100 for a FREE consultation. Many of my clients wish they’d called us sooner, and so do we. A clean slate and a brighter financial future are waiting for you.