Tuesday, April 15, 2008

Discharging income taxes in bankruptcy

Subject: back taxes
Question: Unfortunately I had to draw out from my retirement money due to my ill mother, whom has since deceased. I owe from 1999 thru this current year. I tried to do offer in compromise but could not come up with the money needed to get started.
I'm just strapped for money and am scared that the IRS will garnish my wages. Can you give me some insight please

There are loopholes to discharge taxes. The tax must be 3 years old, filed on time and accurate, and you just owe. If they were inaccurate and corrected more than 2 years before your bankruptcy case, then they will be dischargeable as well. Anything less than 3 years old will not be discharged.
This is a narrow loophole, so speak with a bankruptcy lawyer to make sure bankruptcy would help your situation.