For some Georgia residents, having unpaid tax balances may be only part of their mountain of financial problems. As a result, they may be considering filing for bankruptcy in hopes of getting their affairs back on track and essentially starting again with fewer debt liabilities. However, it is important to know that bankruptcy does not always discharge tax debt, and for individuals looking for tax relief, it is wise to know when they could qualify for forgiveness through bankruptcy.
Numerous stipulations exist if a person wants to have outstanding federal taxes discharged through bankruptcy, including:
- The debt must be related to income taxes.
- The individual has filed all tax returns, and all of those returns were legitimate.
- The individual did not carry out any fraudulent actions relating to the tax returns.
- The tax debt was due at least three years prior to filing for bankruptcy.
- The individual did not willfully carry out any tax evasion actions.
- The IRS has reviewed and assessed the outstanding balance at least 240 days before the person filed for bankruptcy.
It is necessary to meet all of the aforementioned requirements if a person hopes to have the debt discharged during Chapter 7 bankruptcy. In the event that a person has accrued financial penalties for not paying taxes or the debt is from unfiled returns, those debts are not dischargeable through Chapter 7. As a result, it is important to fully understand eligibility before relying on bankruptcy to address tax debt.
Fortunately, even if Georgia residents do not believe that bankruptcy is their best option for tax relief, they may be able to explore other options. The available methods to address unpaid tax obligations can vary from person to person, and much like with bankruptcy, certain stipulations apply for qualifying. If individuals are concerned about their unpaid taxes, they may find it helpful to discuss their specific situations with experienced tax attorneys for assistance.