Is Tax Debt Your Main Cause of Financial Stress?
Finances are an ongoing concern for just about every American, but some financial stressors are easier to deal with than others. Unfortunately, tax debt is a more difficult type of debt to deal with, as it is one of the few types of debts that may or may not be discharged via bankruptcy. While some types of tax debt are dischargeable, several are not. You can avoid complications with your bankruptcy case by consulting with a Alabama bankruptcy lawyer regarding the eligibility requirements for certain debts under certain bankruptcies. Contact Cloud Willis & Ellis today to learn more.
Issues That Affect Whether or Not Your Tax Debt is Dischargeable
Unfortunately, many factors that determine whether or not a tax debt is dischargeable are unchangeable. For instance, the age of your tax debt comes into play, as well as how you earned the income reported on your tax return. Because of the number of unique details that have a bearing how whether or not your tax debt is dischargeable, it can be difficult for you to assess your situation on your own and come up with a conclusive determination. Our Birmingham bankruptcy lawyers at Cloud Willis & Ellis are familiar with the many complex tax and bankruptcy laws and use that knowledge to help clients out of tough financial situations—or, if not out of them, through them. That said, though everyone’s financial situation is unique, overcoming any financial problems begins with understanding the law and how it applies to your case. If you have an outstanding tax debt, consider the following:
- The age of your tax debt affects whether or not you can discharge it via bankruptcy;
- Typically, the older your tax debt, the more likely you can discharge it;
- Tax debts must generally be three years old to be eligible for Chapter 7 bankruptcy;
- Chapter 7 bankruptcy is typically restricted to tax debt associated with taxes based on wages, earned income, and commission, as opposed to property tax debt; and
- If you applied for an extension, the IRS uses the date you filed to determine the age of your tax debt, not the date on which your taxes were originally due.
Of course, those are not the only stipulations that apply to your tax debt. Your tax debt is subject to other eligibility requirements, of which your Birmingham bankruptcy lawyer can inform you. One such requirement includes the amount of time that has passed between your filing tax and the date you filed for bankruptcy. If your taxes were audited by the IRS, the audit must have come at least 240 days prior to your filing for bankruptcy. This ensures that you do not try to get out of paying your tax debt simply because the IRS discovered that you were not paying, or were underpaying, your taxes in the first place.
We Can Provide Clarification on Tax Debt and Financial Relief Laws
At Cloud Willis & Ellis, we provide legal advice and assistance to individuals and businesses alike. If you or your business is suffering financially because of your outstanding tax debt, get the clarification you need to make an informed decision regarding financial relief. Contact our Alabama bankruptcy attorneys today to learn more.