In the past, you may have considered yourself someone who handles money well. Now, you wonder whether having that idea was correct because you have landed on hard financial times. Before you start beating yourself up, you may want to remember that numerous people face financial difficulties and accrue substantial amounts of debt, and you have options for effectively addressing that debt.
You may have been thinking about filing for bankruptcy for some time because of the depth of your debt. However, you may have felt hesitant to file because you have tax debt and were unsure whether bankruptcy could help. Fortunately, if your situation meets certain criteria, you may have the chance to have your tax debt discharged.
When is tax debt forgivable?
You, like many other Tennessee residents, likely feel anxious when it comes to dealing with matters related to the Internal Revenue Service. You may also think that the IRS will do whatever it takes to get money owed to it. While the IRS will certainly make efforts to collect if you do nothing to address your debt, bankruptcy may be able to help under the following conditions:
- Your tax debt is related to a tax return that was due at least three years before your bankruptcy filing.
- Your tax debt is associated with a tax return that you filed at least two years before filing for bankruptcy.
- Your tax debt was assessed at least 240 days before you moved forward with bankruptcy.
- Your tax debt is related to a necessary and truthful tax return, not one that is fraudulent or frivolous.
- Your tax debt has not resulted from willful attempts to evade the IRS or your taxes overall.
Other circumstances may also apply that could result in your tax debt being dischargeable through bankruptcy. Of course, your case differs from others, and it is important that you have the right information that applies to your specific situation.
How can you learn more?
In order to gain personally tailored information about how bankruptcy could help you, you may want to discuss your affairs with a bankruptcy attorney. This legal professional can explain how bankruptcy and tax debt relate, determine your options for moving forward with this debt relief option, and address any concerns you may have about the process overall. Remembering that you are not alone may allow you to feel more comfortable.