Bankruptcy & the IRS
Some taxes and penalties can be discharged (wiped out) by bankruptcy. Those taxes that cannot be discharged can be paid without interest in Chapter 13.
The same provisions of the “automatic stay” that protect debtors from their creditors also apply to the IRS and State Department of Revenue. This means that wage garnishments and levies put in place by taxing authorities are stopped by the filing of bankruptcy.
Whether taxes can be discharged depends on: the kind of tax, what tax year it is for, whether a return was filed, and the type of bankruptcy filed.
The typical rule of thumb in bankruptcy is that taxes can be discharged, as long as the taxes were first due more than three years before the bankruptcy is filed, and the return was filed on-time, and the last two tax returns have been filed on time.
Make an appointment to speak with one of our bankruptcy attorneys today to find out your options.
920 South 107th Ave
Omaha, NE 68114
1028 G Street
Lincoln, NE 68508
2121 North Webb RD. Suite 303
Grand Island, NE 68803
Phone: (402) 965-0775
Fax: (402) 939-0430