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Bankruptcy and Tax Relief

By Nehemiah Jefferson, Esq., LL.M.

The bankruptcy code can be used to obtain tax relief. However, the dischargeability of taxes in bankruptcy may not include all years owed.

A taxpayer may be able to discharge income taxes via bankruptcy if they filed their tax returns and the time has passed that meet ALL of the three conditions below for Chapter 7: (1) at least three years from the due date of the tax return including extensions; or (2) at least two years from the date the tax return was filed (i.e. assessed) for delinquent returns; and (3) at least 240 days from the date of assessment of an audited or amended tax return. Note that certain events may toll the above periods.

Personal income taxes are eligible for bankruptcy relief. Trust fund recovery penalty taxes are not dischargeable.

Nehemiah Jefferson, Esq., LL.M., is Principal of Esquire Tax Firm PLLC. The firm practice areas include Civil and Criminal Tax Representation, Estate Planning, Probate, and Business Planning. He earned his Bachelor’s degree from The Florida State University, his Juris Doctor from John Marshall Law School (Atlanta), and LL.M. in Taxation from the University of Alabama. Attorney Jefferson is licensed to practice law in the State of Florida, Texas, The District of Columbia, and is a member of the United States Tax Court Bar. He may be reached at www.esqtaxfirm.com.