Can back taxes due be included in a Chapter 13 bankruptcy?

We are self-employed?

Asked on October 18, 2011 under Bankruptcy Law, California

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Yes, back taxes can be included in both a chapter 7 and chapter 13 bankruptcy filing if they meet what is known as the 5 tier test.  Here is what I have found:

If the income tax debt meets all five of these rules, then the tax debt is dischargeable in Chapter 7 and Chapter 13 bankruptcy petitions.

  1. The due date for filing a tax return is at least three years ago.
  2. The tax return was filed at least two years ago.
  3. The tax assessment is at least 240 days old.
  4. The tax return was not fraudulent.
  5. The taxpayer is not guilty of tax evasion.

Seek advice from your bankruptcy attorney.   Good luck.


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