Bankruptcy and Tax Requirements

taxes

There are many questions and misconceptions surrounding all aspects of filing for bankruptcy. We aim to dispel bankruptcy myths and answer your questions so that you can make informed decisions and correctly follow bankruptcy procedures.

Tax season is upon us, and as usual at this time of year, Veitengruber Law wants to keep you abreast of the most up-to-date information and policies regarding bankruptcy and tax filing. Better to avoid a problem now than to have an unwelcome surprise, like an IRS tax penalty, later.

Upon filing for a Chapter 13 Bankruptcy, which allows debtors to keep possession of valuable, non-exempt property, all state and federal tax filings for the four years immediately prior to the bankruptcy filing are required. Accurate tax returns for all four years must be filed and presented to the appointed trustee before the initial Meeting of Creditors occurs, with the absolute deadline being 7 days after this meeting. This typically falls roughly 30 days following the official filing of the bankruptcy case.

Failure to have your tax returns completed in this manner is very dangerous when filing for bankruptcy, because the rules regarding same are quite strict, and failure to abide by them will risk having your case dismissed entirely.

We understand that our clients are often quite distressed financially, which frequently leads to falling behind on filing for taxes. This is precisely why we work in tandem with an accountant so that your late tax paperwork can be filed in an emergent matter, if need be.

Tax debt is a profoundly serious issue. Veitengruber Law provides clients with solutions that make sense and are affordable. You need not fear astronomical attorney’s fees on top of your already mounting debt. You will quickly understand that our retainer is only a small fraction of the money you will save with a smoothly executed bankruptcy case. We help you avoid IRS penalties and interest, as well as keep liens off your property. It is possible to have certain taxes discharged in bankruptcy, but in order to have this happen, we must work closely with you to ensure that you are 100% compliant with IRS regulations.

Any taxes that are not eligible for discharge can be placed in a Chapter 13 payment plan. This allows clients to repay remaining tax debts over a reasonable and attainable 3-5 years without accruing interest or additional penalties. Abiding by your payment plan will allow all remaining dischargeable debt to be released at the end of your payment period.

To learn more about the importance of timing your bankruptcy filing appropriately (especially during tax season), contact us today for a free consultation.

Photo courtesy of Chris Tolworthy

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2 Responses to Bankruptcy and Tax Requirements

  1. Pingback: Can I Keep My Tax Refund if I File for Chapter 13 Bankruptcy? | Veitengruber Law

  2. Pingback: Can I Discharge Income Tax Debt in a Chapter 7 Bankruptcy? | Veitengruber Law

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