How Chapter 7 Bankruptcy Can Help Eliminate IRS Tax Debts

July 20, 2009

You may have heard the hype from firms claiming they can reduce all of your IRS tax debt for pennies on the dollar. The reality is that most taxes can’t be eliminated, but some can. But it is not as easy as it sounds. One legal and reliable way is to file for a Chapter 7 bankruptcy. Once you apply for bankruptcy, you must then pass a series of steps to see if you can discharge IRS tax debts under Chapter 7. Basically you can discharge an IRS tax debt if you meet all of the following conditions:

·         The taxes are only income taxes.

·         You did not commit fraud.

·         You did not commit willful evasion.

·         You filed a tax return.

·         The debt must be at least three years old.

·         You pass the "240-day rule."


As you can see the discharge of an IRS debt is not as simple or easy as some may lead you to believe. It is advisable to speak with an attorney experienced in bankruptcy law and you can by contacting Fears | Nachawati toll free at 1.866.705.7584 for a free bankruptcy consultation.


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