You should be aware that tax debts may be dischargeable in Chapter 7 or Chapter 13 bankruptcy. There are five methods to avoid tax debt if you're willing to file for one of them. Keep in mind, however, that in order to get your taxes discharged by filing for bankruptcy, you must satisfy certain requirements; therefore, make sure you leave no stone unturned before initiating the bankruptcy process to eliminate your tax burden.
A Chapter 7 bankruptcy filing will allow you to obtain a complete and entire discharge of all legally dischargeable debts. In Chapter 13 bankruptcy, you must create a payment plan to repay at least a portion of your debts, and the remainder will be discharged. When declaring bankruptcy, only a portion of your tax burden will be discharged. You must fulfill five requirements in order to have your debt taxes eliminated, and each one is crucial to attaining your objective. The following are:
The tax return deadline must have occurred at least three years ago.
The tax return must have been submitted at least two years ago.
3.The tax evaluation must be at least 240 days old.
4. The tax return cannot be deceptive
You cannot be found culpable of evading income tax.
If you're able to satisfy all of these stringent requirements, you shouldn't have any issues and will likely have your tax debt discharged. Keep in mind that declaring bankruptcy has its own consequences, particularly on your credit score. However, that is the subject of another article. You shouldn't file for bankruptcy to avoid paying your tax debt because, in the long run, the damage it will cause to your credit report will be more detrimental than beneficial.
Filing for bankruptcy should only be done as a last resort, after a thorough analysis of every aspect of your circumstance from top to bottom and side to side. Filing for Chapter 7 or Chapter 13 bankruptcy may very well be your best chance at rebuilding your life and future if, after a thorough analysis of all the circumstances in your case, you conclude that you have exhausted all other options.""
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