JJGrady

IRS Tax Debt

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Hi,

Looking to file a Chapter 7 and I have 7,400.00 in IRS Income Tax Debt from Tax year 2007. Also around 646.00 from year 2008. My wife and I filed Jointly. This is in addition to other debts we are looking to discharge. Questions I have, Are these debts dischargeable do to the age of the taxes? Since we filed Jointly on the returns, does my wife need to file bankruptcy also? She has no job/income, she is a homemaker. I was looking to simply file a Chapter 7 myself, seeing that all other debt is in my name exclusively.

Thanks in advance!

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Discharging tax debt is requires you to be able to prove the following...

Income taxes can be discharged... the taxes must come due 3 years before the filing, the original tax return was late (and more than 2 years before filing BK), the tax must be assessed 240 days before filing BK and there is no fraud or attempt to evade taxes.

Additionally, you cannot be missing returns - in other words, you have to have filed your returns prior to filing BK.

If one can meet the requirements, then the income tax can be discharged.

She may also need to file with you in order to completely discharge the tax debt...to be safe, you need to consult a BK lawyer.

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The post above is correct. Timing matters in this case by reason of the bankruptcy code. Use your search function in the bk forum. I know I've posted the law on tax debts and discharge.

And without a joint filing, the debt will still be owed by your spouse (unfortunately).

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I don't ever recommend pro-se filing these days. You risk too much. All it takes is one creditor to really make an effort to contest your debt and you are in for a hard time. Attorneys do not like picking up partially done cases that were handled badly and those that do charge extra. So you are rolling the dice if you choose pro-se.

I did a post (sticky) in here about ways to reduce the attorney fees. The short of it is that if you are organized and do most of the pre-filing paperwork before you enter the office then there is no reason why you can't be given a discount ... you did most of the work anyways. The attorney is there if a problem does develop that you didn't anticipate.

Also keep in mind when you are dead set on filing, you are going to stop making payment on all unsecured debt as well as on any secured debt where you are turning in the property. This frees up most of your income to rapidly save the funds to pay the attorney with (and to start socking away funds for the post filing recovery).

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