Will declaring bankruptcy help me to remove my tax debts?

Filing bankruptcy will only remove certain tax debts. In general, it's not a good idea to file bankruptcy solely for tax debts because of the high probability that they will not be discharged. Not to mention that the IRS can make the tax debtor's life miserable in the meantime.

Tax Debts that can be Discharged

A tax debt must be three years old and the return has to have been filed two year previous. It must have been filed by the tax payer. There can be no fraudulent returns, and the tax payer has not been found guilty of fraud.

Someone who has entered into a payment program to pay off the debt can see the back taxes discharged. Just because the debt is being paid down does not mean that it is ineligible for elimination. If taxes have not been filed by the tax payer and instead were completed by the IRS, the debts will not be cleared.

Last, but not least, the petitioner must show four years of filed tax returns to the trustee. This includes the most recent return.

Hiring a Tax Attorney

The best thing to do before filing bankruptcy is to consult with a tax lawyer. They can look over the situation and give ideas to settle the tax debt without having to file. Hiring a tax attorney means that they can represent you effectively to the IRS and bring any tax issues to a favorable settlement.