If you owe money to the IRS and declare bankruptcy, what then?

Question

What happens if you owe money to the IRS (backed taxes, for example) and declare bankruptcy? Will they still come after you and hunt you down? Will they hold on to that money like a starved Chihuahua on a pork chop?

Answer 1

Your other debts would be cleared but you'd still owe the IRS. Tax debts cannot normally be cleared through bankruptcy, though filing BK may make it easier for you to clear your IRS debt.

Answer 2

Taxes are not dischargeable in a normal bankruptcy. I have heard that VERY old taxes can be discharged if RARE circumstances. I have never heard an explanation of those circumstances that I could follow. Also note: the only people I have heard make the claim also claim to be bankruptcy attorneys. There MAY be a conflict of interest in their statements.

Answer 3

Income tax on a return that you filed that was due and owing over three years ago, presently 2003 and earlier and any tax from an audit of older years that was assessed (you got a bill) over 240 days ago would be discharged unless IRS filed a notice of lien which attached to exempt assets. If you file a Chapter 13 and make all the payments in a confirmed plan, any thing remaining, including penalties due on newer years, would also be discharged.

Answer 4

The type of bankruptcy declared will determine how much of your assets are required for taxable purposes. Publication 908 details bankruptcy.

Answer 5

Bankruptcy does not include taxes or any monies owing the government.You'll still owe them.

Answer 6

You will still owe them - bankrupcy doesn't relieve you of tax debts.

Answer 7

gesh you make it sound like they are the bad guys!

You are stealing money from your fellow citizens, not "the government". What makes you so friggin' special that you are exempt from paying your fair share?

And, no, bankrupsy does NOT effect your taxes, you still owe them.