Let’s say, for example, that you’ve not paid your income tax from 2011 through 2015, and that the year of filing the bankruptcy case is 2015. Well, the rule is this: number one, first and foremost, the law was recently changed about and when I say recently, I mean about three years ago, that is if you never filed your income tax return on time, you cannot discharge your income taxes. That is just a hard and fast rule.
However, hopefully you’ve been mindful and dutiful and you have found your income taxes on time, then the rule is this: as long as the income tax is due and owing for more than three years before we file the bankruptcy case then that income tax usually can be discharged. For example, if you’re filing in 2015, then year 2015, year 2014, year 2013, probably even year 2012, depending on the time of year that you file in 2015, cannot be discharged but if you have any income tax liability from 2011, 2010, 2009, and so forth and you filed the income tax return on time then you should be able to discharge those income taxes, that is you can wipe out the income taxes.
There’s another little rule that I’ll need to tell you about which is this: let’s say that the tax was due in owing for more than three years, that you filed the text return on time, but in eight months before we file the case, the IRS has come back and said, “Okay, well for your 2011 taxes, you actually owe $5,000 more.” If they take any activity that is any collection activity against you within eight months of filing your bankruptcy case, even though it’s been more than three years since the income tax liability is due, you still will not be able to discharge your income taxes.
The best solution to that is to consult with your bankruptcy lawyer and make sure that they don’t file that bankruptcy petition until at least those eight months have expired. I know that these rules are super confusing. They’re very confusing even for the bankruptcy lawyers that practice in this area, but if you have any questions, please call me at 770-792-1000.