bankruptcy fraud penalties

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Chapter 7 vs. Chapter 13

The two most common types of bankruptcy for individuals are Chapter) 7 (liquidation) and Chapter 13 (adjustment of debts. Although each are governed by their own set of requirements and conditions are also usually tax treatment under both procedures. However, will dictate the basic concepts behind any kind of bankruptcy, as the debts are settled.

As a rule – under Chapter 7 if the debt to meet meet all the following conditions, then they can be discharged during the bankruptcy proceedings, but if even a qualification is not met, then the debt after the bankruptcy stay. However – under Chapter 13 – there is almost always a distribution to creditors. Therefore, the court-appointed administrator is negotiating with the IRS and had to decide on a solution achieve.

Qualifications for the discharge

Although many taxpayers under the impression that tax debts can not be dismissed Some really can! However, in order to qualify for tax debts to be made, they must meet a strong list of requirements. Under bankruptcy law, The following requirements must be met:

1. Tax Return Filed
Even if you are not in a position to pay the tax due, must You still file a tax against a tax liability may be considered for discharge. In addition, the tax return for the tax liability that you need unloaded submitted at least two years before filing for bankruptcy, regardless of when the proceeds were originally due.

2. 3 years old or older
In order to discharge a tax liability, there must be a return to be obtained on the basis of at least three years before. So if you wanted to bankruptcy in 2010 included, the tax They hope to have that released by the tax year 2007 or earlier emerged. This limit also includes automatic extensions that you may have requested so if you an extension of six months after your return, it will add another six months to wait before you can file for bankruptcy.

3. IRS assessment
To have a tax liability discharged through bankruptcy, the IRS will need to have it evaluated at least 240 days before the bankruptcy for you.

4. Income Taxes Only
Unfortunately, the only kind of tax tax debt, which can be discharged through bankruptcy. Other tax and unpaid employer payroll taxes and Trust fund recovery penalty can not be dismissed.

5. No fraud allowed
Last but not least, create the income tax liabilities that are not fraudulent Activities are available. If you were deliberately trying to evade taxes, and convicted of tax evasion, then you will not be allowed to lay off its debts by Bankruptcy.

Tax Returns

Will be allowed before the bankruptcy, you need both the judges and all creditors who request a copy of your last make available tax return. You must also demonstrate to the court that your four most recent tax returns were filed with the IRS have the latest, give as the date of the first meeting of creditors.

About the Author:

The Tax Lady Roni Deutch and her law firm Roni Lynn Deutch, A Professional Tax Corporation have been helping taxpayers across the nation find IRS tax relief for over seventeen years. The firm has experienced tax lawyers who can fight IRS tax liens on your behalf.

Article Source: ArticlesBase.comBankruptcy and IRS Back Taxes

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