Washington Tax Attorney

Guidelines for Income Tax Discharge

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) that was reinforced by Congress and agreed upon by the President in 2005 mainly combined the various tax discharge rules connected to bankruptcy in Chapter 7, Chapter 13 and Chapter 11. These rules are extremely complicated and are usually applicable to the taxpayer depending on the details and conditions of each case. Taxes which are old can be discharged and the latest ones are considered ‘important taxes’ which are non-dischargeable.

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Dates

Usually, the capability to discharge a tax in bankruptcy and choosing the appropriate bankruptcy chapter is based on four dates which are :

• The last date when the tax return was due for the year of the default tax.
• The date the taxpayer filed the tax return.
• The date the tax was evaluated by the IRS.
• The nearness of the previous dates to the date of filing a case on the taxpayer’s bankruptcy.

Necessities

The dates are indicated in the Bankruptcy Code Sections 507(a)(8)(A)(i), 523(a)(1)(B) and 507(a)(8)(A)(ii), respectively. This code enables a taxpayer to discharge an income tax provided all the following necessities are adhered to :

• Filing of the tax return is done two years prior to the filing of bankruptcy.
• The tax return was supposed to be paid more than 3 years prior to filing of bankruptcy.
• Assessment of the tax liability done more than 240 days prior to filing of bankruptcy.
• No fraudulent tax return was filed or there was no tax fraud.
• The filing of tax returns was done for the purpose of tax liability.

Thus the bankruptcy discharge of a personal income tax liability is mainly decided by the inability to file tax returns on the due date, the exact return filing date and tax evaluation date to the date of filing of bankruptcy. These dates can be considered separate statutes of a restricted timeframe which, when expired, can be changed from a tax of non-dischargeable priority tax to a dischargeable non-priority tax in a bankruptcy case.

Tax Attorney Directory in Washington

Considering the complexity of bankruptcy cases or any tax issue, an experienced tax attorney is needed to take care of these situations and resolve them. A Washington lawyer directory is the best source to offer an extensive attorney database which is current and user friendly. The listings consist of attorneys from various fields like family law, bankruptcy, business law, criminal law, personal injury and immigration law.