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Ability to discharge tax lien in bankruptcy, will chapter 7 allow me to discharge other debts and pay off IRS tax lien

I have an IRS tax lien against me, if I am willing to resign with IRS and pay that debt off, Is it possible to file for a chapter 7 Bankruptcy for my other debts, while paying off my IRS debt, understanding that I have to meet all other criteria?

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Attorney answers (2)

Reputation Level 8
There is not enough information in your question for a complete answer.

Would you be surprised to know that sometimes taxes are actually discharged in a bankruptcy? The general criterea are as follows:

The taxes are more than three years old at the time the Bankruptcy was filed. (The three-year period begins to run from the time the returns were due, plus any periods of extension);

If the return was not filed on time, more than two years has expired since the return was filed;

If there was an assessment, more than 240 days have expired from the date of the assessment before the bankruptcy is filed;

There has been no fraud.

Caveat: If you intend to discharge taxes with your bankruptcy filing, I recommend that you obtain a complete history of your tax obligations for each specific year in question from the I.R.S. and consult a tax attorney before filing the bankruptcy. To get your Federal IRS tax history, call the IRS at 800-829-1040and ask them for a report called MFTRA-X. Tell them you want the MIFTRA-X for each year that you owe them for. They will mail you the reports, and might even fax them if you ask them nicely.

Also note that a bankruptcy discharge does not automatically remove any filed or recorded tax lien on any property which you own. If there is no property of any value, the IRS may agree to abate, (remove) the lien if the tax is discharged, without any payment!
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Reputation Level 13
You can pay the IRS off then file which would be your best bet.
3 people marked this answer as good

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